Bus Law Exam 2 Concept Quizzes

Ahmir agrees to purchase a shipment of oriental rugs from Oriental Rug Company for the price of $50,000, to be delivered on August 15. On July 15, Ahmir notifies Oriental that he no longer wants to purchase the rugs. Oriental spends $1,000 to advertise the rugs and obtains a new purchaser who buys the rugs for $40,000. Oriental then sues Ahmir for breach of contract. If Oriental is successful in its breach of contract suit against Ahmir, Oriental may receive:

$11,000 from Ahmir.

Logan agrees to deliver fifty pounds of crab claws to Dominique by May 15. Dominique needs the crab claws for a wedding party that Dominique is catering on May 16, so time is of the essence of the contract. Logan contacts Dominique on May 15 and tells Dominique that the earliest Logan can deliver the crab claws is on May 17. Dominique cancels the order and quickly makes other arrangements for the wedding party she is catering. Logan then demands payment from Dominique for the full contract price, and Dominique refuses. If Logan sues Dominique for damages under the contract:

Dominique will not have to pay because Logan breached the contract.

A contract for the sale of a digital book is a sale of goods.

FALSE

Quon decides to sell his antique roadster, so he places an ad on Craigslist. He lists the roadster as a 1957 Mercedes Benz 300SL Roadster, describes it as in good working condition, and states that no reasonable price will be refused. Fern responds to the ad and offers to pay $25,000 to Quon for the car, which Quon agrees to. In this scenario, who is the offeror?

Fern is the offeror.

Elvis agrees to provide guitar lessons to Angela's niece for three months for $600. Angela decides her niece really is not interested in guitar lessons, and assigns her rights under the contract to Jose, so Jose can use the lessons for his daughter. When Jose contacts Elvis to set up the first guitar lesson for his daughter:

Jose cannot enforce the contract against Elvis because the contract is for personal services.

Koko purchases a ski boat from Marina Boating Supply for $24,000 cash. Koko has not yet completed the arrangements for her slip in the local harbor where she will dock the boat, so Koko arranges with Marina to keep the boat at Marina's facility until Koko can make arrangements. Koko promises Marina that she will pick up the boat within two weeks. One week later, a hurricane destroys the boat. The risk of loss of the ski boat falls on:

Marina Boating Supply.

Korbyn enters into a contract with Peyton to sell Peyton a 1956 roadster. The contract has a condition precedent that the roadster will pass inspection by an independent appraiser, verifying that the roadster contains all original parts and is in good working order. This contract provision means that:

Peyton is not required to perform under the contract until the appraisal is complete.

Nadia needs help running her bakery. Nadia contacts her friend Zoey, who has baking experience but lives in another state, and offers Zoey a job. Nadia orally promises Zoey that she will employ Zoey for at least two years. Zoey quits her job in the other state, moves her family, and begins to work for Nadia. After three months, Nadia terminates Zoey's employment. Zoey sues Nadia, claiming they had a contract for two years. If Nadia defends the lawsuit by claiming the contract could not be enforced because it violates the statute of frauds, the court will likely hold in favor of:

Zoey, under the theory of promissory estoppel.

Owen offers to sell his motorcycle to Julian for $5,000. After he makes the offer, Owen has second thoughts. Owen can revoke the offer to sell his motorcycle to Julian:

as long as Julian has not yet accepted the offer.

Wilson and Everett have a contract under which Everett is to supply to Wilson 5,000 sets of bicycle spokes by September 15. The contract provides that any lawsuit for breach of contract must be brought within three months of the breach. Everett delivers the 5,000 bicycle spokes to Wilson on September 15. Wilson refuses the delivery, however, because half of the spokes are broken. Everett refuses, after repeated requests from Wilson, to replace the shipment. On January 10, Wilson files a lawsuit against Everett for breach of contract. Wilson's lawsuit against Everett for breach of contract:

will not be dismissed because parties cannot reduce the period for bringing such a lawsuit to less than one year.

