Commercial Law Chapters 9,10,11,12,13,14,(little)15,17,18 Test #2

Barbara, an antique dealer, intentionally represents the value of an antique of drawers as $6,000 when she has reason to know the value is considerably less. Margaret agrees to buy it for $5,500. It is worth $2,500. In a state that use the "benefit-of-the-bargain" rule, Margaret's damage award be:

$3,500

The UCC Article 2 statute of frauds provision applies to the sale of goods for the price of __________ or more

$500

mary agrees to sew george's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck and calls mary who says it will now cost $60. When mary finished the dress (with ruffles), georgia must pay:

$60, since the modified agreement is supported by additional consideration.

Which of the following is correct with regard to conditions subsequent?

A "sale or return" contract is an example of a contract with a condition subsequent.

Which of the following is an exception to the suretyship provision requirement under the statute of frauds?

A promise, the leading object of which is to obtain an economic benefit for oneself.

ABC, Inc. calls the Widget Corporation of America to order 400 widgets at $2 a widget. Widget accepts the oral order and then sends out an order confirmation form, with the pre-printed name Widget Corporation of America on the top of the form. The form states that an order has been received for "300" widgets and that it will be filled promptly.

ABC can enforce the contract for 300 widgets, but not for 400 widgets.

Chris receives a printed form in the mail from Wyandott Heating indicating that he has placed a telephone order for a $600 furnace. He doesn't recall placing the order. Which of the following is correct?

Chris can hold Wyandott to the order.

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. What result?

Fay is still liable because selling the skis amounts to a ratification

Which of the following is true with respect to substantial performance?

It has particular importance in the construction industry, and substantial performance does not defeat the purpose of the contract

Percy, age 17, purchased a used mobile home from a mobile home dealer for $20,000. The price, however, is twice the reasonable value of the mobile home. One month later, Percy wishes to disaffirm the contract. If the mobile home is considered a necessity, then:

Percy must keep the mobile home but is only liable for the reasonable value of the mobile home.

Vladimir entered into a contract to buy Daniel's collection of rare stamps. Vladimir mailed payment of $10,000 for the stamps to Daniel, but now Daniel tells Vladimir, "I'll never part with these stamps." Are the following remedies available ti Vladimir?

Restitution: Yes; Specific Performance: Yes

Robert Briscoe is 17 years old. He lies to Bouyers Auto Group about his age in order to induce them to sell him a new pickup. Bouyers falls for this lie and sells him the pickup. Under the prevailing view, which of the following is correct?

Robert may disaffirm and get his money back.

Steve purchases a four-wheel-drive truck from Belk Auto Sales. Steve is only 17 years of age. He wrecks the vehicle and attempts to disaffirm the contract and have Belk repay him all that he has paid. In the majority of jurisdictions, what would happen?

Steve may simply return the vehicle and get his money.

carlos owns a store in polk county. His trade extends throughout river city, but not beyond county limits. he sells his store to virginia and as a part of the transaction agrees not to engage in the same business anywhere within the state for a period of three years.

The agreement is unreasonable, and the agreement unduly interferes with the interest of the public.

Which of the following is correct with respect to election of remedies?

The code rejects and doctrine of election of remedied; its remedies are cumulative, the remedy of specific performance is inconsistent with that is restitution, and a person who seeks an injunction may also seek incidental damages for the breach.

Anita owes Brad $75,000. Brad signs a written statement granting Carl a gratuitous assignment of his rights from Anita. Brad delivers the signed statements to Carl before he dies.

The delivery of the statement makes the assignment irrevocable

Fred contracts to sell a certain tract of land to Mary for $20,000, but the contract is silent as to the time of delivery of the deed and payment of the price.

The payment of the $20,000 and the delivery of the deed are mutually dependent and, in the absence of an agreement of the contrary, are concurrent conditions.

wayne helped hank study all night for an important exam. After hank got an "A" on the exam, he told wayne, "I will give you $10 for helping me get a good grade." Wayne said " Thanks, I'll take it."

