CONTRACTS I / II / III - MCQ

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Question 7 15 / 15 pts Rhonda created a flyer in which she offered to "paint your home for $3,000." The flyer stated, "Call Rhonda at 777-222-3333 now!" She passed out 250 flyers in her surrounding neighborhood. Martin saw the flyer and called Rhonda and left a message stating, "I saw your flyer. If you can show up and repaint my house with the same color first thing tomorrow morning for $3,000, the job is yours." Martin provided his address. When she got Martin's message, Rhonda drove by late that evening to look at Martin's home. The following morning, Rhonda showed up with everything and began painting. Martin returned from the coffee shop and saw Rhonda in action. "Stop," he shouted. "I hired someone else." Do the parties have a contract? No, Rhonda never accepted Martin's offer verbally or in writing. No, because Martin effectively revoked his offer to Rhonda. Yes, because Rhonda accepted Martin's offer by painting. Yes, because Martin accepted Rhonda's offer to paint his house.

C is the best answer as Martin's offer to have Rhonda show up is likely to be construed as a unilateral offer that can be accepted by performance, and Rhonda accepted by beginning to perform the contract as offered. A is incorrect because Rhonda accepted Martin's offer by beginning performance. B is incorrect Martin's revocation came only after Rhonda's acceptance. D is incorrect because Rhonda's flyer would not be construed as an offer, because it did not include the parties, nor the time of performance, nor the subject matter of the contract, the house, and therefore was not sufficiently definite.

Statute of Frauds

If a promise in a contract is incapable of being fully performed within one year after the making of the contract, the contract must be in writing. Keep in mind that the one-year period is measured from the time of execution of the contract, not the time it will take the parties to perform. If the contract can possibly, but not probably, be performed in one-year, the contract is not within the Statute of Frauds.

>>>>UCC 2-207(1)

Under UCC 2-207(1), an acceptance with additional or different terms is still a valid acceptance. Even under the UCC a conditional acceptance is a rejection/counter-offer.

Question 13 2 / 2 pts Bill agrees to loan Hal $500,000 to purchase a home, pursuant to a 20 year mortgage agreement. Hal agrees to make payments to Bill on the mortgage. Hal sells the home to Sandra, who agrees to be personally liable to Bill on the mortgage. Bill agrees to discharge Hal from all liability for the mortgage, and to accept payments from Sandra, and Hal consents. This arrangement is: A novation and Hal is no longer liable to Bill. A delegation of Hal's duties, and Hal remains liable to Bill. An accord and satisfaction, and Hal remains liable to Bill. None of the above.

A is correct because this is a novation, and Hal is no longer liable to Bill, because Bill has agreed to accept the performance of Sandra instead. B is incorrect because Bill's agreement is to accept performance from Sandra and to release Hal. C is incorrect because an accord and satisfaction is an agreement through which the parties to a contract agree that a subsequent performance is agreed upon in discharge of the existing duties under a contract between the same parties. D is incorrect because A is correct.

Andy was a merchant who mailed an order form to Bob, another merchant. The order form stated that Andy would sell Bob 12 tons of sunflower seeds, for the total sum of $600.00. Delivery was to be made at Bob's store on December 1. Payment was to be due upon delivery. Bob mailed a purchase order form complying with Andy's terms, but adding that Andy would be liable for damages if the delivery was delayed and that payment is due within 30 days of delivery. Which of the following statements is correct? A contract was created when Bob mailed the form. No contract was created until Andy received Bob's form. No contract was created because the terms in the forms varied. No contract was created because Bob made a counter-offer.

A is the correct answer. UCC 2-207(1) provides that a response to an offer that contains different or additional terms can qualify as an acceptance, as long as it communicates the intent to accept with definite and seasonal (timely) terms. Although some of the terms in Bob's purchase order form varied from Andy's order form, the price and quantity of goods was the same. Therefore, the mailbox rule would apply and Bob's purchase order would be an effective acceptance upon mailing. B is wrong since the mailbox rule would apply and Bob's purchase order would be an effective acceptance upon mailing. C and D are wrong since UCC 2-207(1) provides that a response to an offer that contains different or additional terms can qualify as an acceptance, as long as it communicates the intent to accept with definite and seasonal (timely) terms. Although some of the terms in Bob's purchase order form varied from Andy's order form, the price and quantity of goods was the same and it would be an effective acceptance.

Question 7 0 / 2 pts Linda entered into a contact with Mark to remodel her home including the addition of a new bedroom and adjacent bathroom. Mark completed the remodel just before Linda was throwing a large wedding shower for her best friend, with 50 women invited to her home. During the event the sewer backed up, spilling out into the front lawn and creating a horrible smell. Linda was humiliated and suffered a nervous breakdown when her event was ruined. She had the place repaired and sued Mark for breach of contract. What can she recover? I. The cost of repairs to the home. II. Damages for emotional distress. III. Punitive damages to punish Mark. All of the above. I and II. I and III. I only

Answers: D is the best answer because cost of repair is generally recoverable, but damages for emotional distress are not available for a breach of contract, except in extraordinary situations, which are foreseeable and for which damages can be proved with certainty. Based on the Erlich case, which is factually similar, damages for emotional distress would not be available here. In addition, punitive damages for breach of contract are generally not available unless the conduct is also a tort, and then only if the conduct involved meets the requirements for recovery of punitive damages - that is wanton, willful, reckless or malicious. Here, there are not facts to indicate that the work was done in an intentionally poor manner. In addition, Linda would have to add tort claims to her lawsuit in order to recover those damages; here, she has alleged only breach of contract. Accordingly, A, B and C are incorrect.

Question 7 2 / 2 pts In January, Margaret, who lived in California, went on-line to book a ticket to Brazil to attend the World Cup in June. She found a good deal on the Fly Cheap Airline website and proceeded to make her purchase. After she entered her credit card information, a new screen displayed that contained a great deal of text under the heading "Terms of Service." As she had done on other websites, she clicked on the "I accept" button without reading the text. The next screen displayed her confirmation number. Had Margaret read the text on the screen, she would have seen a statement that read: "Purchaser agrees to resolve all disputes with Fly Cheap Airlines in binding arbitration in Alaska." In June, Margaret went to Brazil and had a great trip. Her return flight, however, was horrible and Fly Cheap lost her luggage. When Margaret threatened to sue Fly Cheap, the flight attendant told her she could only file an arbitration action in Alaska against Fly Cheap. The flight attendant told her it was a term of service displayed on the website before a purchase is finalized. Is Margaret bound by the arbitration clause in the terms of service policy? Yes, because it is a standard policy in contracts. Yes, because Margaret agreed to the terms of service policy. No, because Margaret was unaware of the arbitration clause in the terms of service policy. No, because arbitration clauses are unenforceable.

Parties to a written contract have a duty to read the terms. Thus, a party to a contract who does not read the terms is still bound by the terms if she enters into the agreement. Here, Margaret could have read the term before she agreed to enter into the contract, but she did not. Thus, a valid contract was formed and Option B is correct. Option A is incorrect because it is not relevant. Option C is not correct because Margaret had a duty to read the terms. Option D is not correct because the law does not support the statement.

UCC 2-207

UCC 2-207 provides that between merchants, unless the offer expressly limits acceptance to the terms of the offer, additional terms contained in an acceptance are to be construed as proposals for additions to the contract. Unless the additional terms materially alter the contract, they are deemed accepted if not objected to within a reasonable time. Since John did not respond to the additional term contained in Paul's letter, he is deemed to have accepted it.

UCC 2-207(1)

UCC 2-207(1) provides that a response to an offer that contains different or additional terms can qualify as an acceptance, as long as it communicates the intent to accept with definite and seasonal (timely) terms.

UCC 2-206(1)(b)

Under UCC 2-206(1)(b), an order to purchase goods for prompt shipment calls for acceptance either by prompt shipment or prompt promise to ship.

UCC 2-207

Under UCC 2-207(1), an acceptance with additional or different terms is still a valid acceptance. Even under the UCC a conditional acceptance is a rejection/counter-offer.

Abe posted an advertisement on Craigslist that stated: "Great Deal. 2013 BMW Model XXX for sale for $15,000. Good condition. Be the first to show up with cash. Test drives on Saturday morning at 111 Fancy Car Lane." Is Abe's posting an enforceable offer? Yes, the posting is an offer since it contains definite and certain terms and conveys Abe's intent to be bound. No, the posting is not an offer since it is addressed to the general public and not to a specific offeree. No, the posting is an invitation to make an offer after the potential buyer takes a test drive. No, the posting does not convey a reasonable understanding that Abe intends a contract to arise and expects to be committed upon acceptance.

A is correct since an offer is a manifestation of willingness to enter a bargain, made so as to justify another person in understanding that assent is invited and will conclude a bargain. For an ad to constitute a valid offer, it must be specific in its identification of the subject of the transaction, clear in who may accept and how such person may accept. Here, Abe's posting specifies who may accept the offer—the "first to show up with cash." B is incorrect since an advertisement made to the general public can be an enforceable offer if it is sufficiently definite & certain, calls for performance of a specific act without further communication and leaves nothing for further negotiation. Here, Abe's posting specifies who may accept his offer to sell the 2013 BMW car—the "first to show up with cash." C is incorrect since the posting is an offer, rather than an invitation to make an offer because it is specific in its identification of the subject of the transaction, clear in who may accept and how such person may accept. Here, Abe's posting specifies who may accept the offer—the "first to show up with cash." D is wrong since the posting does manifest a willingness to enter a bargain, made so as to justify another person in understanding that assent is invited and will conclude a bargain.

Dana, a college student, decided to sell her car because she really needed money. Frank had previously told Dana he'd love to buy her car if she ever wanted to sell it. Dana sent an email to her friend Frank, offering to sell Frank the car for $5,000 by next Friday, when she needed to pay her rent. Right after she sent the email to Frank, Dana shut down her email and went to class. Frank replied by email to Dana stating he would buy the car for cash next Friday. After Dana got out of class, her grandmother called to say she would be making a gift to Dana of $5,000. Dana realized she would not need to sell her car, and so called Frank and left a voicemail for him indicating she had changed her mind and did not want to sell the car. Only the next morning when she opened her email, did she receive Frank's acceptance. Do Dana and Frank have a contract? Yes, because Frank sent Dana an email accepting her offer. Yes, but only if Dana got Frank's email prior to calling him. No, because Dana revoked her offer before she got Frank's acceptance. No, because Frank received Dana's voicemail before Dana received Frank's acceptance.

A is the best answer based on the mailbox rule, which provides that acceptance is effective on dispatch and revocation is effective upon receipt in the absence of any other rules being stated. B is incorrect because under the mailbox rule, Frank's message is effective upon dispatch. C is incorrect because Frank's acceptance is effective upon dispatch, and the revocation was made after Frank's acceptance was dispatched. D is incorrect because the Frank's acceptance was effective upon dispatch, and Dana did not need to receive it in order for it to become effective under the mailbox rule.

Bart agreed to buy 1,000 widgets from Sam for $100 per widget, and put their contract in writing. At the time for delivery, Sam breached the contract by failing to deliver as promised, and Bart had to buy the widgets elsewhere on the open market for $110 per widget. Which of the following is correct? Bart can recover $10,000 from Sam, assuming the goods are the same. Bart can recover $100,000 from Sam, assuming the goods are the same. Bart cannot recover anything from Sam since Bart was able to buy the widgets elsewhere. Bart cannot recover from Sam, because the difference in price is unreasonable.

A is the best answer because Bart can recover the difference in price times the number of widgets, which is $10,000. B is incorrect because the calculation of $100,000 is not accurate. C is incorrect because Bart can recover the reasonable difference in value of the widgets. D is incorrect because there are no facts suggesting the price was not reasonable, and the facts indicate Bart bought the widgets on the open market.

Question 11 2 / 2 pts Farmer is in the business of selling vegetables to grocery stores and offers to deliver 20 boxes of vegetables to Grocery Store Owner for $20 a box. Grocery Store Owner agrees and, on May 1, Farmer faxes a signed preprinted purchase order form that states "20 boxes of vegetable will be delivered to 10 Grocery Store Lane at a cost of $20 a box. Farmer to deliver product by May 10 and will unload the boxes by the back door of the store." On May 2, Grocery Store Owner returns the purchase order form signed and with a handwritten note stating, "Farmer will stack the boxes in piles of four by the back door of the store." On May 10, Farmer delivers the 20 boxes of vegetables, leaving them in piles of five by the back door of the store. If Grocery Store Owner sues Farmer for breach of contract, who will prevail? Grocer, because Farmer was required to stack the boxes in piles of four. Grocer, because Farmer's breach was material. Farmer, because he never accepted Grocer's term pertaining to stacking the boxes in piles of four. Farmer, because Grocer's proposal was a counter-offer.

A is the best answer because Grocer accepted the contract and offered an additional term, which becomes part of the contract unless it materially alters the contract or is objected to by Farmer, neither of which seem to be the case here. B is incorrect because this is a contract for sale of goods, and the perfect tender rule applies rather than material breach. C is incorrect because an additional term becomes part of the contract if it does not materially alter the contract and was not objected to, which is the case here. D is incorrect because Grocer's communication was an acceptance with an additional term, not a counter-offer.

Question 2 2 / 2 pts Diva, a famous rock singer, ordered a gown from a well-known designer, Latissa West, and agreed to pay $10,000 for the gown, which she intended to wear to an awards event. After the final fitting, Diva had second thoughts and cancelled the order. Latissa was able to sell the gown to another minor celebrity, but could only get $5,000 for it. If Latissa sues Diva, what damages can she recover? Latissa can recover $5,000. Latissa can recover her lost profits, as she is a lost volume seller. Latissa cannot recover her losses because she sold the gown at too low a price. Latissa can only recover her consequential damages.

A is the best answer because a seller can recover the difference between the market price and contract price when a buyer repudiates. Because this is a specialty item she cannot recover as a lost volume seller, so B is incorrect. C is incorrect because there is no indication that the resale was not commercially reasonable. D is incorrect because consequential damages would typically involve lost profits which are not appropriate here, and because expectation damages will make the seller whole based on the benefit of the bargain.

Question 7 2 / 2 pts Dana decided she wanted to sell her old car and buy a new one. She wrote a letter and offered to sell the car to her nephew Nelson for $5,000.Nelson was very excited because it was such a good deal, he thought he would just resell it for $6,000 or even more. The same day he received Dana's letter, he sent Dana a letter agreeing to buy the car for $5,000.A few days later, he woke up and had second thoughts, so he sent a second letter to Dana, telling her that he was sorry but he could not take the car off her hands.What are the rights of the parties? Nelson is obligated to purchase the car based on his acceptance. Nelson is obligated to purchase the car unless his rejection arrives first at Dana's house. Nelson is not obligated to purchase the car because the rejection revokes the acceptance. Nelson is not obligated to purchase the car because his rejection is effective.

A is the best answer because an acceptance if effective upon dispatch and if the acceptance is sent prior to the rejection the subsequent rejection does not undo the acceptance, regardless of when the rejection is received. B is incorrect because it does not matter which arrives first, given that the acceptance is effective upon dispatch. C is incorrect because the rejection sent after dispatch does not revoke the acceptance. D is incorrect because the rejection is not effective.

Question 1 2 / 2 pts On April 1, Eve sent a letter to Dell offering to sell him 100,000 widgets at $5 per widget. On April 3, Eve got a better price and so she sent a letter to Dell revoking her April 1 offer. Dell received the letter with the offer on April 4, and immediately sent a letter to Eve accepting the April 1 offer. Dell received the April 3 letter from Amy revoking the offer on April 7. Eve received Dell's acceptance on April 6. What are the rights of the parties as to the widgets? Dell's acceptance is effective and Eve's revocation is ineffective. Dell's acceptance is ineffective because it was mailed after Eve mailed the revocation. Eve's revocation is effective because she mailed it before she received Dell's acceptance. Eve's revocation is effective because Dell received it in due course.

A is the best answer because an acceptance is effective on dispatch and a revocation is effective on receipt; here, Dell's acceptance was dispatched on April 4 and he received the revocation on April 7. B is incorrect because the revocation is not effective until receipt. C is incorrect because Dell's acceptance is effective upon mailing. D is incorrect because Dell's acceptance was mailed on April 4, and Dell did not receive the revocation until April 7.

Question 7 2 / 2 pts Sam put his home on the market for sale for $1,000,000. Brenda wanted to buy the home, but needed to sell her own home first. Brenda asked Sam to give her an option to purchase his home for $1,000,000 for a period of 30 days. Sam requested that Brenda pay him $10,000 for the 30 day option. Brenda paid Sam the $10,000 and their deal was confirmed in a written agreement which both Brenda and Sam signed. Two weeks later Don offered to purchase Sam's home, and Sam agreed to sell the home to Don. What are Brenda's rights? Brenda can sue Sam for breach of the option contract. Brenda cannot sue Sam because the option was unenforceable. Brenda cannot sue Sam because the option was revocable. Brenda cannot sue Sam because Sam is not a merchant.

A is the best answer because an option contract at common law is enforceable where consideration is given. B is incorrect because the option is enforceable for the foregoing reasons. C is incorrect because the option is not revocable if consideration is given and there is an explicit promise to keep the offer open. D is incorrect because the transaction is not governed by the UCC and it does not matter whether Sam is a merchant.

Question 3 0 / 2 pts Ellis hired Farah to cater his corporate anniversary party for $15,000. Ellis gave Farah a deposit of $5,000. Ellis created an expensive publicity and media campaign to announce the event, costing $10,000. Farah got a better contract with a well-known celebrity and cancelled her agreement with Ellis to do the corporate event before Ellis paid anything beyond the deposit. Ellis hired Chef Tell, a famous TV chef instead, at a cost of $25,000 but Ellis had to change the date and this added $2,000 to the cost of the media campaign. Ellis sued Farah for breach of contract. If Ellis sues for restitution what amount will he recover? $5,000 $10,000 $15,000 $25,000

A is the best answer because restitution would require disgorgement of the benefit from the defendant, and Farah received only the $5,000. B, C and D are incorrect because they do not represent amounts that Farah received.

Debbie was hosting a garage sale that was well-attended by the neighborhood. Pamela, one of Debbie's neighbors, attended the garage sale and, after some bargaining, purchased a treadmill from Debbie for $600. Although Debbie had used it routinely for several years, now that she had a gym membership, Debbie no longer needed the treadmill and thought she could better use the money from its sale to fund the gym membership. What law applies to the transaction? The UCC applies because this is a transaction involving a sale of goods. The UCC does not apply because Debbie is not a merchant. The UCC does not apply because Debbie and Pamela are not merchants. Common law is applicable to this transaction.

A is the best answer because the UCC applies if the contract involves a sale of goods, whether or not the parties to the contract are merchants. B and C are incorrect because the UCC is applicable and the fact that Debbie and Pamela are not merchants does not matter in determining whether the UCC applies. D is incorrect because common law would not apply to a sale of goods.

Paint Corp is a large industrial painting company, specializing in painting hotels. Paint Corp. has entered into a contract with Hotel to paint the exterior of all Hotel buildings for $25,000. Paint Corp. needs to purchase the paint to do the job, and invites Acme Inc., a paint manufacturer, to submit a bid to supply 500 gallons of paint that will be needed for the job. Acme replies that it will supply the paint required for $10 per gallon. Paint Corp. enters into a written agreement with Acme Inc. on these terms, signed by the parties. What is the governing law? Are the parties merchants? The UCC governs the contract and both Paint Corp. and Acme Inc. are merchants. Common law governs the contract because it is a contract for painting services. This is a hybrid contract, and the UCC governs, and both parties are merchants. The UCC governs the contract, but neither party is a merchant.

A is the best answer because the contract involves a sale of goods and both parties have expertise in the goods (paint). B is incorrect because the contract involves a sale of goods, not services. C is incorrect because this is not a hybrid contract. D is incorrect because both parties are merchants.

Question 6 15 / 15 pts Bruce wanted to purchase a new car from Del, a car dealer. During their negotiations, Del and Bruce discussed the possibility that Bruce would be able to get free oil changes at the dealership for as long as he owned the car. After extensive negotiations, Bruce finally agreed to purchase the car from Del. Once the deal was written up, it did not include the free oil changes that Del had mentioned at one point during their negotiations. The written contract provided that it was the full and complete agreement of the parties regarding the purchase of the car and that nothing in the agreement could be modified unless a later agreement in writing was signed and approved by the owner of the dealership. Can Bruce enforce the agreement about the free oil changes? No, because the agreement is barred by the parol evidence rule. No, because the agreement contained a merger clause. Yes, because the contract was not fully integrated. Yes, because the parol evidence rule does not apply in the event of fraud.

A is the best answer because the parol evidence clause bars introduction of evidence of agreements made prior or contemporaneously with a fully integrated written agreement, that varies or contradicts the agreement. B is incorrect because a merger clause is not dispositive of a full integration, but is one factor in determination of the integration of the contract. C is incorrect because the contract was fully integrated. D is incorrect because while fraud is an exception, there is no indication that Del committed fraud here.

Score for this quiz: 18 out of 30 Submitted Aug 2 at 10:23pm This attempt took 30 minutes. Question 1 2 / 2 pts Art and Bev entered into a written contract pursuant to which Art agreed to sell his invention to Bev for $100,000. At the time the parties met to sign the contract, just before they signed the sales agreement, Bev said to Art, "I assume you will be getting a patent on the invention." Art said, "I will do my best, of course. But it is not a sure thing." Bev did not tell her attorney to address this issue in the written contract, however the contract did contain an integration clause. Art and Bev went ahead and signed the final contract. Art exerted extensive efforts to obtain a patent for the invention, but he was not able to obtain a patent on the invention. Bev sued Art, claiming he breached the contract. How should the court rule? Obtaining a patent was not part of the parties' contract, so Art will prevail. Obtaining a patent was part of the parties' agreement, so Bev will prevail. Bev will prevail because Art misrepresented his ability to obtain a patent. Art was obligated to obtain the patent, so Bev will prevail.

A is the best answer because the parol evidence rule and the integration clause will result in the court excluding the oral discussions about the patent, and at any rate Art's statements were equivocal about obtaining a patent. B is incorrect because the parol evidence rule and the integration clause will result in the court excluding the oral discussions about the patent, and at any rate Art's statements were equivocal about obtaining a patent. C is incorrect because Art's statements were equivocal as to obtaining the patent, and would not rise to the level of a misrepresentation. D is incorrect because the contract did not obligate Art to obtain the patent.

Question 13 2 / 2 pts Will owed his sister Rita $5,000. He decided to sell his car in order to pay her. Tess agreed to purchase Will's car for $5,000 and Tess agreed to pay the proceeds to Rita by May 30. Will told Rita about the arrangement and Rita agreed that it would be acceptable. After Tess had the car checked out by a mechanic, she decided it was only worth $4,000. As a result, Tess and Will agreed to lower the price to $4,000. What are Tess's obligations to Rita? Tess must pay Rita $5,000. Tess must pay Rita $4,000. Tess must pay Rita $4,000 and Will must pay Rita $1,000. Tess is no longer obligated to pay Rita after the modification of the contract.

