Business Law Final
Written evidence or an electronic record of a contract for a sale of goods priced at $500 or more is required by the Uniform Commercial Code.
true
When a naïve purchaser enters into a contract in reliance on the opinion of an expert, the innocent party is not entitled to rescind the deal.
false
When no delivery terms are specified in a contract for a sale of goods, the contract will fail for indefiniteness.
false
primary obligation is a promise to pay another's debt only if that party fails to pay.
false
Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan knowingly misrepresents a number of material features about the restaurant and the business. When Beth discovers the truth, she can rescind the contract on the basis of
fraud
Ken, a real estate agent, assures Lily that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Lily buys the property and then discovers that the street has no more traffic than any other in its vicinity. Lily is most likely a victim of
fraud
If the parties to a contract for a sale of goods have not agreed on a price, a court will determine a reasonable price at the time for delivery.
true
Punitive damages are generally not awarded in an action for breach of contract.
true
Reformation is an equitable remedy used when the parties have imperfectly expressed their agreement in writing.
true
The Statute of Frauds operates as a defense to the enforcement of an oral contract for the sale of land.
true
The UCC imposes some different rules on merchants.
true
To be characterized as a "good" under the UCC, an item of property must be movable and tangible.
true
Under the UCC, an offeror must be notified within a reasonable time that the offeree has accepted.
true
Under the doctrine of mitigation of damages, the duty owed depends on the nature of the contract.
true
Words or terms in contracts that are subject to more than one reasonable interpretation can lead to bilateral mistakes.
true
A firm offer by a merchant may be oral.
false
A statement of opinion is generally subject to a claim of fraud.
false
All collateral promises must be in writing to be enforceable.
false
An award of damages for a breach of contract can elevate the nonbreaching party to a better position than he or she would have been in if the contract had not been breached.
false
An oral contract for a transfer of land is always enforceable.
false
Damages that compensate the nonbreaching party for the loss of a bargain are known as consecutive damages.
false
In a contract for a sale of goods, the usual measure of compensatory damages is the difference between the retail price and the wholesale price.
false
Misrepresentation cannot occur by silence.
false
Reliance on a misrepresentation is justified if the misrepresentation is an obviously extravagant statement.
false
Restitution is limited to rescission cases.
false
Under the UCC, there are no exceptions to the perfect tender rule.
false
Under the perfect tender rule, if tender is not perfect, the seller is obligated to try again.
false
Sara contracts to work exclusively for Thermal Company during July for $5,000. On June 30, Thermal cancels the contract. Sara finds a similar job for the month of July but earns only $3,000. Sara files a suit against Thermal. As compensatory damages, Sara can recover
2,000
Clay Pots pays Dora $25,000 to propose an online marketing campaign. Two days later, Dora tells Clay Pots that she has accepted a job with its competitor Earthenware Inc. and cannot plan the campaign. As compensatory damages, Clay Pots can recover
25,000
Rita contracts to work for Social Media Corporation (SMC) during April for $4,500. On March 31, SMC cancels the contract. Rita declines a job of a different type and rank with Tech Talk, Inc., which would have paid $3,500. Rita files a suit against SMC. As compensatory damages, Rita can recover
4,500
Banquets & Parties (B&P) contracts to buy 1,000 uninflated balloons from Gas Bags, Inc., for $1 per item. When the market price decreases to 50 cents per balloon, B&P refuses to go through with the deal. Gas Bags can recover
500
Brad leaves an iPod at Computer Sales & Repair (CSR) to have the battery replaced. CSR sells the iPod to Doris, who does not know that it belongs to Brad. Brad can recover from
CSR
County Dentists Clinic offers to buy from Dental & Medical Supplies Company a certain quantity of floss and other items for a certain price. Dental & Medical can accept the offer by
a prompt promise to ship or a prompt or current shipment of the goods.
Hal's Hardware Inc. and Ideal Tools Corporation sign a written contract for a sale of goods. To be enforceable, this written contract must include
a quantity term, such as "50 hammers" or "100 boxes of assorted nails."
Effortless Workouts, Inc., offers to sell a treadmill to Farouk and sends it to him on a trial basis. This is
a sale on approval
Paramount Bookstores buys fifty cases of an assortment of books from Quixotic Publishing Company with the right to return the unsold books in lieu of payment. This is
a sale or return
Fruit of the Plant, Inc., agrees to sell a certain quantity of a high-quality grain seed to Grange Co-op. Fruit of the Plant can obtain only half of the quantity ordered, so the seller also ships a lesser quality seed in twice the amount of the remainder of the order for the same price. Grange Co-op rejects the lesser quality seed. With time for performance not yet expired, Fruit of the Plant can
attempt to cure the defect.
Omni Metals Company and Piecework Fabrication, Inc., enter into a contract under which Omni agrees to deliver a certain quantity of sheet metal to Piecework each month. The contract does not include a price term. In a suit between the parties over the price, a court will
determine a reasonable price at the time for delivery.
