L201 Exam 4 In-Class Questions

Best Buy orders 200 iPads for $300 each from Apple. Best Buy finds the iPads cheaper somewhere else and cancels the order. Apple doesn't want to lose the order so Apple offers to reduce to $290 per iPad. Best Buy Agrees. Apple delivers and then bills Best Buy for $300 each. How much does Best Buy have to pay?

$290

Contracts for the sale of goods for ____ or more must be in writing to be enforced

$500

Suzy= emancipated 15 year old. Suzy enters into a contract with Beth for $100 necessary groceries on credit. The reasonable value is $80. How much does Suzy pay?

$80

Aaron promises to sell his boat to Matt, and Matt promises to buy it from Aaron. What type of contract is this?

A bilateral contract

Example of a void contract

A contract made by a person who has been adjudicated insane and institutionalized

X Inc., offers to sell 99 discs to Y for $999 - assurances in signed writing to keep open for 1 year

A firm offer that cannot be revoked for 3 months

Which of the following does the statute of frauds cover?

A real estate mortgage

Settlement of an Unliquidated Debt

Accord and satisfaction

The settlement of an unliquidated debt

Accord and satisfaction

Ace Painting Company agrees to paint Steve Smith's house for $2,000, payable upon completion. Ace refuses to honor agreement, having received a more lucrative contract and Smith files suit for breach of contract. Which promise is at issue? Who is the promisee? Has promisee given consideration?

Ace's promise to paint Steve Smith Yes, to pay

C agrees to start portrait of Z on 4/1/17. On 3/27/17, C writes that Z won't be able to perform

Anticipatory repudiation

Type of contract when Aaron promises to sell boat to Matt and Matt promises to buy from Aaron

Bilateral

Calvin tells Sara that he will sell her his car for $5,000. Sara agrees. The exchange is to take place in 10 days. The contract between Calvin and Sara is now:

Bilateral, executory, and express

Xena and Yoni have a contract, which obligated Xena to sell Yoni 100 boxes of screws for $100. Xena seeks to cancel the contract but instead the parties agree to orally modify the contract so that Xena will sell Yoni the same 100 boxes of screws for $75. The second agreement is:

Binding by virtue of being mutually agreed upon

Shipping nonconforming goods without notice to the buyer is:

Both acceptance of the offer and a breach

Morton Reeves, a building subcontractor, submitted a bid for construction of a portion of a high-rise office building. The bid contained material errors in computation. Lago Corp., the general contractor, accepted the bid with the knowledge of Reeves' errors. Reeves:

Can avoid liability on the contract since Lago knew of his errors

Bing engaged Dill to perform personal services for $2,200 a month for a period of four months. The contract was entered into orally on July 1, 1984, and performance was to commence September 1, 1984. On August 10, Dill anticipatorily repudiated the contract. As a result, Bing:

Can immediately sue for a breach of contract

Exception to the consideration requirement

Charitable subscription

Law to be applied when looking at landscaping contract (mowing, installation of plants, labor)

Common law of contracts

Intended to give the victim of the breach of contract the "benefit of the bargain"

Compensatory damages

The glue that holds the bargain together

Consideration

Ellie and Bianca have an oral contract for sale of land price $500,000. Bianca pays $400,000 and takes possession of the land.

Contract enforceable - Bianca paid part purchase price & took possession

The remedy for a violation of the Statute of Frauds in an executory contract.

Contract unenforceable; possibly recover promissory estoppel/quasi-contract

A contract entered into by a minor that cannot be disaffirmed until majority

Contracts involving real estate

A rejection and terminates the power to accept an offer

Counteroffer

In a hybrid contract, which includes both the sale of goods and services, most courts will apply:

Depends on which element (goods or services) predominates

The legal part can be separated from the illegal part - if the contract consists of several promises or acts by one party, each of which corresponds with an act or a promise by the other party

Divisible

Contract induced by an improper threat and victim had no reasonable alternative

Duress

Physically forcing someone to sign a contract

Duress - void because of physical force

A signed writing by a merchant containing assurances that the offer will be held open

Elements of a firm offer

If part of an agreement is legal and part is illegal, the courts will:

Enforce legal part so long as possible to separate to 2 parts

What a court will do when a part of a contract is legal and part is illegal (divisible contract)

Enforce the legal part if it is possible to separate the 2 parts

Status of contract between A and B where A and B performed 50% and has 50% left to perform

Executory

The status of contracts to commit crimes and torts that are never carried out

Illegal

Y will purchase all gas that he wants to buy in 2017 from V at the price of $2/gallon. V agrees to those terms.

