ACC Exam 2 Review Vocab

12. Dondi contracts to buy a custom espresso maker from Caffee Specialties, Inc., for $4,500, but Caffee fails to deliver. Dondi buys the appliance elsewhere for $5,500. Dondi's measure of damages is a. incidental damages only. b. $1,000 plus incidental damages. c. $0. d. $1,000.

$1,000 plus incidental damages.

9. Consumer Credit Union pays Derby $10,000 to design an ad campaign. The next day, Derby tells the credit union that he has accepted a job in Boston and cannot design the campaign. As compensatory damages, the credit union can recover a. $10,000. b. $100,000. c. $0. d. $1,000.

$10,000.

non-assignable rights

- Per-Statute (Depends on the state) - Personal Services cannot be assigned - Contractual specify unless:

Mitigation

-A non-breaching party has a duty to mitigate damages -For example, if you have a contract with someone to buy parts for something and they are $10 per part, you cannot go out and buy the most expensive one on the market. You have a duty to find one that is the closest to that price.

Punitive Damages

-In place to punish the breaching party -Usually not in contract cases, but may appear in a contract opinion if there is also a tort involved (fraud) -Generally not allowed because we do not want to discourage people from signing contracts

What type of defenses can be made?

-Mistake -Misrepresentation -Undue Influence -Statute of Frauds -Fraudulent Misrepresentation

Non-Delegable Duties

-Personal skills or expertise -If special trust is placed in the obligor -If the contract prohibits delegations

novation ***********

-a swapping out of parties -the new party assumes all duties, rights, and obligations of the former party

compensatory damages

-compensate an injured party for the loss of the bargain, simply replacing what is lost from a breach. -value of actual performance For example, you have a contract with someone to perform a service for $100, the other party breaches and you find a new client and you will be paid $80. The compensatory damages would be $20.

Delegation

-similar to assignment only the transfer of duties, not the rights -if a delegation is valid, then the obligee must accept performance from the delegatee

Fraudulent Misrepresentation 4 requiremnts

1) Intent to deceive 2) Innocent party reasonably relied 3) Injury or damage to innocent party 4) A misrepresentation of material fact

Minors

18 and under

Mailbox Rule

An acceptance is effective when it leaves the hands of the offeree so long as the offeree uses the same method as the offer was sent or another authorized means; All contracts communications are effective when received except the acceptance - when it is sent

Bilateral

A promise for a promise

Consideration

Bargained for Exchange of legally sufficient value; promise, performance , promise not to preform, all must not be already legally required

Implied

Based on the behavior on the parties Three elements: One party furnished a service or property, the other party had a chance to reject the service or property, The party furnishing the service expecting to be paid and the accepting party knew or should have known that the furnishing party so expected

Express

Clearly stated in words (spoken or written)

operation of law

Death of a party, Destruction of the subject matter, Supervening illegality

uniform transaction act

Documents are not invalid because they are in electronic form; not any document, but documents related to transaction

Informal

Does not have to be in a certain form (most contracts)

Executed

Everyone has done what they promised

UCC - Offer

If price is missing the price is the reasonable price, delivery terms are pick it up at seller's place of business if not specified, and payment terms are due on delivery if not specified.

consequential

Indirect and foreseeable loss (not expressly stated in value of contract)

Capacity

Minimum mental capacity to hold someone legally to what they promised to do We talk about: minors, intoxicated, mental incompetence

26. Mona offers Ned, a building inspector, money to overlook the violations in her new warehouse. Ned accepts the money and overlooks the violations. Mona is charged with the crime of bribery. The crime occurred when a. Ned accepted the bribe. b. Mona offered the bribe. c. Mona decided to offer the bribe. d. Ned overlooked the violations.

Mona offered the bribe.

Adequacy of Consideration

Not fair or equal. Courts will not deal with equality so long as the consideration is legally sufficient; adequacy is extremely different

Unilateral

Promise for performance (can only be accepted by performance, act of performing is accepting)

Formal

Refers to contracts that have to be in a very particular form.

