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Business Law pratice
Terms in this set (71)
Ordinarily, one can agree to a bargain without knowing that it exists.
Painting a garage can constitute "something of legally sufficient value."
Contracting parties are bound only by terms that can be objectively inferred from promises made.
Acceptance is timely if it is effective before the offer is terminated.
Domestic Gas Company offers to sell Energy Ltd. a certain quantity of liquefied natural gas. If Energy sends an acceptance via Domestic's authorized mode of communication, it will be effective when it is
words and actions
Fresh Agro Inc. offers to deliver produce to Growers' Market for a certain price. Fresh's intent to extend an offer is determined by reference to Fresh's
Under the objective theory of contracts, a contract is not enforceable without a clearly defined objective.
Courts normally do not enforce the terms of click-on agreements.
Not question the adequacy of the consideration
EcoEnergy LLC files a suit against Fiber Optics Inc., claiming that the consideration for their contract is inadequate—that the plaintiff will not realize sufficient financial benefit from the deal to make it worthwhile. Most likely, the court will
Business Center Inc. and Catering LLC enter into a contract. Later, they agree to rescind it and enter into a new contract. If the first contract was subject to a preexisting duty, the new contract will most likely be
neither party has begun to perform.
Lumber LLC files a suit against Mill Company to enforce an oral contract that would otherwise be unenforceable under the Statute of Frauds. The court could enforce such a contract if
A contract provision that deprives one party of the benefits of the agreement may seem unfair but a court is not likely to consider it unconscionable.
A minor can enter into any contract an adult can, without exception.
A landlord can avoid liability for injuries that occur on rental property by including an exculpatory clause in the lease.
valid because it is part of a sale of an ongoing business.
Reed agrees to sell his Sports Equipment store to Taylor. As part of the sale, Reed promises not to open a similar, competing store anywhere. This promise is most likely
A party to a contract who has no reason to know that the contract is illegal can often obtain restitution on a partially executed contract.
At Mattress Store, Nate signs a contract to buy bedroom furniture. The contract sets a schedule of $500 monthly payments, subject to a late fee of 15 percent. Nate finds the language of the contract difficult to understand. This is most likely
Ray agrees to buy one hundred pounds of almonds from Sol. To be enforceable, the agreement must be in writing if the almonds cost at least
Efron understood the legal consequences.
Intoxicated, Efron enters a contract for the sale of his business, Freight Dispatch, to Gretel for less than its market value. This contract is enforceable if, at the time,
Generally neither party to an illegal contract can sue for breach.
The standard measure of compensatory damages is the value of the breaching party's actual performance.
reform the contract to reflect the parties' true intentions.
Jill enters into a contract to buy a certain office building from Kim. At the closing, Kim refuses to transfer title. In a suit for breach, Jill should seek specific performance to.
Bottling Company enters into a contract with Chug's Brewery to provide certain bottling and delivery services. Before Bottling starts to work, the market price rises for the fuel for glass ovens. Bottling tells Chug's that due to the added cost it will not perform their deal. Bottling's contractual obligation to Chug's is
When a seller breaches a contract for a sale of goods, knowing the buyer plans to resell the goods, the buyer can recover the lost profits from the planned resale.
A court will grant specific performance as a remedy only when the legal remedy is adequate.
In contract law, damages compensate for harm suffered as a result of another's wrongful act, not for the loss of a bargain.
Rita contracts to work for Social Media Corporation (SMC) during April for $4,500. On March 31, SMC cancels the contract. Rita declines a similar job with Tech Talk, Inc., which would have paid $3,500. Rita files a suit against SMC. As compensatory damages, Rita can recover
Music Masters Inc. enters into a contract to pay Nagi for a dozen original songs. Nagi transfers the right to payment under the contract to Omni Artists. After the transfer, Nagi's contract right to the payment is
In most states, a person whose employment is wrongfully terminated has no duty to take a similar job if one is available.
A seller who places goods at the disposal of a buyer has tendered delivery but cannot yet demand payment.
the concepts of identification and risk of loss.
In a sale of oranges from Citrus Farm to Juice Factory Inc. to be delivered after the harvest, a fire destroys the fruit before it is picked. Under the UCC, the rights and liabilities of Citrus and Juice in this circumstance are generally determined by
Life Products Inc. enters into a contract to sell medical supplies to Med Clinic, which later sells some of the items to Nina, a patient and consumer. Article 2 of the UCC applies to
If a sales contract prohibits any changes unless they are in a signed writing, then only those changes agreed to in a signed writing are enforceable.
In a sales contract, the passage of risk of loss from a seller to a buyer gives the buyer the right to insure the goods and the right to recover from third parties who damage them.
When a sales contract contemplates shipment of the goods but does not specify the arrangements, either party can make those arrangements.
April, when the calves are conceived.
Beef, Inc. raises calves to sell. Beef breeds its cows in April, and the cows calve in February of the following year. In January, Cold Cuts Inc. contracts with Beef to buy fifty calves. Identification takes place in
A contract for a sale of natural gas is a contract for a sale for goods.