Illusory contract

When the surrounding facts and circumstances indicate that an agreement has in fact been reached, a(n) _____ has been created.

Implied contract

Test to determine if contract can be performed within 1 year for purposes of SOF

Impossibility test

When the consideration given in exchange for the collateral promise is something the guarantor seeks primarily for his own benefit rather than for the benefit of the primary debtor, the contract:

Is outside the statute of frauds

Daniel owes Casey a debt, the amount of which is subject to a good faith dispute. The parties agree to settle the debt, with Daniel promising to pay Casey $15,000 and Casey promising to release Daniel on a $25,000 debt. The settlement agreement:

Is supported by consideration

Oral contract for the sale of land that has been completely performed by the vendor (seller)

Is taken out of the SOF and can be enforced without any writing

What is the legal status of an improperly dispatched acceptance that was sent by a means of communication that was non-authorized by the offeror (traditional common law)?

It is effective when received

A bilateral contract is "taken out of the statute of frauds" when:

It is fully performed by at least one party

Which of the following conditions characterizes a firm offer regarding the sale of goods?

It must be made by an offeror who is a merchant

Applied by courts to resolve a "battle of the forms" when the forms contain conflicting terms

Knock-out rule

A debt that is both due and certain

Liquidated

On May 1, Dix and Wilk entered into an oral agreement by which Dix agreed to purchase a small parcel of land from Wilk for $450. Dix paid Wilk $100 as a deposit. The following day, Wilk received another offer to purchase the land for $650, the fair market value. Wilk immediately notified Dix that Wilk would not sell the land for $450. If Dix sues Wilk for specific performance, Dix will:

Lose because the agreement was not in writing and signed by Wilk

The only state to have adopted the UCC only partially

Louisiana

Rules that states acceptance occurs when offeree dispatches acceptance by authorized means

Mailbox rule

The rule that states the offeree must accept the terms as stated in the offer

Mirror image

Def of party seeking to rescind because of reliance on unintentional materially false statement of other

Misrepresentation

Guy and Boyd make an oral contract whereby Guy agrees to sell Boyd 480 widgets (goods) at a price of $480. Later, the parties want to modify the contract so that the price would become $520. This modification:

Must be in writing

Milner Developers proposed an offer to Henry Wright, an independent contractor, offering to hire him for their next project. They offered him a certain rate and specified the contract details along with describing the stipulated mode of acceptance but received no response. Wright responded to the offer after a delay of two months with a quote for a higher amount than that mentioned by Milner Developers. Do the two parties have a binding contract?

No, because Wright's letter was a counteroffer to the original offer

Helen worked for ABC Motors for 25 years. The president of ABC said to her: "In consideration of your past service for 25 years, I promise to give you a new car next week." However, he did not give the car. Is this promise legally enforceable?

No, legal consideration is absent

Can a local businessman pay a police officer $50 a week to watch the business more closely?

No, public officials cannot give consideration on duties they are already supposed to perform

Todd is a licensed real estate broker in Ohio. One of Todd's largest clients, Sun Corp., contracted in writing with Todd to find a purchaser for its plant in New York and agreed to pay him a 6% commission if he was successful. Todd located a buyer who purchased the plant. Unknown to Todd, New York has a real estate broker's licensing statute, which is regulatory in nature, intended to protect the public against unqualified persons. Todd violated the licensing statute by failing to obtain a New York license. If Sun refuses to pay Todd any commission and Todd brings an action against Sun, he will be entitled to recover:

Nothing

Written agreement, Felicia agrees to sell Queen 100 boxes $6/box ($600). Felicia then orally agrees $4/box ($400)

Oral modification is valid

A contract in which one party to agreement buy all produced goods of the other party

Output contract

When parties are permitted to use parol evidence to prove the additional terms of the agreement

Partial integration

Contract between Stella and Painture, LLC for paint purchase ($50) and installation ($1000). Stella sues Painture.