A is the best answer because under the Restatement, once a party assents to a third party beneficiary arrangement, the rights of the party vest and the obligation cannot be modified without the party's consent. B is incorrect, because Rita is not bound by the modification. C is incorrect because the question posed concerns the rights against Tess and because Rita can collect the entire $5,000 from Tess. D is incorrect because the agreement may not be modified once the rights of the third party beneficiary have vested and any modification does not alter the rights of the third party beneficiary.

Question 15 2 / 2 pts Frieda is an artist. She has agreed in writing to sell one of her original paintings, "Floral #91" to Colin, who is an art collector, for $100,000. Colin had his heart set on this painting for many years, but Frieda only recently decided to sell it. Prior to delivery of Floral #91 to Colin, Frieda receives an offer for the same painting for $150,000 from Art, another art collector. Colin is irate upon hearing that Frieda is entertaining Art's offer for the painting. Assuming Colin is insisting on having Floral #91 for his collection, which is Colin's best strategy? Sue for specific performance based on his contract with Frieda. Offer Frieda $150,000 for the painting. Sue for damages, assuming Colin can find another painting he likes. Sue for restitution, based on quasi contract.

A is the best answer in terms of recovering the painting, which is presumably unique. B is a secondary practical approach, but Colin would be better off enforcing his original contract. C is less desirable, because Colin is not ending up with the painting he wants as a result of a damages remedy. D is not applicable factually, as there is no unjust enrichment upon which to base a restitution claim, and quasi contact is not needed where there is a contract in fact, as there is here. Quiz Score: 18 out of 30

Question 14 2 / 2 pts Art owned a factory manufacturing widgets. On April 1, Art sent a letter in which Art offered to sell 10,000 widgets to Ben, to be delivered by May 1. Ben replied by mail on April 6, accepting the offer. Art called Ben on April 8, and left a voicemail message for Ben indicating that Art had sold the widgets to Corry, so they were no longer available. Art received Ben's letter on April 10. What result? Ben's acceptance is effective if it was properly addressed. Ben's acceptance was too late even if properly addressed. Art revoked his offer effectively by leaving the voicemail for Ben. Ben's acceptance is effective upon receipt by Art.

A is the best answer under the mailbox rule, which provides that an acceptance is effective upon dispatch, if properly addressed. B is incorrect because it was not too late, given that no time was stated in the offer, and he returned the acceptance within a reasonable time. C is incorrect because the revocation was communicated after the acceptance was mailed, and the acceptance is effective upon dispatch under the mailbox rule. D is incorrect because an acceptance is effective on dispatch not upon receipt.

Question 10 2 / 2 pts Owen's neighbor Brian always admired Owen's home, which had a lake front view. Owen told Brian he would agree to sell it to Brian for $500,000 cash. Two days later, Brian called Owen and agreed that would be a fair price. Owen and Brian negotiated by phone over the closing date several times, and finally agreed that it would be good to finalize the deal at the end of the month. After the date for the sale passed, Owen did not receive any funds from Brian, and Brian refused to perform. If Owen sues Brian, is the contract enforceable? No, because the contract was not in writing. No, because the time of performance is not definite. Yes, because the terms of the contract are definite enough and the contract need not be in writing. No, because the terms of the contract are not definite enough.

A is the best answer under the statute of frauds, which requires that a contract for the sale of real estate be in writing. B is incorrect because the time for performance is definite, as the parties agreed to a 30 day period. C is incorrect because a contract for sale of real estate is required to be in writing under the statute of frauds. D is incorrect because the terms are definite enough, but the contract must be in writing, so it is not enforceable.

Question 11 0 / 2 pts Bank entered into a contract with Oliver, the owner of a commercial building, to lease part of the building for purposes of running a retail bank. Oliver agreed to provide such security as appropriate for the premises. Ron robbed the bank and in the process injured Tim, a teller employed by the Bank. Tim sued the Bank and Oliver. Tim alleged that he was a third party beneficiary of Bank's contract with Oliver. Oliver moved to dismiss Tim's claim against him. How should the court rule? Grant the motion if Tim was not an intended beneficiary of the lease. Grant the motion because Tim was not in privity with Oliver. Deny the motion because Tim was an intended beneficiary of the lease. Deny the motion because Tim assumed the risk when he took the job.

A is the best answer, as Tim, as an employee, is not likely to be an intended third party beneficiary of a general provision in a lease to provide security to a commercial tenant, based on the Masad case. B is incorrect because a lack of privity is not determinative of the right to sue as a third party beneficiary. C is incorrect because Tim is not likely to be an intended beneficiary under the lease. D is incorrect because assumption of risk is a defense to a tort claim, not to a breach of contract claim.

Mary had long admired Sally's pet pig, who was trained to get the newspaper and start the coffee every morning. Mary finally convinced Sally to sell her the pig and Mary wrote out a contract that said, "Sally agrees to sell her pig to Mary. Price to be decided at time of delivery." When Mary arrived to pick up the pig a week later, Sally refused to give the pig to her. Mary then filed suit. Does the UCC apply to the transaction? Yes, because it was a transaction involving goods. Yes, because this is a hybrid contract. No, because a farm animal, such as a pig, does not fit the definition of 'goods' under the UCC. No, because the value of the pig was less than $500.

A is the correct answer since a 'pig' is a movable, tangible object, considered a 'good' under the UCC. B is incorrect since this contract only involves the sale of goods and consequently, it is not a hybrid contract. C is incorrect since livestock, such as a pig, are considered to be 'goods' (movable tangible objects) under the UCC. D is incorrect since the value of the contract does not determine whether the contact is controlled by the UCC or the common law.

Mary and her husband John were planning a big wedding for their daughter. They planned to spend no more than $25,000 for the wedding. Mary consulted with various wedding planners and she especially liked the plans presented to her by Susan. On June 1, Susan gave Mary a detailed written proposal for the wedding that had a total cost of $45,000, greatly exceeding Mary and John's budget. Susan's proposal stated that the signed proposal, along with a $1,000 deposit, had to be returned to her as soon as possible. Mary signed the proposal on June 3 and gave it to John for his signature. John was busy and he did not get around to signing the proposal until June 5. Even then, John signed the proposal without reading it while he was busy on a phone call. Mary gave Susan a $1000 deposit along with the signed proposal on June 6. On July 1, the wedding proceeded flawlessly and one day after the party, Mary and John received Susan's final invoice for $44,000. John refused to pay the bill on the grounds that he never agreed to pay $45,000 for the wedding. Susan sued for breach of contract. Is Susan likely to prevail? Yes, because John signed the proposal on June 5. Yes, because Mary returned Susan's proposal as soon as possible, along with a $1,000 deposit. No, because John did not read the proposal before signing it. No, because there was no meeting of the minds.

A is the correct answer since applying the objective standard for determining assent, a reasonable person would presume that John agreed to the contract terms, including price, by signing the proposal. B is not the best answer since it does not include John's manifestation of assent to the contract. Although the facts demonstrate that Mary complied with the terms of the contract with respect to return of the proposal and deposit, it does not include John's assent. C is wrong since by signing the proposal, John was manifesting assent to the contract and is accountable for his assent to the contract terms, whether read or unread. D is incorrect because there was a meeting of the minds demonstrated by John's written assent to the contract terms.

Question 14 0 / 2 pts Donna called Martin and said, "I'll sell you my new couch for $1,000." Which of the following is a valid acceptance? Sounds like a good deal. What color? I'd love a new couch. Would you take $750? Yes. Can you deliver it to my house? Yes, but I need you to deliver it to my house.

A valid acceptance requires a manifestation of an intent to be bound by the terms of the offer. Here, Options A and B do not supply clear intent to be bound by the terms of the offer. Options C and D both provide certainty with the response "Yes"; however, option D adds an additional condition, continuing the negotiations. Option C presents a definitive agreement with a request.

Question 10 2 / 2 pts Since Pamela accepted a new job at a great driving distance from her home, she wanted to buy a new car that got great gas mileage. Pamela went to a car dealership and spoke to Denny, a salesman and employee of the car company. Pamela told Denny what she was looking for and he told her, "I recommend that you buy this cute little sports car. It gets 80 miles to the gallon." Denny knew that the sports car, despite its small size, was a real gas guzzler. Pamela was thrilled to find a cute car that was economical on gas, so she immediately signed an agreement to buy the car recommended by Denny. Unfortunately, shortly after driving the car, Pamela discovered that the car got miserable gas mileage, around 20 miles per gallon. If Pamela seeks to avoid the contract to purchase the car, what is the likely outcome? Pamela will be able to avoid the contract, on the grounds of fraudulent misrepresentation Pamela will be able to avoid the contract since the contract terms were unfair Pamela will not be able to avoid the contract since there was a valid offer, acceptance and consideration Pamela will not be able to avoid the contract since it complied with the statute of frauds

A is the correct answer. A contract induced by fraudulent misrepresentation is voidable. Fraudulent misrepresentation requires 1) An intentional misrepresentation of material fact; 2) Knowledge that the misrepresentation is likely to induce a reasonable person to manifest assent; 3)The misrepresentation does induce the other party to enter the contract; 4) Justifiable reliance on the misrepresentation by the innocent party. Here, Denny misrepresented the gas mileage of the sports car, knowing that this was an inducement for Pamela to enter into a contract to purchase a car. Pamela did, in fact, rely on his misrepresentation. B is wrong since there are no facts indicating that the contract terms themselves are unfair, just that this was not the car that Pamela wanted. C is wrong since the contract is still unenforceable if it is induced by fraud. D is wrong for the same reason.

Question 8 2 / 2 pts Since Pamela accepted a new job at a great driving distance from her home, she wanted to buy a new car that got great gas mileage. Pamela went to a car dealership and spoke to Denny, a salesman and employee of the car company. Pamela told Denny what she was looking for and he told her, "I recommend that you buy this cute little sports car. It gets 80 miles to the gallon." Denny knew that the sports car, despite its small size, was a real gas guzzler. Pamela was thrilled to find a cute car that was economical on gas, so she immediately signed an agreement to buy the car recommended by Denny. Unfortunately, shortly after driving the car, Pamela discovered that the car got miserable gas mileage, around 20 miles per gallon. If Pamela seeks to avoid the contract to purchase the car, what is the likely outcome? Pamela will be able to avoid the contract, on the grounds of fraudulent misrepresentation Pamela will be able to avoid the contract since the contract terms were unfair Pamela will not be able to avoid the contract since there was a valid offer, acceptance and consideration Pamela will not be able to avoid the contract since it complied with the statute of frauds

Question 5 2 / 2 pts Sam and Bill entered into a written contract for the sale of 100 power drills. Although they orally agreed on a price, they inadvertently failed to include it among the terms in the written agreement. In an action for breach of contract, the court should admit testimony from a party to establish the price that the parties intended refuse to enforce the contract if the contract price is $500 or more refuse to enforce the contract since the writing did not contain all the essential terms of the agreement conclude that the contract requires the payment of a reasonable price

A is the correct answer. A court may interpret a contract in accordance with the intentions of the parties even if, as a result of inadvertence, the writing omits a term on which the parties agreed. In determining the intentions of the parties, the court may consider evidence that is relevant. B and C are wrong since a writing may satisfy the Statute of Frauds even though an essential term (except quantity of goods) is omitted. D is wrong since the parties here did agree on a contract price, although it was omitted from the writing. Consequently, since the parties' intentions regarding price are known, UCC gap fillers will not be used.

Question 2 2 / 2 pts On March 1, Sam offered to sell Daisy, his show dog, to Bill for $25,000. In return for the $100 that Bill paid Sam, Sam handed Bill a signed written statement that stated the offer and that Sam promised not to revoke for a period of 30 days. On March 15, Bill wrote to Sam and stated, "I cannot pay more than $20,000 for Daisy. If you cannot accept that amount, I cannot go through with the deal." On March 25, after receiving Bill's letter of March 15, Sam sold Daisy to someone else. Bill learned of the sale on March 26. On March 27, Bill wrote to Sam and stated, "I accept your offer to sell Daisy. Enclosed is my check for $25,000." Did Bill have the power to accept Sam's offer to sell Daisy on March 27? Yes, because Bill paid $100 for a 30-day option. No, because Bill's power to accept the offer terminated when Sam sold Daisy. No, because Bill's power to accept the offer terminated on March 26 when Bill learned of the sale. No, because Sam did not respond to Bill's counter-offer of March 15.

A is the correct answer. A non-revocable option contract is created when consideration is recited and there is a writing signed by the offeror. Here, on March 1, there was an irrevocable option contract for Sam to sell Daisy to Bill for $25,000. Bill had paid $100 consideration and the contract was in writing signed by Sam. B and D are wrong because on March 1, there was an irrevocable option contract for Sam to sell Daisy to Bill for $25,000. Bill had paid $100 consideration and the contract was in writing signed by Sam. C is wrong because Bill had 30 days or until March 31 to accept Sam's offer.

Tim wanted to sell his grand piano. Because Able and Baker had expressed interest in it, Tim wrote to them both on May 21, telling them that he was selling his grand piano and would sell it at a fair price. On June 1, Tim received a letter from Able offering to buy the piano for $2,000. On June 3, Tim received a letter from Baker that said, "I received your offer of May 21. Will $3,000 buy the piano?" On June 5, Tim wrote to Baker, "I accept your offer and will sell you the grand piano for $3,000. (signed)." Tim's letter of June 5 can best be described as: An offer. An acceptance. An invitation to make an offer. A solicitation.

A is the correct answer. An offer is a manifestation of present intent to be bound to specified terms. Since Tim's June 5 letter expresses an unequivocal intent to sell the grand piano to Baker for $3,000, it is an offer. It is irrelevant that Tim characterized his offer as an acceptance. B is wrong since an acceptance is an agreement to be bound to the terms of an offer. Since Baker's letter did not actually say that he would pay $3,000 for the piano, the letter did not express a willingness to be bound. Tim's June 5 letter, consequently, could not be an acceptance since Baker had not made a valid offer. C and D are wrong since Tim's June 5 letter expressed an unequivocal intent to sell the grand piano to Baker for $3,000.

Most members of Jane's family, including her mother, attended the University of Southern California in Los Angeles. To honor her mother, Jane decided to donate $25,000 to establish a scholarship in her mother's name. In June 2011, Jane sent a letter to the President of the University and pledged to provide the scholarship funds in six months, in time for the 2012 spring semester. The University announced the scholarship and numerous students applied for the monies. The University awarded the scholarship in Jane's mother's name. Unfortunately, Jane was killed in an automobile accident within days of the announcement of the scholarship award. The administrator of Jane's estate refused to honor Jane's scholarship pledge and the University sued. Will the University prevail? Yes, the pledge is enforceable. No, the pledge is not enforceable because it is only effective between family members. No, the pledge is not enforceable because there is no consideration. No, the pledge is not enforceable because the University did not detrimentally rely on the pledge.

A is the correct answer. A written promise to make a charitable contribution will generally be binding without consideration, under the promissory estoppel doctrine. B is wrong since the promissory estoppel doctrine extends beyond family members. C is wrong since A written promise to make a charitable contribution will generally be binding without consideration, under the promissory estoppel doctrine. D is wrong since detrimental reliance is not required for a charitable contribution, as long as it is in writing.

Question 2 15 / 15 pts On March 1, Mitch entered into a contract with Mary to sell his house to her on April 1. On March 20, Mitch was involved in a serious skiing accident, the result of which he suffered significant brain damage. An attorney acting on Mitch's behalf, attempts to void Mitch's contract with Mary on the grounds of mental incompetency. Is the contract between Mitch and Mary enforceable? Yes, if Mitch understood the contract at the time the contract was formed. Yes, if Mary is also incompetent. No, since Mitch suffered brain damage before title to his property was passed to Mary. No, since Mitch was not mentally competent to pass title to his property to Mary.

A is the correct answer. An adult is presumed to have contractual capacity. However, a mentally incompetent party may overturn that presumption by evidence that the party lacked contractual capacity at the time that the party entered the contract. A person lacks mental capacity to contract because of mental incompetency if either (1) the person did not understand the contract or (2) the person understood the contract, but acted irrationally in relation to the transaction and the other party knew the person was acting irrationally. Therefore, the contract is enforceable only if Mitch understood the contract at the time it was signed. B is wrong since Mary's mental competency is irrelevant since Mitch is seeking to avoid the contract. C and D are wrong since the issue of Mitch's mental competency only is relevant at the time that the contract was formed, not afterwards.

Question 6 2 / 2 pts Betty owns a rural property and on May I, she hired John to drill a well to improve the quality of her drinking water. The contract provided that the well must be completed by July 1. John proceeded to drill and when the drill reached two hundred feet down, the drill hit rock, causing it to break and plug the hole. On June 1, John told Betty that he would not be able to complete a substitute well any earlier than August 1. Betty cancelled the contract with John and hired another driller who completed the well by July 1. What are the respective rights of Betty and John on June 1? John's statement constitutes a repudiation and Betty may sue immediately. Betty must wait until July 1 to see if John performs before taking any action. There is no actionable breach unless John fails to complete the well by July 1. Betty must wait until July 1 to take action because John may retract his repudiation.

A is the correct answer. An anticipatory repudiation occurs when a party makes it clear, even before his performance is due, that he cannot or will not perform. The vast majority of states allow the victim of an anticipatory repudiation to sue immediately and before the repudiator's time for performance has arrived. Here, when John told Betty that he would not be able to complete a substitute well by the agreed upon date, John anticipatorily repudiated the contract and Betty had an immediate right to sue. B is wrong because her right to sue was immediate. C is wrong since John breached the contract on June 1 when he made the statement. D is wrong since Betty's right to sue for breach was immediate

Question 10 2 / 2 pts Betty owns a rural property and on May I, she hired John to drill a well to improve the quality of her drinking water. The contract provided that the well must be completed by July 1. John proceeded to drill and when the drill reached two hundred feet down, the drill hit rock, causing it to break and plug the hole. On June 1, John told Betty that he would not be able to complete a substitute well any earlier than August 1. Betty cancelled the contract with John and hired another driller who completed the well by July 1. What are the respective rights of Betty and John on June 1? John's statement constitutes a repudiation and Betty may sue immediately. Betty must wait until July 1 to see if John performs before taking any action. There is no actionable breach unless John fails to complete the well by July 1. Betty must wait until July 1 to take action because John may retract his repudiation.

Question 5 0 / 2 pts Billionaire, Inc. contracted in writing with Sam, who owned all of XYZ Corporation's outstanding stock, to purchase all of its stock at a specified price per share. At the time the contract was executed, Billionaire's contracting officer said to Sam, "Of course, our commitment to buy is conditioned on our obtaining approval of the contract from ParentCorp, Ltd., our parent company." Sam replied, "Fine. No problem." Sam subsequently refused to consummate the sale on the grounds that Billionaire had neglected to request ParentCorp's approval of the contract, which was true. ParentCorp's chief executive officer, however, is prepared to testify that ParentCorp would have routinely approved the contract if requested to do so. Billionaire can also prove that it has made a substantial sale of other assets to finance the stock purchase. If Billionaire sues Sam for breach of contract, is Billionaire likely to prevail? Yes, because the condition of ParentCorp's approval of the contract, being designed to protect only Billionaire and ParentCorp, can be and has been waived by those entities. Yes, because Billionaire detrimentally relied on Sam's commitment by selling off other assets to finance the stock purchase. No, because the express condition of ParentCorp's approval had not occurred prior to the lawsuit. No, because obtaining ParentCorp's approval of the contract was an event within Billionaire's control and Billionaire's failure to obtain the approval was a breach of contract.

A is the correct answer. Billionaire, Inc and ParentCorp, Inc. waived the condition of ParentCorp's approval of the contract. A waiver is a knowing and voluntary abandonment of a right. A court is likely to find that a condition has been waived if it is a minor one, such as a procedural or technical condition. B is wrong because detrimental reliance is not relevant to enforcement or lack of enforcement of the condition. Although the statement is true, C is not the correct answer since the condition was waived. D is incorrect since Billionaire's failure to obtain ParentCorp's approval was not a breach of contract, but rather, a waiver of that condition.

Question 14 15 / 15 pts Phoebe owned a large yacht that was run-down and in need of repairs. On September 25, she entered into a contract with Dennis, a yacht repairman who had worked in the local area for many years. Dennis agreed to repair the yacht for $5,000. Dennis agreed that the yacht repairs would be completed no later than November 15, so Phoebe could use the yacht for a party over the Thanksgiving holiday. Since it would be impractical to take the yacht out of the water for the repairs, Phoebe and Dennis agreed that all of the repairs would be completed while the yacht remained moored in the bay. Dennis attempted to start the repairs on October 1. However, as had been the case for many years, there were heavy storms throughout the month and into November, causing the water to become too choppy to permit any work on the yacht. As a result, by November 10, Dennis notified Phoebe that he would be unable to complete the repairs by November 15. If Phoebe asserts an action against Dennis for damages resulting from breach of the contract, who is likely to prevail? Phoebe, because the bay frequently had serious storm conditions and choppy water during October and November Phoebe, if Dennis could have timely completed the yacht repairs by removing the yacht from the water when he started the repairs Dennis, if Dennis' schedule made it impossible for Dennis to work on Phoebe's yacht at any time other than October and November Dennis, because the storms were not foreseeable.

A is the correct answer. Circumstances that make performance of a contractual obligation impossible can excuse performance if the circumstance could not reasonably have been foreseen by the parties at the time that the contract was made. If the bay was prone to heavy storms in and choppy water in October and November, the circumstance that prevented performance was foreseeable and would not excuse Dennis' failure to perform the repair. D is wrong since as a yacht repairman working in the area for many years, Dennis likely knew about the bad weather conditions in October and November when he agreed to repair the yacht in those waters. B is wrong since the parties agreed that the work would be performed while the yacht was in the water, Dennis was not required to remove it. C is wrong since Dennis must have known his schedule when he contracted with Phoebe.

Question 9 15 / 15 pts Abe, a computer manufacturer, and Brian, a retailer, entered into a final, written agreement in which Abe agreed to sell and Brian agreed to buy all of his requirements of computers, estimated at 20 computers per month, during the period January 1 and December 31, at a price of $50 per computer. A dispute arose in late October, when Brian returned 25 non-defective computers to Abe for full credit. Abe refused to credit Brian for the returned computers. In an action by Brian against Abe for damages due to return of the 25 computers, Brian introduced the written agreement, which expressly permitted Brian to return defective computers for credit but was silent as to return of non-defective computers for credit. Over Abe's objection, Brian seeks to introduce evidence that three times during the agreement he had returned, for various reasons, 25 non-defective computers, for which Abe had granted full credit. The trial court will probably rule that the evidence offered by Brian is admissible, because course-of performance evidence, when available, is considered the best indication of what the parties intended the writing to mean. admissible, because the evidence supports an agreement that is not within the relevant statute of frauds. not admissible, because the evidence is barred by the parol evidence rule. not admissible, because the express terms of the agreement control when those terms are inconsistent with the course of performance.

