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Terms in this set (49)
The ___ rule states that the first bona fide assignee for value to notify the debtor of the assignment prevails, regardless of whether he is the first person to receive the assignment in point of time.
English rule regarding multiple assignments
T/F: The assignee of a contract is not subject to defenses that the obligor may raise against the assignor.
-The assignee takes the assignment of the contractual right subject to all the defenses that the obligor could raise against the assignor.
T/F: Future accounts or earnings, not founded on existing contracts, are assignable.
False-merely speculative debt has no real existence
T/F: As a general rule, one may assign contractual rights, but may not assign contractual duties.
True-delegate contractual duties
T/F: An obligor is the person who assigns his rights under a contract to another.
True- Someone who owes a duty under a contract is an obligor.
T/F: When the rights of a third party beneficiary have vested, the parties to the contact may not change it without his/her consent
True- when a third-party beneficiary has accepted, adopted, or acted
upon the agreement, the parties may not change it without his/her
T/F: Third party incidental beneficiaries may not sue to enforce any of the contractual provisions.
T/F: A life insurance contract is an example of a third party creditor beneficiary contractual situation
False-Third party Donee beneficiary
T/F: The parol evidence rule prevents all oral testimony concerning a contract from being introduced at a trial.
False- only oral testimony that contradicts the clear, unambiguous
T/F: If a contract is impossible to perform within one year of the date of its making it is within the statute of frauds.
True-Courts hold that only contracts on which performance within a year from the
date of making is impossible fall within the statute (required to be in writing)
T/F: A license to hunt on real estate is outside the statute of frauds.
True-no because permission not a sale
T/F: Mutual promises to marry or engagement contracts are outside the statute of frauds.
T/F: A primary promise to answer for the debt of another does not fall within the statute of frauds.
True - because primary promise does not require writing and statute has to be written
The statute of frauds renders oral agreements that fall within its ambit
-the law requires that certain contracts must be in writing in order to be enforceable by a Court
_______requires certain types of contracts be in writing or that there be a written memorandum concerning the contact, signed by the party being sued.
Statute of frauds
T/F: Noncompete clause in contracts are never enforced in North Carolina as they are considered contracts in restraint of trade
False-they are enforced but must be very specific to be upheld
T/F: In North Carolina the penalty for usuary is forfeiture of the amount of interest in excess of the legal rate
False- Forfeiture of the entire amount of interest charged.Preferred approach and the approach used in NC
T/F: A party does not have a duty to mitigate his damages when there is a contractual breach.
False- party may have a duty to take positive steps on order to mitigate
______ damages may be awarded in civil when there is malice or vindictive behavior shown on the part of the defendant.
Punitive -Awarded in civil cases when there is malice or
vindictive behavior shown on the part of the defendant
T/F: Compensatory damages may not be speculative or hypothetical
T/F: As a general rule, the doctrine of anticipatory repudiation applies only to executed bilateral contracts.
True -basic definition
T/F: If a breach of contract is material or total, the innocent party may resind the agreement and sue for damages.
-A breach of a contract occurs when a party fails to perform one of the duties or conditions of the agreement. If the breach is material or total, the innocent party may rescind the agreement and sue for damages
T/F: Partial payment of a debt will toll the statute of limitation
True- A partial payment on a debt will toll the statue of limitations and it will begin running from the date of the partial payment
T/F: As a general rule, so-called acts of God rendering performance impossible will allow one to escape liability for damages
False- SO called acts of God, or even unavoidable accidents rendering performance impossible will not allow one to escape liability for damages
T/F: The doctrine of substantial performance applies only when a lack of full performance is intentional.
False-could have accidentally painted room a different blue still get price reduced if taken to court
T/F: When the parties under a contract are required to perform simultaneously, the performance are conditional.
Jones agreed orally with Smith to sell Smith a house for $200,000. Smith sent Jones a signed agreement and a down payment of $20,000. Jones did not sign the agreement, but allowed Smith to move into the house. Before closing, jones refused to go through with the sale. Smith sued Jones to compel specific performance.
Smith will win because Smith made a down payment, took possession and
On January 1, 2015 Adams, the manager for Have a Nice Day LLC, a mortuary offers Baker a job in their crematorium for the remainder of her natural born life at a salary of $600 per week. Baker agrees to accept the position and the two parties shake hands on the agreement. Baker returns to begin work the next day. After 2 months, a dispute arises between the two over the dress code for mortuary workers. Adams gets angry and tells Baker that, as far as he's concerned, the parties never had a real contract, she can just go home, and he isn't paying any of her salary. Baker sues Adams to enforce the contract and recover the money owed to her.
Baker will win because the parties entered into a valid contract on January 1,
Eddie Grip and Sam Scoop enter into an agreement that requires them to transfer stolen building equipment, knowing them to be stolen, in exchange for $50,000 in counterfeit currency that Sam will attempt to spend in various discount stores in North Carolina. This contract is:
-A contract having no legal force or binding effect
Jane Beauty signs a contract with Jack "The Ripper", an unlicensed physician, to perform plastic surgery - medical procedure. At the time of signing Jane knows that Jack is an unlicensed physician and that surgery is a medical procedure. This contract is enforceable by:
Joe pays Best Electronics $1,050.00 for a new computer. For the purpose of the UCC, this is
U.S. Technologies, Inc., contracts to sell six computers to Office Leasing, which contracts to lease the computers to First National Bank. Nancy, the owner of U.S. Technologies gives a computer to Frank. Article 2 of the UCC is generally held to apply to
The sale only
James Jones agrees to sell a pump on his land to his neighbor, Louis. If the pump can be removed by disconnecting two pipes, its sale will likely be governed by:
-because it can be removed without physically harming the land.
