Business Law Final

A contract in which a party assumes a secondary obligation normally must be in writing to be enforceable.

True. Secondary obligation and collateral promises=same

In a contract for a sale of goods, the usual measure of compensatory damages is the difference between the retail price and the wholesale price

False

Misrepresentation cannot occur by silence.

False

Reliance on a misrepresentation is justified if the misrepresentation is an obviously extravagant statement.

False

Restitution is limited to rescission cases.

False

Under the UCC, there are no exceptions to the perfect tender rule

False

Under the perfect tender rule, if tender is not perfect, the seller is obligated to try again.

False

When a naïve purchaser enters into a contract in reliance on the opinion of an expert, the innocent party is not entitled to rescind the deal.

False

primary obligation is a promise to pay another's debt only if that party fails to pay.

False

All collateral promises must be in writing to be enforceable.

False. ( There are exceptions, so not all of them have to be in writing)

Acceptance of goods precludes the buyer or lessee from exercising the right of rejection.

True

An innocent party can rescind a fraudulent contract and be restored to his or her original position.

True

If a buyer breaches a contract, the seller can choose to simply cancel the contract.

True

If a buyer repudiates a contract before the time for contract performance, the seller can bring an action to recover damages.

True

If a party against whom enforcement of an oral contract is sought admits under oath that a contract for sale was made, the contract will be enforceable.

True

If goods identified to a contract are destroyed through no fault of either party, both parties are excused from performance.

True

If the parties to a contract for a sale of goods have not agreed on a price, a court will determine a reasonable price at the time for delivery.

True

The Statute of Frauds operates as a defense to the enforcement of an oral contract for the sale of land.

True

The UCC imposes some different rules on merchants

True

To be characterized as a "good" under the UCC, an item of property must be movable and tangible.

True

Under the UCC, an offeror must be notified within a reasonable time that the offeree has accepted.

True

Words or terms in contracts that are subject to more than one reasonable interpretation can lead to bilateral mistakes.

True

Written evidence or an electronic record of a contract for a sale of goods priced at $500 or more is required by the Uniform Commercial Code

True

When no delivery terms are specified in a contract for a sale of goods, the contract will fail for indefiniteness.

false

Ken, a real estate agent, assures Lily that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Lily buys the property and then discovers that the street has no more traffic than any other in its vicinity. Lily is most likely a victim of

fraud

Punitive damages are generally not awarded in an action for breach of contract.

true

Reformation is an equitable remedy used when the parties have imperfectly expressed their agreement in writing.

true

Under the doctrine of mitigation of damages, the duty owed depends on the nature of the contract.

true

A statement of opinion is generally subject to a claim of fraud.

False

An award of damages for a breach of contract can elevate the nonbreaching party to a better position than he or she would have been in if the contract had not been breached.

False

An oral contract for a transfer of land is always enforceable

False

Damages that compensate the nonbreaching party for the loss of a bargain are known as consecutive damages.

False

An otherwise unenforceable oral contract may be able to be enforced under the doctrine of promissory estoppel.

True

A firm offer by a merchant may be oral.

False

Sara contracts to work exclusively for Thermal Company during July for $5,000. On June 30, Thermal cancels the contract. Sara finds a similar job for the month of July but earns only $3,000. Sara files a suit against Thermal. As compensatory damages, Sara can recover

2,000

Clay Pots pays Dora $25,000 to propose an online marketing campaign. Two days later, Dora tells Clay Pots that she has accepted a job with its competitor Earthenware Inc. and cannot plan the campaign. As compensatory damages, Clay Pots can recover

25,000

Rita contracts to work for Social Media Corporation (SMC) during April for $4,500. On March 31, SMC cancels the contract. Rita declines a job of a different type and rank with Tech Talk, Inc., which would have paid $3,500. Rita files a suit against SMC. As compensatory damages, Rita can recover

4,500

Banquets & Parties (B&P) contracts to buy 1,000 uninflated balloons from Gas Bags, Inc., for $1 per item. When the market price decreases to 50 cents per balloon, B&P refuses to go through with the deal. Gas Bags can recover

500

ActioNOW and Becca enter into an oral contract in which Becca agrees to work on a project for ActioNOW for eighteen months. This contract is enforceable by

A) becca b) ActioNOW c) any third party d) none (correct)

Brad leaves an iPod at Computer Sales & Repair (CSR) to have the battery replaced. CSR sells the iPod to Doris, who does not know that it belongs to Brad. Brad can recover from

CSR

Consumers Choice store accepts a shipment of EZ2U-brand tablets from Digital Devices, Inc. Consumers Choice later discovers a defect in the tablets, revokes acceptance, and returns the tablets via GoBack, Inc. During the return, the tablets are lost. The loss is suffered by

Digital Devices

Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan knowingly misrepresents a number of material features about the restaurant and the business. When Beth discovers the truth, she can rescind the contract on the basis of

Fraud

Gas & Wood Stove Shop receives Hearthwarm-brand stoves from Independent Dealer, Inc., under a sale or return agreement. While the stoves are in Gas & Wood's possession, title is held by

Gas & wood

Guido and Hal want to rescind their contract under which Guido sold Hal a mountain bike for $100. To rescind the contract

Guido must return the $100 and Hal must return the bike.

