Advertisement Upgrade to remove ads

One purpose of contract law is to make business matters more predictable.

TRUE

The elements of a contract are agreement, consideration, legality, and capacity.

TRUE

Robert offers to buy a car from Jane for $400. Jane must accept this offer in order to form an enforceable contract.

TRUE

Strawly Corp. wants to sell land which has toxic waste underground. It may shift all the responsibility for environmental cleanup to the buyer by including such a provision in the sales contract.

FALSE

Contracts for the sale of fabric, automobiles, computers, furniture, and paper clips would all be governed by Article 2 of the Uniform Commercial Code.

TRUE

A valid contract can legally be voided by either party.

FALSE

Lucy and Rick sign a contract in which Lucy agrees to deliver 10 boxes of chocolates in exchange for Rick's promise to pay $5 per box. Lucy delivers the candy. Rick pays for the goods. This contract is fully executory.

FALSE

Mary goes into Honest Harry's Electronics and purchases a TV. Mary agrees to pay for the TV in 30 days on the store's "30 days same as cash" plan. This is an executory contract.

TRUE

Valerie promises Teresa that she will pay Teresa $75 if Teresa will clean Valerie's house by noon on Saturday. If Teresa cleans the house by noon on Saturday and Valerie pays the $75, then this is an implied, bilateral, executory contract.

FALSE

Upon the recommendation of a friend, Hope hires Joey to rewire her kitchen and he completes the work within the time agreed. Then Hope finds out that Joey is not a licensed electrician, and she refuses to pay him for the work. A court will enforce the agreement because otherwise Hope would be unjustly enriched.

FALSE

When promissory estoppel is used by the courts, it is because there is NOT an enforceable contract present.

TRUE

Alex promises to pay $100 to anyone who finds his lost watch. Kate finds and returns the watch to Alex after hearing of the reward money. Alex and Kate have an enforceable unilateral contract.

TRUE

Jerry offers to shovel the snow from Ben's driveway for $35. Ben replies "OK." This is an example of:

An express, Bilateral Contract.

As English judges were developing the common law of contracts in the twelfth and thirteenth centuries:

Promises were found not binding unless written and sealed.

Miles purchased a lawnmower with an attached warning that said, "The manufacturer is not responsible in the case of an injury caused by the lawnmower." If Miles is injured because of a defect in the mower and sues the lawnmower manufacturer, he will most likely:

win, as this warning would be unenforceable.

Mike made the following offer to Mick: "I will pay you $500 if you agree to paint my house." Mick replied that he would. At this point, the contract is an:

executory, bilateral, express contract.

What is not required to establish promissory estoppel?

A promise made by the plaintiff in response to the defendant's promise.

Shelly offers to sell Jane goods both parties know are stolen. Jane accepts the offer, and agrees to pay for the goods. Later, Jane refuses to accept or pay for the goods. If Shelly sues Jane for breach of contract, what is the probable result?

The law would not enforce Jane's promise, as it does not have a lawful purpose.

Larry goes to his barber who has cut his hair for the past several years. The barber proceeds to cut his hair as they talk about the most recent snow storm to hit the area. This is an example of a:

unilateral, implied contract.

Robert, a minor, buys a stereo from Jane for $200. State law allows a minor to disaffirm contracts within a reasonable time after turning 18. Robert disaffirms the contract the day after turning 18 and returns the stereo.

This contract was a voidable contract, Robert can disaffirm.

Patty is a poor college student struggling to work and keep up with her studies. Fred, her uncle, promises to pay Patty support of $200 per month for the next six months. Although Fred didn't ask her to, she quits her current job in order to devote full time to her studies for the next six months. Fred makes one payment and then stops with no explanation. If Patty sues, what is the likely result?

Patty may win under the doctrine of promissory estoppel.

The basic distinction between a bilateral contract and a unilateral contract is that:

only one promise is involved in a unilateral contract.

On January 16, Deb offers to sell her waterbed to Colleen for $600. Colleen accepts and agrees to pay Deb $600 on January 27. Which of the following is correct?

On January 16, the contract was executory.

An express contract:

Has both parties setting forth their intentions.

John enters into a contract to paint Chad's house. When Chad decides on a color, John will buy the paint and paint the house for the price of $2,500. This contract is governed by:

the common law of contracts governs because the predominant factor of the contract is for the sale of services and not goods.