Mirror image

The acceptance mist mirror the offer, or it is not an acceptance, it is a new offer or a counteroffer

Incidental

The third party happens to get some benefit from the fact that a contract exists

Liquidated Damages

These are damages that are outlined in the contract. It will be a clause put into the contract and be a specific amount

Duress

Threats, Blackmail, Extortion

counteroffer

You offer to sell me your car for $3000 and I respond, I will give you $2500

29. Deb buys a song through eSongs, an online music vendor. Before completing the purchase and downloading the song, Deb must agree to a provision not to make and sell copies of the song. This provision is a. a choice-of-law clause. b. a browse-wrap term. c. a click-on agreement. d. a shrink-wrap agreement.

a click-on agreement.

43. Valley Farms offers to sell Harvest Bakeries, Inc., "five hundred bushels of wheat, offer limited to terms herein." Harvest responds, "We agree to buy five hundred bushels only if the wheat is Grade A quality." Under the UCC, this statement is a. a confirmation. b. a breach. c. a counteroffer. d. an acceptance.

a counteroffer.

42. SFX Paintball Games, Inc., and Delivery Corporation sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to estimate but approximately $1,000." This is a. a penalty clause. b. a liquidated damages clause. c. a mitigation of damages clause. d. a nominal damages clause.

a liquidated damages clause.

7. Star Flooring orders carpet from Textile Corporation, but Textile does not deliver. Star will probably be unable to enforce the agreement under the UCC if the parties omitted a. shipping arrangements. b. a quantity term. c. a payment term. d. the duration of the deal.

a quantity term.

32. If Betty collides with Dave's car, Dave should be able to recover the cost of repairs if Betty failed to act as a. a reasonable person. b. a faultless person. c. a blameless person. d. a reliable person.

a reasonable person.

19. Trina pays Urban Edge Electronics store $1,500 for a laptop computer. Under the UCC, this is a. a lease. b. a sale. c. a gift. d. a crime.

a sale.

41) Nate tells Opal, "I might sell the skis that I bought last fall since I haven't used them and the skiing season is almost over." This is a. an invitation to accept an offer. b. an offer. c. an acceptance of an offer. d. a statement of future intent.

a statement of future intent.

49. Lois takes out a life insurance policy with Mega Insurance Corporation that names her son, Nero, as the beneficiary. This is a. a third party intended beneficiary contract. b. a delegation. c. a third party incidental beneficiary contract. d. an assignment.

a third party intended beneficiary contract.

compensatory

actual and direct loss (expressly stated value of contract)

What is not an offer?

advertisements, opinions, plans to do something, preliminary negotiations

. 11) Rally Corporation sells ski gear to SnoSportz Company, which sells a pair of skis to Tyra, a consumer, who later sells them to Uli, another consumer. Article 2 of the UCC applies to the sales transactions between a. Rally and SnoSportz only. b. SnoSportz and Tyra only. c. Tyra and Uli only. d. all of the buyers and sellers.

all of the buyers and sellers.

23. Loren and Kendra enter into a contract for the distribution of Loren's produce to local restaurants for which he agrees to pay Kendra. Kendra transfers her right to payment under the contract to County Bank. This transfer is a. an alienation. b. prohibited. c. an assignment. d. a delegation.

an assignment.

Penalty

an excess charge for breaching the contract

agreement

an offer, an acceptance

3. Grandiloquent Properties, Inc., and Investment Capital Corporation enter into a contract for a sale of land. To be enforceable, the contract must be in writing if the land is valued at a. any price. b. more than $5,000. c. more than $500. d. more than $50,000.

any price.