Huseyin and Ashish are negotiating the details of a new garage that Ashish plans to build on Huseyin's property. They agree on the building specs, the delivery date, and a price of $25,000. Ashish draws up the contract and sends it to Huseyin to sign. Huseyin reviews the contract and notices the price is listed as $2,500 instead of $25,000. Elated at the unbelievably low price, Huseyin quickly signs the contract and sends it back to Ashish, who signs it as well. If Ashish later tries to rescind the contract due to the mistaken price:

Ashish will be successful, because it is a mathematical mistake that Huseyin was aware of.

Bryan owns Snow Country, a business that leases out snow cone stands. Kaylee agrees to lease one of the snow cone stands for $500 per month. Kaylee and Bryan sign a written contract that states the monthly lease amount is $5,000. When Kaylee refuses to pay the $5000 for the first month's rent, Bryan sues for breach of contract. If Kaylee tries to introduce evidence in court that shows that the amount stated in the written contract is incorrect:

Kaylee will be allowed to introduce the evidence under the parol evidence rule.

Midwest Life Insurance sells a life insurance policy to Thiago. Under the terms of the contract between Thiago and Midwest Life, Thiago will pay $75 per month for the policy, and, upon Thiago's death, Midwest Life will pay $100,000 to Laurelei. Four years later, Thiago dies, and Midwest refuses to pay under the terms of the policy. The party entitled to sue Midwest for its failure to honor the terms of the contract is:

Laurelei, because she is a donee beneficiary.

Lupita enters into a contract with Faith to purchase a used car. At the time they sign the contract, Lupita appears to be very intoxicated. Faith notices this but signs the contract anyway. If Lupita later decides she wants to get out of the contract:

Lupita can raise the defense of lack of contractual capacity due to intoxication.

Selma wants to buy Matilda's house. Selma has been admiring the house for a long time and has asked Matilda repeatedly to sell the house to her, but Matilda has always refused. Finally, Selma tells Matilda that if Matilda does not sell Selma the house, Selma will kill Matilda's daughter. Afraid for her daughter's life, Matilda signs the contract to sell the house to Selma. If Matilda later tries to rescind the contract:

Matilda may rescind the contract on the grounds that she signed the contract under duress.

Ruby, a seventeen-year-old, purchases a car from Smitz Used Auto Sales and agrees to pay for it over a period of twenty-four months. Ruby makes the payments for four months but then decides the car payment is too much for her limited budget. Ruby tells Smitz that she wants to stop making payments and that she wants out of the contract completely. The contract between Ruby and Smitz can be canceled by:

Ruby, because she is a minor, but Ruby must return the car.

Exculpatory clauses in contracts are generally enforceable as long as they are reasonable, do not violate public policy, and do not attempt to protect a party from its own intentional misconduct.

TRUE

Tanya is in the business of selling rubber mats. Ralph is in the business of selling real estate. Logan is in the business of selling stocks and bonds. Article 2 of the U.C.C. governs the sale of the items sold by:

Tanya only.

Sarah is shopping at Sylvia's thrift store, and notices that the inside of the store needs repainting. Sarah offers to paint the store for $400. Sylvia does not respond to Sarah's offer. Later that day, Sarah returns to the store with painting supplies in hand and begins painting the store. When Sarah is finished, she demands payment of $400 from Sylvia. Will Sylvia have to pay Sarah for painting the store?

Yes, Sylvia will have to pay Sarah for painting the store, even though she did not verbally agree to the contract.

Dakotah is the cheerleading coach for Northfield High School. Dakotah places an order by telephone with Cheerleader Supply Inc. for thirty cheerleader uniforms. Each uniform is to be emblazoned with the Northfield High emblem and a cheerleader's name. The total cost of the uniforms is $900. Two weeks after placing the order, Dakotah realizes she ordered the wrong style of uniform, so she contacts Cheerleader Supply and attempts to cancel the order. Cheerleader Supply at this time is almost through completing the work on the order. Cheerleader Supply:

can enforce the contract, even though it is not in writing, because it is for specially manufactured goods.