A is the correct answer. Course of performance, course of dealing and usage of trade evidence may be introduced to help interpret the meaning of a writing even if the writing is a complete integration. Course of performance evidence controls over course of dealing which prevails over usage of trade. Here, course of performance evidence, how the parties have previously conducted themselves in the contract in question, would be admissible. B is wrong since the contract is in writing. C is wrong since admission of course of performance is not barred by the parol evidence rule. D is wrong the express terms here do not contradict the course of performance evidence.

Question 5 0 / 2 pts Mary agrees to clean Alice's house once a month between the months of January and October for $50 a cleaning. Mary's fee is payable within 30 days of her performance. In May, Mary cleans Alice's house, as required under the agreement. In June, however, Mary takes a better-paying job and does not clean Alice's house. On July 1, Alice withholds payment for the May cleaning because of Mary's failure to clean in June. If Mary asserts an action against Alice for breach of contract, what is the likely result? Mary will prevail because she did not breach the contract in May Mary will prevail because she substantially performed Alice will prevail because Mary breached the contract in June Alice will prevail because Mary's breach in June was a material breach of the entire contract.

A is the correct answer. Here the parties divided up their performances into one-month installments, with each monthly cleaning by Mary paired in value with Alice's payment of $50. In this divisibility scenario, the court will treat the arrangement largely as if it were a series of individual contracts, each for one month. Therefore, since Mary did not breach the May contract, she is entitled to Alice's performance, payment of $50. B is wrong since this is a divisible contract divided into a series of monthly contracts and Mary fully performed in May. C is wrong since Mary did perform the May contract, she is entitled to Alice's full payment for that month. D is wrong because, the court will treat the arrangement largely as if it were a series of individual contracts, each for one month.

Jane saw an advertisement in the newspaper where Hank listed his Ford Mustang for sale for $15,000. Jane called Hank and offered to buy the Mustang for $12,000. Hank said that he needed some time to think about Jane's offer. A few hours later, Hank called Jane back and stated that he wanted no less than $14,000 for the Mustang. Jane rejected Hank's offer. Jane then entered into a contract to purchase a car from Pete. Subsequently, Hank called Jane and told her that he would now take her offer to purchase his Mustang for $12,000. Jane refused and Hank sued Jane for breach of contract. How should the court rule? Jane should prevail because Hank's offer to sell his car for $14,000 operates as a counter-offer, terminating Jane's offer to purchase the car for $12,000. Jane should prevail because she decided to purchase a car from Pete. Hank should prevail, since Jane's offer to purchase the car for $12,000 had no time limit on it and can be accepted within a reasonable time Hank should prevail, since Jane's offer to purchase the car for $12,000 was revived after Jane rejected Hank's offer to sell for $14,000.

A is the correct answer. In response to his ad, Jane offered to purchase Hank's Mustang for $12,000. When Hank called Jane back and stated that he would not take less than $14,000 for the car, Hank was making a counter-offer. Since the price in Hank's communication was different than the offer price, there was no acceptance under 2-207(1). At that point, Jane's offer to buy the car was extinguished. Consequently, Hank's attempt to sell the car to Jane subsequently had no legal effect. B is wrong since it is irrelevant. Jan's offer to Hank had been extinguished by the time she purchased the car from Pete. C is wrong. In response to his ad, Jane offered to purchase Hank's Mustang for $12,000. When Hank called Jane back and stated that he would not take less than $14,000 for the car, Hank was making a counter-offer. Since the price in Hank's communication was different than the offer price, there was no acceptance under 2-207(1). At that point, Jane's offer to buy the car was extinguished. Consequently, Hank's attempt to sell the car to Jane subsequently had no legal effect. D is wrong since once an offer is extinguished, it cannot be 'revived'

Question 5 2 / 2 pts When Paula's uncle died, he left her a bequest of an office building that had a movie theater on the ground floor. At the time Paula acquired title to the building, the movie theater was vacant, so she advertised for a tenant. Dexter decided to respond to the ad since he thought it was a good location for a pornographic movie theater. Dexter called Paula, said he was interested in leasing the space, but he did not tell her what type of films he intended to show since he thought that she might be unwilling to rent it to him for that purpose. On June 1, they entered into a written rental agreement for the theater, occupancy to begin on July 1. On June 15, the city council passed an ordinance prohibiting the showing of pornographic films in the neighborhood where Paula's theater was located. As a result, Dexter told Paula that he was cancelling their rental agreement. If Paula asserts an action against Dexter for breach of contract, the court should find for Paula Dexter, under the doctrine of frustration of purpose Dexter, under the doctrine of impossibility of performance Dexter, because after the contract was formed, governmental action made its subject matter illegal

A is the correct answer. None of the other answer choices justify a victory for Dexter. B is wrong since frustration of purpose may excuse performance of a contract where an unforeseen event destroys its underlying purpose, but only if both parties know of the purpose. Here, Paula did not know Dexter's purpose in renting the theater. C is wrong because Paula was unaware of the use contemplated by Dexter. D is wrong since the subject matter of the contract between Dexter and Paula was the rental of the movie theater and the city council did not make the rental of a movie theater illegal.

Question 12 0 / 2 pts Patrick's hobby is restoring and collecting antique cars. After buying an antique car, he contacted a body shop about having the car repainted. After some negotiation, the body shop wrote out the terms of an agreement with Patrick as follows: "Payment: Paint Job= $700 payable, $300 in advance and $400 on completion." Both parties signed the agreement. Which of the following best describes the obligations of the parties? Patrick's payment of the initial $300 is a condition precedent to the body shop's obligation to paint the car, and the body shop's painting of the car is a condition precedent to Patrick's obligation to pay the additional $400. Patrick's payment of the initial $300 is a condition precedent to the body shop's obligation to paint the car, but a condition subsequent to Patrick's obligation to pay the additional $400. Payment by Patrick and the painting of the car by the body shop are concurrent conditions. Neither party's obligation to perform is conditioned upon performance by the other party.

A is the correct answer. Performance of one of a series of mutual promises is a condition precedent to others in the series if the circumstances indicate that it should obviously precede the others. Since the agreement called for payment of $300 in advance, it is obvious that the parties intended that it should be paid before the work is commenced. Since the contract calls for payment of an additional $400 after completion, it is obvious that the parties intended that the paint job should be finished before payment of additional money is required. B is incorrect-since the body shop was obligated to paint before receiving the additional $400, Patrick's payment of the additional $400 cannot be called a condition subsequent of the body shop's obligation to paint the car. C is wrong because the language of the contract makes it obvious that the parties intended a consecutive order of performance. D is wrong since the agreement required partial payment in advance and completion of the job before the balance was due.

Question 10 2 / 2 pts Over a friendly lunch, Betty offered to sell her mink coat to Sally for $500. Sally turned the offer down and said, "I can't afford to pay more than $100." Betty responded, "I'm offering a good price. I'll give you a week to think about it." Laughing, Sally said "I won't change my mind." Betty said, "I'll still keep the offer open for you for a week." Three days later, Sally ran into Betty's husband who was carrying Betty's mink coat. He explained that Betty had agreed to sell the coat to a consignment store for $1,000, and he was taking it to get cleaned. Sally frantically called Betty and said, "I accept your offer and will buy your mink coat for $500." Which of the following is the most accurate statement? There is no contract because Sally knew that Betty revoked the offer before she accepted. There is no contract because Sally's counteroffer terminated her power of acceptance. There is a contract because Sally had an enforceable option contract. There is a contract because Sally never rejected Betty's offer.

A is the correct answer. Revocation of an offer is valid when the offeree receives notice either directly or indirectly that the offeror has revoked the offer. Here, Sally learned from Betty's husband that Betty had sold the coat to a consignment store. Thus, she had indirect notice of the revocation, making her acceptance ineffective.

Mary was interested in purchasing a luxury condominium in a new development. She purchased the condominium from Luxe builders and along with the sale, Luxe provided a 10-year warranty on the building and fixtures. A few months after Mary purchased her condominium, there were a series of heavy rainstorms and the roof leaked. Luxe refused to honor the warranty and Mary sued for breach of warranty and breach of contract. Does common law or the UCC govern this transaction? Common law governs because a warranty is a service, not goods. Common law governs because a condominium is not considered to be a movable, tangible object. UCC governs because the transaction involved a sale of real estate. C governs because a condominium structure is capable of being moved with the use of machinery.

A is the correct answer. The purpose of the transaction is for services to be provided, repair of the roof under the warranty. Therefore, the common law would apply. B is incorrect since this transaction does not involve the sale of the condominium, but the enforcement of the warranty. Consequently, A is a better answer than B. C and D are wrong since the UCC does not control real estate transactions where a structure is being sold with the land, despite the fact that some structures, placed on the land, are movable.

Question 9 0 / 2 pts Baker, the operator of a bakery, had arranged to purchase new ovens for his establishment. Donna was opening a new bakery and agreed to purchase Baker's used ovens. Because Baker's new ovens were not delivered and installed on time, he was unable to deliver the used ovens to Donna by the date set in the contract. Meanwhile, at the time that she entered into the contract, Donna decided to delay her entry into the bakery business and had already entered into a contract to resell Baker's ovens to someone else at a profit. If Donna sues Baker for loss of profits on the resale of the used ovens, what will be the likely result? Donna will not be able to collect her lost profits because they would not have been foreseeable. Donna will not be able to collect her lost profits because there was no material breach by Baker. Donna will be able to collect her lost profits because Baker should have foreseen the possibility that Donna would resell the ovens. Donna will be able to collect her lost profits because lost profits are part of her expectation damages.

A is the correct answer. The rule from Hadley v. Baxendale states that damages are not recoverable in a breach of contract action unless they are foreseeable at the time that the contract was made. Here, since there are no facts to indicate that Donna informed Baker of her intention to resell his ovens, any loss of profits she would have made on that sale are not foreseeable and hence, not recoverable. For that reason, C is incorrect. B is wrong because Baker did breach the contract by not providing the ovens to Donna on the date set in the contract. D is wrong since lost profits are considered 'incidental damages' and not expectation damages, since they are not a direct result of the breach of the contract.

Question 4 2 / 2 pts In a single writing, Washer contracted with Manager to wash the windows on three identical commercial office buildings for $2,000 each. The contract provided for Manager's payment of $6,000 upon Washer's completion of the work on all three buildings. Washer did not ask for any payment when the windows on the first building were completely washed, but she demanded $4,000 after washing the windows on the second building. Does the contract require Manager to make the $4,000 payment? No, because Manager has no duty under the contract to pay anything to Washer until all the windows on all three buildings have been washed. No, because Washer waived her right, if any, to payment on a per-building basis by failing to demand $2,000 upon completion of the first building. Yes, because the contract is divisible. Yes, because Washer has substantially performed the entire contract.

A is the correct answer. Where the parties to a contract expressly provide for payment for service rendered under the contract and the contract is not divisible, the terms will dictate the payment. Since the contract provides for one payment of $6,000 after performance is complete, Manager has no obligation to pay anything until all the windows on all three buildings have been washed. B is wrong since no waiver has taken place because the express terms of the contract will prevail. C is wrong because the contract is not divisible. D is wrong because Washer has not substantially performed until all three building's windows have been washed.

Question 8 2 / 2 pts Under a contract with Acme Farms, Boxer Excavation, Inc., begins digging an agricultural pond. In mid-project, Boxer asks for $15,000 over the contract price, claiming an increase in the "cost of doing business." Acme agrees but later refuses to pay. Their agreement is unenforceable because Boxer's performance was a preexisting duty. unenforceable because Acme's promise was illusory. enforceable. unenforceable because its performance is unforeseeably difficult.

A is the correct answer. a modification under the common law requires new consideration and none is provided here. B is incorrect because Acme's promise to pay is not illusory. C is wrong because the modification fails for lack of consideration. D is wrong because parties make their own bargain and the difficulty of performance is irrelevant.

Question 8 0 / 2 pts Bruce wanted to purchase a new car from Del, a car dealer. During their negotiations, Del and Bruce discussed the possibility that Bruce would be able to get free oil changes at the dealership for as long as he owned the car. After extensive negotiations, Bruce finally agreed to purchase the car from Del. Once the deal was written up, it did not include the free oil changes that Del had mentioned at one point during their negotiations. The written contract provided that it was the full and complete agreement of the parties regarding the purchase of the car and that nothing in the agreement could be modified unless a later agreement in writing was signed and approved by the owner of the dealership. Can Bruce enforce the agreement about the free oil changes? No, because the agreement is barred by the parol evidence rule. No, because the agreement contained a merger clause. Yes, because the contract was not fully integrated. Yes, because the parol evidence rule does not apply in the event of fraud.

ANSWER: A is the best answer because the parol evidence clause bars introduction of evidence of agreements made prior or contemporaneously with a fully integrated written agreement, that varies or contradicts the agreement. B is incorrect because a merger clause is not dispositive of a full integration, but is one factor in determination of the integration of the contract. C is incorrect because the contract was fully integrated. D is incorrect because while fraud is an exception, there is no indication that Del committed fraud here.

Question 4 0 / 2 pts Ann and Bob, who were formerly in a romantic relationship, were involved in a very heated contract negotiation over the sale of an antique piano that Ann had acquired through her family and had listed for sale at $50,000. Bob wanted the piano very badly that at one point, he held Ann against her will, locked in his office, and finally threatened Ann, indicating he would destroy her reputation in the industry, if she refused to sell the piano to him at the price he wanted, which was $20,000. Ann agreed to sell the piano to Bob at the price he wanted, just to get out of Bob's office unharmed. She signed a writing memorializing the agreement the following day. The contract is: Voidable based only on undue influence. Voidable based only on duress. Voidable based on both duress and undue influence. Enforceable, because Ann could have called the police at any time.

ANSWER: B is the best answer because undue influence involves persuasion of a party who by virtue of a relationship between them is justified in assuming that the person would not act in a manner consistent with their interests, resulting in an unfair bargain; duress involves a stronger person inducing assent based on a threat. In each case the contract is voidable. A and C are incorrect based on this analysis. D is incorrect because it is irrelevant.

Question 19 15 / 15 pts In a written contract, Furniture Supplier agreed to provide Bob with all of the furnishings for his new beach bungalow at a fixed price of $600,000. The contract contained the following provision: "Prior to the delivery of furnishings or during the course thereof, this contract may be modified by mutual agreement of the parties as to 'extras' requested by Bob. Such modifications, however, may be authorized only in writing, signed by both parties." During the course of delivery of the requested furnishings, Bob requested $10,000 worth of 'fish statues' for the pool area of his beach bungalow for the orally agreed price, in addition to the contract price. Bob subsequently refused to pay anything for the statues, solely on the ground that no written, signed authorization for them was ever made. If Furniture Supplier sues Bob for breach of contract for the cost of the fish statues, which of the following is the likely outcome? Furniture Supplier will prevail, because courts generally will not uphold 'no oral modification' clauses. Bob will prevail because the 'no oral modification clause' of the contract likely will be enforced. Bob will prevail because of the parol evidence rule. Bob will prevail because of the Statute of Frauds.

ANSWER: B is the correct answer. In a contract for the sale of goods, a signed agreement which excludes modifications or rescission except by a signed writing, cannot otherwise be modified or rescinded. Bob will prevail because the court likely will uphold this provision in the contract. A is incorrect since courts generally uphold 'no oral modification' clauses under these circumstances. C is wrong since the parol evidence rule does not apply to modifications made after the contract is formed. D is wrong because based on the Statute of Frauds alone, Bob would not prevail since the modification was for a sale of goods in excess of $500.

Question 10 2 / 2 pts Al is an air conditioning contractor who entered into a contract with Hank, a homeowner. For a total price of $2,000 Al was to provide and install a central air conditioner and the required 220 volt service line to the house to increase its power capacity. The day before the contract was signed, Al told Hank that Al would give Hank 10 replacement filters valued at $40 after the work was done. The writing does not mention the filters. The work has been done, but Al has refused to supply the 10 filters. If Hank asserts an action against Al for failure to deliver the filters, which of the following is Al's best defense? The promise is not enforceable because the contract contains a merger clause. The promise is not enforceable because it was gratuitous. The promise is not enforceable because it was oral. The promise is not enforceable because of the parol evidence rule.

ANSWER: B is the correct answer. Since there is no consideration for Al's promise to provide the filters to Hank, it would be considered a gift and not enforceable. The parol evidence rule provides that a contemporaneous oral or written promise is not admissible in a fully integrated contract to supplement or contradict the contract terms. Consequently, A is not correct since the contract does not contain a merger clause and would probably not be considered to be fully integrated. D is incorrect for the same reason. C is incorrect since oral promises are enforceable if they have consideration and do not violate the parol evidence rule.

Question 6 2 / 2 pts Dennis, a Labrador retriever breeder and Pearl, a dog lover, signed the following agreement: "For $10,000, Dennis will sell to Pearl a black lab puppy that Pearl may choose from among the puppies on Dennis' ranch." Pearl refused to accept delivery of a black lab puppy timely provided by Dennis or to choose among those remaining, on the ground that during their negotiations, Dennis had orally agreed to include the first round of vaccination, worth $100, and also to give Pearl the option to choose a black or a yellow lab. Pearl insisted on one of Dennis' yellow lab puppies, but he refused to part with any of his yellow lab puppies or to include the vaccinations demanded by Pearl. If Pearl sues Dennis for damages and seeks to introduce evidence of the alleged oral agreement, the court probably will: admit the evidence as to both the vaccination and the option to choose a yellow lab puppy. admit the evidence as to the vaccinations but not the option to choose a yellow lab puppy. admit the evidence as to the option to choose a yellow lab puppy but not the promise to include the vaccinations. not admit any of the evidence.

ANSWER: B is the correct answer. The parol evidence rule provides that where the parties intend a writing to be the final expression of their agreement, a prior or contemporaneous oral or written agreement cannot be admitted to contradict or supplement the writing. Here, there is no merger clause, so likely the agreement is not fully integrated. When a writing is a partial integration, prior agreements may be admitted unless they contradict the writing. Since the agreement on vaccinations does not contradict a term of the writing, evidence of that agreement could come in, while the agreement regarding the option to choose a yellow, rather than a black, puppy would not. Therefore, A, C and D are wrong.

Question 18 0 / 15 pts Abe contacted Fred, a fireplace manufacturer, about the possibility of Abe supplying Fred with his requirements for stones for manufacture of fireplaces for housing developments. Since Fred indicated interest, on January 2, Abe sent a letter to Fred entitled "Offer To Sell" indicating that he would supply "as much stone as you might require" during the upcoming year, with the price of $5.00 per pound being "firm" during that time. The letter was signed by Abe. Fred, believing this to be an excellent price, used it in making a bid to construct the fireplaces in 500 homes in a new housing development. A week later, Abe sent another letter to Fred stating, "This letter is to inform you that any sales of stone will henceforth be at $7.00 per pound. Sorry for the inconvenience." Fred did not respond because he was upset that the price increase would cause him to suffer a loss on the new housing development project. If two weeks later, Abe then makes another delivery of stone to Fred which Fred accepts and bills him at $7.00 per pound, is Fred obligated to pay the increased rate? Yes, because no consideration is required for a modification under the UCC. Yes, because Abe and Fred are merchants. No, because Abe made a firm offer in January. No, because Fred relied on the offer.

ANSWER: C is the correct answer. An offer by a merchant to buy or sell goods in a signed writing, which gives assurances that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, not to exceed three months. Therefore, the price is fixed at $5.00 per pound for the remaining time up to 90 days. A is wrong since Abe cannot revoke the offer at $5.00 per pound. B is wrong since it is only relevant that Abe is a merchant, making a merchant's firm offer. D is wrong since while Fred relied on the offer, it does not answer the question regarding the attempt by Abe to increase the price.

Question 7 2 / 2 pts Abe contacted Fred, a fireplace manufacturer, about the possibility of Abe supplying Fred with his requirements for stones for manufacture of fireplaces for housing developments. Since Fred indicated interest, on January 2, Abe sent a letter to Fred entitled "Offer To Sell" indicating that he would supply "as much stone as you might require" during the upcoming year, with the price of $5.00 per pound being "firm" during that time. The letter was signed by Abe. Fred, believing this to be an excellent price, used it in making a bid to construct the fireplaces in 500 homes in a new housing development. A week later, Abe sent another letter to Fred stating, "This letter is to inform you that any sales of stone will henceforth be at $7.00 per pound. Sorry for the inconvenience." Fred did not respond because he was upset that the price increase would cause him to suffer a loss on the new housing development project. If two weeks later, Abe then makes another delivery of stone to Fred which Fred accepts and bills him at $7.00 per pound, is Fred obligated to pay the increased rate? Yes, because no consideration is required for a modification under the UCC. Yes, because Abe and Fred are merchants. No, because Abe made a firm offer in January. No, because Fred relied on the offer.

Question 5 2 / 2 pts Hank and Al signed a contract that called for Al to install a 3 ton air conditioning unit for an agreed price. Before any work was done but after the contract was signed, Hank was told by his neighbors that their houses had 3 ton units and that these units are not sufficient to keep their houses cool on really hot days. Hank phoned Al and asked Al to install a unit rated at 4 tons. During their conversation Al agreed to do so and Hank agreed to pay an additional $300 for the larger unit. The 4 ton unit was installed and Hank used it for 30 days, but refused to pay the additional $300. Is Al entitled to recover the $300? Al cannot recover the $300 because of the parol evidence rule. Al cannot recover the $300 because the modification was not in writing. Al can recover the $300 because completion of performance by Al and Hank's failure to object makes Hank's promise enforceable. Al can recover the $300 because their course of dealing has priority over the express terms of the contract.

ANSWER: C is the correct answer. Hank's acceptance of Al's performance created the obligation for Al to pay. The modification to install a 4 ton unit at an additional cost of $300 for the larger unit does not require a writing under the Statute of Frauds. Service contracts do not have to be in writing and even if this was considered a contract for the sale of a 4 ton unit for $300, that also would not have to be in writing since it is a sales contract for less than $500 in value. B is wrong for that reason. A is wrong because the parol evidence rule does not apply to agreements made after the contract was effectuated. D is wrong since course of dealing (the conduct of the parties in other contracts) is not applicable here.