Zena enters into a contract with Steeley Company to purchase a washer and dryer. She doesn't understand the financing terms, but signs the agreement anyway because she needs the appliances. The financing terms are very unfavorable to Zena, and she is unable to make all of her payments when they are due. Steeley sues. The court would:

be exercising judicial restraint if it requires Zena to pay as she promised, even if the agreement was unfair and unwise.

When Olga asks Sven if he wishes to sell his Harley motorcycle, he replies that he would not sell it "for less than $2,000. "Olga replies, "I accept," and hands him $2,000. A contract exists.

FALSE

April put an advertisement in the newspaper advertising the sale of her computer for $500. Simultaneously, six people responded to the ad by mail with formal written acceptances. April is bound on six contracts to sell her computer for $500.

FALSE

On Monday, Harry puts an offer in the mail to Sally to sell his guitar for $50. Monday night when jamming with his buddies, he decides he will really miss his old guitar and has second thoughts about selling it. Tuesday morning he puts a revocation in the mail informing Sally he has changed his mind and the guitar is no longer for sale. The revocation is effective on Tuesday morning.

FALSE

Vern Valve Company makes valves for plumbing fixtures. At the beginning of the year, it sends out a price list addressing each one, "To our valued customers." Honest Hank Hardware orders a variety of valves at the prices quoted on the price list. Vern Valve must sell the valves to Honest Hank for the prices quoted on the list.

FALSE

According to the UCC, one or more open terms will not cause a sales contract to fail for indefiniteness as long as the parties intended to make a contract and there is a reasonably certain basis for the court to grant an appropriate remedy.

TRUE

Nella offers to sell her crop of strawberries, which have just been picked, to Morgan's Market. Since she does not specify a time limit for acceptance, Morgan's can accept the offer the following week, as long as Nella has not revoked it.

FALSE

Candy, Inc. signed an agreement with Sweet Plantation. Under the contract, Candy, Inc. agreed to purchase all the sugar cane Sweet Plantation grew during the coming season. This contract will be unenforceable due to its vagueness.

FALSE

If both parties believe they have a binding contract, this belief is controlling if there is later a question about the validity and enforceability of the agreement.

FALSE

John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky Derby. Prince Charming came in last, much to John's frustration and embarrassment. John exclaims in a loud voice, "I'm selling that horse to the first person who hands me $100 bucks!" John has:

not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer.

Which of the following are generally considered to be legal offers?

NONE

The intent of the offeror to extend an offer to the offeree is generally determined by reference to:

the words and conduct of the offeror.

The Johnsons decided to sell their summer cabin on Beech Lake. They sent flyers out to all who previously had expressed an interest in buying the cabin stating that they were planning on selling their cabin. The flyer described the location of the property, the size of the lot, and the price. If one of the recipients responds by sending a letter accepting, an agreement:

will not be formed because the flyer was sent out as an invitation to negotiate.

Regency Construction placed an order for two hundred 2 x 4s from Lumber Jack. If the place of delivery and time for shipping the goods are not specified, the UCC provides:

the place of delivery is Lumber Jack's and the time for delivering the lumber is a reasonable time based on normal trade practice.

On January 8, Quastrar, Inc. sent Hylavian Company a letter offering to sell $10,000 in restaurant supplies. On January 18, Hylavian mailed a letter to Quastrar accepting the offer. Quastrar received the acceptance letter on January 20. On January 17, Quastrar sent a letter revoking the offer. Hylavian received this letter on January 21. A contract between Quastrar and Hylavian:

was formed on January 18.

Which of the following offers are considered to be irrevocable for a given period?

ALL (firm, option, writing)

Collector Carl displays his beer can collection at the local swap meet. Mary sees the collection and is interested in buying it. Carl says he will sell the collection for $1,500. Mary says she really likes the collection but is only willing to pay $1,000. Which of the following is correct?

Mary's counteroffer terminates Carl's offer of $1,500.

Hensley and Boyer have been negotiating for several months over issues related to the purchase and sale of some real estate. They draft a letter of intent which:

may or may not be an offer, depending on the exact language and whether the document indicates that the parties have reached an agreement.