Predominant purpose= service common law contract rules apply

Which of the following will likely be legally binding despite lack of consideration?

Promise to donate money to charity which charity relied on

Amy agrees to paint Sally's car for $500 on complete. Sally tries to cancel because Becky offered to paint for $400. Who is the promisee and promisor?

Promisee= Amy Promisor= Sally

Prevent offeror from revoking offer prior to acceptance when offeree relies on being kept open

Promissory estoppel

Requires reasonable reliance on the promisor's promise

Promissory estoppel

A memorandum on the sale of goods that does not indicate the ______ of goods to be sold will not satisfy the UCC's writing requirement.

Quantity

Memo on sale of goods that doesn't indicate ____ of goods to be sold does not satisfy the UCC writing requirement

Quantity

Allows a party who has materially breached a contract to recover the reasonable value of any benefits he has conferred on the promise

Quasi-contract

Help dentist where J had tooth pulled, written contract or oral agreement to pay

Quasi-contract

Imply promise to pay benefits he received from another to avoid unjust enrichment

Quasi-contract

Ends the right to rescind a voidable contract

Ratification

Failure to rescind promptly and unequivocally upon learn facts that constitute avoidance grounds

Ratification

Disaffirming minors are required to pay:

Reasonable value of necessaries

Contract cancelled and return to pre-contract positions

Rescission

When the court undoes a contract to return parties to position they were in before contract existed

Rescission

Where the parties to a contract wish to cancel their contract and be in the same position as they were prior to forming the contract, they should seek to obtain a(n) ___________.

Rescission

The legal remedy of __________ requires the defendant to pay the value of the benefits that the plaintiff has conferred on him.

Restitution

When an offer is withdrawn by the offeror before acceptance by the offeree

Revocation

Ace Painting Company agrees to paint Steve Smith's house for $2,000, payable upon completion. Smith tries to cancel contract, having received offer from Budget Painting Company to paint his house for $1,500. Which promise is at issue? Who is the promisee? Has promisee given consideration?

Smith's promise to pay Ace Ace Yes, ready to paint

Price signed a contract to sell Wyatt a parcel of land for $90,000. The entire sales price was payable at the closing. Price has decided to keep the land. If Wyatt commences an action against Price, what relief is Wyatt most likely to receive?

Specific performance

Governs contract between Greg and Jones. Greg signed contract to work as manager for Jones.

State common law

According to the Code, when there is an acceptance that contains terms that are different from the original terms of the contract, the contract will consist of _____ and the appropriate gap-filling presumptions of the Code

Terms on which the parties' writings agree

In the sale of goods contract if a term is left open, that open term can be filled by these

The UCC's "gap-filling" rules

Mr. W enters into a contract to sell a car to Tim who is 16 years old (minor)

The contract is voidable and enforceable unless & until Tim cancels

Mr. White enters into a contract to sell a car to Joe Jr. who is 15 years old and is considered a minor in the state where he lives. What is the status of the contract that Mr. White and Joe Jr. entered into?

The contract is voidable and is enforceable unless and until Joe Jr. cancels it

Three days before she was judicially declared mentally incompetent and institutionalized, Irma bought a $50,000 automobile by cash and took delivery of it

The contract is voidable due to Irma's institutionalization

When a court begins computing time for the purposes of the statute of frauds one year provision

The date of formation of the contract

What is the status of the offer when offeree tries to accept offer on its exact terms after expired

The offeree becomes the offeror making a new offer

Mr. White contracts with his wife Ms. White to watch their kids, Joe and Jimmy, for $50 for the night. What is the status of the contract between Mr. Smith and Ms. White?

There is no contract because Ms. White gave inadequate consideration

The remedy for a violation of the Statute of Frauds when the contract is fully executed

There is no remedy.

Tracy, aged 12, is named the sole inheritor of her family mansion, which is valued to be worth millions. She has disaffirmed the agreement on the advice of her uncle and guardian Pete. This automatically transfers the title to the latter. Which of the following statements is true of the case?