Score for this attempt: 225 out of 600 * Submitted Jun 28 at 8:40pm This attempt took 120 minutes. Question 1 15 / 15 pts Paul, a pianist, orally agreed to pay Dixon $30,000 for a genuine Steinway grand piano. During their negotiations, both parties referred to the piano as "a true Steinway". Dixon, a reputable musical instrument dealer, had no reason to believe that the piano was anything other than a true Steinway and Paul relied on Dixon's judgment in the matter. Accordingly, Paul paid Dixon $30,000 and received a receipt for the grand piano. A short time later, Paul discovered that the piano that he purchased was not a genuine Steinway, but a masterful imitation. The piano was valued at only $1,000. Paul asserts an action against Dixon to rescind the contract and recover the $30,000. Who will likely prevail? Dixon will win, because the sales contract was valid and enforceable. Dixon will win, because he did not make any misrepresentations as to the genuineness of the piano. Paul will win, because the sales contract was unenforceable under the Statute of Frauds since Paul did not sign the receipt. Paul will win, because although the sales contract was valid, it would be voidable by Paul since the parties were mutually mistaken about the genuineness of the piano.

ANSWER: D is the correct answer. Mutual mistake as to a material aspect of the contract is grounds for avoidance of a contract. For that reason, A is wrong. B is wrong since the mutual mistake doctrine still applies. C is wrong since the receipt would only have to be signed by the party to be charged, not Paul.

Question 10 2 / 2 pts On March 1, Patty, who owned a pet store received from Fish, Inc., a letter offering to sell Patty 1,200 goldfish suitable for sale in Patty's pet store. The Fish, Inc. offer stated that it would remain open until March 20, but that Patty's acceptance must be received on or before that date. On March 16, Patty mailed a letter of acceptance. On March 17, Fish, Inc. e-mailed Patty to advise that it was revoking the offer. Patty's letter did not arrive at Fish, Inc.'s address until March 21. As of March 22, which of the following is a correct statement? The e-mail revoking the offer was not effective. The offer was revocable at any time for lack of consideration. The mail was the only authorized means of revocation. Under the terms of Fish, Inc.'s offer, Patty's attempted acceptance was ineffective.

ANSWER: D is the correct answer. The offeror is the master of their offer. Here, the offer expressly states that the acceptance had to be received by Fish, Inc. on or before March 20. Since the mailbox rule is a default rule, it is not applicable here and Patty's acceptance was not effective until it was received on March 21. By then, the offer had already been revoked (March 17). Since the revocation was effective on March 17, answer A is wrong. B is wrong since there is consideration here, exchange of goldfish for money. C is wrong since the offer did not specify any particular means for revocation. Quiz Score: 12 out of 20

Question 3 2 / 2 pts Saul has a car dealership through which he sells used cars, and Bella is interested in purchasing a used car, but she doesn't get paid until next week. Sam writes a memo promising to sell Bella a used Volvo, license number ABC123, for $5,000, with the offer to remain open for two weeks, and gets his boss to sign off on it. The next day Saul gets a better offer and sells the Volvo for $5,500. A week later Bella returns for the Volvo, and Sam tells her he already sold it. Bella shops around looking for another car but only finds a comparable one for $5,500 and ultimately buys one at the higher price. If Bella sues Sam for breach of contract, what result? Bella wins, because Sam agreed to keep the offer open. Bella wins, because she relied on Sam's agreement to her detriment. Sam wins because the promise to keep the offer open had no consideration. Sam wins because the promise was not signed by both parties.

Answer: A is the best answer because Sam's promise is a firm offer by a merchant, Sam, in a signed writing that provided that the offer would be held open for the specified period of time. Consideration is not required under the merchant's firm offer rule, so C is incorrect. The memo will satisfy the statute of frauds requirement because it is signed by the party to be bound, so C is incorrect. B is incorrect because there are no facts suggesting Bella took any action in detrimental reliance and that is not necessary to enforce the promise made here by Sam.

Question 4 2 / 2 pts Sam has a car dealership through which he sells used cars, and Bella is interested in purchasing a used car, but she doesn't get paid until next week. Sam writes a memo promising to sell Bella a used Volvo, license number ABC123, for $5,000, with the offer to remain open for two weeks, and gets his boss to sign off on it. The next day Sam gets a better offer and sells the Volvo for $5,500. A week later Bella returns for the Volvo, and Sam tells her he already sold it. Bella shops around looking for another car but only finds a comparable one for $5,500 and ultimately buys one at the higher price. If Bella sues Sam for breach of contract, what result? Bella wins, because Sam agreed to keep the offer open. Bella wins, because she relied on Sam's agreement to her detriment. Sam wins because the promise to keep the offer open had no consideration. . Sam wins because the promise was not signed by both parties

Answer: A is the best answer because Sam's promise is a firm offer by a merchant, Sam, in a signed writing that provided that the offer would be held open for the specified period of time. Consideration is not required under the merchant's firm offer rule, so C is incorrect. The memo will satisfy the statute of frauds requirement because it is signed by the party to be bound, so D is incorrect. B is incorrect because there are no facts suggesting Bella took any action in detrimental reliance and that is not necessary to enforce the promise made here by Sam.

Question 12 15 / 15 pts One day while driving, Joe's car was struck in the rear by Donna's car. Joe was certain that that he had caused the accident because he had stopped unexpectedly. However, as soon as he got out of the car, Joe yelled at Donna, "You rear-ended me! I'm going to sue you!" Donna offered to pay Joe $5,000 if he refrained from filing a lawsuit. Joe agreed. Donna later refused to pay $5,000, and Joe sued her to enforce the contract. If all of the foregoing facts are proved or admitted at trial, is Joe entitled to recover? No, because Joe thought he had caused the accident. Yes, because Donna and Joe had an enforceable contract. Yes, because the law encourages the settlement of disputed claims. Yes, if the court finds that Donna caused the accident.

Answer: A is the correct answer. Forbearance from suing is consideration if the plaintiff subjectively believes he has a valid claim. Here, Joe thought he had caused the accident, which would mean he did not believe he had a valid claim. Therefore, Joe's subjective belief at the time the agreement was made would make the agreement unenforceable. Choice B is incorrect because there was no enforceable contract. Choice C is not correct because it is only a policy reason that does not support the result. Choice D is incorrect because even if Donna had caused the accident, Joe's belief that he did not have a claim still makes the consideration offered at the time of the contract formation invalid.

Question 20 15 / 15 pts John owns a clothing store that sells athletic apparel. John purchased 2,000 jogging outfits from Runner's Garb, a wholesale manufacturer of sportswear for adults. John and Runner's Garb had several conversations and ultimately agreed that Runner's Garb would sell jogging outfits to John at a price of $15 per outfit. John sent a confirmatory e-mail to Runner's Garb that stated the terms of 250 jogging outfits at $15 per outfit, to be delivered in ten days. The e-mail contained an automatically applied signature. Runner's Garb received the e-mail but failed to deliver the jogging outfits on a timely basis. John sued Runner's Garb for breach of contract and Runner's Garb asserted the Statute of Frauds as a defense. How should the court rule? The contract is enforceable, because Runner's Garb did not timely object to the confirming e-mail. The signature requirement of the Statute of Frauds is not satisfied by the e-mail. Sending a confirmation by e-mail does not satisfy the Statute of Frauds. The e-mail is not adequate unless the goods were specifically manufactured.

Answer: A is the correct answer. John's e-mail was a merchant's confirmatory memo since it identified the subject of the contract, indicated that a contract had been made between the parties, set out the essential terms of the contract and was 'signed'. Under the UCC, a memorandum that is between merchants (as here) is enforceable against a party who does not sign it (here, Runner's Garb) where the recipient of the memorandum does not object within 10 days after receiving the memorandum. Here, choice A indicates that Runner's Grab did not object. B is wrong because the signature requirement under the Statue of Frauds can be satisfied with an e-mail authentication of the sender or in this case, an automatically applied signature. (UCC 2-201). C is wrong. John's e-mail was a merchant's confirmatory memo since it identified the subject of the contract, indicated that a contract had been made between the parties, set out the essential terms of the contract and was 'signed'. Under the UCC, a memorandum that is between merchants (as here) is enforceable against a party who does not sign it (here, Runner's Garb) where the recipient of the memorandum does not object within 10 days after receiving the memorandum. Here, Runner's Grab did not object. D is an incorrect statement of the law.

Question 16 15 / 15 pts Meg contracted with Rick, a painter, to have the interior of her house painted for $10,000. Rick agreed to use only high-priced 'green' paint on Meg's home because Meg was environmentally conscious and did not want her young children to be breathing the toxic paint fumes. Rick filled out a standard form contract and deliberately did not specify the brand of paint that he intended to use. After Rick told Meg that the written contract contained all of the terms that they had agreed to, she signed the contract without reading it. After completion of the painting job, Meg saw some empty paint cans left in her garage and realized that Rick had not used the 'green' paint that she had requested. If Meg asserts an action against Rick for misrepresentation, any statements made by Rick before the contract was signed would be admitted as an exception to the parol evidence rule. would be admitted if the contract was only partially integrated. would be barred by the parol evidence rule. would be barred because they occurred before the contract was signed.

Answer: A. A is the correct answer. Evidence that attacks the validity of the written contract (such as misrepresentation) generally is considered an exception to the PER and is admissible. For that reason, C is wrong. B is wrong since evidence of misrepresentation is admissible, whether or not the contract is integrated. D is wrong since evidence of misrepresentation is an exception to the PER.

Question 6 2 / 2 pts Meg contracted with Rick, a painter, to have the interior of her house painted for $10,000. Rick agreed to use only high-priced 'green' paint on Meg's home because Meg was environmentally conscious and did not want her young children to be breathing the toxic paint fumes. Rick filled out a standard form contract and deliberately did not specify the brand of paint that he intended to use. After Rick told Meg that the written contract contained all of the terms that they had agreed to, she signed the contract without reading it. After completion of the painting job, Meg saw some empty paint cans left in her garage and realized that Rick had not used the 'green' paint that she had requested. If Meg asserts an action against Rick for misrepresentation, any statements made by Rick before the contract was signed would be admitted as an exception to the parol evidence rule. would be admitted if the contract was only partially integrated. would be barred by the parol evidence rule. would be barred because they occurred before the contract was signed.

Question 7 2 / 2 pts Bill is a chef who runs a business preparing and serving fine cuisine dinners for homeowners hosting parties. Bill enters into a written contract with Angela, a wealthy celebrity, to prepare and serve an elegant sit-down dinner for thirty people to celebrate New Years' Eve. The negotiated contract price is $50,000, with 60% of the contract price representing the costs of the specified food, beverages, and place settings and 40% represents the fee for preparing and serving the meal. Angela agreed to pay $30,000 up front, and the rest upon her manager's certification that the service was acceptable, following the event. Under the majority rule, what is the governing law for the contract? The common law applies because cooking services are not a sale of goods The common law applies because the thrust of the contract is for the preparation of the food, not the sale of goods The UCC applies because under the gravamen test, contract provisions for goods can be severed from contract provisions for services The UCC applies because only one party, Bill, is a merchant

Answer: B is correct. The majority of jurisdictions apply the predominant purpose test to hybrid contracts test to determine the primary purpose of the contract. Here, it appears that the value of the contract is in the food preparation and serving the meal, making it a common law contract. A is incorrect because although it is a correct statement, it does not apply the predominant purpose test. C is wrong since the gravamen test is not used by the majority of jurisdictions. D is wrong since whether or not the parties are merchants are irrelevant.

Question 8 0 / 2 pts Randy entered into a lease with Len, a retail landlord, for a small donut shop for a term of five years, and agreed to pay $700 per month. The lease provided that, if Randy breached the lease he would be required to pay a penalty of 50% of his gross revenues for the store over the past year. Len explained the clause to Randy and he initialed it when he signed the lease. The store earned about $10,000 in gross revenues per month until a new donut store opened nearby with about six months left on the lease, which seriously harmed Randy's business. With six months left on the lease, Randy realized he was not making any profit, and he decided to close his business and cancel the lease. Len accepted the cancellation, and advised Randy that he owed Len a total of $60,000 as a penalty. What is Randy's best argument? The charge is procedurally unconscionable. The charge is an unenforceable penalty. The charge is fraudulent. Len must mitigate his damages by re-leasing the premises.

Answer: B is the best answer because although parties may agree to liquidated damages, the clause must be a reasonable forecast of actual damages from the anticipated breach, and not a penalty. Here the consequence of the breach is the loss of $4,200 in rent which is an amount reasonably ascertained based on the lease provisions; but the clause would allow Len to recover more than 10 times that amount. A is a weaker argument where the clause was brought to Randy's attention and he initialed it. C is incorrect factually because the clause was not misrepresented or concealed. D is a good argument, but does not address as directly the demand for the penalty, and would not eliminate the penalty.

Answer: B. B is correct. The majority of jurisdictions apply the predominant purpose test to hybrid contracts test to determine the primary purpose of the contract. Here, it appears that the value of the contract is in the food preparation and serving the meal, making it a common law contract. A is incorrect because although it is a correct statement, it does not apply the predominant purpose test. C is wrong since the gravamen test is not used by the majority of jurisdictions. D is wrong since whether or not the parties are merchants are irrelevant.

Question 3 0 / 2 pts In January, Jessica, a professional pianist, says to Peter, a piano distributor, "I'm interested in buying your new grand piano." Peter responds, "You can have it for $50,000. That's my offer." "I'd like you to promise that you'll hold that offer open for four months until May 1, so that I may consider it," replies Jessica. "Of course," says Peter. "The offer is good until May 1. I won't take it back." "Great. Let's put it in writing," says Jessica. The parties then sign a writing that fully sets forth their names and addresses and provides that: "Peter hereby offers to sell his new grand piano to Jessica for $50,000. This offer will not be revoked or withdrawn before May 1." On April 20, Peter told Jessica that he was selling his new grand piano to Alex, since Alex offered him $60,000 for it. When Jessica tries to tender her check for $50,000 to buy the piano on April 25, Peter tells her that it has already been sold. If Jessica asserts an action against Peter for breach of the contract, who is likely to prevail? Jessica, because Peter signed an option contract. Jessica, because Peter promised to keep the offer open until May 1. Peter, because he is only obligated to keep the option open for three months, and can revoke the offer any time after the three months has past. Peter, because consideration is required to keep an option open under the UCC.

Answer: C is the correct answer. An option contract between merchants (a merchant's firm offer) requires a signed writing that an offer will be kept open for a period of time but no longer than three months, unless consideration is paid. Since the contract specifies a longer period of time and consideration was not paid, the option becomes revocable at the will of the offeree (Peter) after the three months have passed. Therefore, A and B are wrong. D is wrong because ordinarily, a merchant's firm offer does not require consideration under the UCC.

Question 6 2 / 2 pts Anglo is an English-speaking county in Europe whose unit of currency is the 'dollar', worth around 85 U.S. cents. Peter, who owned a glue factory in Anglo, entered into a written contract with Dan, while Peter was on a business trip in the U.S. The contract provided that Dan would purchase 20 tons of liquid glue from Peter for the price of "Nine Thousand (9,000) Dollars." After receiving the shipment, Dan sent Peter an international money order of 9,000 Anglo dollars. Peter wrote to Dan, claiming that the agreement called for the payment in U.S. dollars, but Dan refused to make any further payment. Peter brought an action against Dan in the U.S. and wanted to introduce evidence that prior to executing the written contract, he and Dan orally agreed that the price in the contract was to be in U.S. dollars. If Dan objects to the evidence offered by Peter, how should the court rule? The evidence should be excluded, since the oral agreement was made prior to the writing The evidence should be excluded, only if the written contract was prepared by Dan The evidence should be admitted, since the evidence offered by Peter does not modify or contradict the written contract The evidence should be admitted, unless the writing is found to be a total integration of the agreement between the parties

Answer: C is the correct answer. D is incorrect because the parol evidence rule does not apply here since the evidence is offered to interpret an ambiguity in the contract, the meaning of the term "dollar", making A and C wrong. B is wrong. Extrinsic (parol) evidence may be introduced to explain an ambiguity, no matter who caused it.

Score for this quiz: 16 out of 30 Submitted Jul 26 at 10:05pm This attempt took 30 minutes. Question 1 2 / 2 pts In an e-mail on Thursday, Donna offered to sell her car to Patrick for $10,000. The writing was complete in all material respects. By a return e-mail, Patrick responded immediately, "I'd like to think about it over the week-end." Donna responded with another e-mail, "OK. Let me know on Monday." Two days later, Patrick saw someone other than Donna driving and parking what appeared to be Donna's car. After the driver got out of the car, Patrick asked him: "Is this your car?" The driver responded, "Yes, I bought it yesterday." Patrick examined the car and correctly concluded that the car was the same one Donna offered to sell him. Later that day, Patrick called Donna by phone and said, "I accept your offer to sell me your car." Donna responded, "I'm sorry, it's sold." Patrick sues Donna for breach of contract. Which of the following facts best supports Donna's claim that she is not in breach of contract? When Donna offered to sell Patrick her car, she was only joking By the time Patrick attempted to accept Donna's offer, she had already sold her car to someone else Donna, in making her offer, did not expressly provide that the offer would be irrevocable Before attempting to accept Donna's offer, Patrick learned that Donna had sold the car to another party

Answer: D. Revocation of an offer is effective upon receipt of notice, whether direct or indirect, by the offeree. Even though Donna agreed to keep the offer open until Monday, she was not obligated to do so. Moreover, when Patrick saw the car with the buyer and confirmed that the car was the one Donna had offered to sell him, he was indirectly notified that Donna had revoked her offer. Thus, D is the best answer. A is wrong since contractual intent is determined by objective manifestations. Here, a reasonable person would think that Donna made an offer to Patrick in her e-mail on Thursday. B is wrong since a revocation is only effective when the offeree has notice of it. C is incorrect because the term 'irrevocable' is not required for an option contract to be valid. Here since Donna is not a merchant who deals in the sale of cars, an option contract requires consideration. Thus, Donna was not obligated to keep her offer open until Monday.

Question 4 2 / 2 pts Bart signed a contract with his employer, Mercer Labs, Inc., agreeing that he would not work for a competitor in the same area for one year following the end of his employment, and would not use any trade secrets learned in his position with a competitive company. Boston Labs hired Bart by doubling his salary. Mercer learned that Bart disclosed information regarding a medical device under development at Mercer Labs to Boston Labs, which Boston was using to develop a similar device. If Mercer sues Boston labs at this point, Mercer should seek what remedies against Bart and Boston Labs? I. Injunctive relief II. Compensatory damages Both I and II. I only. II only. None of the above.

Answers: B is the best answer here. An injunction is available to order Bart and Boston not to use the trade secrets. Compensatory damages may also be available, but will not be appropriate here, as there are no damages yet. Therefore A, C and D are incorrect.

Sam decided to hold a garage sale to get rid of a bunch of old items from around the house. He planned to try to sell some clothing and books, as well as some children's toys and games. Should Sam sell these items at the garage sale, what is the applicable law that governs these transactions? The UCC applies because Sam is a merchant. The UCC applies because the items Sam hopes to sell are tangible movable items. Common law applies because Sam is not a merchant. Using the predominant purpose test, common law is applicable.

B is the best answer because the items are tangible, movable items, which are goods, and the UCC applies to sales of goods. A is incorrect because whether or not a party is a merchant does not determine whether or not the UCC applies, and at any rate, Sam is not a merchant. C is incorrect because common law is not applicable and whether or not common law applies does not depend on whether a party is a merchant. D is incorrect because the predominant purpose test does not apply here, since this is not a hybrid transaction, and because common law is not applicable.

Question 6 2 / 2 pts Helen had always dreamed of starting a small boutique, and decided to take the leap. George agreed to lease a retail space to Helen for the store for three years. After the lease was signed, Helen spent $20,000 on inventory and another $10,000 on décor for the store, specifically designed to mesh with George's location. George breached the lease before Helen even moved into the property, notifying her on the day prior to move in that he had decided to lease to another tenant. The other tenant moved into the space. Helen located another space, but had to completely redo the décor arrangements. If Helen sues George, she is most likely to be able to recover Specific performance of the lease. Her expenses incurred on the décor. Lost profits from her anticipated sales. None of the above.

Answers: B is the best answer, as Helen incurred these expenses in reliance on the contract with George. A is not likely because a court will not award specific performance where it will disrupt the subsequent tenant and Helen will have difficulty proving that damages are inadequate once she is in another space, so she would not be likely to seek specific performance. C is not likely because new businesses are unlikely to be able to establish lost profits with certainty. D is incorrect because it is likely she can recover her expenses in reliance.

Question 5 2 / 2 pts Cora agreed to sell her waterfront home on Balboa Island to Emily in a written contract for $2.5 million. The location is choice, and there are no others available on the market. After one of Cora's neighbors suggested that Cora should sell the home to a man instead, Cora backed out of the sale agreement with Emily. Emily wants the property very badly, and had already deposited the cash necessary for the purchase into escrow. What is the best remedy for Emily under the circumstances? Emily should buy another property and recover the difference in value from Cora. Emily should seek an injunction barring Cora from selling the property to anyone else. Emily should seek an order that Cora specifically perform the contract with her. Emily should seek restitution of her deposit paid into escrow.

Answers: C is the best answer as courts will order specific performance of contracts to sell real property. A is a possible remedy, but inferior because it will not result in Emily's ownership of the property. D is a possible remedy but also will not result in Emily's ownership of the property. B is also a possible remedy, but inferior for the same reasons.

Question 8 0 / 2 pts Cleaning Company placed flyers around the city that list its available services and states: "This coupon is worth $20 off the price if you call within 24 hours and order a top-to-bottom house-cleaning for $500. Call us by noon and we will clean your home today." Bryan called Cleaning Company at 10 am, and ordered the top-to-bottom cleaning at his home at 100 Main St., located in City that afternoon. Do the parties have a contract? Yes, because the flyer is an offer for a unilateral contract. Yes, because there is mutual assent to the terms. No, because the flyer is an invitation to make an offer. No, because the flyer failed to provide specific and definite terms.

B is correct. Here, the ad specifies the terms for a deal—$480 for a top-to-bottom house-cleaning—and identifies how a person may accept—calling within 24 hours. Thus, the ad is an offer. Bryan accepted as specified, by calling, so his acceptance is valid. There is a bargained for exchange so there is adequate consideration. Therefore B is the best answer. A is incorrect because the offer is not for a unilateral contract. C is incorrect because, although many ads are invitations to make offers, this ad includes words of commitment - call us by noon and we will clean your house today. D is incorrect because as to the top to bottom cleaning, the flyer provided specific and definite terms.

Question 13 0 / 2 pts Deb borrowed $1,000 from Carl and agreed to repay the loan in 30 days. After entering into this agreement, Deb incurs an unexpected repair bill for $500 for her car. She calls Carl and requests that he accept $1,100 in 60 days in discharge of her original agreement. Carl agrees to Deb's proposal in writing. What are Carl's options? This is a novation, and Carl must wait for 60 days for Deb's payment. If Deb makes timely payment of the $1,100, Carl must accept it. Carl can still sue on the original agreement after 30 days. Deb's duty to Carl on the original agreement is discharged when Carl agrees to accept $1,100 in 60 days.