If Morales and Rolfes Supply negotiate for the purchase and sale of a supply of fuel for a three-year period for Morales' business:

the contract may indicate a method for determining the price, without stating a definite price.

Acme Co. offers to buy 1000 widgets from Widget World Co. The written offer provides for 1000 at $10 per widget, to be delivered May 1. The offer has no other provisions. Widget World sends a written acceptance. However, the acceptance also states that if any claim arises under this contract, Widget World must be notified within 10 days. Acme does not object to this provision. Both parties are merchants. Which of the following best describes this situation?

A contract exists. If the additional terms are construed to be material, they are not part of the contract. If the additional terms are not material, they are part of the contract.

Vivian goes to an auction and sees a rare antique lamp that is an identical match to one she already has. At the proper time she bids on the lamp and is the highest bidder. Even though she is the highest bidder, the auctioneer refuses to accept her bid and withdraws the lamp from the auction. Can the auctioneer do that?

Unless otherwise stated, the auctioneer had the right to withdraw the item before the fall of the hammer.

David and George have a contract wherein George agrees to buy sporting goods and equipment. Since the goods are not to be delivered for several months, they left the price open. Under the UCC, which of the following will be true?

The price will be the reasonable price based on fair market value of the goods at the time of delivery.

Bob signed an agreement with Joe under which Bob agreed to purchase all the hay that Joe grew during the coming growing season. This contract will be:

enforceable as long as both parties act in good faith and Bob doesn't suddenly demand more hay than what was reasonably estimated.

Wally owns 200 acres of land. Wally offers to sell the land to Robert for $1,500 per acre. Robert replies that he does not need 200 acres of land but would like to buy 40 acres at $1,500 per acre. Wally agrees to sell but does not identify which 40 acres. Later, Wally refuses to sell any land to Robert. What is the result?

Wally wins; this agreement is too indefinite since it does not identify which 40 acres are to be sold.

Jack mails an offer to Joan that states, "I offer to sell you my car for $2000. If I don't hear from you in 10 days, I will assume you are willing to buy the car for the stated price." Jack hears nothing by the deadline and assumes he has a deal. What is the result?

Joan is not bound. Generally an offeree must say or do something to accept an offer.

A seller's form clearly states no warranty is included. The buyer's form states that the seller warrants the goods for one year. In this case:

the warranty term is a "different term," and the majority of states hold that a contract can be formed but the contradictory terms cancel each other out.

The UCC requires consideration for agreements modifying contracts for the sale of goods.

FALSE

Contracts in which one party agrees to buy all his requirements of certain goods from the other party are generally unenforceable because there is no definite amount.

FALSE

An illusory promise is not consideration.

TRUE

Contracts generally do not require bargaining that leads to an exchange between the parties.

FALSE

Courts normally require adequate consideration.

FALSE

Pastor Tom was employed by the First Church for 40 years. On Pastor Tom's retirement there was no adequate pension plan. Two months after the retirement, a wealthy parishioner, in consideration for Pastor Tom's 40 years of faithful service and for being such a "sweet" man, promised to pay him $500 per month for the rest of his life. This promise probably is not enforceable.

TRUE

What phrase is critical to the validity of a requirements contract?

"in good faith"

Zero, Inc. agreed to build Millie a storage building for $8,000. After beginning the project, Zero realized that it could not complete the job and make a profit. Zero demanded $9,500 to complete the building. Millie agreed to pay the $9,500. When the project was complete, Millie tendered $8,000 to Zero for the job. If Zero sues Millie for the remaining $1,500:

Zero will lose because there was no legal consideration to support the additional $1,500.

An unliquidated debt can be described as:

a debt in which the existence or amount is in dispute.

A promise by Derkin Restaurants to buy all of the produce it needs this next year at an established price from Elfredo's Produce would be an:

enforceable requirements contract.

Bernie owes an undisputed amount to Wilde's Heating & Air Conditioning. Which of the following is true?

If Wilde's agrees to accept less than the full amount as full payment, the agreement is not binding.

If Becky promises not to drink alcohol until she becomes a legal adult in exchange for Ben's promise of $1,000, the agreement is:

not enforceable because Becky does not have a legal right to drink alcohol.