Henry files a suit against Irrigation Services to enforce an oral contract that would otherwise be unenforceable under the Statute of Frauds. The court could enforce such a contract if

Henry forseeably and justifiably relied on Irrigation's promise

Garden & Field stores order a specific assortment of rose bulbs from Hybrid Flora Company. Hybrid mistakenly ships a selection of annuals, which Garden & Field rejects and returns via Intra-state Transport, Inc. During the return, the annuals are lost. The loss is suffered by

Hybrid Flora

Megan, an agent for Nabob's, a department store, orders one hundred dresses from Original Designs Inc. Absent a specific agreement between the parties to the contrary, title will pass to Nabob's when

Original Designs physically delivers the dresses.

A merchant is a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods being purchased or sold.

True

A party seeking to recover compensatory damages can also recover incidental damages.

True

County Dentists Clinic offers to buy from Dental & Medical Supplies Company a certain quantity of floss and other items for a certain price. Dental & Medical can accept the offer by

a prompt promise to ship or a prompt or current shipment of the goods.

Effortless Workouts, Inc., offers to sell a treadmill to Farouk and sends it to him on a trial basis. This is

a sale on approval

​Paramount Bookstores buys fifty cases of an assortment of books from Quixotic Publishing Company with the right to return the unsold books in lieu of payment. This is

a sale or return

Hal's Hardware Inc. and Ideal Tools Corporation sign a written contract for a sale of goods. To be enforceable, this written contract must include

a) a date b) the parties' contact info c) a quantity term (correct) d) a correct title, such as purchase order or sales invoice

Air Flo, Inc., and Banyan Grove Apartments enter into an oral contract in which Air Flo agrees to provide air-conditioning and heating maintenance for Banyan Grove's facilities for two years. This contract is enforceable by

a) any third party b) Banyan Grove C) air flo d) none of the choices (correct)

Lewis, an employee of Silos, Inc., makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently, Silos's bid is significantly low. Any contract with AgriCo-op that includes the mistake may be rescinded

a) if silos knew or should have known of the mistake b) if AgriCo-op knew or should have known of the mistake (correct) c) under no circumstances D) If lewis's supervisor did not know of the mistake

Dix agrees to sell Eli, for $1,500, a remote parcel of land. They believe the land to be worthless, but beneath it is shale rock containing oil. A court would

a) not rescind the contract (correct) b) rescind the contract on the basis of mistake c) rescind the contract on the basis of fraud d) rescind the contract on the basis of undue influence

Eleanor offers Flossy the amount of an investment in Flossy's start-up business venture if she marries Eleanor's son Glen. This promise is enforceable

a) only if the amount of the investment is more than 500$ b) only if glen agrees to marry flossy c) only if it is in writing(correct) d) under no circumstances

Dick's Burgers n' Shakes enters into an oral contract with Restaurant Equipment Warehouse (REW) for REW's sale to Dick's of a single-spindle milkshake mixer for $300. Assuming the terms can be proved, the contract is enforceable by

a) the manufacturer of the mixer b) Dicks or REW (correct) c) any third party with material interest d) none of the choices

County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Doyle to Ezra, the furnished information is mistaken. If Doyle and Ezra are both ignorant of the mistake, it is

a)fraudulent misrep b)unconscionable c) a unilateral mistake d) a bilateral mistake (correct)

Fruit of the Plant, Inc., agrees to sell a certain quantity of a high-quality grain seed to Grange Co-op. Fruit of the Plant can obtain only half of the quantity ordered, so the seller also ships a lesser quality seed in twice the amount of the remainder of the order for the same price. Grange Co-op rejects the lesser quality seed. With time for performance not yet expired, Fruit of the Plant can

attempt to cure the defect

Soft Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Soft tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may

await performance, sue Soft, or suspend its own performance.

Omni Metals Company and Piecework Fabrication, Inc., enter into a contract under which Omni agrees to deliver a certain quantity of sheet metal to Piecework each month. The contract does not include a price term. In a suit between the parties over the price, a court will

determine a reasonable price at the time for delivery.

Jason contracts with Golf Carts Unlimited, Inc. to buy five golf carts. The contract lists the five carts as GC001, GC002, GC003, GC004, GC005. Identification

has taken place

Fresh Dairy, Inc., is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector's Helado Corporation is also interested. Fresh Dairy is not notified of Gelato's performance within a reasonable time. Fresh Dairy

may treat the offer as having lapsed.

Builders, Inc., agrees to construct an office building for Champ Fitness Clubs, Inc. The project proceeds according to plan, but before it is done, Champ tells Builders to quit. Builders may recover

profits plus the costs incurred up to the time of the breach

Hydro Source Company contracts to sell pumps, tanks, and water storage systems to InFlo Irrigation, Inc. Before the goods are delivered, InFlo indicates that it will not be able to pay. Hydro Source can pursue the following relief

resell the goods and recover any damages from InFlo.

Retail Company and Sales Wholesale Corporation enter into a contract for a sale of beach toys for $5,000. To be enforceable, the contract should be in writing and identify

the quantity

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OptiBank through Newt's investment firm. Unknown to Mona, Newt realizes a commission from the investment. Most likely, Mona may rescind the contract on the basis of

undue influence.

Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on—a local law prohibits construction on the rest of the property. Ralph can

​not avoid the contract because persons are assumed to know the law.

Global Outfitters Outlet and Holly, a consumer, enter into a contract for a sale of camping gear. If the contract includes a clause that is perceived as grossly unfair to Holly, its enforcement may be challenged under

​the doctrine of unconscionability.