There is no contract because there is no valid consideration

which is not a revocable offer

a bid to construct a bridge for the city, an offer to buy stock in the ABC Corporation once it is formed, a unilateral offer to pay john $30 to mow your lawn after he has completed half the job and indicates he wishes to finish

Al owes Tory $500, due June 1. Al, Tory, and Ted mutually agree that Ted will pay Tory instead of paying Al the money Ted owes Al. Such an agreement is an example of:

a novation

a fiduciary is

a person who owes a duty of trust, loyalty, and confidence to another

according to common law, informing someone of an intention to do an act or an intention to refrain from acting in a specified manner is considered to be

a promise

The parol evidence rule is:

a rule of substantive law

Matthew recently borrowed $50 from Ricardo for a couple of weeks. Matthew, still short of cash, tells Ricardo, " I will wash and wax your car in exchange for the $50 I owe you." Ricardo tells Matthew, "OK, that's great!" Matthew's performance of his new duty will be:

a satisfaction

lyle offers to sell his house to dennis for $50,000. Dennis responds "I will pay you $50,000 for the house if you will repaint the second floor." This response could best be described as:

counteroffer

Will wants to buy a new car. He goes to the bank to get a loan for the purchase. He signs an agreement to pay the $10.00 per month in premiums on a term life insurance policy which names the bank of the recipient of the policy proceeds in the event of his death before the loan is repaid. This bank is a(n):

creditor beneficiary

Which of the following are requisites for fraud in the inducement?

false representation of a fact that is material, Representation is made with knowledge of its falsity and the intention to deceive, the representation is justifiably relied on

an offer, made by a merchant under the ucc, that is irrevocable even though no consideration is given to keep it open is known as a(n)

firm offer

sam wants to sell his golden retriever to al. Sam tells al that the dog is three years old and that he will point, back, and receive. Although the dog is three years old and will point at birds, he will not back (honor another dog's point). Al relies on sams statements and purchases the bird dog. the buyer has most probably been a victim of

fraud in the inducement

Unless one of the parties contractually assumed the risk, the ___________ discharges a contract if supervening circumstances make fulfillment of the purpose which both parties had in mind impossible.

frustration of purpose doctrine

which of the following is correct with regard to consideration?

in a unilateral contract, a promise is exchanged for an act or forbearance to act, and in a bilateral contract, there is an exchange of promises

A(n)n__________ is a third party who obtains possible benefits but no rights under a contract

incidental beneficiary

james threatens to hit kenneth on the head with a baseball bat unless kenneth signs a contract agreeing to pay james $500 for his latest painting. Because of the threat, kenneth signs the contract:

james has committed physical duress against kenneth

jill contracts to purchase kevin's automobile under the belief that she can sell it at a profit to linda, but after jill has bought the car, she finds out that linda isn't interested in buying it

jill cannot void the contract

Dividend Parcel Service (DPS) includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to the manufacturer to be repaired anyway. The watch is destroyed when the DPS driver uses the package for a ball and tosses it to his buddy. Mary is:

likely to collect from DPS because it attempted to excuse intentional and reckless behavior.

A contract may contain a __________ damages provision by which the parties agree in advance to the damages to be paid in the event of a breach

liquidated

A contractor and Southampton, Inc. have a contract which calls for the contractor to build a building with the completion by June 15. If the building is not complete by that date, the contract calls for the contractor to pay $100 per day in damages. The $100 per day is:

liquidated damages

As a result of a breach of contract by Susan, ellen's personal losses were substantial. Ellen's obligation is to:

mitigate damages

The usual remedy for breach of contract is:

money damages

before granting an injunction enjoying a former employee from competing in a described territory, the courts insist that the employer demonstrate that the restriction is _____ to protect the employer's legitimate interest.

necessary

Joanne, a minor, sold her laptop computer to Bruce, an adult. Bruce then sold the laptop to Anna, also an adult, who had no knowledge of the fact that the original owner was a minor. Under the Uniform Commercial Code, Joanne may:

not avoid her contract to Bruce and may not recover her laptop.