Tracy cannot disaffirm until she has reached majority

T/F: A counteroffer is a rejection and it terminates the offeree's power to accept the original offer

True

T/F: Common law= offeror can revoke offer at any time prior to acceptance even if promised not to

True

The effect of rescission before performance of an illegal act

Typically, each party can recover whatever they parted with

Governs contract between Dee and Li. Entered into contract with Li for the sale of Dee's boat

UCC

The law that applies to a sale of goods when the seller is not a merchant

UCC applies, but merchant is held to a higher standard

Absence of meaningful choice and terms unreasonably advantageous to one of the parties

Unconscionability

An otherwise valid contract whose enforcement is barred by the applicable contract statute of limitations is an example of a(n):

Unenforceable contract

Your friend lost her cell phone and offers you a reward of $25 if you find it

Unilateral

We talked about the Nolan Ryan 1968 baseball card in relation to the doctrine of

Unilateral mistake

A contract where at least one party has the option to avoid his or her contractual obligations

Voidable

Characterizes the effect of incapacity caused by mental impairment

Voidable - If a contract is found to be voidable on the ground of mental impairment, the person who lacked capacity at the time the contract was made has the right to disaffirm the contract

Written memoradum, indicates existence of a contract, quantity and signed by party to be charged

What the UCC requires to satisfy the Statute of Frauds

When do traditional contract (common law) rules apply to a contract for the sale of goods?

Where no specific UCC Article 2 rule exists

Barney is 23 years old. His aunt had promised in writing to pay him $1,000 if Barney would refrain from drinking alcohol for one year. Barney refrained from drinking alcohol for one year. However, his aunt now refuses to pay Barney as agreed-upon. The aunt claims that because Barney suffered no detriment by refraining from alcohol, his non-drinking does not constitute legal consideration and therefore no contract was formed. If Barney sues his uncle, Barney will:

Win because Barney had a legal right to drink alcohol

Can you use parol evidence when contract says "buy Matthew's truck" and Matthew's has 2 trucks?

Yes, can use parol evidence to explain the ambiguity

Betty, age 16, buys a car and wrecks it one week later. She takes it back to the seller and demands all her money back. According to the traditional rule, is she entitled to get all her money back?

Yes, regardless of the condition of the car, because this was a voidable contract

Walter attempts to introduce oral evidence in action relation to written contract with Susan prohibited if related to

a change in the meaning of an unambiguous provision in contract

Offers that fail to specify a time limit are only open for:

a reasonable time

Jonas contracts with Lucy to paint Lucy's house. Jonas paints Sarah's house by mistake, thinking it belongs to Lucy. Sarah is on vacation and does not know Jonas is painting her house. Sarah comes home from vacation and discovers her house has been painted. Sarah's house looks much better than it did before the paint job. Jonas' work has greatly improved the value of Sarah's house. Jonas sends a bill to Sarah and she refuses to pay. Jonas sues Sarah. Who most likely wins? Why? a. Sarah because she did not hire Jonas to paint her house and she did not know he was painting her house until the job was finished. b. Jonas because of the doctrine of Quasi-Contract; Jonas conferred a benefit on Sarah and she retained the benefit. c. Jonas will win but Sarah can get indemnified by Lucy d. Jonas because of the doctrine of promissory estoppel. e. Jonas but only because his work has greatly improved the value of Sarah's house creating an Implied Contract

a. Sarah because she did not hire Jonas to paint her house and she did not know he was painting her house until the job was finished.

Nina has breached a contract between Milo and her, but not materially. This means that Milo can: a. Sue only for damages caused by the breach b. Sue for damages for a total breach of the contract c. Cancel the contract d. Withhold his performance, even if the breach is remedied e. Recover punitive damages

a. Sue only for damages caused by the breach

When a promisee who has an existing claim agrees with the promisor that he will accept some performance different from that which was originally agreed on, both parties can use the remedy of:

accord and satisfaction

Sarah is 16 years old. She left home at age 15; her parents no longer support her. Sarah entered into a contract with Best Groceries for the purchase of $100 of groceries on credit. The groceries consisted of basic, necessary items. However, their reasonable value is only $80. If Sarah discovers that she has been overcharged and refuses to pay, Best is entitled to collect: a. None of the above b. $80 c. $100 d. $90 e. $50

b. $80

In order for the consideration requirement in contracts to be met: a. The consideration given by each party must be of roughly equal value b. Each party must give consideration c. The consideration must have monetary value d. The consideration must consist of some form of property e. The consideration must be illusory