B is the best answer as once Deb makes the payment of $1,100 in 60 days, this is an executed accord and satisfaction. A is incorrect because this is not a novation, which would have to involve a third party. C is incorrect because Carl has promised to wait for 60 days, so that any suit by Carl after 30 days would be a breach of the agreement with Deb. D is incorrect because the agreement is not discharged until the payment is made.

Question 2 2 / 2 pts Art entered into a written contract to sell his property to Bob for $100,000. After Bob signed the contract, Art spent $5,000 cleaning up some debris on the property, as requested by Bob. Bob repudiates the contract, and Art is able to sell the property to Cal for $100,000. If Art sues Bob, he can recover Expectation damages of $100,000. Reliance damages of $5,000. Restitution based on the benefit to Bob. None of the above.

B is the best answer because Art as a seller incurred expense in reliance on Bob's agreement and request to clear the debris. Art has not incurred expectation damages of $100,000 since he was able to resell the property, so A in incorrect. There is no benefit to Bob, so restitution is not available and therefore C is incorrect. D is incorrect because B is applicable.

Question 3 2 / 2 pts Delta is a manufacturer of a variety of components used in airplane manufacturing including bolts. Delta enters into a written contract with Aero Flight to supply 10,000 bolts per month for a period of one year at a price of 5 cents per bolt. In March Delta notified Aero Flight that it could no longer deliver the bolts as agreed starting in June, due to a problem with a materials supplier. Which of the following are correct? Aero Flight must wait until June to see if Delta in fact breaches. Aero Flight may treat the notification as a breach and sue immediately. Aero Flight must wait to see if Delta retracts its statements. Aero Flight must wait until it incurs damages to sue for breach

B is the best answer because Delta has anticipatorily repudiated its contract with Aero Flight, which may be treated as a breach upon learning of the repudiation, even if the damages have not yet occurred, as long as the repudiation is clear, which is the case here. A is incorrect because, although Aero Flight could wait for the actual breach, it is not required to do so. C is incorrect because although Delta might retract its statement , Aero Flight may immediately sue for breach and there is no requirement that it wait for a retraction. D is incorrect because damages need not be incurred and the party may sue for repudiation upon learning of the breach.

Score for this quiz: 26 out of 30 Submitted Jul 12 at 10:19pm This attempt took 29 minutes. Question 1 2 / 2 pts Jay agreed to paint the entire interior of Ron's house by June 1 for $4,000. Jay completed most of the work by May 28, and Jay's work was satisfactory on most of the house, but he failed to paint several of the baseboards in one of the bedrooms. Ron pointed this out to Jay on May 29. Jay claimed he had completed the job and requested payment. Ron refused to pay Jay prior to June 1, and demanded that Jay complete the job before payment. Which of the following is correct? Ron is excused from payment under the contract as of May 30 due to Jay's failure to complete the work. Ron is excused from payment as of June 1, if Jay fails to cure. Jay substantially completed the work, and is entitled to payment on May 30. Jay is in material breach on May 30 and has forfeited his right to cure.

B is the best answer because Jay is in breach on May 30, but has the right to cure until the contract deadline of June 1 and if so, to receive payment in full. A is incorrect because Jay has until June 1 to cure any defects in the work, at which time Ron would be obligated to pay him. C is incorrect because the work was not completed by May 30 and Jay is not entitled to payment. D is incorrect and Jay has until the contract deadline of June 1 to cure.

Question 5 2 / 2 pts Stella, a film star, called Chloe, a well-known designer, and ordered three pair of expensive custom shoes to wear for the awards season during several big red carpet events, at $200 per pair. Chloe obtained the materials for all three pair of shoes and began construction of the first set of shoes. Stella then met with another designer and decided on a different look. She called Chloe and cancelled the order. What are Chloe's rights? Stella can cancel the contract with Chloe because it was not in writing. The contract is enforceable because Chloe started making the shoes. The contract is not enforceable based on unilateral mistake. The contract is unenforceable due to lack of consideration.

B is the best answer because although contracts for sale of goods over $500 are required to be in writing, there is an exception for contracts involving specially manufactured goods. A is incorrect due to the exception to the statute of frauds for specially manufactured goods. C is incorrect because there is no mistake on the facts. D is incorrect because the parties entered into a bargained for exchange of payment in exchange for delivery of the shoes.

Question 4 2 / 2 pts Edwin, a baker, agreed to sell 100 apple pies per month to Fran, who owned a gourmet restaurant in a high end shopping area, at $5 per pie. Edwin's business became very busy, and after delivering about 50 pies, Edwin advised Fran of a price increase to $6 per pie. The pies were so popular Fran readily agreed. The agreement to the higher price is: Enforceable, but only if the change in price arises from unforeseen circumstances. Enforceable because no consideration is required. Unenforceable under the pre-existing duty rule. Unenforceable due to lack of consideration.

B is the best answer because there is no consideration required for a modification to a contract under the UCC, and this contract involves a sale of goods, so falls within that provision. A is incorrect because although unforeseen circumstances would potentially justify an exception to the pre-existing duty rule, that rule is not applicable here, because this contract falls under the UCC. C is incorrect because the pre-existing duty rule does not apply to contracts under the UCC. D is incorrect because no consideration is required for modification of a contract under the UCC.

Score for this quiz: 22 out of 30 Submitted Jul 5 at 9:32pm This attempt took 29 minutes. Question 1 2 / 2 pts Bill is a chef who runs a business preparing and serving fine cuisine dinners for homeowners hosting parties. Bill enters into a written contract with Angela, a wealthy celebrity, to prepare and serve an elegant sit-down dinner for thirty people to celebrate New Years' Eve. The negrrect!otiated contract price is $50,000, with 60% of the contract price representing the costs of the specified food, beverages, and place settings and 40% representing the fee for preparing and serving the meal. Angela agreed to pay $30,000 up front, and the rest upon her manager's certification following the event, that the service was acceptable. After the dinner, Angela's manager refused to issue the certification regarding acceptable service, because some of the food was cold and the service was too slow. As a result, Angela refused to pay the balance of the contract price. If Bill sues Angela for the balance of the contract price, who will prevail? Angela, unless Bill can prove that other managers would have been satisfied. Angela, if she can show that her manager's refusal was in good faith. Bill, unless Angela proves that her manager's refusal was both in good faith and reasonable. Bill, if Bill proves that the service was conducted in an appropriate manner.

B is the best answer because this is condition of satisfaction by a specific person, the manager. Therefore, the satisfaction of someone else is irrelevant, so A is incorrect. For the same reason, C is incorrect, because reasonableness implies some objective standard, while the contract here is based on a subjective standard, the approval of a particular person. D is incorrect because this will not meet the condition of approval.

Question 12 2 / 2 pts Ray purchased new carpet for his home from Carpet World. The advertisements for Carpet World had a customer satisfaction guarantee stating, if for any reason a customer is not satisfied with the carpet for any reason, Carpet World will replace it for free. Ray thought he liked the sample when he saw it in the store, but once it was installed, he did not like the look of it in his home. What are the rights of the parties? Ray is not entitled to have new carpet installed unless he articulates an objective and specific reason for his dissatisfaction. Ray is entitled to have new carpet installed at no cost, if Ray is acting in good faith. Ray is entitled to have new carpet if a reasonable person would do so. Ray is entitled to have new carpet if a third party confirms his judgment.

B is the best answer where there is a condition of satisfaction that is subjective it is enforceable as long as it is exercised in good faith. A is incorrect because the condition of satisfaction here was subjective based on Ray's taste. C is incorrect because a subjective condition examines only the good faith of Ray's opinion, not the opinion of a reasonable person. D is incorrect because it is not necessary to address the opinion of a third party where that was not required under the agreement between the parties.

Question 15 2 / 2 pts Garth agreed that he would paint a fence for Jillian for $500. When the time came for Garth to do the job, he had a more lucrative customer, so Garth arranged for Ken to do the work for Jillian instead, and agreed to pay Ken $400 and provided Ken with all the paint and other supplies needed for the job. Which of the following are correct? I. Jillian is a third party beneficiary of the contract between Ken and Garth. II. Jillian may enforce Ken's promise to paint the fence. III. Garth remains liable to Jillian for the work. IV. The agreement operates as a novation. All of the above. I, II, and III II, III, and IV I, II, and IV

B is the best answer, because Garth's agreement with Ken creates a third party beneficiary situation, I and II are correct. III is correct because Garth will remain liable to Jillian in the absence of any agreement by Jillian to consent to the transfer of duties, which is the case here. Without such consent, there is no novation, so that IV is incorrect. For these reasons, A, C and D are incorrect. Quiz Score: 24 out of 30

Nora entered into a written contract to purchase designer pens for her chain of women's boutiques with Quincy, a local artist. She agreed to purchase 200 pens per month for $5 per pen, for a period of six months. Nora sold the pens for $20 each and they sold out in the first month. After the first month, Quincy called and said he could not keep up with the production schedule and maintain the high quality so he had to back out of the contract. Nora took a month to locate another suitable vendor, but was able to enter into a contract with Selma to deliver the pens, at $7 per pen for the remainder of the contract period. If Nora sued Quincy for breach of contract she can recover: I. Consequential damages for the month with no sales, less expenses saved II. Expectation damages based on the difference in value III. Incidental damages incurred All of the above I and II II and III I and III

B is the best answer, under 2-713, allowing a buyer to recover the difference between the market price and contract price (II), plus consequential damages, less expenses saved (I). There are no incidental damages referenced, as incidental damages would include expenses incurred.

Question 5 2 / 2 pts Owner and Contractor entered into a written agreement under which Contractor agreed to build a house and pave an adjacent sidewalk for Owner at a price of $500,000. While construction was proceeding, Contractor informed Owner that he did not have enough workers to pave the sidewalk, but he could complete the house on time. Owner orally agreed to modify the contract so that Contractor did not have to pave the sidewalk, but would still be paid $400,000 upon completion of the construction of the house. Contractor completed the house. Contractor took another job after Owner confirmed verbally that Contractor was no longer obligated to do the paving. Owner later demanded that Contractor pave the adjacent sidewalk. Contractor refused. Can Owner recover for breach by Contractor based on Contractor's failure to pave the sidewalk or is the modification enforceable? Any modification to a contract must be in writing, so the modification is not enforceable. The modification is enforceable because Contractor detrimentally relied upon Owner's promise by taking another job. The modification is enforceable only if the contract did not include a no oral modification clause. The oral modification was made in good faith and therefore enforceable.

B is the best answer. This contract is governed by the common law because it involves a service. Under the common law, modifications to a contract require additional consideration, but detrimental reliance is a substitute for consideration. Here, Contractor relied on Owner's oral modification of the parties' agreement by taking another job. Choice A is incorrect because there is no law requiring that a modification be in writing. Choice C is incorrect because even if the contract included a no oral modification clause, that clause could be waived. Choice D is incorrect because it is only required for modifications under the UCC.

Question 4 15 / 15 pts After Patricia's first year of medical school, Patricia's mother called her, telling Patricia that she would pay half her medical school tuition, as long as Patricia passed all her classes. Patricia continued her medical school studies and passed all her classes in her second year and Patricia's mother paid half her tuition. Patricia's mother then called her and said she would pay her full third year tuition, since she had done so well in her first two years of medical school. Patricia's mother subsequently died and the administrator of her mother's estate refused to pay her full tuition, only agreeing to pay half. Which of the following would be the administrator's strongest argument against Patricia's claim that she is entitled to payment of the full tuition? The modification is unenforceable because it is required to be in writing pursuant to the statute of frauds. The modification is unenforceable because it lacks new consideration. The modification is enforceable because no consideration is required. The modification is enforceable because it was made in good faith.

B is the best answer. Under common law, new consideration is required for a modification to a contract. Here Patricia is not promising to do anything new in exchange for the promise by her mother to pay all of the tuition, so the modification lacks new consideration. Past consideration is not sufficient. A is incorrect because the modification here does not need to be in writing. C is incorrect because new consideration is required for a modification of a contract at common law, though not under the UCC. This is a common law contract. D is wrong since good faith is not the only requirement for a modification to be enforceable.

Question 13 2 / 2 pts Lisa and Megan are both merchants dealing in widgets. On May 1, Lisa called Megan and offered to sell her 100 widgets for $100. Lisa told Megan that the offer would remain open until May 10. Lisa sent Megan a confirming letter to Lisa to this effect. On May 3, Megan sent a signed acceptance letter to Lisa by mail. On May 4, Lisa called Megan and revoked her offer. On May 6, Lisa received Megan's letter of acceptance. Was a valid contract formed between Lisa and Megan? Yes, if there was consideration for Lisa's promise to hold open the offer until May 10. Yes, because Lisa promised her offer would remain open until May 10. No, because Lisa revoked her offer before she received Megan's acceptance. No, because there was no consideration given by Megan for Lisa's promise to hold the offer open.

B is the best answer. Under the mailbox rule, revocation is effective upon receipt and acceptance is effective upon dispatch. A merchant's firm offer under the UCC is irrevocable even if no consideration is given when it includes a promise to hold the offer open in writing and explicit assurance that it will be held open for a stated period of time. These requirements are met here because Lisa offered to hold the offer open until May 10, in writing. Megan accepted the offer by that date. And Lisa's offer was irrevocable prior to May 10, so her attempted revocation was ineffective. A is incorrect because no consideration is required for a merchant's firm offer. D is incorrect for the same reason. C is incorrect because the revocation was ineffective given 1) the promise to hold the offer open until 5/10 and 2) the dispatch of the acceptance prior to the revocation.

Johnny's Burgers was running a promotional contest. Customers who purchased burgers were given reward cards, some of which enabled the purchaser to get free food prizes or one grand prize of $1 million. The back of the reward cards contained terms that stated that any disputes over the reward cards had to be resolved in arbitration. In the Johnny's Burgers restaurant were posters advertising the reward cards and containing the same arbitration term in small print. Over the next month, Mary went to Johnny's Burgers every day and purchased a hamburger, receiving a reward card each time. Mary never read the back of the reward card or the posters hanging in the restaurant. After Mary failed to win the $1 million grand prize, she sued Johnny's Burgers in court for fraud. Johnny's Burgers claimed that Mary was bound by the arbitration provision set forth on the reward tickets and on the posters in the restaurant and consequently, the case could not be litigated in court. How is the court likely to rule on the applicability of the arbitration provision? Mary is bound by the arbitration provision because it is fair Mary is bound by the arbitration provision because she purchased the hamburgers and received the reward cards on Johnny's Hamburger's terms. Mary is not bound by the arbitration provision because the reward cards were given to Mary after she purchased the hamburgers. Mary is not bound by the arbitration provision because she did not read it.

B is the correct answer since Mary manifested her assent to the terms of the promotional contest by purchasing hamburgers and receiving the reward cards. Since the contract terms requiring arbitration were provided to Mary on the back of the reward card and on posters hanging in the restaurant, she is bound by those terms, whether or not she actually read them. A is wrong since although many courts routinely uphold arbitration despite a defense of lack of due process, Mary is bound by the arbitration provision because it was a term of the contract to which she manifested assent. C is incorrect since similar to the James v. McDonald's case covered in class, courts have held that as long as the standard terms, such as arbitration provisions, are made available to the other party, a party who assents to the contract will be bound by those terms. D is incorrect since Mary manifested her assent to the terms of the promotional contest by purchasing hamburgers and receiving the reward cards. Given that the contract terms requiring arbitration were provided to Mary on the back of the reward card and on posters hanging in the restaurant, she is bound by those terms, whether or not she actually read them.

Question 5 2 / 2 pts John, who was planning to go to law school, told Mary that he might need some law books. Mary had recently inherited a law library, so she compiled a list of the books in the collection and mailed it to John with a note that said, "Interested in some of these law books in exchange for your antique clock that i admire so much ?" John wrote the following letter on a copy of the booklist and mailed it to Mary on July 1: "I will take the books on this list in exchange for the antique clock if you deliver the books to my home by the time I start law school in mid-September. I promise to hold this offer open until September 1. /s/ John". When Mary delivered the law books to John on August 30, he refused to accept them and to give Mary the clock. If Mary asserts a claim against John for breach of contract, what is the likely outcome? John will prevail, if he no longer planned to start law school in mid-September. John will prevail, since he had the power to revoke his offer to take the law books in exchange for giving Mary the clock. Mary will prevail, since under the common law, John's letter created an irrevocable option in her favor. Mary will prevail, since under the UCC, John was prevented from revoking the offer until September 1.

B is the correct answer since the promise to keep the offer open was unsupported by consideration, it is a gratuitous one and therefore, unenforceable. A is wrong since going to law school was not a condition of the agreement and the agreement was freely revocable. C is incorrect since the promise to keep the offer open was unsupported by consideration, it is a gratuitous one and therefore, unenforceable. In any event, the promise was made by John and not by Mary. D is wrong since there are no facts to indicate that John was a 'merchant', this was not a merchants' firm offer.

Question 9 2 / 2 pts Pat, who owns a chain of children's clothing stores, enters into a contract with Dave to purchase 10,000 pairs of toddler overalls in three shipments for the price of $15 for each pair of overalls. The parties' written contract did not address the packaging of the overalls. When Dave makes the first delivery to Pat, the overalls are crammed into a large box, unfolded and very wrinkled. In a claim by Pat against Dave, will Pat be able to introduce evidence to show that the usual practice in the apparel industry is to deliver items of clothing in a pressed and folded manner? No, because the contract between the parties did not include a provision for delivery of the goods. Yes, because evidence showing usage of trade is admissible in this situation Yes, because evidence showing course of dealing is admissible in this situation Yes, because evidence showing course of performance is admissible in this situation

B is the correct answer. "Usage of Trade" is a practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The usual practice in the apparel industry regarding delivery would be considered usage of trade and admissible in this situation. A is wrong since courts can admit extrinsic evidence to help interpret the meaning of a contract between the parties, whether or not the term is expressly stated therein. C is wrong since the evidence offered is not course of dealing (a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct). D is wrong since the evidence offered is not course of performance (sequence of conduct between the parties to a particular transaction, is admissible if one party, with the opportunity for objection to the other party's performance, accepted the performance without objection).

Question 8 2 / 2 pts On June 1, Sam and Bob contracted in writing for the sale and purchase of Sam's cattle ranch and to close the transaction on December 1. On November 1, Bob told Sam, "I'm increasingly unhappy about our June 1 contract because of the current lamb market, and do not intend to buy your ranch unless I'm legally obligated to do so." Sam immediately sent a fax to Bob stating, "I am counting on you to follow through with our deal. Let me know immediately if you do not intend to do so." If Sam hears nothing in response from Bob and sues Bob on November 20 for breach of contract, Sam will probably Win, because Bob committed a total breach by anticipatory repudiation on November 1. Win, because Bob's November 1 statement created reasonable grounds for Sam's insecurity with respect to Bob's performance and Sam did not receive assurances of Bob's performance. Lose, because the parties contracted for the sale and conveyance of a cattle ranch, and Sam cannot bring suit for breach of such a contract prior to the agreed closing date. Lose, because Bob's November 1 statement to Sam was neither a repudiation nor a present breach of the July 1 contract.

B is the correct answer. A Prospective Inability to Perform is where there are reasonable grounds for the promisee to believe that a promisor will commit a breach by non-performance. While courts are split on whether this can be considered as an immediate breach, all courts agree that the promisee may suspend his performance and demand adequate assurances of due performance. UCC 2-609, the demand for adequate assurance of performance is required to be in writing. If such assurances are not provided within a reasonable time, the failure to provide assurances may be treated as a breach of contract. Here, Sam had reasonable grounds to believe that Bob would not perform and since Bob did not provide adequate assurance of performance within a reasonable time, Sam is entitled to sue for breach. A is wrong since Bob's statement was not an anticipatory repudiation since it was not an unequivocal statement of breach. C and D are incorrect for the reasons stated above.

Question 9 0 / 2 pts In a writing signed by both parties on December 1, Dan agreed to sell his lawnmower to Paul for $1,000, delivery to be made on the following February 1. Through a secretarial error, the writing called for delivery on March 1, but neither party noticed the error until February 1. Before signing the agreement, Paul and Dan orally agreed that the contract of sale would be effective only if Paul notified Dan in writing no later than January 2, that Paul had arranged to resell the lawnmower to a third person. Otherwise, they agreed orally, "There is no deal." On December 15, Paul entered into a contract with Tammy to resell the lawnmower to Tammy at a profit. Paul did not give Dan notice of the resale of the lawnmower until January 25. Meantime, the value of the lawnmower had unexpectedly increased about 75% since December 1, and Dan cancelled the agreement. If Paul asserts an action against Dan on February 2 for breach of contract, which of the following is Dan's best defense? The secretarial error in the written delivery-term was a mutual mistake concerning a basic assumption of the contract and the agreement is voidable by either party. Paul's not giving written notice by January 2 of his resale of the lawnmower was a failure of a condition precedent to the existence of a contract. In view of the unexpected 75% increase in value of the lawnmower after December 1, Dan's performance is excused by the doctrine of frustration of purpose. The agreement, if any, is unenforceable because an essential term was not included in the writing.

B is the correct answer. A condition is an event, not certain to occur, which must occur before performance under a contract becomes due. In other words, when making a contract, the parties agree that the obligation to render a particular performance is contingent on the happening of a specified uncertain event. Here, the parties agreed that the sale of the lawnmower from Dan to Paul was contingent upon Paul's reselling the lawnmower and notifying Dan by January 2. When that condition did not occur, Dan's obligation to sell the lawnmower to Paul was extinguished. A is wrong since neither party here made a mistake. C is wrong since the purpose of the contract was to sell the lawnmower, which was not thwarted by Paul's failure to notify Dan of the resale. D is wrong since the delivery date here was not an omitted term, and the parties acted with the correct date, February 1, in mind.

Pam received a brochure from Debbie in the mail. The brochure contained a photograph of a printer and above the printer, the statement, "While they last. All printers on sale at 25% below manufacturer's list price." Pam immediately contacted the manufacturer of the printer shown in Debbie's brochure and determined that the manufacturer's list price for the printer was $400. Pam then sent her check for $300 (25% below list price) to Debbie with a letter that stated, "I hereby accept your offer for the sale of the printer. My check is enclosed." Debbie's brochure is best described as: An offer for the sale of a printer An invitation for an offer An invitation for an offer that ripened into an offer when Pam learned the manufacturer's list price for the printer An invitation for an offer that ripened into an offer when Pam sent her check for 25% below the list price of the printer

B is the correct answer. An offer is a manifestation of willingness to enter a bargain, made so as to justify another person in understanding that assent is invited and will conclude a bargain. Usually, the intent to be bound required for an enforceable offer is not found in an advertisement unless it indicates the number of items on sale and contains language indicating the intent that payment of a specified price will conclude the bargain. Here, the phrase "While they last." makes clear that the reader of the advertisement does not have the power to turn it into a binding contract by accepting. A is wrong. An offer is a manifestation of willingness to enter a bargain, made so as to justify another person in understanding that assent is invited and will conclude a bargain. Usually, the intent to be bound required for an enforceable offer is not found in an advertisement unless it indicates the number of items on sale and contains language indicating the intent that payment of a specified price will conclude the bargain. Here, the phrase "While they last." makes clear that the reader of the advertisement does not have the power to turn it into a binding contract by accepting. C and D are wrong since the advertisement did not ripen into an offer, no matter what actions Pam took. In fact, Pam's actions of determining the manufacturer's list price and sending the check can be characterized as an offer made on her behalf, not an acceptance of Debbie's offer.

