BUAD 260 MC Final

Debra, an accountant, contracts to sell her furniture to Dwight for $1,000 by a written agreement signed by both parties. The written agreement states that the place of delivery is to be Debra's residence. Though she notifies Dwight that the furniture is available to pick up, he delays in picking it up for several days; in the interim, the furniture is stolen from Debra's residence through no fault of Debra's. This is the first and only time Debra has attempted to sell used furniture. Which of the following statements is/are correct? I. Debra may recover the $1,000 purchase price from Dwight. II. When Debra tendered the goods to Dwight, the risk of loss passed to him. III. Debra is not a merchant.

All

Which of the following statements, concerning contracts entered into by intoxicated persons, is/are true? I. A person may avoid any contract that he enters into if the other party has reason to know that the person, because of his intoxication, is unable to understand the nature and consequences of his actions or unable to act in a reasonable manner. II. Contracts entered into by intoxicated persons are generally voidable. III. Contracts entered into by intoxicated persons generally may be ratified when the intoxicated person regains her capacity. IV. Intoxicated persons are usually liable for necessaries furnished to them during their incapacity.

All

A contingency understood but not expressed by the parties is a(n) __________. a. express condition b. implied-in-fact condition c. implied-in-law condition d. concurrent condition e. condition precedent

B

A(n) _______ is an agreement between the parties to terminate their respective duties under the contract. a. objective impossibility b. mutual rescission c. tender d. condition subsequent e. frustration of purpose

B

A(n) _________ is an affirmation of fact or promise about the goods, which either consists of a description or sample of the goods and which becomes part of the basis of the bargain. a. warranty of title b. express warranty c. implied warranty d. warranty of merchantability e. warranty of fitness for a particular purpose

B

All of the following are methods of discharging a contractual duty except _____. a. modification b. breach c. novation d. impossibility e. frustration of purpose

B

All of the following are necessary steps to arrive at the injured party's total compensatory damages except: a. Add the loss of value to the injured party caused by the other party's failure to perform or deficient performance. b. Add the loss or costs the injured party avoids by not having to perform. c. Add allowable incidental damages. d. Add allowable consequential damages.

B

_________ is/are contract damages placing the injured party in as good a position as he would have been had the contract not been made. a. Compensatory damages b. Reliance damages c. Punitive damages d. Specific performance e. Liquidated damages

B

A(n) __________ is a provision excusing one party from fault or liability. a. usury statute b. Sunday statute c. exculpatory clause d. covenant not to compete

C

Brown Co. and ANM Industries enter into an oral contract, which provides that ANM will deliver 12,000 shirts at $6 per shirt. Brown sends a letter to ANM acknowledging the agreement. The letter is signed by Brown's president, contains the quantity term but not the price, and is mailed to ANM's vice president for sales. Which of the following statements is/are correct? I. Brown is bound by the contract once its authorized agent signs the letter. II.ANM cannot raise the statute of frauds as a defense if ANM does not object in writing to Brown's written acknowledgment within ten days of receiving Brown's written acknowledgment. a. I only b. II only c. Both I and II d. Neither I and II

C

In a __________, risk of loss is on the buyer or agent, who has title until she revests it to the seller by returning the goods. I. sale on approval II. sale or return III. consignment a. I and II only b. I and III only c. II and III only d. II only e. I, II, and III

C

Which of the following offers, for the purchase of goods, will likely fail for indefiniteness under the UCC? a. An offer by a buyer to purchase the entire output of a seller over a stated period. b. An offer by a buyer to purchase all of the goods from a seller that the buyer requires over a stated period. c. An offer by a buyer to purchase an unspecified quantity of goods from a seller for a specified price. d. An offer by a buyer to purchase a specified quantity of goods from a seller for an unspecified price.-mu

C

Which of the following promises or agreements do not have to be in writing to be enforceable? a. An agreement upon consideration of marriage. b. An agreement to transfer an interest in land. c. An executor's promise to pay the estate's debts out of estate funds. d. An agreement to sell goods priced at $600. e. A suretyship promise to answer for the debts of another.

C

_________ is an offer by one party—who is ready, willing, and able to perform—to the other party to perform his obligation according to the terms of the contract. a. Objective impossibility b. Mutual rescission c. Tender d. Condition subsequent e. Frustration of purpose

C

__________ is/are damages designed to punish the defendant and thus discourage him, and others, for similar wrongful conduct. They are generally not recoverable for breach of contract. a. Compensatory damages b. Reliance damages c. Punitive damages d. Specific performance e. Liquidated damages

C

A court, that follows the predominate purpose test, would likely conclude that the UCC applies to which of the following transactions? a. An attorney prepares a will for a client. The client pays the attorney $500. b. A CPA prepares a tax return for a client. The client pays the CPA $250. c. Jim washes Frank's car. Frank pays Jim $20. d. A carpet retailer delivers and installs carpeting for a customer. The customer pays the carpet retailer $3,000 for the carpeting and installation. e. A plumber repairs a pipe for a customer. The customer pays the plumber $125.