b. Each party must give consideration

Why is past consideration not a consideration in a present promise? a. It falls under exceptions to consideration b. It does not pertain to the present exchange c. It is not covered under the UCC codes for consideration d. It involves an issue of moral obligation e. It involves a modification

b. It does not pertain to the present exchange

Justine, a self-employed 16 year old whose parents are dead, buys a dress on credit for $70. After receiving the dress and discovering that its reasonable value is only $50, Justine tries to disaffirm the deal before paying the $70. In this case: a. Justine can disaffirm, and she is bound to pay the full $70 b. Justine can disaffirm, but she is only bound to pay $50 c. Justine can disaffirm, and she can return the dress without paying for it d. Justine has to return the dress e. Justine cannot disaffirm

b. Justine can disaffirm, but she is only bound to pay $50

Keisha agreed to sell Susan her Picasso painting. She wrote the name of the painting and $600 on a napkin. Both Keisha & Susan signed the napkin. Susan paid Keisha the money and Keisha: a. May refuse to hand over the painting since contract was on a napkin and is unenforceable

b. Must give Susan the painting since the contract satisfies the statute of frauds

James goes to a dentist to have a tooth extracted. James never signs a written contract for this service, and he and the dentist never made an oral agreement either. Later, the dentist bills James who refuses to pay. The dentist sues James. Which of the following is true? a. The dentist can recover under the doctrine of promissory estoppel b. The dentist can recover under quasi-contract c. It depends on the application of Article of the UCC d. The dentist can recover under the preexisting duty theory e. The dentist cannot recover because there was no express contract here

b. The dentist can recover under quasi-contract

Mr. Yellow delivers a stack of newspapers to Mr. Green's store to see if he wants them. A note attached indicates the stack of papers is $50. Mr Green without communicating an acceptance sold the entire stack of papers to his customers. What is the status of the agreement between Mr. Yellow and Mr. Green? a. There is no contract because Mr. Green did not expressly accept the offer b. There is a contract because because Mr. Green accepted by implied action c. There is no contract because the goods are treated as gifts to Mr. Green d. There is no contract because the Secretary of State was not notified e. There is no contract because silence cannot constitute acceptance

b. There is a contract because Mr. Green accepted by implied action

Kyle sent Tara a letter offering to sell Tara his car. Tara left the letter on her desk, where her roommate, Maggie, saw it. After reading the letter, Maggie wrote to Kyle and stated that she (Maggie) wanted to accept Kyle's offer. Which of the following is true? a. Kyle must sell Maggie his car unless Kyle is a merchant under UCC b. There is no contract between Kyle and Maggie because Kyle did not communicate the offer to Maggie c. Kyle and Tara have a contract for the purchase of Kyle's car d. Maggie's letter is a valid acceptance of Kyle's offer e. None of the above

b. There is no contract between Kyle and Maggie because Kyle did not communicate the offer to Maggie

On Thursday, Trista Dylan receives a letter from Charlie Holmes offering to sell her a diamond ring and stating that: "if you choose to accept, you must do so prior to 2:00 p.m. tomorrow." Trista had a telegram of acceptance dispatched well before 2:00 p.m. on Friday but it is delivered to Charlie's home only at 2:15 p.m. Do Trista and Charlie have a binding contract? (apply modern contract law rule) a. No, because Trista's purported acceptance was received after 2:00 p.m. b. Yes, because Trista dispatched telegram prior to 2:00 p.m. c. No, because Trista's use of a telegram was not stipulated in the offer d. Yes, unless Charlie is not home to receive the telegram. e. No, because a diamond ring is "goods"

b. Yes, because Trista dispatched telegram prior to 2:00 p.m.