Question 2 0 / 2 pts Betty is a retail florist who has been ordering roses from Sam, a flower wholesaler, for two or more years. Each time that Betty has submitted a purchase order to Sam for "Roses", Sam has shipped roses of assorted colors. A week before Mother's Day, Betty sent the same purchase order to Sam for 50 dozen roses. When the Mother's Day order arrived at Betty's florist shop, Betty inspected it, saw that it only contained red roses and rejected them. Sam sued for breach of contract. If Betty seeks to introduce evidence of previous orders of roses from Sam, which of the following is true? The evidence is admissible because it is usage of trade evidence The evidence is admissible to interpret the purchase order for Mother's Day roses The evidence is admissible because it is course of performance evidence The evidence is not admissible

B is the correct answer. If a contract term is ambiguous (capable of more than one meaning), a court may admit extrinsic evidence to explain the ambiguity. Here, evidence of what "roses" meant in the context of this contract would be admissible to help interpret the contract. Also, the evidence sought to be admitted is course of dealing evidence and would be admissible on that basis as well. A is wrong because the evidence is not usage of trade (evidence of custom in the industry). C is wrong because the evidence is not course of performance-- sequence of conduct between the parties to a particular transaction, is admissible if one party, with the opportunity for objection to the other party's performance, accepted the performance without objection. D is wrong since there are grounds to admit the evidence to interpret the contract.

Score for this quiz: 20 out of 20 Submitted Jun 21 at 9:59pm This attempt took 29 minutes. Question 1 2 / 2 pts A rock band entered into a written contract with the Coliseum to perform a concert for a price of $1,000,000. The concert was highly publicized because the coliseum was such a historical site that had been recently been restored. The concert was to be performed on April 1. On March 25, a severe winter storm took place which caused significant damage to the coliseum and caused a massive power outage in the area surrounding the coliseum. The rock band could not find another suitable location for their concert on such short notice and consequently, the band had to cancel the concert. The rock band asserted an action against the coliseum for breach of contract. How is the court likely to rule? The coliseum's obligation to the rock band is unexcused and it must pay the rock band's $1,000,000 fee. The coliseum's obligation to the rock band is excused due to impossibility. The coliseum's obligation to the rock band is excused due to frustration of purpose. The rock band assumed the risk of the storm and cannot collect their $1,000,000 fee.

B is the correct answer. If a court concludes that performance of a contract has been rendered objectively impossible by events occurring after the contract was formed, the court generally will discharge both parties from their obligations to perform. One of the circumstances where a court would conclude that the doctrine of impossibility acts to discharge the contract is when there has been destruction of the subject matter- If performance involves particular goods, a building or some other tangible item, which through no fault of either party is destroyed or otherwise made unavailable, the contract is discharged. The discharge occurs only where the particular subject matter is essential to performance of the contract. Here, the destruction of the coliseum was essential to the contract since it was a historical site. It was damaged by a winter storm, not the fault of either party. Consequently, A is wrong. C is not the best answer since although the purpose of the contract was frustrated, the subject matter was functionally 'destroyed' for the purpose of this contract. D is wrong since there is no indication in these facts that the rock band assumed the risk here.

Question 10 0 / 2 pts Dan enters into a contract with Pearl to build her a vacation home near a lake. That contract stated that the cost of construction was $100,000 and that Acme hardwood flooring was to be installed throughout the house. A flooring subcontractor hired by Dan substituted Brave flooring for the Acme flooring because Acme flooring was difficult to get in the area. Brave flooring was comparable to Acme in appearance, quality and durability. Several months after the construction was completed, Pearl was in her garage when she noticed a box of flooring stamped with the name "Brave" on the outside of the packaging. Pearl complained to Dan that Brave rather than Acme flooring had been installed and Dan told her it would cost $20,000 to replace all of the flooring in the house. The difference in the market value of Pearl's vacation home with Brave, rather than Acme flooring, was negligible. If Pearl asserts an action against Dan seeking damages for breach of contract, how should the court rule? Pearl should be awarded the cost of replacement of the flooring, because Dan did not substantially perform Pearl should be awarded damages equal to the difference between the market value of the property with Acme flooring and the market value with the Brave flooring Pearl should be awarded full expectation damages because Dan breached the contract Pearl should be awarded nothing, because Dan substantially performed

B is the correct answer. It is not appropriate to award the cost of rectifying a nonconformity in performance where the breach is neither material nor willful and the cost of remedying the defect in performance is grossly out of proportion to the harm caused by the breach. Therefore, C is incorrect. A is incorrect since the cost of replacing the flooring is 20% of the contract price and Dan did substantially perform. D is incorrect because Pearl would still be entitled to the diminution in market value, although it may be de minimis

Ray, the owner of a gas station, offered to provide a free tank of gas and a car wash once a week to Oscar, a law enforcement officer, if Oscar would drive by Ray's house once a day, just to check on things. Oscar's regular patrol route took Oscar by Ray's house on a daily basis anyway, so Oscar agreed. Is Oscar's deal with Ray enforceable? Yes, because it is supported by consideration. Yes, if it is in writing. No, because Oscar did not give consideration. No, because Oscar did not validly accept Ray's offer.

C is the best answer because Oscar had a pre-existing duty to patrol Ray's house, so Oscar did not give consideration for the agreement. A is incorrect because Oscar did not give consideration. B is incorrect because even it the agreement is in writing, there is no consideration, so it is not enforceable. D is incorrect because Oscar did accept Ray's offer.

Alex received a coveted job offer to open an office for his employer Data Industries, in Hong Kong. Unfortunately, he is unable to take his pure breed show dog, Badger, with him and consequently, on December 1, Alex sent faxes to three of his friends, Cal, Dan and Eve. The fax stated, "I am leaving for Hong Kong next week and I am forced to sell my beloved dog, Badger. I know that you have admired Badger for a while and so, I am offering you the opportunity to buy Badger for $5,000. The first cashier's check for $5,000 that I receive will complete the purchase." Cal obtained a cashier's check for $5,000 and put it in a properly addressed, stamped envelope to Alex on December 2. Dan called Alex on December 3 and left Alex a voicemail that said that he was sending a messenger with the cashier's check on the following day. On December 3, Eve sent Alex a fax that stated "I am accepting your offer. In fact, I am so anxious to call Badger my own that I am putting a cashier's check for $5,500 in the mail today to make sure that I am the one that gets him!". Alex received Dan's check on December 4. On the following day, Alex received Cal's check. On December 6, Alex received Eve's check and immediately notified her that she could have custody of Badger. Alex's notification to Eve can best be characterized as: An enforceable acceptance of Eve's counter-offer An unenforceable attempt to accept Eve's counter-offer A revocation of the offer made to Cal A revocation of the offer made to Dan

B is the correct answer. On December 1, Alex made an offer to Cal, Dan and Eve that could be accepted by any of them, in the event that Alex received their cashier's check for $5,000 first. Since the offeror is considered the master of the offer, Alex dictated that the only proper method of acceptance was by performance, his receipt of the cashier's check in the specified amount. The valid acceptance here occurred on December 4, when he received Dan's cashier's check. Eve's communication of December 3 was a counter-offer since it did not comply with the terms of Alex's December 1 offer. Therefore, Alex's notification on December 6 was an attempt to accept the counter-offer which was not legally enforceable. A, C and D are wrong. On December 1, Alex made an offer to Cal, Dan and Eve that could be accepted by any of them, in the event that Alex received their cashier's check for $5,000 first. Since the offeror is considered the master of the offer, Alex dictated that the only proper method of acceptance was by performance, his receipt of the cashier's check in the specified amount. The valid acceptance here occurred on December 4, when he received Dan's cashier's check. Eve's communication of December 3 was a counter-offer since it did not comply with the terms of Alex's December 1 offer. Therefore, Alex's notification on December 6 was an attempt to accept the counter-offer which was not legally enforceable. C and D are wrong since neither one made an offer. Dan's communication was an effective acceptance of Alex's December 1 offer.

Patrick was exasperated with the smog in Big City and sent his good friend, Andrew, the following letter on January 1: "Andrew, my family and I are moving out of here and going to live on a tropical island. Do you want to buy the stuff in our house? The price is $25,000." Andrew received the letter on January 2, and on January 3, he sent Patrick a letter accepting the offer. The next day Patrick changed his mind about moving to a tropical island. He called Andrew on January 4 and left him a message telling him to forget the deal. Later that day, Patrick received the letter that Andrew had sent on January 3. Is there a contract between Patrick and Andrew? Yes, because Andrew agreed to pay $25,000 for Patrick's 'stuff'. Yes, because Andrew's letter of acceptance was effective when he mailed it. No, because Patrick's retraction of his offer was communicated to Andrew before Andrew's letter of acceptance was received. No, because the description of the subject matter as "the stuff in our house" is not sufficiently definite and certain.

B is the correct answer. Since Patrick did not specify a method of acceptance of his offer, the mailbox rule is applicable. Therefore, Andrew's letter of acceptance was effective when he mailed it on January 3. A, while a correct statement, is not the best answer. Andrew's letter accepting Patrick's offer to sell for $25,000, would only be effective under the mailbox rule, if it was mailed prior to Patrick's retraction of his offer. Consequently, b is a better answer. C is wrong because Andrew's acceptance was effective on dispatch, on January 3. D is wrong since the term "stuff' appears to be understood by Patrick's good friend, Andrew.

Don, a motorcycle retailer, had an adult daughter, Polly, who needed a motorcycle for transportation but had only $3,000 with which to buy one. Don wrote to her, "Give me your $3,000 and I'll give you the motorcycle on our lot that we have been using as a demonstrator." Polly thanked her father and paid him the $3,000. As both Don and Polly knew, the demonstrator was reasonably worth $10,000. After Polly had paid the $3,000, but before the motorcycle had been delivered to her, one of Don's sales staff sold and delivered the same motorcycle to a customer for $10,000. Neither the salesperson nor the customer was aware of the transaction between Don and Polly. Does Polly, after rejecting a tendered return of the $3,000 by Don, have an action against him for breach of contract? Yes, because Don's promise was supported by the moral obligation a father owes his child as to the necessities of modern life. Yes, because Don's promise was supported by bargained-for consideration. No, because the payment of $3,000 was inadequate consideration to support Don's promise. No, because Don tried to return Polly's money.

B is the correct answer. The agreement was supported by consideration--$3,000 in exchange for the motorcycle. A is wrong since the consideration here was the sale of a motorcycle for a price; consequently, the contract is supported by a bargained-exchange. C is wrong because courts do not inquire into the adequacy of consideration. D is wrong since Polly would be entitled to expectation damages for breach of contract, not simply the return of the consideration that she paid.

Question 4 2 / 2 pts Pete had two tickets for the performance of the play, "Pixie", an immensely popular Broadway musical. Since Pete was unable to make the performance, he called several friends and left a voicemail stating, "I have two tickets for Pixie next Saturday night. I will sell you the tickets for seven-five each. First person to call me back gets the tickets!" Pete's friend, Donna, called Pete and left him a voicemail message in reply that stated, "I want those tickets for Pixie. I hear it's great! Call me to make arrangements." Donna thought that Pete was referring to the movie version of Pixie and accordingly, she thought the price was $7.50. However, Pete actually was referring to the new Broadway musical and intended to sell the tickets for $750 each. After Pete tells Donna that he was thinking about the play, she refuses to pay. If Pete asserts an action against Donna to enforce the agreement, which of the following is Donna's best defense? Donna's claim that she should be excused from performing on the grounds of frustration of purpose Donna's claim that there was a unilateral mistake, because the difference in price makes the contract unenforceable Donna's claim that there was a mutual mistake as to a basic assumption of the contract Donna's claim that she should be excused from performing on the grounds of impracticability

B is the correct answer. The elements required to avoid a contract based on unilateral mistake include all of the elements required of a mutual mistake claim ( the mistake must concern a basic assumption on which the contract was made; the mistake must have a material effect on the agreed exchange of performance and the adversely-affected plaintiff must not be the one on whom the contract has implicitly imposed the risk of the mistake) plus evidence that the effect of the mistake is such that enforcement of the contract would be unconscionable OR the other party had reason to know of the mistake or the other party's fault caused the mistake. Here, only Donna made the mistake and since paying $750 for two movie tickets is likely unconscionable this would provide her strongest defense. A is wrong since there are no facts to indicate that Donna did not want to see the play, rather she did not want to pay $750 for movie tickets that she assumed were being offered. C is wrong since only Donna was mistaken. D is wrong since the impracticability doctrine does not apply.

Sara decided to hold a yard sale at her house and prepared a flyer which she handed out around the neighborhood, stating: Garage Sale: Saturday, 8 am - noon only. Antiques, clothes, books, art and more! The flyer is most likely to be construed as: An offer to sell the items listed. An offer, because the UCC will fill in the gap as to prices. An invitation to make an offer, because there is no specific quantity indicated. An invitation to make an offer because no prices are given for the items.

C is the best answer because the yard sale will fall under the UCC, and quantity is required for an enforceable contract. A is incorrect because no quantity is shown for the items listed as required under the UCC. B is incorrect because even though the UCC will fill the gap as to prices, there are no quantities listed in the flyer and quantity is required for a valid offer under the UCC. D is incorrect because price is not required, and a reasonable price will be determined by the court under the UCC.

Question 6 2 / 2 pts A premarital agreement was signed by Priscilla, a pregnant woman, and the father of her child, Dixon, a wealthy businessman. The agreement provided that in the case of a divorce, Dixon would not be responsible for child support, alimony or financial support to Priscilla and any future child, in exchange for Dixon's relinquishment of his custody and visitation rights. Dixon told Priscilla that if she did not sign the agreement as drafted, he would not marry her. After the couple lived together for fifteen years and had two children, they separated and Dixon sought to enforce the premarital agreement and Priscilla objected. Who is likely to prevail? Priscilla, since the agreement lacks consideration Priscilla, since the terms of the agreement are unconscionable Dixon, since the terms of the agreement were bargained for Dixon, since Priscilla signed the agreement

B is the correct answer. The issue is whether the contract here is so one-sided and so unfair, that a court should as a matter of judicial policy, refuse to enforce it. Private consumers, rather than business persons are generally successful. The principle is one of the prevention of oppression and unfair surprise. Here, there is procedural unconscionability-where Priscilla is induced to enter a contract without having any meaningful choice. A is wrong since the agreement did have a bargained for exchange—relinquishment of custody and visitation rights in exchange for a promise not to pursue child support, alimony or financial support. C and D are wrong since although they are factually correct, the procedural and substantive unconscionability can serve to void the agreement.

Question 12 0 / 15 pts On July 1, Debbie and Bob, a lawyer, contracted for Debbie to sell Bob the library of law books Debbie had inherited from her father. Bob agreed to pay the purchase price of $10,000 when Debbie delivered the books on August 1. On July 15, Bob received a signed letter from Debbie that stated, "I have decided to dispose of the book stacks containing the law books you have already purchased. If you want the stacks, I will deliver them to you along with the books on August 1 at no additional cost to you. Let me know before July 20 whether you want them. On July 18, Bob faxed Debbie a note that said, "I accept your offer of the stacks." When Debbie delivered the law books on August 1, she did not include the stacks, which she had sold to someone else. If a court rules that Debbie is contractually obligated to deliver the stacks, it will be because Bob provided new bargained-for consideration by agreeing to take the stacks in addition to the law books. Debbie's letter of July 15 and Bob's fax message of July 18 constituted an effective modification of the original sale-of-books contract. Bob's fax of July 18 operated to rescind the original sale-of-books contract. Debbie's letter of July 15 waived the bargained-for consideration that would otherwise be required.

B is the correct answer. The parties effectively modified the contract to add the stacks. New consideration is not required to modify a contract under the UCC. A is incorrect since Bob did not provide any new consideration by agreeing to the modification. C is wrong since Bob's fax modified, but did not rescind the original contract. D is wrong since new consideration is not required to modify a contract under the UCC.

Question 8 15 / 15 pts On December 15, 2016 Business Man received from Office Supply an offer consisting of the Office Supply's catalog and a signed letter stating, "Order as much as you need to supply your office in the next year. Enclosed prices are good through the end of next year." No other correspondence passed between the Office Supply and the Business Man until the following March 5, 2017, when the Office Supply received from Business Man a faxed order for "100 printer ink cartridges, catalog item #11." Did the Business Man's March 5 fax constitute an effective acceptance of the Office Supply's offer at the prices specified in the catalog? Yes, because a one-year option contract had been created by the seller's offer. Yes, because Office Supply had not revoked its offer before March 5. No, because the Business Man did not accept Office Supply's offer within a reasonable time. No, because the irrevocability of Office Supply's offer was for one year.

B is the correct answer. This question involves a merchant's firm offer, which is an option to keep an offer open by a merchant, and expressed in a signed writing. A merchant's firm offer is valid for no more than three months. After three months, the offer may be revoked but notice must be provided to the offeree. Here, Office Supply is a merchant who sent a signed writing offering to keep his offer to sell supplies open for a year. No communication occurred between the time the offer was issued and the acceptance was sent. Therefore, B is correct since the offer cannot be revoked for three months. A is not correct because the UCC specifies that firm offers can only last for three months and then are revocable at the will of the offeror. C is incorrect because a firm offer had been issued, making the offer open but revocable after three months. This does not require that an acceptance be issued within a reasonable time. D is wrong since under the merchant's firm offer rule, the offer could be irrevocable for only three months, not one year.

John manufactured pine furniture. Paul was a lumber supplier who had sold pine lumber to John on several occasions. On March 1, John sent Paul an order for 'one unit of white pine lumber' at a specified price to be delivered prior to March 30. On March 5, Paul wrote to John, "I acknowledge your order dated March 1. I will deliver white pine lumber prior to March 30, but because of problems at the mill, I cannot assure that all of the lumber will be of good quality." John did not respond to Paul's letter. Subsequently, on March 28, Paul delivered one unit of white pine lumber to John, but John refused to accept it, claiming that the lumber delivered was not of good quality. If John asserts a claim against Paul for damages related to Paul's failure to deliver good quality lumber, which of the following would be Paul's most effective argument in response? Paul's letter of March 5 was a rejection of John's offer. John failed to respond to Paul's letter of March 5. John refused to accept the lumber shipped by Paul. Paul's delivery on March 28 was not an acceptance of John's offer because the lumber was not of good quality.

B is the correct answer. UCC 2-207 provides that between merchants, unless the offer expressly limits acceptance to the terms of the offer, additional terms contained in an acceptance are to be construed as proposals for additions to the contract. Unless the additional terms materially alter the contract, they are deemed accepted if not objected to within a reasonable time. Since John did not respond to the additional term contained in Paul's letter, he is deemed to have accepted it. A is wrong since 2-207 provides that an expression of acceptance operates as an acceptance even though it contains terms different from those of the offer. C is wrong since a buyer who rightfully rejects non-conforming goods is entitled to damages. D is wrong since delivery of the goods probably was an acceptance under UCC 2-206.

Question 13 2 / 2 pts Hadley saw his neighbor Nell's dog Rover running loose several blocks from home. Hadley called Rover and Rover recognized Hadley and came running. Hadley was able to collect Rover and bring her back to Nell. Nell was so grateful she promised to give Hadley $100 next week when Nell got paid. Is Nell's promise to Hadley enforceable? Yes, because Hadley went out of his way to return Rover to Nell. Yes, because Hadley performed a service for which Nell agreed to pay Hadley. No, because there was no consideration for Nell's promise. No, because the consideration given was not adequate.

C is the best answer because there was no bargained for exchange between Hadley and Nell, since Hadley had already returned Rover when Nell made the promise to pay Hadley. D is incorrect because there is no consideration; in addition courts do not inquire into the adequacy of the consideration. A and B are not correct because Hadley's conduct was gratuitous, and not in consideration of any promise by Nell.

Julie Jewels manufactures earrings that it sells to retail stores, including Bargain Mart. Bargain Mart placed an order for 3,000 pairs of earrings to be delivered in 60 days, approximately 30 days before the busy holiday shopping season. Bargain Mart's order states that "time is of the essence." The offer further states that acceptance must be received within ten days of the offer. The manager of Julie Jewels was away on a business trip when Bargain Mart's order arrived. When Julie Jewel's manager returned three weeks later, she replied by sending an acknowledgement to Bargain Mart stating that Julie Jewels will ship the earrings order in 90 days. Did the parties have an enforceable contract when Bargain Mart received Julie Jewel's acknowledgement? No, because Julie Jewel's acknowledgement was a counter-offer under the mirror image rule. No, because there was no definite and seasonable expression of acceptance. Yes, because the change in terms is not a material alteration of the parties' agreement. Yes, because the acceptance can be tendered within a reasonable time under the UCC.

B is the correct answer. Under UCC 2-207(1), an attempt to accept an offer is effective if it is definite and seasonable (timely). Here, since Julie Jewels' acknowledgement was sent three weeks after the 'time is of the essence' order was received, the acknowledgement would not be considered a seasonable acceptance. A is wrong since the mirror image rule does not apply to acceptance under the UCC. C is wrong since under UCC 2-207(1), an attempt to accept an offer is effective if it is definite and seasonable (timely). Here, since Julie Jewels' acknowledgement was sent three weeks after the 'time is of the essence' order was received, the acknowledgement would not be considered a seasonable acceptance. D is wrong since where there is a time constraint in the offer, the UCC gap filler of a 'reasonable time' is inapplicable.

Question 15 2 / 2 pts Joe and Tom are merchants dealing in widgets. Over the phone, they discuss: Joe: I can sell you 100 widgets for $1 each and deliver them to you on Friday by 9:00 a.m. Tom: Yes, I accept. Please deliver after 1:00 p.m. and send me the invoice by e-mail. If Joe responds with silence, delivers the widgets at 9:00 a.m., and leaves the invoice in an envelope with the widgets, how will a court treat Tom's requests if Tom sues for breach of contract? Find that an enforceable contract was formed and treat Tom's requests as terms of the contract. Find that an enforceable contract was formed, replace the delivery time with a reasonable delivery time, and include the method of invoicing as a term of the contract. Find that an enforceable contract was formed, keep the delivery time as 9:00 a.m. and include the method of invoicing as a term of the contract. All of the above

B is the correct answer. Under the UCC, in transactions between merchants additional terms that are not objected to are incorporated into the contract and different terms may be deleted and replaced with a reasonable term by the court. Here, the parties identified different delivery times and Tom included the additional term of invoicing. Thus, the invoicing term would be included and the delivery time would be deleted for a reasonable time. Accordingly, Option B is correct. Option A is incorrect because it treats both terms as additional terms. Option C is incorrect because the law does not support it. Quiz Score: 26 out of 30

A publisher mailed an offer to publish a writer's first book for $50,000. The writer immediately mailed back her acceptance. The acceptance was properly addressed with the correct amount of postage. However, the post office lost the letter and the publisher never received it. Is there a contract? Yes, because the writer mailed her acceptance Yes, because the acceptance was properly addressed with the correct postage. No, because the post office lost the letter No, because the publisher did not receive the acceptance letter

B is the correct answer. Under the mailbox rule, an acceptance is effective when sent, assuming the acceptance was correctly addressed and the postage is adequate. Since the facts state that the acceptance was sent with a proper address and postage, the mailbox rule applies, making C and D incorrect A is wrong because even if the writer mailed her acceptance, the mailbox rule would not apply if the acceptance was not properly dispatched.

