Question

1. Implied ContractThomas Rinks and Joseph Shields developed Psycho Chihuahua, a caricature of a Chihuahua dog with a "do-not-back-down" attitude. They promoted and marketed the character through their company, Wrench, LLC. Ed Alfaro and Rudy Pollak, representatives of Taco Bell Corp., learned of Psycho Chihuahua and met with Rinks and Shields to talk about using the character as a Taco Bell "icon." Wrench sent artwork, merchandise, and marketing ideas to Alfaro, who promoted the character within Taco Bell. Alfaro asked Wrench to propose terms for Taco Bell’s use of Psycho Chihuahua. Taco Bell did not accept Wrench’s terms, but Alfaro continued to promote the character within the company. Meanwhile, Taco Bell hired a new advertising agency, which proposed an advertising campaign involving a Chihuahua. When Alfaro learned of this proposal, he sent the Psycho Chihuahua materials to the agency. Taco Bell made a Chihuahua the focus of its marketing but paid nothing to Wrench.1. This case primarily involvesSelectA. an express contractB. an implied contractC. a quasi contract2. An implied contract may also be referred to asSelectA. an implied-in-law contractB. an implied-in-fact-contractC. a quasi contract3. In this case, to determine the terms of the contract, the court would rely onSelectA. plain meaning of the termsB. conduct of the partiesC. unjust enrichment of one party4. Implied contracts Select A. do B. do not require an agreement between the parties.5. To determine if a contract exists in this case, the court would need to determine if WrenchSelectA. furnished a good or serviceB. signed a contractAndSelectA. expected to be paidB. demanded a signed contractand if Taco BellSelectA. knew or should have known about that expectationB. asked Wrench about payment termsAndSelectA. had a chance to reject the goods or servicesB. had unauthorized access to the confidential goods6. Wrench did provide goods or services to Taco Bell by giving themSelectA. monetary compensationB. artwork, merchandise, and marketing ideasC. roylaties related to Psycho ChihuahuaD. a license to use Psycho Chihuahua in any way they saw fit7. In this situation, it seems as if Taco Bell knew, or should have known, that Wrench expected to be paid, because WrenchSelectA. proposed termsB. created a productC. suedand Taco BellSelectA. is a businessB. used Wrench’s materialsC. contacted their attorneys.8. Taco Bell’s rejection of Wrench’s terms was not sufficient to be considered rejection of Wrench’s services or property becauseSelectA. Taco Bell used the property even though they rejected the termsB. Taco Bell failed to notify Wrench in writingC. Taco Bell could not reject the terms because there was an implied contract.9. A court in this case likely Select A. would B. would not find that an implied contract existed and Select A. Wrench B. Taco Bell would win the case.10. WHAT IF THE FACTS WERE DIFFERENT?What if Taco Bell had rejected the terms proposed by Wrench and had never used the Chihuahua as a Taco Bell icon? In this case, the court likelySelect A. would B. would not find that an implied contract existed and Select A. Wrench B.Taco BellItem 16 would win the case.

Answer 1

1. This case primarily involves an implied contract, where things may not have been written down but the actions by both sides show there was an agreement.

2. Implied contract may also be refereed to as an implied-in-fact contract because the facts (not written documents) show there was an agreement.

3. The court would rely on the conduct of the parties. Since there isn't a written agreement, they look at the actions people took to see if they behaved as if they were in a contract.

4. Implied contracts do not require an agreement between the parties. Someone may be operating on the assumption of an implied contract and the other person disagrees that they acted in a way that implied a contract, but it is their actions that matter not how they felt about the agreement.

5. To determine if a contract exists the court will look at: furnished a good or service, expected to be paid, knew or should have known about that expectation, had a chance to reject the goods or services