Payne entered into a written agreement to sell a parcel of land to Stevens. At the time the agreement was executed, Payne had consumed alcoholic beverages. Payne's ability to understand the nature and terms of the contract was not impaired. Stevens did not believe that Payne was intoxicated. The contract is a. void as a matter of law. b. legally binding on both parties. c. voidable at Payne's option. d. voidable at Steven's option.

b. legally binding on both parties

Martin Nowak, an accountant, entered into a written contract with Jane Gibson to perform certain tax services for Jane. Shortly thereafter, Jane was assessed additional taxes and she wanted to appeal the assessment. Jane was required to appeal immediately and the workpapers held by Martin were necessary to appeal. Martin refused to furnish Jane with the workpapers unless he was paid a substantially higher fee than was set forth in the contract. Jane reluctantly agreed in order to meet the filing deadline. The contract as revised is: a. voidable at Jane's option based on undue influence b. voidable at Jane's option based on duress c. void on the ground of undue influence d. void of the ground of duress

b. voidable at Jane's option based on duress

. King sent Foster, a real estate developer, a signed offer to sell a specified parcel of land to Foster for $200,000. On the same day that King's letter was received Foster telephoned King and accepted the offer. Which of the following statements is true under the statute of frauds? a. No contract was formed because Foster did not sign the offer b. No contract was formed because King is not a merchant c. A contract was formed, although it would be enforceable only against King d. A contract was formed but it is unenforceable e. A contract was formed and it is enforceable against both parties

c. A contract was formed, although it would be enforceable only against King

If Pool Liner Manufacturing Company makes an offer in a signed writing in which it proposes to sell 100 of its SunRay Pool Liners to Aqua Systems Pro for $200,000 and gives assurances that the offer will be kept open for six months, the offer is: a. A firm offer that cannot be revoked for six months b. A revocable offer c. A firm offer that cannot be revoked for three months d. An option e. An offer for a unilateral contract

c. A firm offer that cannot be revoked for three months

Which of the following meets the requirements of consideration? a. A promise not to engage in a crime or tort b. A promise without a binding obligation c. A promise that involves the exchange of a legal value d. A promise to do a preexisting duty e. A promise to give a gift

c. A promise that involves the exchange of a legal value

Able borrowed $10,000 from Baker, promising to return it with $1,000 interest on January 1, 2006. There is no dispute that Able owes Baker $11,000 due on January 1, 2006. On that day, Able gave Baker a valid check in the amount of $10,500 marked "payment in full for loan due January 1, 2006." Baker accepted that check and deposited it into his account. If Baker then sues Able for the unpaid $500, what would the result be? a. Able wins, because Baker accepted the lesser payment. b. Able wins, because Baker made an implied promise to accept $10,500 as full payment, thereby forgiving $500 of the loan. c. Baker wins, because Able gave no consideration in exchange for Baker's promise to forgive $500 of the loan. d. Baker wins, because marking "payment in full" can never relieve a party of its original obligations under a contract

c. Baker wins, because Able gave no consideration in exchange for Baker's promise to forgive $500 of the loan

Sue offers to buy a house from John and they were negotiating the price of the house. In the meantime, Sue confides in John's wife that she is willing to pay an amount of $50,000 for the house. Delighted to hear this, John's wife tells him the good news. John immediately calls up Sue and accepts her offer. Is there a binding contract? a. Yes, because there is valid consideration b. Yes, because a third party has communicated the terms of Sue's offer to John and that John had accepted the same c. No, because the offeror had not communicated the terms of the offer to the offeree d. No, because the contract is still not signed by both parties e. Yes, because of the doctrine of implied contract

c. No, because the offeror had not communicated the terms of the offer to the offeree

Whose signatures are needed in order to satisfy the statute of frauds? a. Witnesses b. Party attempting to enforce the contract c. Party against whom enforcement is being sought d. Third party e. All parties

c. Party against whom enforcement is being sought

Which of the following is true of a revocation? a. The power of revocation of an offer lies with the offeree b. Death or insanity cannot be reasons for revocation c. Promissory estoppels are used to prevent revocations d. Offers that fail to state a specified time period are considered invalid e. Revocations are never valid

c. Promissory estoppels are used to prevent revocations

April and Brian entered into a partially integrated written contract. Before the written contract was completed, April made an oral statement to Brian regarding the terms of the contract. This statement was not contained in the written contract. Under the parol evidence rule, evidence of April's oral statement would be admissible if it were used to: a. Create a completely new agreement b. Introduce an ambiguous term in the written contract c. Prove an additional term consistent with the written agreement d. Change the terms of the written contract e. None of the above