Uniform transaction act

attribution- if it comes from your fax machine or your email account, it may be attributed to you Notarization- can be done electronically under the UETA

30. The standard of proof to find a defendant who has been charged with a crime guilty is a. beyond a reasonable doubt. b. a preponderance of the evidence. c. beyond all doubt. d. clear and convincing evidence.

beyond a reasonable doubt.

offer

clear what the offer is - must include price and quantity

36. The elements of any contract include a. capability. b. consideration. c. practicality. d. formation.

consideration.

legality

contracts for illegal things are void and such a contract cannot be enforced in a court

Punitive

damages to punish, almost never in contracts

27. Sam and Tiffany enter into an implied contract. This is a contract in which the parties' conduct a. undercuts any terms based on the facts. b. finds the contract's facts. c. terminates any unintended consequences. d. defines the contract's terms.

defines the contract's terms.

39. Sunny Company and Collision Center enter into a contract where Sunny agrees to deliver glass to Collision Center. The contract does not include a price term. In a suit between the parties over the price, a court will use the UCC to a. determine a reasonable price. b. impose the highest market price. c. return the parties to the positions they held before the contract. d. impose the lowest market price.

determine a reasonable price.

31. Ruth contracts to provide Shelly with fifty hours of telepathic personal coaching. The state legislature subsequently passes a law making telepathic personal coaching illegal. This law will a. fulfill the contract. b. not affect the contract. c. discharge the contract. d. require immediate performance of the contract.

discharge the contract.

38. Davis points a gun at Eton, threatening to shoot him if he does not steal from his employer, Freddy's Convenience Store, and give the stolen funds to Davis. Charged with theft, Eton can successfully claim, as a defense a. entrapment. b. self-defense. c. duress. d. nothing.

duress.

Lapse of Time

either specified or reasonable time period

e-contracts

electronic signature

18. Albus, who is 15, goes to court to legally remove himself from his parents control, care, custody, and earnings. This act is a. severability. b. disaffirmance. c. ratification. d. emancipation.

emancipation.

20. Riley, a Sterling Bank employee, deposits into his account checks that are given to him by bank customers to deposit into their accounts. This is a. larceny. b. money laundering. c. embezzlement. d. burglary.

embezzlement.

40. Overseas Corporation (OC), a U.S. firm, orally agrees to sell six freezers to Pisa Pizza, Ltd., in Italy. OC fails to deliver. Under the CISG, Pisa Pizza can a. not enforce the agreement because the price term is not specified. b. not enforce the agreement because there is no consideration. c. not enforce the agreement because it is not in writing. d. enforce the agreement.

enforce the agreement.

Mistake of value (Unilateral or Bilateral)

enforceable

ratification

the minor turns the age of majority (18) and decides to stay in the contract (implied or express)

37. Intoxicated but fully aware of the consequences, Uri agrees to a written two-year cell-phone service contract with Wander Talk, Inc., at more than the average market price. This contract is a. not enforceable because the contract clearly favors Wander Talk. b. enforceable. c. not enforceable because contracting parties can change their minds. d. not enforceable because Uri was intoxicated when he agreed to it.

enforceable.

35. Beth is injured in a car accident and sues Cash, alleging negligence. Cash claims that Beth was driving more carelessly than he was. Comparative negligence may reduce Beth's recovery a. even if Beth was only slightly at fault. b. only if Beth was as equally at fault as Cash. c. only if Beth was less at fault than Cash. d. only if Beth was more at fault than Cash.

even if Beth was only slightly at fault.

Past consideration

if a party already did their part before the offer

intoxication

if the person is so intoxicated that lack the mental capacity to contract, the contract is voidable

Unilateral Mistake of Fact

is enforceable EXCEPT it is voidable in only two instances: inadvertent math error and other party knew mistake was made/should have known

48. Cleo sells kitchen appliances at her store. One afternoon, Cleo sells a used display shelf to Earline. That weekend, Cleo sells a used sofa to Flavia. Under the UCC, Cleo is a merchant of a. kitchen appliances, display shelves, and sofas. b. kitchen appliances only. c. kitchen appliances and display shelves only. d. none of the choices.

kitchen appliances only.

10. Plato works for Quirky, Inc. During work hours, Plato "steals" his employer's computer time to start up his own business, Rowdy, Co. This is a. larceny. b. burglary. c. robbery. d. no crime.

larceny.

