legal and social exam 2

Tina and Leroy have a contract

2

Which of the following would be considered a merchant under the UCC?

A gun dealer sells a rifle to someone who enters his shop.

Which of the following statements concerning a Chapter 11 reorganization plan is TRUE?

A reorganization plan can be confirmed by the court over objections of some creditors if the court determines that the plan is feasible and fair.

Many states will not accept an e-signature on

All of these are correct.

Which of the following parties can defeat a perfected security interest?

All of these are correct.

Which of the following would suffice for a signature on a writing under the Statute of Frauds?

Any of these would suffice. Judges define "signature" very broadly.

How may an offer be terminated? Choose 3 answers.

I. An offeror may terminate an offer by revocation. II. A reasonable amount of time has passed. III. The offeree may make a counteroffer.

What conditions must be met for an offer to be legally accepted? Choose 2 answers.

I. It may only be accepted by the intended offeree or the offeree's agent. II. Acceptance must be unequivocal, with no requests for changes in the offer.

What factors are used to judge if consideration is adequate to ensure a fair bargain? Choose 2 answers.

I. Promises must be made with voluntary consent. II. Promises exchanged may not be a preexisting duty.

Jack mails an offer to Joan that states, "I offer to sell you my car for $2000. If I don't hear fromyou in 10 days, I will assume you are willing to buy the car for the stated price." Jack hears nothing by thedeadline 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.

Which of the following statements concerning liquidated damages is NOT TRUE?

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

When Myrtle comes home from work one evening, she finds that her yard has been mowed andtrimmed. Later, a man comes to collect for the yard work done. Myrtle refuses to pay for the work since shehas never seen the man before and did not hire him to do her yard work. Which of the following answers ismost accurate?

Myrtle would not have to pay for the yard work.

Madison purchases several 50-pound bags of mulch at the local gardening store. An employee carries the bags of mulch to Madison's truck and loads them into the back for her. Will Article 2 of the UCC govern the contract in this situation?

Yes, because the primary purpose of this contract is the sale of goods.

Under the UCC, a buyer's right to reasonably obtain substitute goods because another party has not honored a contract is called

a cover.

Hiram is a debtor to Central Credit Union, a secured party. If Hiram fails to maintain insurance on the collateral, he has likely

defaulted on the security agreement

Quon and Bert have signed a contract for Bert to mow Quon's grass every week in June, July, and August for a price of $40 per week. They have agreed to all the necessary terms, but Bert has not yet mowed because it is still May. What type of contract do they have?

executory

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.

Alice signs a contract with Bob to buy Bob's house for $150,000, with the clause,

false

Chapters 11 and 13 are liquidation chapters.

false

Dr. Gonzalez ordered specialized surgical equipment

false

Judith is a CPA with an excellent reputation and client base. She sells her tax preparation business to Shawn, and the sales contract includes a non-compete clause restricting Judith from opening a similar business for one year within a 10-mile radius of her former office. If she opens a tax preparation office five miles away after one year, a court would probably

grant an injunction barring her from operating the new office.

When one party breaches a contract, the discharged party

has no obligation to perform, and may sue the breaching party for damages.

A trustee can void any transfer that meets all of the following requirements EXCEPT

if the pre-petition payment was made in the ordinary course.

Sal has ordered 100 pounds of shrimp for his restaurant from Sam every Friday for 5 years and has always paid that week's market price. One Friday, Sal decides to take a vacation, but doesn't tell Sam. Sam claims they have a contract, even though it was never written down. What kind of contract do they have?

implied-in-fact

An exculpatory clause is generally unenforceable when

it involves public transportation.

Jaime offered to buy Kevin's bike. Jamie is the:

offeror

What factors make an agreement enforceable under the principle of quasi-contract? Choose 2 answers.

I. The enriched party knows about the benefit and keeps it. II. One party is being enriched at the expense of the other.

Tess, a tenant, moves from her apartment in breach of the lease agreement.

false

Rest Well Hotel orally ordered 1,000 blankets monogrammed with its initials, RWH, from TriColor Textiles. TriColor had just finished monogramming the blankets when Rest Well called and canceled the order. TriColor will be able to enforce the agreement even though there was no writing.

true

The expectation interest is designed to put the injured party in the position he or she would have been in had both sides fully performed their obligations.

true

What elements are required for an offer to be effective under the common law? Choose 3 answers

I. The offer must be communicated to the offeree. II. The terms of the offer must be reasonably definite so that all parties understand them. III. The offeror must intend to be bound by the offer.