Question 2 2 / 2 pts Patty, who owns a chain of women's clothing stores, enters into a contract with Diddy to purchase 10,000 pairs of denim jeans in three shipments for the price of $15 for each pair of jeans. The parties' written contract did not address the packaging of the jeans. When Diddy makes the first delivery to Patty, the jeans are crammed into a large box, unfolded and very wrinkled. In a claim by Patty against Diddy, will Patty be able to introduce evidence to show that the usual practice in the apparel industry is to deliver items of clothing in a pressed and folded manner? No, because the contract between the parties did not include a provision for delivery of the goods. Yes, because evidence showing usage of trade is admissible in this situation Yes, because evidence showing course of dealing is admissible in this situation Yes, because evidence showing course of performance is admissible in this situation

B is the correct answer. Usage of Trade is a practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The usual practice in the apparel industry regarding delivery would be considered usage of trade and admissible in this situation. A is wrong since courts can admit extrinsic evidence to help interpret the meaning of a contract between the parties, whether or not the term is expressly stated therein. C is wrong since the evidence offered is not course of dealing (a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct). D is wrong since the evidence offered is not course of performance (sequence of conduct between the parties to a particular transaction, is admissible if one party, with the opportunity for objection to the other party's performance, accepted the performance without objection).

Amy imported arts and crafts products from Mediterranean countries, selling in import shops and through a catalog. Amy sent catalogs describing her products and prices to prospective customers, taking orders by mail on forms provided with the catalogs. The phrase, "10 percent discount on COD orders only" appeared on the order form and on each page of the catalog. After receiving Amy's catalog, Betty decided to order 1,000 Greek vases for sale in her import shop. On April 1, she typed "Send immediately 1,000 Greek vases (Catalog #1234) at 10% discount; payment within 10 days of receipt and acceptance." on the order form. Amy received the order form on April 5 and on the following day, she shipped 1,000 Greek vases to Betty (who received and accepted them on April 10). On April 6, Amy wrote to Betty, "I am shipping pursuant to your request and expect payment within 10 days. Since discounts only apply to COD shipments, you are billed at the full price." Betty received the letter and enclosed bill on April 11. On April 12, Betty sent a check in payment of the amount billed, less a 10% discount. When was a contract for sale of the Greek vases formed? On April 1, when Betty sent the order to Amy. On April 5, when Amy received the order from Betty. On April 6, when Amy shipped the Greek vases to Betty. On April 10, when Betty received the shipment of Greek vases.

C is correct. A contract is formed upon acceptance of an offer. Since Betty's order identified the subject of the transaction, specified the quantity, set forth the price and terms, and called for shipment, it was an effective offer. Under UCC 2-206(1)(b), an order to purchase goods for prompt shipment calls for acceptance either by prompt shipment or prompt promise to ship. Since Amy shipped on April 6, the contract was formed on that date. A and B are wrong since Betty' s order could not constitute an acceptance due to the fact that catalogs of the kind used by Amy are mere invitations to negotiate. D is wrong because the contract had already been formed when the goods were shipped.

Question 10 0 / 15 pts For an agreed price of $5 million, Dan contracted with Pat to design and build on Pat's commercial plot, a 15-story office building. In excavating for the foundation and underground utilities, Dan encountered a massive layer of rock at a depth of 15 feet. By reasonable safety criteria, the building's foundation required a minimum excavation of 25 feet. When the contract was made, neither Dan nor Pat was aware of the subsurface rock, which was extraordinarily uncommon in the area. Neither Dan nor Pat had ever encountered rock to that extent in the area of Pat's commercial plot. Claiming accurately that removal of enough rock to permit the construction as planned would cost him an additional $3 million and a probable net loss on the contract of $2 million, Dan refused to proceed with the work unless Pat promised to pay an additional $2.5 million for the completed building. If Pat refuses and sues Dan for breach of contract, what will the court probably decide? Dan's performance is excused under the doctrine of impossibility. Dan's performance is excused under the doctrine of commercial impracticability. Pat will prevail, because Dan assumed the risk of encountering subsurface rock. Pat will prevail, because subsurface rock was not common anywhere in the vicinity of Dan's construction site.

B is the correct answer. When performance of a contract becomes much more burdensome than reasonably expected at the time that the contract was formed, a party can be discharged from the duty to perform on the grounds of impracticability. Since the subsurface rock was not common in the area, Dan would not be determined to have assumed the risk. A is wrong since the doctrine of impossibility will not apply since it is still possible to perform the contract at a greater expense.

Albert purchased a ski boat at an auction. After one outing, Albert realized the boat had a slow leak and needed to be repaired. Albert took the boat to Sam's Ski and Boat Repair. After Sam had repaired the boat, Albert discovered it still leaked. The repair bill from Sam showed that Albert was charged $400 for parts and $350 for labor. A dispute arose over this transaction. Does the UCC or common law apply to this transaction under the majority of jurisdictions? -The UCC applies since the costs of the parts exceeded the costs of the services. -The UCC applies to the sale of the parts and the common law applies to the costs of labor. -The common law applies since the predominant purpose of the contract was to repair the boat. -The common law applies since this is a hybrid contract.

C is correct. Where the primary purpose of the contract is the provision of services and the parts (goods) are incidental, the common law will control the contract. A is wrong since although the costs of goods somewhat exceeds the costs of services, the primary purpose of the contract is the provision of services and the parts (goods) are incidental, so the common law will control the contract. B is wrong since the majority of jurisdictions would use the predominant purpose, not the gravamen test. Only the gravamen test divides the provisions of the contract up into transactions involving goods versus services. D is wrong since the common law would apply only if services predominates the contract.

Rhonda created a flyer in which she offered to "paint your home for $3,000." The flyer stated, "Call Rhonda at 777-222-3333 now!" She passed out 250 flyers in her surrounding neighborhood. Martin saw the flyer and called Rhonda and left a message stating, "I saw your flyer. If you can show up and repaint my house with the same color first thing tomorrow morning for $3,000, the job is yours." Martin provided his address. When she got Martin's message, Rhonda drove by late that evening to look at Martin's home. The following morning, Rhonda showed up with everything and began painting. Martin returned from the coffee shop and saw Rhonda in action. "Stop," he shouted. "I hired someone else." Do the parties have a contract? No, Rhonda never accepted Martin's offer verbally or in writing. No, because Martin effectively revoked his offer to Rhonda. Yes, because Rhonda accepted Martin's offer by painting. Yes, because Martin accepted Rhonda's offer to paint his house.

Question 2 2 / 2 pts Roger agreed to paint an apartment complex owned by Abe, for $20,000, between June 10 and June 18. Prior to the date the painting was set to commence, the entire apartment complex was destroyed in a fire.What are Roger's rights in reference to the contract with Abe? Roger can sue Abe for specific performance of the contract. Roger can sue Abe for damages based on the contract. The contract is discharged based on impossibility of performance. The contract is discharged based on the doctrine of mutual mistake.

C is the best answer based on the destruction of the building rendering performance impossible. A is incorrect because the contract cannot be performed, so specific performance is not an available remedy. B is incorrect because performance is excused based on impossibility. D is incorrect because there was no mutual mistake regarding the contract.

Question 8 2 / 2 pts Roger agreed to paint an apartment complex owned by Abe, for $20,000, between June 10 and June 18. Prior to the date the painting was set to commence, the entire apartment complex was destroyed in a fire. What are Roger's rights in reference to the contract with Abe? Roger can sue Abe for specific performance of the contract. Roger can sue Abe for damages based on the contract. Correct! The contract is discharged based on impossibility of performance. The contract is discharged based on the doctrine of mutual mistake.

Question 12 2 / 2 pts Bart, a roofer, entered into a contract with Owen, the owner of a commercial building to repair the roof. The contract required Bart to cooperate with the retail tenants of the building to complete the repairs in a timely manner. The warranties in the contract ran not only to Owen, but also to all tenants of the commercial building. Bart failed to properly complete the roofing repairs on the building causing Mart, a commercial tenant operating a retail store in the building, to suffer harm as a result of water damage to its merchandise after a heavy rain. What are the rights of the parties? Only Owen can sue to enforce the contract with Bart. The court will dismiss any claims by Mart unless Mart was a party to the contract. Mart can sue Bart directly on the contract. Mart was not an intended beneficiary of the contract between Bart and Owen.

C is the best answer because Mart is an intended third party beneficiary and can sue to enforce the contract. D is wrong for that reason. A is incorrect because, although Owen can also sue, Owen is not the only party that can sue Bart. B is incorrect because Bart cannot defend on the basis that Mart was not a party to the contract; under third party beneficiary theory, Mart can sue.

Question 6 2 / 2 pts Ray, the owner of a gas station, offered to provide a free tank of gas and a car wash once a week to Oscar, a law enforcement officer, if Oscar would drive by Ray's house once a day, just to check on things. Oscar's regular patrol route took Oscar by Ray's house on a daily basis anyway, so Oscar agreed. Is Oscar's deal with Ray enforceable? Yes, because it is supported by consideration. Yes, if it is in writing. No, because Oscar did not give consideration. No, because Oscar did not validly accept Ray's offer.

Question 4 2 / 2 pts Roger hired Carl to paint his home by June 1, and agreed to pay Carl $5,000 for the job. Carl got very busy with other jobs, so he asked Frank to do the work instead. Frank agreed to take the job and complete it by June 1, and Carl agreed to pay Frank the $5,000. Unfortunately, Frank failed to follow through because Frank got very busy in May and fell behind on all of his jobs. Which of the following accurately states Roger's rights? Carl had no right to assign Carl's contract with Roger to Frank and Roger can sue on that basis. Due to Carl's assignment of the contract to Frank, Roger can sue only Frank due to Frank's failure to perform. Roger is a third party beneficiary of the agreement between Carl and Frank. Roger can sue Carl on the original contract, but cannot sue Frank, because Roger had no agreement with Frank.

C is the best answer because Roger was the intended beneficiary of the contract between Frank and Carl. A is incorrect because as a general rule contracts are assignable unless there is a particular skill involved. Generally construction and repair contracts are delegable. B is incorrect because Roger never agreed to excuse Carl's performance obligations under the original contract, so there was no novation, and Roger can also sue Carl, not only Frank. D is incorrect because Roger can sue both Carl on the original contract and Frank as a third party beneficiary of the contract between Frank and Carl.

Question 9 2 / 2 pts Randall agreed to sell 100,000 gadgets to Brandon for $5 per gadget, with all gadgets to be shipped in 45 days. Brandon intended to sell the gadgets in his hardware store operation. The parties confirmed this agreement in writing. The contract included a no oral modification clause. Prior to the shipping date, Randall called Brandon to tell Brandon that his cost of production increased and the price would go up to $6 per gadget. Brandon still thought this was a good deal, and agreed to the increased price. Randall confirmed the details in writing, and then shipped the gadgets. Brandon then refused to pay the increased price. If Randall sues Brandon for the increase in the price, who is likely to prevail? Brandon, because he acted under duress in accepting the increased price. Brandon, because the modification lacked consideration. Randall, because the modification is enforceable despite lack of consideration. Randall, if he provided consideration for the increased price

C is the best answer because a modification under the UCC does not require consideration. A is incorrect because there is no indication of duress. B is incorrect because consideration is not required for a contract modification under the UCC. D is incorrect for the same reason.

Question 7 2 / 2 pts Ken, a car dealer, offered to sell Bob, a car collector, Ken's red Ferrari for $120,000, indicating that Ken would leave the offer open for a period of two weeks. Ken confirmed his proposal in a signed writing to Bob. The following day Carl, another car collector, offered Ken $130,000 for the same car, and Ken accepted the offer. If Bob sues Ken for breach, who will prevail? Ken, because Bob did not provide consideration to Ken. Ken, because at a minimum, a recital of consideration is required. Bob, because Ken's offer was irrevocable for two weeks. Bob, if there was a recital of consideration in Ken's written offer.

C is the best answer because both Ken and Bob are merchants and the UCC allows formation of an irrevocable offer between merchants even if there is no recital of payment of consideration if the offer is by a merchant, in a signed writing, with explicit assurance that it will be held open. A is incorrect, because under the UCC, no consideration is required. B is incorrect because no recital of consideration is required. D is incorrect because no recital of consideration is required.

Pat agreed to purchase Dan's home for $500,000. The home was located near the pool and park in a beautiful planned use development. After the parties signed a written agreement in which Dan agreed to the terms of the deal, the real estate market started to go up and Dan thought he could get more money for the home. Dan refused to perform the contract. Pat wants to do whatever he can legally to obtain title to the home. Pat should: Sue for expectation damages to recover the benefit of the bargain. Sue for specific performance, but the court probably will not enforce the contract. Sue for specific performance, because damages are not an adequate remedy. Sue for damages because specific performance is not available.

C is the best answer because generally real property is considered unique and specific performance is an available remedy. A is incorrect because a suit for expectation damages will not meet Pat's objective of obtaining title to the home. B is incorrect because the court is likely to award specific performance under the circumstances. D is incorrect because specific performance is available.

Alan is a general contractor who builds swimming pools. Brent is the general manager of a hotel chain. Brent planned to open a new hotel in Bakersfield, California and contacted Alan regarding the pool. Alan and Brent entered into a signed, written agreement, pursuant to which Alan and his crew would construct the swimming pool and surrounding area for $50,000. Of this amount, $5,000 was related to the cost of materials, and $45,000 was related to labor expenses for the construction. This agreement is governed by what law? The UCC applies because a pool is a tangible good. The UCC applies because Brent and Alan are merchants. Common law applies because the primary focus of the contract is construction services. Common law applies to all hybrid contracts.

C is the best answer because the contract predominantly involves services rather than goods. A is incorrect because the pool is tangible, but is not a moveable good, and so the UCC would not apply to the pool. B is incorrect because whether the UCC applies turns on whether the contract involves the sale of tangible moveable goods, not on whether the parties are merchants. D is incorrect because common law may apply to some hybrid contracts, but the UCC would apply to those in which a sale of goods is the predominant purpose of the transaction.

Question 5 2 / 2 pts Julie Yard, owner of a music school, contracted with Tacky Treasures to purchase a bust of Beethoven for $300, to be delivered the day before her grand opening. Tacky called Julie the day of delivery and said there would be a delay. Desperate for décor, Julie ran around town seeking a replacement. All she can find is a bust of Mozart in a local art gallery. The price is $500, but she had to have something so she bought it and sued Tacky for damages. Julie can recover $500 based on the price of the Mozart piece. $300 based on the Beethoven piece. $200 based on the difference in value between the two pieces. $200 based on the market value of the Beethoven piece.

C is the best answer because the measure of cover is the difference between the contract price and the price of the substitute transaction. A, B and D are incorrect because they do not derive from the correct rule.

Question 4 2 / 2 pts Harriet's Homebuilding Company sent a purchase order to Fabulous Fixtures, ordering 500 light fixtures for some homes it was building at $5 per fixture. The purchase order stated that it was limited to its terms and it did not include an arbitration clause. Fabulous sent an acknowledgment stating that it would ship to Harriet the quantity of fixtures ordered at the price ordered. The back of the form stated in fine print, "This acknowledgment contains the following terms:" One of the terms indicated that all disputes would be subject to arbitration. Assuming that the court finds there was a contract, does the parties' agreement include the arbitration term? Yes, because the arbitration term is not material to either of the parties involved in the transaction. Yes, unless Harriet's Homebuilding Company objected to the term after it received the communication from Fabulous Fixtures. No, because Harriet's Homebuilding Company expressly limited acceptance to the terms of the offer, which did not include any arbitration clause. No, because this is a contract between merchants so the terms automatically become part of the parties' agreement.

C is the best answer because the offer expressly limited acceptance to the terms of the offer and did not include an arbitration clause. Therefore it is a proposal for an addition to the contract and not included unless it is accepted. A is incorrect because it is probably a material change to the contract particularly in view of the limitation on the offer. B is incorrect because the limitation in the offer could be construed as an objection, even though it was not made after the acceptance, and an additional objection would not be required. D is an incorrect statement of the law

Harriet's Homebuilding Company sent a purchase order to Fabulous Fixtures, ordering 500 light fixtures for some homes it was building at $5 per fixture. The purchase order stated that it was limited to its terms and it did not include an arbitration clause. Fabulous sent an acknowledgment stating that it would ship to Harriet the quantity of fixtures ordered at the price ordered. The back of the form stated in fine print, "This acknowledgment contains the following terms:" One of the terms indicated that all disputes would be subject to arbitration. Assuming that the court finds there was a contract, does the parties' agreement include the arbitration term? Yes, because the arbitration term is not material to either of the parties involved in the transaction. Yes, unless Harriet's Homebuilding Company objected to the term. after it received the communication from Fabulous Fixtures. No, because Harriet's Homebuilding Company expressly limited acceptance to the terms of the offer, which did not include any arbitration clause. No, because this is a contract between merchants so the terms automatically become part of the parties' agreement.

Randy, an accountant, called his friend Frank, a real estate broker, and offered to sell Frank his motorcycle for $6,000. Frank called Randy back and agreed to buy the motorcycle from Randy for $6,000. Randy failed to follow through on the sale, because he changed his mind and decided to keep the motorcycle. Can Frank enforce the agreement? Yes, because Frank detrimentally relied on Randy's promise to sell. Yes, because Frank and Randy exchanged consideration. No, because there is no writing. No, because there is no consideration.

C is the best answer because the statute of frauds requires that contracts for the sale of goods over $500 be in writing signed by the parties, or fall within exceptions that are not applicable here. A is incorrect because there are no facts to show that Frank changed his position in reliance on Randy's promise to sell. B is incorrect because there is consideration for the promise, but there is no writing so the contract is not enforceable. D is incorrect because there is consideration present based on these facts.

Bart agreed to buy 1,000 widgets from Sam for $100 per widget, and put their contract in writing. At the time for delivery, Sam breached the contract by failing to deliver as promised, and Bart had to buy the widgets elsewhere on the open market for $110 per widget. Which of the following is correct? The UCC applies because the contract was in writing. The UCC applies only if Bart and Sam are merchants. The UCC applies because the transaction involves a sale of goods. The UCC does not apply to this transaction.

C is the best answer because the widgets are tangible things, which are classified as goods, rather than services, so the UCC applies. A is incorrect because the application of the UCC does not turn on whether the contract was in writing. B is incorrect because the UCC applies to contracts for the sale of goods regardless of whether the parties are merchants, although whether they are merchants or not may have other implications as we will learn in the course. D is incorrect because the UCC is applicable to contracts for the sale of goods over $500.

Question 10 2 / 2 pts Bart agreed to buy 1,000 widgets from Sam for $100 per widget, and put their contract in writing. At the time for delivery, Sam breached the contract by failing to deliver as promised, and Bart had to buy the widgets elsewhere on the open market for $110 per widget. Which of the following is correct? The UCC applies because the contract was in writing. The UCC applies only if Bart and Sam are merchants. The UCC applies because the transaction involves a sale of goods. The UCC does not apply to this transaction.

Debbie was hosting a garage sale that was well-attended by the neighborhood. Pamela, one of Debbie's neighbors, attended the garage sale and, after some bargaining, purchased a treadmill from Debbie for $600. Although Debbie had used it routinely for several years, now that she had a gym membership, Debbie no longer needed the treadmill and thought she could better use the money from its sale to fund the gym membership. Would Debbie be considered a merchant under the UCC with respect to the sale of the treadmill? Yes, since she was knowledgeable about treadmills. Yes, since she was involved in selling the treadmill. No, since she was not regularly in the business of selling treadmills. No, since she was engaged in selling unwanted items to her neighbors and not to the 'general public'.

C is the best answer because. Debbie would not be considered a merchant since she is not a person who deals in goods of the kind or otherwise by her occupation holds herself out as having knowledge or skill peculiar to the practices or goods involved in the transaction. A and B are wrong since the facts do not indicate that she held herself out as having specialized knowledge of treadmills. Causal sellers, such as those occasionally offering goods at garage sales or swap meets are not considered to be merchants under the UCC. D is wrong since the potential buyers of the goods are generally not relevant to the issue of whether the seller is a merchant.

Question 11 2 / 2 pts Art entered into a written agreement to work as a news anchor for CBC, a national news organization for two years, for $1 million per year. Art's contract provided that CBC's rights under the contract for Art's services, could not be assigned, and that any assignment would be void. CBC sold all of its assets to ANA, an international news organization, and assigned all contracts with CBC employees to ANA. CBC advised ANA of Art's non-assignment clause at the time of the sale. For personal reasons, Art did not wish to be affiliated with ANA, as he felt it would tarnish his reputation as an independent newsperson. If ANA sued to compel Art to work for ANA, Art's best argument would be: Consideration is required for the assignment. CBC breached Art's contract in making the assignment. Art's contract is not assignable under these circumstances. Generally, assignments are valid only with the consent of the promisee.

C is the best answer here. Clauses that prohibit assignment of the rights of a party under the contract are generally enforceable under the Restatement 2nd, section 322, assuming they provide that the contract would be void, and because Art's contract is a personal services contract for unique services that would not be assignable under these circumstances, where the change is material to Art. A is incorrect as a statement of law because generally no consideration is required for an assignment. B is technically correct as far as CBC breaching Art's contract, but that argument is more appropriate in a claim for breach against CBC. D is incorrect because generally an assignment of rights is valid even if there is no valid consent.

Question 8 2 / 2 pts Hal, a farmer, contacted Ralph, a food broker, offering to sell Ralph five tons of tomatoes for $100 per ton to be delivered on June 1. Ralph agreed and followed up by sending a fax to Hal "confirming purchase of 5 tons of tomatoes at $100 per ton to be delivered June 1," signed by Ralph. Ralph later refused to make the purchase. Is the contract enforceable? No, because it was not signed by Hal. No, because it was not definite enough. Yes, because Ralph signed the fax. Yes, if Hal never objected to the fax.