Consumers Choice store accepts a shipment of EZ2U-brand tablets from Digital Devices, Inc. Consumers Choice later discovers a defect in the tablets, revokes acceptance, and returns the tablets via GoBack, Inc. During the return, the tablets are lost. The loss is suffered by
digital devices
Jason contracts with Golf Carts Unlimited, Inc. to buy five golf carts. The contract lists the five carts as GC001, GC002, GC003, GC004, GC005. Identification
has taken place
Garden & Field stores order a specific assortment of rose bulbs from Hybrid Flora Company. Hybrid mistakenly ships a selection of annuals, which Garden & Field rejects and returns via Intra-state Transport, Inc. During the return, the annuals are lost. The loss is suffered by
hybrid flora
Fresh Dairy, Inc., is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector's Helado Corporation is also interested. Fresh Dairy is not notified of Gelato's performance within a reasonable time. Fresh Dairy
may treat the offer as having lapsed.
Air Flo, Inc., and Banyan Grove Apartments enter into an oral contract in which Air Flo agrees to provide air-conditioning and heating maintenance for Banyan Grove's facilities for two years. This contract is enforceable by
none of the choices
Eleanor offers Flossy the amount of an investment in Flossy's start-up business venture if she marries Eleanor's son Glen. This promise is enforceable
only if it is in writing
Hydro Source Company contracts to sell pumps, tanks, and water storage systems to InFlo Irrigation, Inc. Before the goods are delivered, InFlo indicates that it will not be able to pay. Hydro Source can pursue the following relief
resell the goods and recover any damages from InFlo.
Retail Company and Sales Wholesale Corporation enter into a contract for a sale of beach toys for $5,000. To be enforceable, the contract should be in writing and identify
the quantity
A contract in which a party assumes a secondary obligation normally must be in writing to be enforceable.
true
A merchant is a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods being purchased or sold.
true
A party seeking to recover compensatory damages can also recover incidental damages.
true
Acceptance of goods precludes the buyer or lessee from exercising the right of rejection.
true
An innocent party can rescind a fraudulent contract and be restored to his or her original position.
true
An otherwise unenforceable oral contract may be able to be enforced under the doctrine of promissory estoppel.
true
If a buyer breaches a contract, the seller can choose to simply cancel the contract.
true
If a buyer repudiates a contract before the time for contract performance, the seller can bring an action to recover damages.
true
If a party against whom enforcement of an oral contract is sought admits under oath that a contract for sale was made, the contract will be enforceable.
true
If goods identified to a contract are destroyed through no fault of either party, both parties are excused from performance.
true
Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OptiBank through Newt's investment firm. Unknown to Mona, Newt realizes a commission from the investment. Most likely, Mona may rescind the contract on the basis of
undue influence
Dick's Burgers n' Shakes enters into an oral contract with Restaurant Equipment Warehouse (REW) for REW's sale to Dick's of a single-spindle milkshake mixer for $300. Assuming the terms can be proved, the contract is enforceable by
Dick's or REW.
Gas & Wood Stove Shop receives Hearthwarm-brand stoves from Independent Dealer, Inc., under a sale or return agreement. While the stoves are in Gas & Wood's possession, title is held by
Gas & Wood.
Guido and Hal want to rescind their contract under which Guido sold Hal a mountain bike for $100. To rescind the contract
Guido must return the $100 and Hal must return the bike.
Henry files a suit against Irrigation Services to enforce an oral contract that would otherwise be unenforceable under the Statute of Frauds. The court could enforce such a contract if
Henry foreseeably and justifiably relied on Irrigation's promise.
Megan, an agent for Nabob's, a department store, orders one hundred dresses from Original Designs Inc. Absent a specific agreement between the parties to the contrary, title will pass to Nabob's when
Original Designs physically delivers the dresses.
County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Doyle to Ezra, the furnished information is mistaken. If Doyle and Ezra are both ignorant of the mistake, it is
a bilateral mistake.
Soft Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Soft tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may
await performance, sue Soft, or suspend its own performance.
Lewis, an employee of Silos, Inc., makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently, Silos's bid is significantly low. Any contract with AgriCo-op that includes the mistake may be rescinded
if AgriCo-op knew or should have known of the mistake.
ActioNOW and Becca enter into an oral contract in which Becca agrees to work on a project for ActioNOW for eighteen months. This contract is enforceable by
none of the choices.
Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on—a local law prohibits construction on the rest of the property. Ralph can
not avoid the contract because persons are assumed to know the law.
Dix agrees to sell Eli, for $1,500, a remote parcel of land. They believe the land to be worthless, but beneath it is shale rock containing oil. A court would
not rescind the contract.
Builders, Inc., agrees to construct an office building for Champ Fitness Clubs, Inc. The project proceeds according to plan, but before it is done, Champ tells Builders to quit. Builders may recover
profits plus the costs incurred up to the time of the breach.
Global Outfitters Outlet and Holly, a consumer, enter into a contract for a sale of camping gear. If the contract includes a clause that is perceived as grossly unfair to Holly, its enforcement may be challenged under
the doctrine of unconscionability.