How may a revocable offer effectively be revoked? Choose 2 answers.

I. The offeror may withdraw the offer with a clear expression. II. The offeror may take an action that contradicts the offer and make that known to the offeree.

What elements are required for courts to apply the doctrine of promissory estoppel? Choose 3 answers.

I. The promise must be definite and relied upon. II. There was a detrimental result from reliance on the promise. III. Enforcement of the promise is necessary to avoid injustice to the promisee.

Mike owns a house in a low-income area of a large city. Mike is on disability, and his total monthly income is $700. A sales representative visits his home to sell him a water purification system. Mike signs a contract that calls for monthly payments of $500 for the next 10 years. The water system is worth no more than $1,000. Mike thought he was signing a permission slip allowing the salesman to conduct a free water test to determine the toxins in the water. How would a court most likely describe this contract?

The contract is unenforceable because it is unconscionable.

Suppose that Lenny Lawyer enters into an agreement with Cindy Client that his fee will be a percentage of the recovery Lenny obtains for Cindy in her pending divorce. State law makes such a contingency fee arrangement illegal in divorce actions. What will be the probable outcome if Lenny attempts to enforce the agreement?

The contract will be void as violating a statute. Lenny will not be able to recover anything.

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, aslong as Nella has not revoked it.

false

Under all chapters of the Bankruptcy Code, most of the debtor's assets are distributed to creditors and the debtor has no obligation to share future earnings with creditors.

false

In a "mixed contract," one involving a sale of both goods and services, the court will

first determine the dominant purpose of the contract. If the sale of goods dominates the contract, then the court will apply the law of the UCC, Article 2. If the sale of services dominates the contract, the court will apply the common law.

Forever Yours, Inc. has a secured and perfected security interest in Sally's big-screen TV. On the filing date of Sally's Chapter 7 petition, the balance of the debt owed to Forever Yours is $2,000. The value of the TV is estimated at $1,500. This means that Forever Yours

is unsecured for $500, the excess of the debt over the value of the TV.

If Jane persuades Linda to buy her horse by telling Linda that the horse runs "like the wind," then Jane's statement is

puffery

What occurs when a secured party takes back collateral because the debtor has failed to make payments when due?

repossession

What are the two most common settings for legitimate non-compete agreements?

sale of a business and employment relationship

The correct order of payment of claims from the debtor's estate would be

secured claims, priority claims, unsecured claims.

All of the following parties had a hand in creating the UCC except

the U.S. Senate.

Who operates the business and develops a plan of reorganization in Chapter 11 bankruptcies?

the debtor in possession

Who is responsible for gathering the bankrupt's assets and dividing them among creditors?

the trustee

A seller's form clearly states no warranty is included. The buyer's form states that the sellerwarrants 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 beformed but the contradictory terms cancel each other out.

Which of the following is a primary goal of the Bankruptcy Code?

to preserve as much of the debtor's property as possible

A buyer's material breach gives the seller the right to refuse to deliver the goods.

true

A promise to do (or not do) something in the future counts as consideration.

true

A wholesaler of coffee notifies a retailer

true

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

true

Alimony and child support obligations are considered priority claims.

true

Bry, Inc. and Gangl Co. entered into an oral agreement for the sale of 3,000 sweaters. Both parties performed as required under the contract. Bry delivered the sweaters, and Gangl accepted and paid for them. Since the contract is fully executed, it makes no difference that it was an oral agreement.

true

Ernest operates an ice cream s

true

If a seller includes an express warranty in the written sales contract, any disclaimer is invalid.

true

Mark, a power tool salesman, promises Jill, a customer, that the Turbo Power Hedge Trimmer 1000 will easily cut through bamboo up to 3 inches thic

true

Under the UCC, the buyer is entitled to consequential damages if the seller could have reasonably foreseen them.

true

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

true

What is the term for a contract agreement in which an offeror promises to pay after the occurrence of a specified act, and the offeree is not required to respond in words?

unilateral contract