17. To constitute consideration, the value of whatever is exchanged must be a. grossly inadequate. b. legally sufficient. c. practically sound. d. objectively worthy.

legally sufficient.

13. Cameron manages an illegal gambling operation in his BBQ Bar & Grill. Cameron reports the profits of the gambling operation as income from BBQ's legitimate activities on its tax returns. This is a. embezzlement. b. money laundering. c. no crime. d. larceny.

money laundering.

25. Royal Properties, Inc., mails a flyer to hundreds of firms, advertising a building for sale. Standard Manufacturing Company responds by saying, "We accept your offer." Between Royal and Standard, there is a. no contract. b. a contract for the sale of the building. c. a contract to negotiate a sale of the building. d. a contract to consider the offer before any others.

no contract.

rejection

no thank you

15. Office Accounting, Inc., hires Perry to repair a computer on site for $400, but Perry does not show up as agreed. Office Accounting hires Raul to do the job for $350. Office Accounting may recover from Perry a. consequential damages. b. compensatory damages. c. nominal damages. d. punitive damages.

nominal damages.

8. Kirk Custodial Service and Green Energy Company enter into an oral contract under which Kirk agrees to provide custodial service for Green's facilities for two years. This contract is enforceable by a. any interested third party, such as a janitorial supplies provider. b. Kirk. c. Green. d. none of the choices.

none of the choices.

34. Nadine is a spectator at the Metro City Softball Tournament, an athletic competition. Regarding the risk of injury, Nadine assumes the risks a. normally associated with the tournament. b. attributable to the tournament in any way. c. different from the risks normally associated with the tournament. d. greater than the risks normally associated with the tournament.

normally associated with the tournament.

6. Under the Electronic Signatures in Global and National Commerce Act (E-SIGN Act), a contract can a. be "denied legal effect" until it is executed. b. be "denied legal effect" if it falls under the UCC's Statute of Frauds. c. be "denied legal effect" unless a hard copy is printed. d. not be "denied legal effect" because it is only in electronic form.

not be "denied legal effect" because it is only in electronic form.

2. Jim is an appliance salesperson. To make a sale, he asserts that a certain model of a Kitchen Helper refrigerator is the "best one ever made." This is a. not fraud. b. fraud if Jim believes that this statement is not true. c. fraud if the statement is the truth. d. fraud if Jim is stating his opinion, not the facts.

not fraud.

Bilateral Mistakes of fact

voidable by either party

28. Jill and Karl contract for the sale of Jill's horse for $1,000. Unknown to either party, the horse has died. Karl is a. not required to pay due to the mutual mistake. b. not required to pay due to the unilateral mistake. c. required to pay because she assumed the risk the horse might die. d. entitled to another horse of equivalent value.

not required to pay due to the mutual mistake.

Discharge by performance

once both parties fulfill their obligations, the contract has been fully performed and discharge occurs

14. Ralph, a van driver for Standard Delivery Company, causes a multi-vehicle accident on a city street. Ralph and Standard are liable to a. only those whose vehicles were closest to Ralph's van. b. only those whose injuries could have been reasonably foreseen. c. all those who were injured. d. only those who were uninsured.

only those whose injuries could have been reasonably foreseen.

Executory

part still has to be done

4. Freida and Gail enter into a bilateral contract, which is created when Freida gives a promise in exchange for Gail's a. performance of a particular act only. b. promise only. c. prudent awareness only. d. payment of money only.

promise only.

nominal

recognizes wrongdoing without injury, usually $1

22. Fashion Center enters into a contract with Promotions, Inc. to retool its merchandising strategy. If Great Promotions breaches the contract, Fashion has a duty to a. punish Great Promotions and deter others from similar acts. b. reduce the damages that Fashion might otherwise suffer. c. reduce the loss that Great Promotions might otherwise suffer. d. take no action.

reduce the damages that Fashion might otherwise suffer.