Marie and Molly enter into a written contract to sell Marie's home to Molly. At the time the contract is executed, Marie tells Molly that for the last six months she has been sharing the home with a family of extraterrestrial beings. Marie states that she has asked the extraterrestrials to move out, but they won't; therefore, she is selling the family home to get rid of them and is willing to sell the home to Molly for well below market price. After the sale of the home is complete, Marie's children challenge the sales contract on the grounds that Marie did not have the mental capacity necessary to enter into a contract, even though Marie has not been declared incompetent by the courts. The contract between Marie and Molly can be rescinded:

if Marie's children can prove that Marie lacked the mental capacity to comprehend the nature, purpose, and consequences of the contract.

Best Dollar Store publishes an advertisement in the local newspaper promoting its new baby diapers that are good for the environment. The advertisement states that the diapers are made from entirely biodegradable materials and that each diaper will completely biodegrade within two months and become a natural part of the soil. Leon is very concerned about the environment and has created a compost heap in the pasture behind his home. Leon purchases a package of the diapers for his child, and, as they are soiled, he adds them to the compost heap. Six months later, the diapers have not even begun to degrade. Best Dollar Store has violated:

its express warranty that the diapers will biodegrade within two months.

American Home Store, headquartered in San Diego, is getting ready for its Fourth of July sale. American orders $1,000 worth of American flags from Canadian Manufacturing, Inc., which is headquartered in Montreal, Canada. American places the order by telephone, and Canadian orally accepts. Two days later, American discovers that it can get the flags cheaper from a manufacturer in Denver. When American attempts to cancel the contract with Canadian, American finds that under the 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG):

the contract is enforceable even though it is not in writing.

Larue owns a horse ranch. Larue enters into a contract with Dora for the purchase of thirty saddles for his ranch to be delivered on a specific date. If the price of the saddles is not included in the contract, under the U.C.C.:

the court will determine a reasonable price at the time for delivery.

Alvin's Department Store agrees over the telephone to purchase $1,000 worth of blankets from Blanket Emporium. Blanket Emporium sends an invoice for the blankets before shipping them, and Alvin's Department Store refuses to go forward with the deal, saying their deal is not a valid contract. The oral agreement between Blanket Emporium and Alvin's Department Store for the purchase of $1,000 worth of blankets:

violates the statute of frauds, and is, therefore, unenforceable.

Duz and Dhelan entered into a written agreement under which Duz agreed to sell Dhelan his used booster box for $501. A week before the agreed date of the sale, Duz learned that used booster boxes were selling on E-Bay for over $5000. Duz immediately sent Dhelan a text notifying him that he is no longer going to go through with their deal. If Dhelan immediately files a lawsuit against Duz, which of the following grounds will most likely be successful?

Anticipatory repudiation

If two people are the only parties who sign a contract, then there are no circumstances under which any other person who is not a party could have any legal interest in, or right to enforce, that contract unless . . .

The nonparty is an assignee or an intended third party beneficiary.

John and Mark enter into a contract under which John agrees to paint the walls of Mark's new house for $150 an hour. The night before the job is set to begin, an earthquake occurs, causing a total collapse of Mark's new house. All that's left is rubble. John claims that Mark should reimburse him for the cost of paint, brushes and rollers he bought in preparation for the job. Mark argues that no reimbursement is required, because he is discharged from performance under the contract. Which of the following types of discharge best supports Mark's argument?

Impossibility of performance.

Mulligan Pro Shop agrees to provide 10,000 grade AAAAA golf balls to Golf Kingdom each month for the next four months. For the first three months, Mulligan delivers 10,000 grade A golf balls instead, and Golf Kingdom accepts the delivery. In month four, Mulligan again delivers 10,000 grade A golf balls to Golf Kingdom, and Golf Kingdom rejects the shipment. If Mulligan sues Golf Kingdom for breach of contract:

Mulligan will win, because Golf Kingdom accepted the prior nonconforming shipments.

Tommy ran away from home at the age of 17. He managed to rent an apartment and signed a contract with the landlord, telling the landlord that he was 18. He moved into the apartment, lived there, and paid the rent on time every month until three months after his 18th birthday, That was when he took Ritchie's Intro to Business Law class and learned that the contract he signed before he turned 18 was voidable. He decides to move out and live in a house with some friends, so he notifies the landlord that he has decided to disaffirm the contract and get his money back since he lacked legal capacity when he signed it. If the landlord sues Tommy to enforce the contract, will Tommy win?