A(n) __________ is a method of discharging a performance in which a third party becomes bound upon a promise to the obligee.

novation

Which of the following would be considered a material breach of a contract?

partial performance that omits some essential part of the contract, delivery of 50 chairs in a contract that calls for 100 chairs, and an intentional breach of the contract

Damages for reliance include expenses for:

preparing to perform

The privilege to play tennis and socalize at the Capital Country Club (CCC) is obtained through application, references, resumes, and fees. Steven and Chanel went to assign the remaining 4 years of their 5-year membership to Charles and Prissy so that Steven and Chanel may join the Silver Hawk Tennis and Polo Club. CCC sues to enjoin Steven and Chanel from assigning their membership. CCC will most probably:

prevail because the parties intended the contract for membership to be persona and thus non-assignable.

The case of In re The Scoreboard, Inc. involved the issue of:

ratification of a contract upon attaining majority

a _________ is a measure designed to protect the public from unqualified practitioners

regulatory license

according to the UCC, an enforceable agreement involving the transfer of title of goods from a seller to a buyer for a price is called a(n)

sale

contract law is significant in that it is basic to other fields of law such as

sales of personal property, commercial paper, and secured transactions

Which of the following is untrue regarding the contracts of intoxicated persons?

slight intoxication will destroy one's contractual capacity.

Miller made a contract to sell his condominiums to Jefferson for $80,000. Two days later Miller changes his mind after discovering that he could have sold the property to another buyer for an additional $20,000. Jefferson sues and asks the court to have the property conveyed to him at the price of $ 80,000. Jefferson is seeking:

specific performance

contracts are governed primarily by

state common law

michelle's boutique places an ad in the sunday paper for beautiful, top-of-the-line designer suits for $20.00. Alice sees the ad in the paper and goes to the store to stock up on business suits for her new job. michelle apologizes for the misprint. alice has finished a class in contract law and insists that the store sell her five suits for $100.00. Alice threatens to sue Michelle for breach of contract

the ad in the newpaper is a solicitation seeking offers, but is not an offer to sell; therefore, alice will not be able to successfully sue for breach of contract

promissory estoppel is a contractual doctrine that includes which of the following considerations?

the courts use the doctrine of promissory estoppel to enforce non-contractual promises, and the courts will not under any circumstance enforce promises that not include all four of the elements of contract

Andrew owns a store in Polk county. His trade extends throughout river city, but not beyond the county limits. He sells his store to jeanne and as part of the transaction agrees not to engage in the same business anywhere in river city for a period of five years.

the geographic restraint is reasonable

the state of florida enters into a contract with treasure salvors governing the salvage of a spanish galleon that sank in the 1600's. under the terms of contract, the salvagers agree to relenquish 25% of the items recovered to the state of florida in return for the right to salvage on state lands. At the time the parties enter into the contract, they both believe that the seabed where the ship lies is state land. Subsequently, the unites states supreme court holds that the continental shelf on which the ship rests has never been owned by florida. the salvagers sue to rescind the contract.

the parties made a mutual mistake for which the contract should be avoided

which of the following contract is covered by article 2 of the uniform commercial code?

the sale of a new car

In addition to the four basic requirements of a contract, which of the following must also occur in order to have a valid contract?

there must be an absence of invalidating conduct and duress

marilyn contracted with with bravo builders to build an addition to her house for $15,000. After digging the foundation, bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming marilyn agrees, which of the following is correct?

this is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of bravo builders.

ratification can occur in which of the following ways

through express language, as implied from conduct, and through failure to make a timely disaffirmance.

The Uniform Commercial Code provides that a court may scrutinize every contract for the sale of goods to determine whether, in a commercial setting, purpose, and effect, the contract is:

unconscionable

Barbara owes Arthur $2,000. On July 1, Arthur assigns the debt to Carl. thereafter on July 15, Arthur assigns the same right to David, who in good faith give value for it and knows nothing about the first assignee. David immediately notifies Barbara of the assignment.

under the english rule, david has priority.

claudia sells her highly successful hair salon to carl. In the sales contract, claudia agrees never to open a hair salon in the state. Which of the following best describes this contract clause?