46. Bill offers to sell his Consumer Service Center business to Dina for $100,000. Dina replies, "The price is too high. I will buy it for $90,000." Dina has a. rejected the offer and made a counteroffer. b. rejected the offer without making a counteroffer. c. made a counteroffer without rejecting the offer. d. accepted the offer.

rejected the offer and made a counteroffer.

47. Deepwater Mining Corporation offers to sell East China Refining, Inc., a certain quantity of unrefined oil. If East China sends an acceptance by an authorized means, the acceptance will be effective when it is a. in transit. b. received. c. written. d. sent.

sent.

24. In comparison to standards that apply to consumers, the UCC imposes on merchants a. less strict legal standards. b. the same overall standards. c. stricter ethical standards. d. special business standards.

special business standards.

consequential damages

special damages that compensate for losses that are more indirect. Caused by special circumstances beyond the contract itself -For example: You have a contract to sell your house to someone for $250,000. The other party breaches, you hire a realtor, put an ad in the newspaper, and also repaint the retaining wall around your house.

21. Grady enters into a contract to buy 440 acres from Hollis to expand Grady's ranch. Hollis breaches the contract. Grady's normal remedy is a. rescission. b. reformation. c. specific performance. d. damages.

specific performance.

Revocation

take back, offer decides not to offer anymore

45. Java rejects an offer from Coffee Co. The offer is a. valid until Coffee Co. revokes the offer. b. valid for the period of time prescribed by a state statute. c. terminated. d. valid for a reasonable time to give Java a "second chance."

terminated.

What happens if the assent is lacking?

the contract is voidable

Intended Beneficiaries

the contracting parties intended to benefit the third party (ONLY intended beneficiaries have legal rights)

Assignment

the giving of rights (benefit) to a third party. Assignor is OUT of the contract after that.

Defenses to the enforcement of a contract include a. a desire not to perform. b. results that do not match expectations. c. adverse economic consequences. d. the lack of a party's voluntary consent.

the lack of a party's voluntary consent.

33. Damon contracts to repair the turf on a soccer field for Carousel Sports Park. Damon knows that without the repair, Carousel will have to cancel an upcoming game. Damon does not perform as promised. As consequential damages, Carousel can recover a. nothing. b. the loss of profit from the canceled game. c. the difference between Damon's price and the actual cost of repair. d. the cost of new turf.

the loss of profit from the canceled game.

disaffirmance

the minor can get out of the contract; consideration returned. Deadline: within reasonable time of turning 18

50. In determining whether a contract has been formed, an element of prime importance is a. the value of the consideration. b. the parties' intent. c. the timing of the signatures on the paperwork. d. the duration of the work.

the parties' intent.

Discharge by Condition

there is a condition in the contract that could not be fulfilled

5. A court is most likely to evaluate the adequacy of consideration if a. a thing exchanged has no intangible value to one of the parties. b. something exchanged is not of direct economic or financial value. c. the items exchanged were of unequal value. d. there is a gross disparity in the value of the consideration exchanged.

there is a gross disparity in the value of the consideration exchanged.

Implied-In-Law

there isn't an agreement

Promissory Estoppel

this is viewed as an exception to consideration

16. Elmo, a minor, misrepresents his age to be twenty-one and contracts to buy a car from Fine New Autos. Ordinarily, Elmo can disaffirm the contract a. under no circumstances. b. under any circumstances. c. only if he can prove that Fine New Autos knew his true age. d. only if he can prove that Fine New Autos did not know his true age.

under any circumstances.

voidable by the minor

until a reasonable time after turning 18

liquidated

written into a contract

44. Clem, a Delite Dairy salesperson, follows Edna, a salesperson for Festive Foods, a Delite competitor, as Edna visits stores to make sales. Clem solicits each of Edna's customers. Clem is most likely liable for a. trade libel. b. wrongful interference with a business relationship. c. conversion. d. trespass to personal property.

wrongful interference with a business relationship.