Mary owes $3,800 on her credit card. She sends the credit card company a check for $800 with the notation "payment in full" on the check. If the credit card issuer cashes the check:

the check may be subject to a UCC exception to the general rules for accord and satisfaction cases involving checks.

If Crosby and Dash are in disagreement as to the exact amount of money that Crosby owes Dash, then they may choose to form a new agreement at a set amount. If they both perform the new agreement, their conduct would be an example of:

an accord and satisfaction.

An agreement in which a buyer agrees to buy all the goods produced by a manufacturer is known as:

an output contract

Bailey Co. and Spryt Bros. enter into a contract for the manufacture and sale of 400 lawn chairs. If both parties agree that a modification is necessary:

an agreement to rescind the contract will terminate the contractual rights of Bailey Co. and Spryt Bros. if neither of them had completed their obligations.

An agreement may violate public policy even if the agreement does not require a party to commit a crime, tort, or violate a statute.

TRUE

If a court finds as a matter of law that a clause of Superior Siding's contract was unconscionable at the time the contract was made, the court must refuse to enforce the contract.

FALSE

Roger parked his car at a garage that has a large sign at the entrance saying, "This garage is not liable for items stolen from a car." This type of notice is referred to as an exculpatory clause.

TRUE

Morality plays no part of gambling contract legality.

FALSE

Which of the following exculpatory clauses will most likely be enforceable?

An exculpatory clause that relieves a riding stable of negligence.

Which of the following is an example of an exculpatory clause?

Seller is not responsible for property damage regardless of the cause of the injury.

AAA and XXX companies are both major international conglomerates. They are negotiating a contract whereby AAA will install a computer system for XXX. One clause in the contract states that AAA will not be liable for damages caused by the negligent installation of the computer system, except that AAA warrants the system and will fix any problem for a period of two years following installation. AAA completes the installation of the computer system. XXX loads extensive amounts of information on the system, but all of it is destroyed because AAA negligently installed the memory chips. AAA fixes the memory, but XXX incurred significant expenses in recreating the lost information. XXX sues for these expenses. AAA defends with the noted clause in the contract.

AAA wins; this exculpatory clause is enforceable.

Mike owns a house in a poor area of a large city. Mike is on disability and his total monthly income is $700. A sales representative visits his home, selling a water purification system. Mike buys and signs a contract that calls for monthly payments of $500 for the next 10 years. The water system is worth no more than $1000. Mike did not understand what he was signing and thought it was a permission slip allowing the salesman to conduct a free water test to determine the number of toxins in the water. How would a court most likely describe this contract?

The contract is unenforceable because it is unconscionable.

Vernon suffers from a mental impairment due to a brain injury from a motorcycle accident. He contracts with Glena to purchase her dining room furniture. A month later, he tries to void the contract. If he is unable to return the furniture, a court will not rescind the agreement unless Vernon can show that Glena acted in bad faith.

TRUE

Pushy Pat, a persuasive salesman, talked Naive Nancy into purchasing something she didn't really need or want. Naive Nancy may rescind the contract because of undue influence.

FALSE

A party to a contract has a duty to investigate the other party's factual statements.

FALSE

Fraudulent, but not innocent, misrepresentation permits the injured party to rescind a contract.

FALSE

Contract rescission can sometimes be based upon a unilateral mistake.

TRUE

When a party to a contract makes a unilateral mistake, the contract:

generally cannot be rescinded by the mistaken party unless the contract is unconscionable or it is proven that the nonmistaken party knew of the error.

Ron, a minor, goes to the hospital for treatment of the flu. On the new-patient form Ron signs, he agrees to pay for any care or treatment he receives. When billed for the treatment:

Ron must pay for the value of the benefit he received, because medical care is a necessary.

Hannah orally agrees to sell her house to Brett for $175,000. If she delivers the deed to Brett with the expectation of payment in two weeks and he fails to pay, most courts will not enforce the contract since it was not in writing.

FALSE

ny contract involving a sale of goods of $100 or more must be in writing.

FALSE

Sweet Plantation, Inc. made a written contract with Candy, Inc. whereby Sweet Plantation agreed to supply all of Candy's sugar requirements for the next year at $.25 per pound. A dispute arose as to how much sugar Sweet is to supply. The parol evidence rule will bar Sweet's introduction of evidence concerning the intent of the requirements of Candy.