unenforceable as a violation of public policy

george has been declared incompetent and is under care of his sister. Unknown to his sister, george rents the 30,000-seat civic center for his birthday party. george's contract with the civic center can be best described as

void contract

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:

when Brenda tells James she will buy the boat

Under which of the following circumstances would a court be unlikely to enforce an illegal contract?

where the agreement is with an unlicensed attorney.

aunt ellie promises her 20-year-old nephew, robbie, that she will pay him $100 if he quits smoking for a month. If robbie does, is there a binding contract?

yes, because robbie gave up a legal right

Arthur mails an offer to brian on june 15. brian receives the offer on june 16. arthur mails a revocation of the offer on june 17. brian mails a letter of acceptance on june 18, and arthur receives the acceptance on june 20. brian receives the revocation on june 19. was a contract formed?

yes, on june 18

jack moved from new hampshire to florida and decided to have an air conditioner installed in his car. After it was installed, jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable?

yes, there is consideration for the modified amount.

Sam, a shopkeeper, dies unexpectedly at the age of 46. His lifelong business associate, Paul, is appointed the administrator of the estate. Sam had a personal debt of $8,000 which he owed to Art's Appliance Store. Paul says to Art, "If there isn't enough money in the estate, I'll personally see that the bill is paid." Which of the following is correct?

An oral statement such as this is not enforceable because it is within the statute of frauds.

which of the following are the two basic elements for consideration?

Bargained-for exchange and legal sufficiency

Donald, a minor, makes a contract with Albert, an adult, to buy a motorcycle. One week later, Donald has his eighteenth birthday and shortly thereafter tells Albert he will pick up the motorcycle next week.

Donald has expressly ratified the contract

In which of the following cases would an oral contract be enforceable without a written memorandum?

Michelle calls an employment agency in Paris to arrange for maid service for her three-month Parisian vacation.

MYLEGS (need contract)

Marriage, OVER 1 Year, Land, Executor, Goods over 500, Suretyship

On March 1, Tammy, a student received a telephone call from Watterson, Inc., offering her a job for one year beginning on June 15, after completion of the school year. According to the personnel manager, she will have to move to California and be ready to start work at 8:00 am on June 15. Should Sara ask for a letter confirming the telephone conversation if she accepts the offer immediately?

Yes, because the contract would be for longer than one year from March 1.

to be effective, an offer must:

be sufficiently definite and certain, be communicated to the offeree, and manifest an intent to enter into a contract

__________ is a provision excusing one party from fault or liability

an exculpatory clause

alice says to brian, "If i decide to buy a word processor next year, I will buy it from you." this is an example of:

an illusory promise

David enters into a contract to give Edward the right of first refusal on a tract of land owned by David. David subsequently offers the land to Fred without first offering it to Edward. An appropriate remedy for Edward to seek would be:

an injunction

a bank robbery has occured, and the banker's association offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be to be entitled to the money. Which of the following is eligible?

an off-duty sheriff from a country other than the one where the arrest occured.

On November 1, Paula and Roberta enter into a contract where both parties are obligated to perform on December 31. On December 1, Paula tells Roberta, "I can, in no way, perform my duties in our contract." This statement is:

anticipatory repudiation

Requirements for a memorandum that satisfies the statute of frauds provisions for a writing include that:

any multiple writings must refer to one another

a contract in which both parties exchange promises is a

bilateral contract

The transfer of a contract duty to a third party is known as a(n)

delegation

don offers to sell his diamond ring to emily. Diane overhears the offer and says "I accept the offer."

diane cannot accept the offer, because it wasn't made to her

A(n) __________ is an intended beneficiary of a contract who receives the benefits of the contract as a gift:

donee beneficiary

Which of the following is correct with regard to duress?

duress by improper threats is the most common form of duress.

elmer wrote a letter to his friend fred offering to sell fred an 80-acre farm for $200,000. after mailing the letter, elmer learns that the farm is actually worth $300,000 and changes his mind about selling

elmer can revoke his offer at any time prior to freds accepting it, because there is no consideration to keep it open

James, a contractor, has a contract to build a new office building for Juan. The contract contains a provision requiring James to furnish a certificate of occupancy from the building inspector before Juan is required to pay. This provision is:

express condition