Under the United Nations Convention on Contracts for the International Sale of Goods, when an acceptance to a contract includes terms additional to those in the offer, the terms automatically become part of the deal
To the extent that it has not been modified by the UCC, the common law of contracts applies to sales contracts.
the new terms of the acceptance.
Rice Farm Corporation offers to sell Sushi Restaurants, Inc., five hundred bushels of rice. Sushi responds, "We agree to buy five hundred bushels only if the rice is Grade A quality." Without more, their contract is formed according to
When the goods delivered are not as promised, the measure of recovery in the buyer's suit for damages is the difference between the value of the goods as accepted and the value if they had been delivered as warranted.
resell the goods and recover any damages from In-Flo.
H2O Company contracts to sell pumps, tanks, and water storage systems to In-Flo Irrigation, Inc. Before the goods are delivered, In-Flo indicates that it will not be able to pay. H2O can
Eventide learned of the breach.
Bayou Boats, Inc., contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide's recovery is measured at the time
Under a shipment contract for the sale of a certain quantity of solar panels, the seller is required to deliver conforming goods at a particular destination.
If a contract states that repair or replacement is the exclusive remedy, then it is, even if repair or replacement is not possible.
in every way
Business Rents LLC and Cartage Trucking Inc. enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, Business Rents must ship or tender lifts to Cartage that, with regard to the contract specifications, conform
Brass Instruments, Inc., sells seventy-six trombones to Community Band. To avoid liability for most implied warranties, Brass should state in writing that the trombones are sold
Under the perfect tender rule, a buyer or lessee has the right to insist on goods that conform to their contract in every detail.
fit for the ordinary purpose for which such goods are used.
Home Redo, Inc., and Ivy enter into a contract for a sale of cabinets and countertops. Home Redo, a merchant who deals in goods of the kind sold, notes that its goods come with an implied warranty of merchantability. Under the UCC, this means that the goods are reasonably
applies only to Beef Burgers.
Beef Burgers, Inc. contracts to buy five hundred head of cattle from Cattle Ranch. Before the seller delivers, an outbreak of disease causes a quarantine of the ranch. In this circumstance, the perfect tender rule
an ordinary holder.
Len makes a gift of a check to Millie who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Millie is
Negotiating bearer instruments requires both indorsement and delivery because the use of bearer instruments involves more risk through loss or theft.
When a note is lost, impaired, or destroyed, the owner loses the right to be paid its value, even if its existence can be proved with a copy.
To determine the value of an instrument, it is necessary to know when the maker, drawer, or acceptor is required to pay.
nonnegotiable, because there is no specific person identified.
Fred has six nieces, ages five to sixteen. He writes an order instrument for $50 that states "Pay to the order of my niece." The order instrument is
an ordinary holder.
Kris transfers a note, on which Liu is the maker, to Mia, who takes it for value and in good faith. Mia knows that Kris breached the contract underlying the note, giving Liu a defense against payment. With respect to this note, Mia is
If Elin delivers a check payable to her order to First Bank without signing it and receives cash, the transfer is an assignment, not a negotiation.
The lack or failure of consideration is a personal defense and can be used to avoid payment to an ordinary holder, an HDC, and a holder through an HDC.
If an instrument is acquired as part of a corporate purchase of assets, the holder will have only the rights of an ordinary holder.
nonnegotiable, because it does not include an express promise to pay.
Karen writes on a piece of paper, "I owe you $600," signs it, and gives it to Lou. This instrument is
A bank is not obligated to pay an uncertified check presented for payment more than six months from its date.
Dan signs a check "pay to the order of Eton" drawn on Dan's account in Fidelity Bank and dates the check "May 1." Eton presents the check to the bank for payment on December 15. This is
If any part of a commercial electronic fund transfer is covered by the Electronic Fund Transfer Act, the entire transaction is excluded from UCC Article 4A.
The destruction of an original check after the creation of a substitute check prevents the check from being paid twice.
Mara has a checking account with North Bank. Mara signs a check "payable to Ovid" drawn on Mara's account. North Bank is
A bank must re-credit a customer's account when the bank pays a check on which the drawer's signature is forged.
can charge Chad's account for $500.
Chad writes Dina an uncertified check for $500 drawn on Chad's account at Employees Credit Union. Seven months later, Dina presents the check for payment. The credit union pays the check in good faith without consulting Chad. The credit union
The contractual rights and duties of the bank and the customer depend on the nature of the transaction.
the bank, which can recover from Ethel
Curt issues a check payable to Discount Mart. Ethel, Discount's cashier, forges the store's indorsement and deposits the check in her bank account. Curt's bank, Farmers Bank, pays the check. Curt can recover from
dismiss the debtor's petition.
In a Chapter 7 bankruptcy, on a finding that the use of Chapter 7 would constitute substantial abuse, the court is most likely to
Construction Company has a claim against Diners Café to satisfy a debt that takes priority over other claims against the same property. This is
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