FALSE

Raymond agrees to transfer an easement right to Sandra for $1,000. This contract is within the statute of frauds and therefore needs to be in writing to be enforceable.

TRUE

Ramona orally agreed to work for Brahma, Inc. for the rest of her life for $50,000 per year. This agreement would not be enforceable since it violates the one-year rule of the statute of frauds.

FALSE

Parol evidence refers to anything (other than the written contract itself) that was said, done, or written before or as the parties signed the contract.

TRUE

Patrick owned an acre of land which was being divided into building lots. Nancy was interested in purchasing the corner lot. In a signed writing, Patrick stated "I will sell Nancy Grimes a lot on Route 70 for $5,500 cash, payable on April 30, 2009." This writing is sufficient under the statute of frauds to make the contract enforceable.

FALSE

The Uniform Commercial Code provides that, under certain circumstances, a merchant may be liable on a written contract, even though that merchant has NOT signed it.

TRUE

Either party may demand rescission of a fully executed oral contract that was required to have been in writing under the statute of frauds.

FALSE

Under the statute of frauds, the writing must: be signed by the defendant; and must state with reasonable certainty the name of each party, the subject matter of the agreement, and all of the essential terms and promises.

TRUE

Robin and Bellman, both merchants, orally agree to a contract for the sale of $5000 of accessories. Bellman, the buyer, sends to Robin, the seller, a written confirmation of the sale, which is sufficient against Bellman under the statute of frauds and which Bellman signs. Robin fails to perform the contract and does not ship out the goods. Bellman sues. This contract is:

enforceable even without Robin's signature because both parties are merchants.

In order to satisfy the statute of frauds, a writing must:

be signed by the defendant and contain the name of each party, the subject matter of the agreement, and the essential terms and promises.

Willis and Leslie orally agree to the sale of a parcel of land for $50,000: one-half payable now as a down payment; one-half payable in 30 days at the time of closing when the title will be transferred. The buyer, Willis, is to have possession immediately. Willis pays Leslie $25,000, takes possession of the land, and starts building a house. At the time of closing, Willis has made a substantial beginning on the house. However, Leslie refuses to transfer the title, claiming the oral contract is not enforceable. This contract is:

enforceable, because Willis has partially performed the oral contract and made improvements on the land.

Abby dies, and her good friend, Claire is appointed to administer Abby's estate. Abby's house was in poor condition, so Claire orally hired a contractor to make repairs. Claire also orally promised that if the estate could not pay the repair bill, he would pay it even though he does not live in the house and has no entitlement under Abby's estate. The estate does not pay the repair bill. Who can the contractor collect from, if anyone?

The contractor can collect from the estate only.

Derek and Abyan were discussing business over lunch when they agreed on the sale of a five-acre parcel of land. Since neither of them had any paper with them, Derek wrote the following on a napkin: "Abyan agrees to purchase from Derek a 5-acre parcel located at the local address of 123 105th Street, St. Joseph, Minnesota, U.S.A. for the price of $4,500 per acre. Transfer of title, payment, and possession to take place on May 1, 2008." Abyan signed the napkin. On May 1, 2008, Derek was ready to close the deal and transfer title but Abyan refused to pay the purchase price. If Derek sues Abyan for the price of the land, the most likely result will be:

Derek will win because the writing is sufficient under the statute of frauds.

Claude agrees to lease his house to Irvin for nine months, the lease to begin six months from the signing of the contract. Under the statute of frauds:

the lease is required to be in writing because of the one-year rule.

The main difference between the UCC requirement for a writing for a contract for the sale of goods and the common law is that the:

UCC does not require all the terms of the agreement to be in writing.

Renita, a merchant, has received a signed, written confirmation from Merchants, Inc. referring to goods she had not ordered. Renita should:

object to the confirmation in writing within 10 days.

Alfred orally promised to pay Robert a salary of $30,000 per year for five years and his moving expenses up to $10,000 if Robert would quit his job and come to work for him at his manufacturing plant. Robert agreed to do so, but requested a written contract. Alfred assured him that the company attorney would prepare such a contract as soon as possible, but Alfred needed Robert to start at once. Accordingly, Robert sold his house, moved his family, and commenced to work for Alfred. He was fired without cause two months later. No written contract was ever executed. Can Robert enforce Alfred's oral promise?