Other things attached to realty but capable of severance
without material harm to the land is considered to be
goods regardless of whom severs them
Ted and Larnont are involved in a dispute over a sales contract involving shoes. Ted
argues that Larnont should be subject to special business standards because Larnont is a merchant by assessing whether Larnont
a. Employed, in the deal with Ted, others who have the status of a merchant.
b. Is a person who deals in shoes.
c. Is a person who, by occupation, holds himself out as having knowledge or skill unique to the shoes involved in the transaction.
All of the above in word who is a merchant (
*this is the answer)
Jane and Susan enter into a contract for the sale of goods that does not specify the payments terms. payment:
Will be due at the time and place where the buyer is to receive the goods.
-When the parties do not specify payment terms, payment
is due at the time and place at which the buyer is to
receive the goods
Bill and Will form a contract for the sale of goods in which no mention is made of how
the goods are to be delivered. In general, the UCC will require that the delivery take place at:
The sellers place of business
-When no delivery terms are specified the buyer takes delivery at the seller's place of business, or if the seller has not place of business, the seller's residence
Art Corporation offers to buy from Faber Pencil Co. 100,000 pencils for a total of $10,000. Faber can accept the offer by:
Promising to ship the pencils and promptly shipping the pencils
- UCC permits acceptance of an offer to buy goods for current or prompt shipment by either (a) a prompt promise to ship, or (b) prompt shipment of conforming goods.
Smith is the offeror and Jones is the offeree under a unilateral sales contract for goods. If
Smith is not notified of Jones's performance within a reasonable time, under the UCC Smith may
Treat the offer as having lapsed
-When there is a unilateral offer the UCC states that when
the beginning of the performance is a reasonable mode of
acceptance, an offeror who is not notified of acceptance
within a reasonable time may treat the offer as having
lapsed before acceptance
Adams and Jefferson disagree about the way in which an ambiguous phrase in their contract can be interpreted. The contract is governed by the UCC. In the suit between the parties to construe the contract, a court may accept oral (parol) evidence of:
Consistent additional terms Parol evidence rule
Tim enters into a contract with Ace Credit Co. governed by the UCC. If a court determines that the contract is unconscionable, it may:
a. Enforce the contract without unconscionable clause
b. Limit the application of an unconscionable clause to avoid an unconscionable result.
c. Refuse to enforce the contract.
d. ****Any of the above unconscionability (this is the answer)
John, the owner of a pharmaceutical company, agrees to sell Joe ten gross of 100-capsule bottles of vitamin C. Before any interest in specific bottles of the vitamin can pass from John to Joe, the vitamins must be:
In existence and identified as the specific goods designated in the contract
-Identification: Before any interest in specific goods can pass from seller to buyer, 2 conditions must prevail:
1. The goods must be in existence
2. They must be identified as the specific goods designated in the contract
Mountain Bikes, Inc., and Beta Bicycle Store contract for a sale of seventy bicycles from
Mountain to Beta. Unless the contract states otherwise, it is assumed that this is:
A shipment contract
- In a Shipment Contract the seller is required only to deliver the goods to the hands of the carrier, and title passes to the buyer at the time and place of shipment. Generally, all contracts are assumed to be shipment contracts if nothing to the contrary is stated in the contract.
Alpha Computers, Inc., and Omega Electronics contract for a sale of thirty hard drives from Alpha to Omega. The hard drives are stored in City Warehouse. Under the contract, Alpha is required to give Omega a warehouse receipt for the goods, which Omega will pick up. Title to the goods passes to Omega
When Omega picks up the goods when title passes
- once goods exist and are identified, title passes to the buyer at the time and place the seller performs the physical delivery of the good.
Fran leaves a pair of recently purchased shoes at a shoe store so that they might be dyed for a wedding. The shoe store accidentally sells Fran's shoes to Jan, who has no Knowledge that the shoes belong to someone else. Fran can recover:
The shoe store for the purchase price of the shoes but cannot recover from Jan.
Lee purchases a bicycle from his brother, Kim, who is a used car dealer. Kim agrees to
keep the bike at his house until Lee picks it up. A tree falls on Kims garage and destroys the bike. The loss is suffered by:
Ron orders a shipment of black coats from Burley Clothing. Burley ships blue coats instead. Ron rejects the coats, but they are destroyed in a fire on their return to Burley. The loss is suffered by:
Burley because Ron never accepted the blue coats.
Alpha Electronics accepts a shipment of computer monitors from Best Screens. When Alpha later discovers a defect in the monitors, Alpha revokes acceptance. If the monitors are destroyed before they are returned to Best, the loss suffered by:
-revocation of acceptance has right to revoke not effective until seller is notified
Retail Stores Inc., agrees to buy goods from Consumer Products Corporation. Retail Stores may obtain insurance coverage for the goods:
Before, at the time, and after the risk of loss has passed
ABC Company orders plastic game pieces from Best Plastics Inc., If some of the pieces conform and some do not conform, to the terms of the contract, ABC:
May accept part of the shipment and reject part.
-If some of the goods conform to the contract the buyer can keep the conforming goods and reject
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