BLAW 301 Final Exam

Rebecca sees a pair of beautiful silver shoes in a store window. She goes in and tells the shopkeeper, "If I am asked to the prom, I will buy those shoes. Please hold them for me." If the shopkeeper signs a note that says, "Will hold for Rebecca silver shoes, style 1028, size 8," will he have to honor that promise? A) Yes, and there is a condition precedent to the contract of sale. B) Yes, there is a contract with a condition subsequent. C) No, there is no contract but simply an illusory promise. D) No, a contract is formed after Rebecca is asked to the prom.

A) Yes, and there is a condition precedent to the contract of sale.

Steven owes Theresa $100 for a used computer which he bought last year at Theresa's garage sale. The two agree that the debt can be paid by Steven's shoveling Theresa's driveway from January through March. The new contract is a(n): A) accord B) satisfaction C) novation D) rescission

A) accord

Alice is browsing in a commercial art gallery when she sees a painting that she likes. Arthur, who is the manager of the gallery, tells her that in his opinion the painting is a genuine Leroy Neiman work. Based upon that representation, Alice buys the work for $5,000. She later discovers that the painting is only a cheap copy of the original that is worth no more than $50. Arthur has: A) breached an express warranty to Alice that the painting is a Neiman work. B) breached the warranty of merchantability. C) not breached a warranty because he was merely expressing his opinion. D) breached an express warranty, the warranty of merchantability, and the warranty of fitness for a particular purpose.

A) breached an express warranty to Alice that the painting is a Neiman work.

A(n) _____________ is a person in a position of trust and confidence who has a duty of utmost loyalty and good faith. A) fiduciary B) servant C) independent contractor D) principal

A) fiduciary

Sid contracts to put new kitchen cabinets in Ned's house. Sid repeatedly tries to install the cabinets, but Ned does not grant him access to the house. In this case: A) Ned is discharged from his duties under the contract because of material breach. B) Ned would not owe any damages because he did not actually receive any benefit under the contract C) Sid is discharged from his duties under the contract because Ned's prevention of Sid's performance constitutes a material breach. D) Both Sid and Ned are discharged from their duties because of impossibility of performance.

C) Sid is discharged from his duties under the contract because Ned's prevention of Sid's performance constitutes a material breach.

Alex sees Mona's ring, and he thinks it is very valuable. He uses physical duress to cause her to give him the ring, and he quickly sells it to unsuspecting Hanna's Antique Jewelry Shop for $5,000. A month later, Mona discovers her ring on sale at Hanna's. Can Mona get the ring back? A) Yes, since a true owner can always recover her own property. B) Yes, since Alex had voidable title to the ring. C) Yes, since Alex had void title to the ring. D) No, since Hanna was a good faith purchaser for value.

C) Yes, since Alex had void title to the ring.

Strict product liability exists if: A) the consumer misuses the product. B) the consumer alters the product before he or she uses it. C) a defective, unreasonably dangerous product reaches the consumer or user without substantial change in the condition in which it is sold. D) the consumer gives the manufacturer or seller notice of the defect.

C) a defective, unreasonably dangerous product reaches the consumer or user without substantial change in the condition in which it is sold.

Anna is 88 years old and under the legal guardianship of her daughter. One day Anna receives a telephone call from a health insurance salesman and purchase of $400 a month Medigap insurance policy. This contract is: A) valid B) voidable C) void D) unenforceable

C) void

True or False: A promisee is the person making promise.

False

True or False: Agents and principals have mutual fiduciary duties to one another.

False

True or False: Allannah has entered into a contract to buy a new Steinway piano. The law governing the contract is Article 3 of the UCC.

False

True or False: Ed buys a car from a friend "as is". The friend tells him, "In my opinion, this car is in excellent mechanical condition." The friend has made an express warranty.

False

True or False: Increased production costs will allow the seller to avoid a contract based upon commercial impracticability.

False

True or False: Revocation of acceptance is effective without notice to the seller.

False

True or False: The "perfect tender rule" provides that only substantial deviations from the promised performance in a sales contract under the Code constitute a material breach and discharge the aggrieved party from the duty of performance.

False

True or False: The UCC "risk of loss" rules assign the loss according to who has ownership of the goods.

False

True or False: A constitution restricts the powers of the government and specifies the rights and liberties of the people.

True

True or False: A fiduciary duty, arising out of a relationship of trust and confidence, is one of utmost loyalty and good faith.

True

True or False: A noncontractual promise may be enforceable where there has been justifiable reliance on the promise.

True

True or False: An express warranty may consist of a sample.

True

True or False: An implied warranty exists by operation of law.

True

True or False: Article 2 of the Uniform Commercial Code does not apply to the sale of services.

True

True or False: Ethical issues in business settings include corporate governance, whistle-blowing, shareholder voting, and management's duties to shareholders.

True

True or False: Hal holds a gun to Irving's head and tells him to sign the contract. Irving signs the contract, because he fears for his personal safety. The contract is void, because it was entered into under duress.

True

True or False: The principal has a duty to indemnify the agent for losses incurred or suffered while acting as directed by the principal in a transaction which is not illegal or wrongful.

True

Don offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer." A) Diane cannot accept the offer, because it wasn't made to her. B) This is a valid acceptance. C) The offer has not been communicated to the offeree. D) This is an invitation seeking offers and not an offer.

A) Diane cannot accept the offer, because it wasn't made to her.

James offers to sell his fishing boat to Brenda for $3,000. Brenda says she will apply for a loan and will buy the boat within a week. A contract is formed: A) when Brenda tells James she will buy the boat. B) when Brenda gets the money from the credit union. C) when Brenda applies for the loan at the credit union. D) Only when James gets the $3,000

A) when Brenda tells James she will buy the boat.

Tom tries to sell his Aston-Martin to Victoria for $12,000. Tom tells Victoria, "I paid $12,000 for the car in 1978 and it's worth twice that today." Tom really paid $8,000 for the car in 1978. If Victoria buys the car, basing her decision on Tom's statement, which of the following correctly states the situation? A) Tom's statements amount to puffing only. B) Tom's statements provide grounds to set the contract aside. C) Tom's statements are actionable only if intentional. D) Tom's statements amount to fraud in the execution.

B) Tom's statements provide grounds to set the contract aside

Unless one of the parties contractually assumes the risk, the ____ discharges a contract if supervening circumstances make fulfillment of the purpose which both parties had in mind impossible. A) bankruptcy law B) frustration of purpose doctrine C) perfect tender rule D) subjective impossibility doctrine

B) frustration of purpose doctrine

In order to form a contract, the parties must: A) manifest their agreement subjectively. B) manifest their agreement objectively. C) indicate solely through written word their intent D) create a formal document called a contract

B) manifest their agreement objectively.

Fay, age 17, ordered a pair of skis on the installment plan. She paid $20 every month until she turned 18, the age of majority. The next day, she sold them to Sharon and disaffirmed the contract. Fay is: A) still liable since she had to disaffirm before her 18th birthday. B) still liable because selling the skis amounted to a ratification. C) still liable because she used the skis. D) not liable because skis are not necessaries.

B) still liable because selling the skis amounted to a ratification.

Which of the following is NOT a breach of an agent's duty of obedience? A) Entering into an unauthorized contract for which his or her principal is then liable. B) Committing a tort for which the principal is now liable. C) Improperly delegating her authority. D) Not following a principal's instruction to misrepresent the quality of a competitor's goods to a potential customer.

D) Not following a principal's instruction to misrepresent the quality of a competitor's goods to a potential customer.