Maybe. Robert should go to court under the theory of promissory estoppel. Alfred made an oral promise that Robert relied upon, and the way to avoid injustice is to enforce the promise.

Scott is trying to introduce oral evidence in court to alter the terms of a written contract he had with Bonnie. Bonnie has raised the parol evidence rule as an objection to Scott's testimony. In which of the following circumstances will Scott not be able to introduce the oral evidence?

The contract has an integration clause in it and Scott's point of contention is covered in detail in the contract, although not to his favor.

Under a contract for the sale of land, the statute of frauds:

requires the defendant to sign the agreement.

When a contract falls within the statute of frauds but is not reduced to a writing, the contract is:

unenforceable

Most contracts are discharged by mutual agreement.

FALSE

Irving is shopping at the local Computers R Us store and agrees to buy a powerful computer for his home "on the condition of personal satisfaction." If Irving takes the computer back to the store for no reason other than that he doesn't like the computer, then the seller will have no choice but to accept the computer and terminate the contract.

FALSE

The legal right to sue for a breach of contract is subject to a statute of limitations.

TRUE

Ramon purchased 5,000 pounds of coffee from Quick Jump Coffee. The coffee was to be delivered on September 1. Since the contract included a date for performance, time is of the essence and the delivery date is strictly enforceable.

FALSE

Jennifer substantially performs her service contract with Gretchen. Due to Jennifer's failure to render complete performance, Gretchen:

is required to pay the full contract price, minus the value of Jennifer's defective performance.

Mary contracted to buy 100 table lamps. Under the terms of the agreement, Mary is to pay for the lamps upon delivery. This is an example of:

a concurrent condition.

Jackie hires Charles to lay new carpet in her bedroom. Charles does such a bad job, that the only way to fix the carpet is to start over and relay the carpet. Which of the following best describes this situation?

This is a material breach. Jackie owes nothing to Charles.

Dana hires Paris to paint a portrait of her poodle, "Mack." The painting is to be done to Dana's personal satisfaction. Upon completion of the painting, which of the following will be true?

Dana may refuse to accept the painting if she really does not like it.

A court:

may refuse to enforce an express condition intended by the parties if the court determines it is unfair and harmful to the general public.

If a condition does not occur:

one party will probably be discharged without performing.

Injunctions are commonly used by courts to force employees to complete their contractual obligations with their employers.

FALSE

Dr. Gonzalez ordered specialized surgical equipment from Physician's Supply Co., but his order was not delivered by the agreed date. Gonzalez is under no obligation to minimize damages since the contract was breached by Physician's Supply, not Gonzalez.

FALSE

Liquidated damages are awarded to parties who have experienced an injury to their legal rights but have no actual loss.

FALSE

Lucky, a contractor, enters into a contract with Penny, a homeowner, to remodel her kitchen. The contract provides a specific completion date. The contract provides that if Lucky does not have the job finished by the date, Penny may deduct $100 per day from the contract price until the job is finished. This is an example of liquidated damages.

TRUE

Most courts hold that a seller of goods is not entitled to consequential damages.

TRUE

Specific performance is available when the subject matter of the contract is unique.

TRUE

Banner enters into a contract with Sylvia to buy her house for $150,000. Sylvia decides later not to sell because she is so emotionally attached to the house. Banner insists that he is entitled to the house. Banner can successfully sue for specific performance.

TRUE

A contract clause which specifies the amount of damages to be paid in the event of a breach is called:

a liquidated damages clause

Costs to rent a vehicle for a short period of time after an auto dealer fails to deliver a purchased vehicle would be:

incidental damages.

The first step a court takes in choosing a remedy is to determine:

what interest it is trying to protect.

In a promissory estoppel case, a court will generally award:

only reliance damages.

Generally, reasonable liquidated damage clauses will be enforced:

when actual damages are difficult to determine.

Under the UCC, if a seller of goods breaches the contract, the buyer:

may "cover" and then receive the difference between the original contract price and the "cover" price.