No, because by continuing to pay rent under the contract for three months after turning 18, Tommy has ratified the contract by his actions.

Erika was planning her first cross country bike trip. She wanted a bike that would handle rough terrain easily because part of the trip would be through Kings Canyon National Park. Salisar is a salesman at Bikes by the Bay, a specialty bike store near Erika. Erika explains the details of the strenuous trip she is planning and states that she needs a very sturdy mountain bike that will handle it. Salisar recommends the Crosstrain 2000, a bike his store is pushing that month because both the store and the salesperson get a bonus for each bike sold. Erika purchases the bike and begins her adventure. Twenty miles into her journey, the front axle breaks due to the rough terrain, causing Erika to plunge down a steep hillside and sustain serious injuries. In advising Erika to purchase the Crosstrain 2000 for her trip, Salisar:

breached the implied warranty of fitness for a particular purpose.

Harold offers to sell Emma his farmland in Bryson County. After discussing the sale at length in front of their friends Nicole and Jackson, Harold and Emma orally agree on a price of $120,000 for the land. The next day, Emma goes to the bank and withdraws $120,000 to pay Harold for the land. When Emma presents the $120,000 to Harold, Harold tells Emma he was just joking and does not wish to sell the land. Emma tries to enforce the deal, and Harold continues to refuse by saying that the deal was not in writing, and, therefore, it is unenforceable. The contract between Harold and Emma for the sale of the land:

is not enforceable because it violates the statute of frauds.

Landscape Supply agrees to provide Delta Lawn Service eight pallets of sod for the price of $260 per pallet. The agreement contains the following provision: "This Agreement may not be amended or modified except by an instrument in writing signed by the party to be charged with such amendment or modification." Delta decides it now needs 160 pallets of sod, and Landscape is willing to reduce the price to $255 per pallet because of the increased amount. Delta and Landscape can accomplish this change to the contract by:

signing an amendment, crossing out the incorrect language and replacing it by hand with the correct terms, or rewriting the entire contract to include the changed provisions.

The weekly Kroger advertisement states that five-pound chubs of ground chuck are available for eighty-nine cents per pound. Arlene sees the advertisement; she realizes that ground chuck has not been priced this low in quite some time, so she hurries to the store to purchase some. Arlene loads seven chubs of ground chuck in her shopping cart. When she goes to the checkout to pay, however, the cashier informs Arlene that the price in the advertisement is a typo and that the correct price is $1.89 per pound. Arlene insists that the store must honor the price listed in the advertisement, because it is an offer that she has just accepted. The cashier calls the store manager for a decision. The store manager will likely explain to Arlene:

that advertisements are not offers, but merely a request for offers.

Milo is the owner of a sporting goods store that has only been open for three months. The holiday season is coming up, and Milo realizes that he will need extra help. Milo asks his friend Jess to help him out at the store. Milo and Jess agree that Jess will work during the months of November and December. However, because Milo is unsure how much help he will need and how much he will be able to pay, they agree to decide each week on the hours that Jess will work for the following week, and to decide the hourly rate after Jess has worked two weeks before she receives her first paycheck. Just before November 1, Jess takes a job at another store. If Milo tries to sue Jess for breach of contract, the court will probably decide:

that the parties had no contract because the terms of the offer were not definite.

Gavin and Allison are having drinks after work. After several rounds, the topic of Gavin's sports car comes up. Gavin is extremely proud of his sports car and brags about it all the time. To impress Allison, Gavin offers to sell Allison his expensive sports car for $5,000. Allison jumps at the deal, because she knows the car is worth much more than $5,000. They even write the "deal" down on a napkin, and both Gavin and Allison sign the napkin. The next morning, when Allison brings $5,000 to purchase the sports car, Gavin explodes. Gavin tells Allison that he was just kidding and that he would never sell his expensive sports car for such a low price. When Allison tries to enforce the deal:

Gavin can either rescind the contract based on incapacity or ratify the contract.