D

A(n) _________ is a warranty that goods are fit for a stated purpose provided that the seller selects the product knowing the buyer's intended use and that the buyer is relying on the seller's judgment. a. warranty of title b. express warranty c. warranty of merchantability d. warranty of fitness for a particular purpose

D

All of the following are methods of discharging a contractual duty except ______. a. mutual rescission b. tender of performance c. accord and satisfaction d. delegation e. novation

D

Which of the following agreements do not have to be in writing to be enforceable? a. An agreement which cannot be performed within one year. b. An executor's promise to pay the estate debts of another out of her own funds. c. An agreement to transfer an interest in land. d. An agreement to sell goods priced at $350. e. A suretyship promise to answer for the duties of another.

D

_________ is/are a court decree ordering the breaching party to render the promised performance. a. Compensatory damages b. Reliance damages c. Punitive damages d. Specific performance e. Liquidated damages

D

A __________ is an event that terminates a duty of performance. a. implied-in-fact condition b. implied-in-law condition c. concurrent condition d. condition precedent e. condition subsequent

E

A(n) ___________ is an agreement to refrain from entering into a competing trade, profession, or business. a. usury statute b. Sunday statute c. exculpatory clause d. unconscionable contract e. covenant not to compete

E

Generally, you may assign rights unless _________________________. I. the assignment is prohibited in the contract II. the assignment is prohibited by law III. the assignment will result in a substantial change (e.g., unique personal service) a. I and II only b. II and III only c. I and III only d. II only e. I, II, and III

E

_______ is/are reasonable damages agreed to in advance by the parties to the contract. a. Compensatory damages b. Reliance damages c. Punitive damages d. Specific performance e. Liquidated damages

E

Which of the following statements, concerning duties of principals to agents, is (are) correct? I. A principal must compensate the agent as specified in the contract, or for the reasonable value of services provided, if no amount is specified. II. A principal is under a duty to reimburse the agent for authorized payments the agent makes on the principal's behalf and for authorized expenses the agent incurs. III. If the principal should realize that the agent is unaware of certain risks of the agency, the principal must eliminate those risks. IV. When a principal is an employer, he is under no duty to provide his employees with reasonably safe conditions of employment.

I

Sue brings her stereo for repair to Louise, a merchant who also sells used stereo equipment. Frank purchases Sue's stereo from Louise in good faith and in the ordinary course of business. Which of the following statements is/are correct? I. The UCC will protect the rights of Frank and consider him the legal owner of the stereo. II. Sue has no recourse against Frank. III. Sue has no recourse against Louise.

I and II

Which of the following statements, concerning the parol evidence rule, is/are true? I. The parol evidence rule excludes inconsistent prior contemporaneous oral and written agreements not incorporated into an integrated contract. II. Parol evidence is not admissible to show that there is a condition precedent to a contract's coming into existence. III. Parol evidence is admissible to show that the parties used words in a nontraditional manner or spoke in code. IV. Parol evidence is not admissible to prove a mistake in reducing the terms of an oral agreement to writing

I and III

Which of the following statements, regarding third-party beneficiary contracts, is (are) true? I. The promisee can also enforce the contract (sue the promisor). II. Incidental (unnamed) beneficiaries have contract rights. III. The promisor can use any defense he has against the promisee against the beneficiary. IV. The promisor and promisee of a third-party beneficiary contract can always modify their contract to the detriment of the intended beneficial

I and III

Which of the following statements, regarding assignments, is (are) true? I. An assignment is ineffective if the assignment would significantly change the nature or extent of the obligor's duty. II. Assignments must always be in writing to be valid. III. The assignee must give consideration to have a valid assignment. IV. If the assignee gives consideration, the assignor may not revoke the assignment without the assignee's consent.

I and IV

Which of the following statements, regarding assignments, is (are) true? I. When a right is validly assigned, the assignee owns the right, and the obligor is bound. II. An assignee takes rights under the contract subject to any defenses that the obligor has against the assignor. III. The obligor must receive notice for the assignment to be valid. IV. In general, where there are successive assignments of the same right, the first irrevocable assignee prevails.

I, II and IV

Which of the following statements, concerning minor's contracts, is/are true? I.A minor's contact is voidable at the minor's option. II.A minor may generally disaffirm a contract any time before reaching the age of majority. III. A minor may generally disaffirm a contract within a reasonable time after reaching the age of majority so long as she has not ratified the contract. IV. A minor has the option of ratifying a contract after reaching the age of majority. V. Ratification, once effected by the former minor upon reaching the age of majority, can later be withdrawn. VI. Contractual incapacity does not excuse a minor from an obligation to pay for necessaries that suitably and reasonably supply his personal needs.