c. Prove an additional term consistent with the written agreement

Lucy wants to replace all of the major appliances in her home. She entered into a contract with Appliances Are Us for the purchase and installation of the appliances. The price of the appliances was $10,000 and the cost of the labor to install the appliances was $1,000. Later, Lucy becomes dissatisfied with this transaction and now wants to sue Appliances Are Us. Lucy wants to apply the contract rules of the UCC, but Appliances Are Us wants to apply the contract rules of the common law. Which source of law will LIKELY govern this case? a. The contract rules of the UCC apply, because the contract included the sale of goods b. The contract rules of the common law will apply because Appliances Are Us is a merchant c. The contract rules of the UCC apply because the predominant purpose of the contract was sale of goods d. The contract rules of the common law apply, because the contract included services, which are governed by the common law e. The contract rules of the common law apply, because all contracts are governed by the common law

c. The contract rules of the UCC apply because the predominant purpose of the contract was sale of goods

April Roberts ordered 100 19-inch color television sets from Carl Soans and requested for a prompt shipment of the goods. Carl promptly shipped 50 21-inch color television sets and 50 19-inch color television sets without informing April that the shipment of nonconforming television sets was an accommodation. Which of the following is true? a. There is no acceptance because Carl's shipment materially differed from the terms of the offer b. There is an acceptance and April is bound to pay the reasonable value of the 50 21-inch television sets she did not ask for c. There is an acceptance but Carl has breached the contract by shipping nonconforming television sets. d. There is a new offer that Carl has made by sending the nonconforming goods which April can accept or reject.

c. There is an acceptance but Carl has breached the contract by shipping nonconforming television sets.

Normally, an illegal contract is: a. Quasi-contract b. Implied contract c. Unenforceable d. Voidable e. Ratified

c. Unenforceable

Reggie went to the Napa Valley Harvest Festival, when he stopped at Tracy's booth where she was selling paintings of vineyards. Reggie admired a painting of vineyards, which did not appear to be for sale. Reggie said to Tracy, "I will give you $200 if you give me that painting right now." Tracy said nothing in response, but she gave Reggie the painting, and Reggie gave $200 in cash. This is an example of a contract that is now: a. bilateral and executed b. bilateral and execturoy c. unilateral and executed d. unilateral and executory e. None of the above

c. unilateral and executed

A demand for additional terms

counteroffer

The shipment of nonconforming goods, intended as an accommodation to the buyer, is a(n):

counteroffer

Sam, a plumber, entered into a contract for $75,000 with Orr to perform certain plumbing services in Orr's building. After Sam had satisfactorily performed the work, Orr discovered Sam had violated a state licensing statute. As a result, Orr denied paying any money to Sam. The licensing statute was enacted merely to raise revenue for the state. An independent appraisal of Sam's work indicated that the building's fair market value increased by $70,000 as a result of Sam's work. The cost of the materials which Sam supplied was $35,000. If Sam sues Orr, Sam will be entitled to recover: a. Nothing b. $35,000 c. $70,000 d. $75,000

d. $75,000

On May 1, 1985, Mint, a 16-year-old, purchased a sailboat from Sly Boats. Mint used the boat for six months, at which time he advertised it for sale. Which of the following statements is correct? a. The sale of the boat to Mint was void, thereby requiring Mint to return the boat and Sly to return the money received b. Sly Boats has the power to recover the boat from Mint because he has advertised it for sale c. Mint's use of the boat for six months after the sale on May 1 constituted a ratification of that contract d. Mint may disaffirm the May 1 contract at any time prior to reaching majority e. The contract is illegal

d. Mint may disaffirm the May 1 contract at any time prior to reaching majority

Smith and Benson make an oral contract for the sale of some land at a price of $500,000. After paying Smith $400,000 of the purchase price, Benson takes possession of the land. One month later, Smith wants to boot Benson off the land. His argument is that the parties' oral agreement is unenforceable under the statute of frauds. Which is the following is the MOST correct? a. Smith is correct, because contract is for amount greater than $500 b. Smith is correct, because it is an oral contract for sale of real estate c. Smith is incorrect, because contract is for indefinite period of time d. Smith is incorrect, because Benson paid part of the purchase price and took possession

d. Smith is incorrect, because Benson paid part of the purchase price and took possession.