The remedy of reformation:

can be used to correct mistakes in the original contract

Mercury Motors inadvertently mixes up a work order on Peter's car. Peter brought the car in to have the tires rotated. Mercury tuned up the motor by mistake, conferring a benefit on Peter. If Mercury Motors insists that Peter pay for the price of the tune-up, Mercury Motors:

cannot recover its expectation interest because there was no enforceable agreement.

In breach of the partnership agreement, Trimble, a partner in the partnership of Morris, Newt, and Oppie, Ltd. quits the partnership and goes to work for a competitor. The former partners may ask the court for:

an injunction to prevent Trimble from working in competition with the former partners.

All Seasons, Inc. ordered $5,000 worth of Christmas decorations from Santa, Inc. The shipment of decorations was to arrive no later than October 1, in time for the Christmas season. The shipment did not arrive until December 1. In spite of the delay, All Seasons covered a third of the order through other suppliers, but had to pay 15% more than the price under contract with Santa, Inc. As a further result of the delay, All Seasons' sales were down 25%. All Seasons can recover:

compensatory damages and consequential damages.

Solomon breaches his contract with Neal to purchase the 500 pairs of socks he had promised to buy. Neal is able to sell the 500 pairs to Renny for a much lower amount. Neal then sues Solomon for damages. Neal will be able to recover:

the difference between Solomon's contract price and the amount paid by Renny.

Which of the following statements is incorrect concerning liquidated damages?

Liquidated damages are enforceable even if the amount is considered to be a penalty on the breaching party.

Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days. The parties negotiated and meant to say in the written agreement, delivery in 50 days. If the two cannot settle this dispute, and Archie still wants to deliver the champagne, then Archie should sue for the remedy of:

Reformation

Reformation is:

an equitable remedy

Fred purchased a Cheapp Lawnmower because the Cheapp Company salesperson intentionally misled him by assuring him that the mower was self-propelled, mulched, and had a five-year unlimited manufacturer's warranty. When Fred finds out that his new Cheapp Lawnmower is not self-propelled, does not mulch, and has a 90-day warranty, he may successfully sue for:

restitution and possibly punitive damages

If a court awards nominal damages it will generally:

award very little money.

Compensatory damages are typically assessed against the breaching party:

to put the non-breaching party in the position it would have been in if the contract hadn't been breached.

The UCC does not apply to contracts for the sale of goods if the value of the goods is less than $500.

FALSE

If the seller has made a substantial beginning in manufacturing custom-ordered goods, then an oral contract may be enforceable regardless of the amount of money involved in the contract.

TRUE

Megan agrees to sell Neff her quartz watch but they do not specify a price. In such a case, the court would not enforce the agreement because all of the essential terms are not present.

FALSE

Newt, a gun dealer, offers to sell a rare civil war musket to Rush, another dealer, for "$15,000, insurance and shipping paid by buyer." Rush responds, "I accept. Insurance and shipping costs divided equally between seller and buyer." The parties:

have a contract and, in the majority of states, the different terms will cancel each other out.

If Edmund and Kaylin have a writing mistakenly showing a sale and purchase of goods for $10,000 when the price should have been $1,000, a court will:

enforce the agreement, relying on oral testimony to determine the correct price.

Harriett raises and sells hippos. In order to keep her hippos happy and healthy, she feeds them Hippo Chow, which she buys from the local pet store. Under the UCC, Harriett is:

a merchant of hippos, but not of Hippo Chow.

Under the UCC statute of frauds, the writing for a sale of goods must:

state quantity.

ABC Siding, Inc. manufactures aluminum siding. ABC enters into a contract to deliver siding to Slippery Siding, Ltd., a retailer of aluminum siding. The written agreement insists that all modifications to the agreement be in writing and signed by both parties. This prohibition against oral modifications is:

valid regardless of whether the clause is signed separately.

Please allow access to your computer’s microphone to use Voice Recording.

Having trouble? Click here for help.

We can’t access your microphone!

Click the icon above to update your browser permissions above and try again

Example:

Reload the page to try again!

Reload

Press Cmd-0 to reset your zoom

Press Ctrl-0 to reset your zoom

It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.

Please upgrade Flash or install Chrome
to use Voice Recording.

For more help, see our troubleshooting page.

Your microphone is muted

For help fixing this issue, see this FAQ.

Star this term

You can study starred terms together

NEW! Voice Recording

Create Set