I, II, III, IV and VI

Which of the following statements, pertaining to types of property and governing contract law, is/are true? I. Land is an example of real property. II. A ladder is an example of a good. III. Contracts involving the sale of intangible property are governed by the UCC. IV. Contracts involving the sale of tangible personal property are governed by the UCC. V. A lawnmower is an example of a good.

I, II, IV and V

Jim, a thief, steals a car from Ron. Later, Jim sells the car to Bill, a good faith purchaser, for $15,000. Which of the following statements is/are correct? I. Jim acquired void title when he stole the car. II. Bill acquired voidable title when he purchased the car from Jim. III. In a lawsuit between Ron and Bill involving the right to the car, Ron will win because he has legal title to the car. IV. Bill's only recourse is against Jim for breach of warranty of title.

I, III and IV

Which of the following statements, pertaining to types of property and governing contract law, is/are true? I. A house is an example of real property. II. Contracts involving the sale of land are governed by the UCC. III. A car is a good. IV. Contracts involving the sale of personal services are governed by the common law. V. A trademark is an example of intangible personal property.

I, III, IV and V

Which of the following statements, pertaining to the perfect tender rule, is/are true? I. The UCC's perfect tender rule imposes on the seller the obligation to conform her tender exactly to the terms of the contract. II. The parties may not contractually agree to limit the operation of the perfect tender rule. III. Under the perfect tender rule, if the goods fail to conform to the contract, the buyer may reject the whole lot. IV. Under the perfect tender rule, if the goods fail to conform to the contract, the buyer may accept the whole lot V. Under the perfect tender rule, if the goods fail to conform to the contract, the buyer may accept any commercial unit or units and reject the rest.

I, III,IV and V

Which of the following statements, regarding third-party beneficiary contracts, is (are) true? I. A third-party creditor beneficiary is a third party intended to receive a benefit from the contract as a gift. II. An incidental beneficiary is a third-party whom the two parties to the contract have no intention of benefiting by their contract. III. Incidental and donee beneficiaries are intended beneficiaries. IV. Creditor beneficiaries can also sue the promise on the original debt.

II and IV

Which of the following statements, concerning contracts entered into by incompetent persons, is/are true? I. A contract entered into by a party, who has been adjudicated incompetent and is under guardianship, is generally voidable as opposed to void. II. Generally, a person is considered mentally incompetent if he is unable to comprehend the subject of the contract, its nature, and its probable consequences. III. An incompetent person, who is not under guardianship, is liable for necessaries furnished to him. IV. An incompetent person, who is not under guardianship, may ratify or disaffirm voidable contracts during a lucid period or when he becomes competent.

II, III and IV

_________ allows for rescission of the buyer's acceptance of the goods if nonconformity of the goods substantially impairs their value, provided that acceptance was (1) premised on the assumption that the nonconformity would be cured by the seller and it was not or (2) the nonconformity was an undiscovered hidden defect. a. Revocation of acceptance b. Commercial impracticability c. Substituted performance d. Right to adequate assurance of performance e. Anticipatory repudiation

a

If the seller gives no instructions within a reasonable time after notification of the buyer's rejection of the goods, the buyer may do which of the following? I. Store the goods for the seller's account II. Reship the goods to the seller. III. Resell the goods for the seller's account.

all

The doctrine of _________ states that, when reasonable grounds for insecurity arise regarding a party's performance, the other party may demand written assurance and suspend his own performance until he receives that assurance. a. revocation of acceptance b. commercial impracticability c. substituted performance d. right to adequate assurance of performance e. anticipatory repudiation

d

How would your answers to the questions in #4 change if Debra was a merchant as to used furniture?

false

___________ are unenforceable (as opposed to being void). The law does not provide a remedy for the breach of an unenforceable agreement and thus "leaves the parties where it finds them.

illegal bargains

A(n) ________ is a law establishing a maximum rate of permissible interest for which a lender and borrower of money may contract. a. usury statute b. Sunday statute c. exculpatory clause d. unconscionable contract e. covenant not to compete

A

Which of the following contracts is not enforceable under the statute of frauds or Uniform Commercial Code (UCC)? a. Jim and Bob enter into an oral contract, whereby Jim agrees to sell his motorcycle to Bob for $450. Later, they orally agree that Jim will paint the motorcycle before delivery and Bob will pay Jim $550. b. Sue and Marie enter into a written agreement, whereby sue agrees to sell her house to Marie for $50,000. c. Sara, an executor, enters into a written contract with the estate creditors to pay the estate's debts out of her own funds. d. Hal and Herb have a written contract for the sale of 200 bushels of wheat at $4 per bushel. They later orally agree to decrease the quantity to 100 bushels at the same price per bushel.

A