In deciding whether consideration necessary to form a contract exists, a court must determine whether: a. The consideration by each party is of roughly equal value b. The consideration conforms to the subjective intent of the parties c. The consideration has sufficient monetary value d. There is mutuality of consideration

d. There is mutuality of consideration

Martin owns Great Expectations, a trendy Manhattan restaurant. He enters into a contract with Mary, who makes and sells pastries. The contract states that Mary will "supply all of Great Expectations needs" for pastries for the next year. Enforceable? a. Yes, but only if Martin buys all of the pastries produced by Mary in the next year. b. No, because the promise fails to specify the quantity of goods to be purchased. c. No, because Martin might not need any pastries in the next year d. Yes, because this is a requirements contract

d. Yes, because this is a requirements contract

Chica, a women's clothing store, held a "prize drawing" for a $500 shopping spree on Saturday that it had advertised throughout the week. Participation in the drawing required being at the store by noon and completing an application form that included personal information and placing it in a box. The information would then be put into a database for marketing purposes. Fashion consultants offering merchandise for sale greeted customers arriving at the store Saturday morning. Joy happened to be walking by the store and popped in just before noon. She filled out the application and placed it in the box. Joy was the winner of the drawing. Has she given consideration for the prize? a. No, she gave no legal value to Chica, she happened to be walking by b. No, unless she purchased an item from one of its consultants c. Yes, but only if she saw the advertisements d. Yes, she came to the store and gave information that was for the store's use

d. Yes, she came to the store and gave information that was for the store's use

A "confirmatory memorandum" exception to the UCC's statute of frauds provision: a. requires that the memorandum be signed by the party to be bound b. requires that the memorandum be sent within 10 days after the contract is made c. applies even though the memorandum does not satisfy the UCC's writing requirement d. requires that both parties to the contract be merchants e. none of the above

d. requires that both parties to the contract be merchants

In general, ambiguities in a written agreement are resolved against the

drafter

Carla lost her iPhone in Hodge Hall. Jonas found Carla's phone while walking to class and returned it to her. The next day, after returning her phone, Jonas saw a flier hanging in Hodge Hall (that Carla made), which offered $50 for the return of Carla's phone. Jonas demands payment from Carla for the return of her phone. Carla refuses. Jonas sues Carla for breach of contract. Who is MOST likely to win and why? a. Jonas wins because it would be against public policy to discourage people from returning lost items b. Carla wins because a flier offering a reward for the return of an item is not specific enough to be a valid offer. c. Jonas wins because he and Carla had a valid bilateral contract d. Jonas wins because this is a unilateral contract in which Jonas accepted Carla's offer with the return of the phone e. Carla wins because Jonas didn't know about the reward until after returning the phone

e. Carla wins because Jonas didn't know about the reward until after returning the phone

Sara tells Kate that she will give her $50 to clean her garage. When Kate is halfway done, Sara decides to revoke her offer. Is this a valid revocation? a. Yes, because Sara is the master of the offer here b. Yes, because Sara can revoke the offer any time she feels like c. No, because this is a valid contract that cannot be revoked d. Yes, because you can't force someone to do something they don't want to e. No, because this is now a bilateral contract

e. No, because this is now a bilateral contract

Damages that are agreed upon at the time the contract is entered into are called:

liquidated damages

A bilateral contract is accepted when the offeree:

makes the promise requested by the offer

The general common law rule on contract modifications holds that an agreement to modify an existing contract requires:

new and independent consideration

Offeror agrees not to revoke offer for stated time in exchange for valuable consideration

option

Contracts in which one party agrees to buy all of the other party's production of a particular commodity is called a(n):

output contract

A minor entered into a contract with GAM & Co. On attaining majority, he wishes to enforce the contract. The adult party must:

perform the contract

A written agreement was signed by two parties and it was intended to be their entire agreement. The parol evidence rule will prevent the admission of evidence that is offered to:

prove the existence of a contemporaneous oral agreement that modifies the contract

The act of agreeing to go along with a contract that could have been voided

ratification

The general rule is that are only effective

revocations and rejections

The status of a contract between a minor and an adult is generally

voidable

Typically completely executed transactions involving a minor are

voidable at the discretion of the minor

"Sign this contract or I'll kill you"

voidable because of duress

A contract in which one or more of the parties have the legal right to cancel their obligations under the contract is called a(n):

voidable contract