C is the best answer, because the statute of frauds is satisfied by a merchant's confirmatory memorandum if it identifies the subject, indicates the contract made, includes the essential terms and is signed by the party to be charged. A is incorrect because Hal is not the party to be charged here since Hal is trying to enforce the contract, so it does not matter whether Hal signed it or not, and the lack of Hal's signature does not make the contract unenforceable against Ralph. B is incorrect because the contract was definite in terms of stating quantity, price and time. D is incorrect because Hal's lack of objection to the fax would make it potentially binding on Hal, but has no effect on whether it is binding on Ralph.

Question 4 0 / 2 pts Theo, an artist, has agreed in writing to provide to Fun Park 50 caricatures of park guests daily for 90 days during the summer tourist season, and a price of $4 per caricature for which Fun Park will charge $20 per customer. After the agreement is signed, Fun Park verbally advises Theo that he may also have a $20 allowance for materials per day. Is the agreement regarding materials enforceable? No, it is barred by the parol evidence rule. No, it is barred by the statute of frauds. No, due to lack of consideration. Yes, if there was a "no oral modification" clause in the writing.

C is the best answer, because there is no additional consideration given by Theo to Park for the additional benefit to Theo, given that he has a pre-existing duty to produce the caricatures. A is incorrect because the parol evidence rule only bars prior or contemporaneous agreements, not oral modifications after the original contract is signed. B is incorrect because the contract is one for services and does not fall within any of the categories for the statute of frauds. D is incorrect because if there was a no oral modification clause in the writing then most likely the agreement would not be enforceable.

Question 6 0 / 2 pts Mary, a student, leased an apartment from John. Mary asked who else lived in the building and John told her that students had always rented his apartments, since they were near the college. Mary proceeded to tell John that she was nervous about getting the apartment, as it would be her first time living on her own. John knew that there was one tenant who was not a student, Sam. John was aware that Sam had been charged with assault on a female student and expelled from the school, but John did not tell Mary, who proceeded to sign a one-year lease. After Mary moved in, one of the other tenants told her about Sam's expulsion. Mary confronted John and demanded to be excused from the lease. "I just don't feel safe here, knowing about Sam," she said. John refused, declaring Mary should have investigated further before moving into the apartment. Mary moved out and refused to pay the rent. If John sues Mary for breach of the lease, who should prevail? John will prevail because Mary breached the written contract by not paying the rent. John will prevail because Mary should have investigated further before signing the contract. Mary will prevail because the contract is voidable. Mary will prevail by showing negligent misrepresentation.

C is the correct answer. A contract induced by fraudulent misrepresentation is voidable. Fraudulent misrepresentation requires 1) An intentional misrepresentation of material fact; 2) Knowledge that the misrepresentation is likely to induce a reasonable person to manifest assent; 3)The misrepresentation does induce the other party to enter the contract; 4) Justifiable reliance on the misrepresentation by the innocent party. Here, John misrepresented that there was a tenant who was not a student, knowing that a female student (living on her own for the first time) would not want to live in a building with a person who had been charged with assaulting a female student. John knew that his misrepresentation induced Mary to enter the contract and Mary did, in fact, rely on his misrepresentation. A is wrong since Mary will be able to void the contract based on fraud. B is wrong since under the circumstances, it was reasonable for Mary to rely on John's representations. D is wrong since John did not commit a negligent misrepresentation, a misrepresentation that was made carelessly rather than dishonestly.

Question 17 15 / 15 pts On March 1, Mitch, who is seventeen years of age, signs a contract to sell his motorcycle to Peter for $10,000 on March 15. On the following day, Mary makes a better offer to buy Mitch's motorcycle for $12,000. On March 5, Mitch gives title to his motorcycle to Mary in exchange for $12,000. On March 14, after Mitch tells Peter that he has already sold his motorcycle to Mary, Peter asserts an action against Mitch to enforce the contract. Who is likely to prevail? Peter, since Mitch is liable to Peter because Peter accepted Mitch's offer to sell the motorcycle for $10,000. Peter, since Mitch is liable to Peter for breach of contract and must sell the motorcycle to him. Mitch, since he is not liable to Peter because Mitch disaffirmed their deal. Mitch, since he is not liable to Peter because he is a minor.

C is the correct answer. A minor (usually defined as an individual under the age of 18 years) does not have the legal capacity to bind himself in a contract and may avoid a contractual commitment by disaffirming it. In most cases, a minor's lack of contractual capacity makes the contract voidable but not void; that is, a minor may choose to avoid (disaffirm) the contract on the grounds of incapacity or to keep it in force. Once the contract is disaffirmed, it is void and cannot be resurrected. Mitch disaffirmed the contract when he told Peter he had already sold the motorcycle to Mary. D is wrong because Mitch's lack of liability stems from his disaffirmance of the contract, not only the fact that he is a minor. A and B are wrong, A and B would be correct statements of law, but for the fact that Mitch is a minor who disaffirmed the contract.

Question 9 2 / 2 pts Alan was the owner of a successful restaurant that his friend, Bob, had been trying to purchase for several years. Alan and Bob went out drinking one night. After they had consumed several beers each, Alan was visibly intoxicated. Despite his intoxication, Alan agreed to sell his restaurant to Bob for less than half of its real market value. Alan wrote and signed the agreement on a napkin. The contract is most likely voidable by Alan, if which of the following is true? Alan appeared intoxicated to Bob at the time Alan wrote the agreement to sell his restaurant on the napkin. Alan disaffirmed the contract after becoming sober. Alan was so intoxicated that that he could not understand the nature of the transaction and Bob knew that this was the case. Alan had no memory of the transaction.

C is the correct answer. A party can avoid a contract due to lack of contractual incapacity on the grounds of intoxication only if the party is so intoxicated that he cannot understand the nature of the transaction and the other party has a reason to know that this is the case. A is wrong since not only does Bob need to know that Alan was intoxicated, he must know that the intoxication caused Alan to fail to understand the transaction. B is wrong since the rule regarding disaffirmance only applies to a party who is incompetent to enter into a contract due to minority. D is wrong since it is irrelevant.

im was a collector of antiques who had purchased many expensive items from Robert, an antiques dealer. Knowing that Robert was traveling to Europe, Jim wrote to Robert on March 1, "If you should come across a Henry VIII dresser in your travels, please purchase it for me. I don't care about the cost." On March 20, Robert wrote back to Jim, "I have found an excellent Henry VIII dresser. The price is $20,000, but I think it's a good buy. Let me know if you still interested." Jim received Robert's letter on March 23 and, on the same day, he texted Robert, "$20,000 is okay. Buy the piece on my account." Soon thereafter, Robert sold the piece to another collector who offered more money. In a lawsuit by Jim against Robert, if the court determines that Robert's letter of March 20 was not an offer, it would most likely be because Robert's letter: was an acceptance of an offer contained in Jim's letter of March 1. did not specify the terms of the payment. did not manifest a willingness to be bound. did not specify a method of payment.

C is the correct answer. An offer is a manifestation of the offeror's willingness to enter into a contract on the terms specified. The language used by the seller Robert leaves doubt about whether the letter expressed a willingness to be bound since he asked Jim to let him know whether he was still interested and whether the price was acceptable. A is wrong. Robert apparently did not intend his letter to result in a contract since he asked Jim to let him know whether he was still interested and whether the price was acceptable. Therefore, even if Robert's letter of March 20 was an offer, Jim's text of March 23 could not have been an acceptance of it. B and D are wrong since if an offer fails to indicate how acceptance should be made, it is implied that acceptance may be made by any reasonable means. Therefore, Robert's letter would not fail as an offer for that reason.

On July 1, after hearing that his friend Mary wanted to go to law school, Alex sent her a letter offering to sell his old law books to her. When he did not hear back from Mary, Alex posted an advertisement on Craigslist that stated, "Slightly used Torts, Contracts and Criminal Law casebooks for sale. $25 each or best offer." Alex sold the Torts and Contracts casebooks as a result of his Craigslist ad. On August 1, Alex went to Mary's house and as soon as Mary opened the door, he said, "I still have my Criminal Law casebook available. I will sell it to you for $15. Do you want to buy it?" Which of Alex's communications, if any, constituted a valid offer? Alex's July 1 letter to Mary Alex's Craigslist ad Alex's August 1 statement to Mary None of the above

C is the correct answer. An offer is a manifestation of willingness to enter a bargain, made so as to justify another person in understanding that assent is invited and will conclude a bargain. Alex's statement manifested his willingness to sell the Criminal Law casebook to Mary in exchange for $15. A is wrong since it was too indefinite to constitute an offer. The letter did not identify the law school books, nor did it state a price. B is wrong since the term "or best offer" is equivocal and does not indicate the intent that payment of a specified price will conclude the bargain. Ds is wrong since C constitutes an offer.

Dennis manufactured motors for farm tractors and in the past, he had been selling the tractor motors for $5,000 each. In January 2014, Dennis decided to cease production on the tractor motors and begin production on big rig motors which would be more profitable. In February 2014, Dennis had three tractor motors remaining in his warehouse and he wanted to clear them out to make room for production of the big rig motors. On February 10, Dennis sent an e-mail to Peter, a farmer, offering to sell any of the remaining three motors for a discounted price of $1,000. On February 15, not having heard from Peter, Dennis sold two of the tractor motors to other buyers. On February 20, Peter sent an e-mail to Dennis that stated, "I am enclosing a check for $3,000 as payment in full for the three tractor motors per your offer of February 10. My truck will be there to pick up the motors next week" Peter's February 20 e-mail constituted: An invitation for an offer An offer to purchase any tractor for $1,000 An offer to purchase the three tractors for $3,000 An offer to purchase any of the remaining tractors for $1,000 each

C is the correct answer. An offer is an expression of the willingness of the offeror to enter into a contract with the offeree on the terms specified in the offer. Since Peter's e-mail expressed a willingness to enter into a contract with Dennis for purchase of three tractor motors for $3,000, it was an offer to purchase three motors on those terms. A is wrong since Peter's e-mail was an expression of his willingness to enter into a contract with the offeree Dennis on the terms specified in the offer. Therefore, it is an offer rather than an invitation for an offer. B and D are wrong because Peter's e-mail expressed a willingness to enter into a contract with Dennis for purchase of three tractor motors for $3,000, it was an offer to purchase three motors on those terms.

Question 8 0 / 2 pts Al was a tractor manufacturer who had purchased hundreds of motors from Bill, an engine maker, in the past at a price of $5,000 each. In 2012, Bill stopped producing the motor. By 2013, Bill only had three motors left in his warehouse. Because he wanted to make room for new motors, Bill signed and sent the following letter to Al on January 1, 2013: "I only have three motors left in stock and have stopped manufacturing them. If you are interested, I will sell you any or all of them for $1,000 each. Because we have done business in the past, I promise to hold this offer open until June 1, 2013." When Bill did not hear from Al by May 20, he sold the motors to a car dealer. Al sent Bill a $3,000 check for the three motors on May 27, 2013. If Al asserts a claim against Bill for failing to keep the motors available until June 1, who is likely to prevail? Al, because Bill made a merchants' firm offer under the UCC. Al, because Bill's offer was irrevocable until June 1. Bill, because his offer was only irrevocable for 90 days. Bill, because his offer was revoked when he sold the motors to the car dealer.

C is the correct answer. Bill's January 1 offer is a merchant's firm offer since it is a writing signed by a merchant which gives assurance that the offer will be held open, However, a merchants' firm offer can only be irrevocable for a time period not to exceed three months. Consequently, the offer was only irrevocable for 90 days. A and B are wrong. Bill's January 1 offer is a merchant's firm offer since it is a writing signed by a merchant which gives assurance that the offer will be held open, However, a merchants' firm offer can only be irrevocable for a time period not to exceed three months. Consequently, the offer was only irrevocable until April 1, not June 1. D is wrong since a revocation is only effective if it is communicated to the offeree. Further, Bill's offer was irrevocable until April 1.

Question 5 15 / 15 pts Dan, who owned a furniture factory, entered into a written contract with Peter, a lumber wholesaler while Dan was on a business trip in the U.S. The contract provided that Dan would purchase 100,000 board feet of lumber for the price of "Three Thousand (3,000) Dollars." Dan was a native of Country, whose unit of currency is the 'dollar', worth around 50 U.S. cents. After receiving the shipment, Dan sent Peter an international money order of 3,000 Country dollars. Peter wrote to Dan, claiming that the agreement called for the payment in U.S. dollars, but Dan refused to make any further payment. Peter brought an action against Dan in the U.S. and wanted to introduce evidence that prior to executing the written contract, he and Dan orally agreed that the price in the contract was to be in U.S. dollars. If Dan objects to the evidence offered by Peter, how should the court rule? The evidence of the oral agreement should be excluded, since the oral agreement was made prior to the written contract The evidence of the oral agreement should be excluded, since it barred by the parol evidence rule The evidence of the oral agreement should be admitted to explain the meaning of 'dollar' in the written contract The evidence of the oral agreement should be admitted, unless the writing is found to be a total integration of the agreement between the parties

C is the correct answer. Extrinsic (parol) evidence may be introduced to explain an ambiguity, no matter who caused it. D is incorrect because the parol evidence rule does not apply here since the evidence is offered to interpret an ambiguity in the contract, the meaning of the term "dollar", making A B and D wrong.

Question 1 0 / 2 pts Helen lives in Montana and owns a vacation home in Hawaii. When her relatives came to visit her in Montana, Helen said to her nieces and nephews: "If any of you clears the weeds in the garden of my house in Hawaii, I'll buy you a ticket to Europe." One of Helen's nieces lives in Hawaii and when she returned to her home, she went to Helen's house and started to clear the weeds. After a week, Laura was still clearing the weeds. She also received an e-mail that Helen sent to all of Helen's nieces and nephews. This was the first communication Laura had had with Helen since she left Montana. The e-mail advised: "I just hired someone to clear the weeds in the garden of my house in Hawaii. I revoke my offer to buy one of you a ticket to Europe." If Laura sues for breach of contract, what result? Laura will prevail because the offer was for a unilateral contract and Laura effectively accepted by beginning performance. Laura will prevail because she performed work for Helen. Helen will prevail because her revocation of the offer was valid. Helen will prevail because Laura was not finished clearing the weeds when Laura received her revocation.

C is the correct answer. For acceptance of a unilateral contract to be effective, the offeror must have notice that the offeree has begun performance or completed performance. Here, Laura began the work for Helen but did not advise Helen that she had done so, making Options A and B incorrect. Although indirect notice can be sufficient, since Helen was not in Hawaii, she could not have seen or heard that Laura had begun performance. Thus, her revocation was valid and Option C is correct. Option D is not correct because Laura's completion of her obligation is not relevant to the revocation analysis since Helen did not have notice of the acceptance. C is the correct answer. For acceptance of a unilateral contract to be effective, the offeror must have notice that the offeree has begun performance or completed performance. Here, Laura began the work for Helen but did not advise Helen that she had done so. Although indirect notice can be sufficient, since Helen was not in Hawaii, and the facts state that there was no communication between Helen and Laura between the time that Helen made the offer and she revoked it, Helen could not have seen or heard that Laura had begun performance. Thus, her revocation was valid. Take a look at Crunchtime at p. 50--When an offer looks for a unilateral contract (acceptance by performance), most courts hold that the offeree must give notice of his acceptance after he has done the requested act. If he does not, that contract that was formed by the act is discharged. Applying that rule,since Helen did not have notice that Laura had started to perform, the offer was revocable.

Question 11 15 / 15 pts Paula bought a two month-old registered bull at auction from Dylan for $800. No express warranty was made. Fifteen months later, tests by bull experts conclusively proved that the bull had been born sterile. If this had been known at the time of the sale, the bull would have been worth no more than $100. In an action by Paula against Dylan to avoid the contract and recover the price paid for the bull, the parties agreed that they both had been aware at the time of the sale, that the minimum age at which the fertility of a bull can be determined is about 12 months of age. Who is likely to prevail? Paula, because the parties were mutually mistaken as to the bull's fertility when they made the agreement Paula, because by auctioning the bull, Dylan was impliedly representing that the bull was fit for breeding Dylan, because Paula assumed the risk of the bull's sterility Dylan, because any mistake involved in the transaction was unilateral, not mutual

C is the correct answer. In order to avoid a contract based on mutual mistake, the mistake must concern a basic assumption on which the contract was made, the mistake must have a material effect on the agreed exchange of performance, and the adversely-affected party must not be the one on whom the contract has implicitly imposed the risk. Here, where Paula knew that the fertility of the bull could not be determined at the time of the sale, she impliedly assumed the risk of the bull's sterility. A is wrong because Paula assumed the risk. B is wrong since it is not consistent with the facts. D is wrong because both parties were mistaken.

Question 2 2 / 2 pts Willy owned and operated the Willy's Ice Cream and Sandwich Parlor. The parlor was located right across from a busy freeway ramp. Because of its prime location, Willy's was a popular stop for tourists and locals. In 2005, Willy leased the Parlor to Dick under a written ten-year lease. During the sixth year of the lease, the city reconstructed the freeway by expanding an existing bridge in order to correct the traffic congestion problem. Because of the reconstruction, the freeway now went over the parlor. This caused a substantial decline in Dick's business. Neither party had knowledge of the city's intent to change the location of the freeway ramp at the time they entered into the lease agreement. Dick contacted Willy and told him of the circumstances. Dick asked Willy to renegotiate the lease agreement, but Willy refused. Because of the decline in the parlor's business, Dick was losing money. He decided to abandon the parlor and refused to pay Willy any rent. Willy brought an action against Dick to recover the unpaid rent. Who will prevail? Dick, because of the doctrine of impossibility of performance. Dick, because the parties inferred, within their agreement, the continued existence of the freeway ramp. Willy, because Dick assumed the risk of any change in circumstances when he entered into the lease. Willy, because of the doctrine of frustration of purpose.!

C is the correct answer. It is likely that the court would find that, as a business person leasing the parlor for ten years, Dick assumed the risk of the ebb and flow of customers. A is wrong since performance is still 'possible', only less profitable. B is incorrect since there was no inference that could reasonably be drawn regarding the freeway in the lease agreement. D is wrong since the doctrine does not apply to these facts—the entire purpose of the contract is not thwarted, only its profitability.

Dexter told his brother Paul that if he went to Plumbers' College and graduated with honors that Dexter would buy Paul a house up to $250,000 in value. Paul attended the college and graduated with honors but Dexter refused to buy Paul the house. If Paul asserts a claim against Dexter to enforce the promise, will he likely prevail? No, Dexter's pledge was merely a gratuitous promise. No, there were no bargained for exchange of promises. Yes, if Paul went to Plumbers' College in reliance on Dexter's promise. Yes, because Dexter has a moral obligation to fulfill the pledge.

C is the correct answer. Promises which foreseeably induce reliance on the part of the promisee will often be enforceable without consideration, under the promissory estoppel doctrine. If Paul went to college based on Dexter's promise to buy him a house, Dexter's promise will be enforced. A is wrong since gratuitous promises can be enforced if there was justifiable reliance on the promise. B is wrong since promises which foreseeably induce reliance on the part of the promisee will often be enforceable without consideration, under the promissory estoppel doctrine. D is wrong since there generally is no moral obligation to pay for a sibling's college.

Question 2 2 / 2 pts Alex, a logger, offered to buy, sever, and remove the standing timber from the tract of land owned by Bob, at a cash price 70% higher than the regionally prevailing price for comparable timber rights. Bob, in desperate financial straits and knowing little about timber values, signed and sent a fax to Alex accepting the offer. However, before Alex started to remove the standing timber from Bob's land, Bob's investment fortunes suddenly improved and he wants to avoid the contract with Alex. Which of the following legal concepts affords Bob his best prospect of effective cancellation? Undue Influence Statute of Frauds Unconscionability Duress

C is the correct answer. The issue is whether the contract here is so one-sided and so unfair, that a court should as a matter of judicial policy, refuse to enforce it. The basic test is whether, in the light of the general commercial background and the commercial needs of a particular trade or case, the clauses involved are so one-sided as to be unconscionable under the circumstances existing at the time of making the contract. Courts have very rarely allowed businesspeople to claim unconscionability. Here since Bob is not knowledgeable about timber rights and the contract price is so grossly excessive, his best chance to void the contract is on the grounds of unconscionability. A is wrong since the doctrine of undue influence is the unfair persuasion of a party who is under the domination of the person exercising the persuasion or who by virtue of the relation between them, is justified in assuming that the person would not act in a manner inconsistent with his welfare. There are no facts indicating that Bob would assume that Alex is acting in his best interest. B is wrong since the contract for timber would not be required to be in writing since this contract is not the sale of an interest in land. D is wrong since Alex did not make an improper threat, a required element of duress.

Question 14 2 / 2 pts Dennis, a logger, offered to buy and remove the standing timber from the tract of land owned by Phil, at a cash price 70% lower than the regionally prevailing price for comparable timber rights. Phil, in desperate financial straits and knowing little about timber values, signed and sent a fax to Dennis accepting the offer. However, before Dennis started to remove the standing timber from Phil's land, Phil's investment fortunes suddenly improved and he wants to avoid the contract with Dennis. Which of the following legal concepts affords Phil his best prospect of effective cancellation? Undue Influence Statute of Frauds Unconscionability. Duress

C is the correct answer. The issue is whether the contract here is so one-sided and so unfair, that a court should as a matter of judicial policy, refuse to enforce it. The basic test is whether, in the light of the general commercial background and the commercial needs of a particular trade or case, the clauses involved are so one-sided as to be unconscionable under the circumstances existing at the time of making the contract. It follows that courts have very rarely allowed business people to claim unconscionability. Only consumers are generally successful. The principle is one of the prevention of oppression and unfair surprise. Here since Phil is not knowledgeable about timber rights and the contract price is so grossly low, his best chance to void the contract is on the grounds of unconscionability. A is wrong since the doctrine of undue influence is the unfair persuasion of a party who is under the domination of the person exercising the persuasion or who by virtue of the relation between them, is justified in assuming that the person would not act in a manner inconsistent with his welfare. There are no facts indicating that Phil would assume that Dennis is acting in his best interest. B is wrong since the contract for timber would not be required to be in writing since this contract is not the sale of an interest in land. D is wrong since Dennis did not make an improper threat, a required element of duress.

Question 3 2 / 2 pts Anglo is an English-speaking county in Europe whose unit of currency is the 'dollar', worth around 85 U.S. cents. Peter, who owned a glue factory in Anglo, entered into a written contract with Dan, while Peter was on a business trip in the U.S. The contract provided that Dan would purchase 20 tons of liquid glue from Peter for the price of "Nine Thousand (9,000) Dollars." After receiving the shipment, Dan sent Peter an international money order of 9,000 Anglo dollars. Peter wrote to Dan, claiming that the agreement called for the payment in U.S. dollars, but Dan refused to make any further payment. Peter asserted an action against Dan in the U.S. and wanted to introduce evidence that prior to executing the written contract, he and Dan orally agreed that the price in the contract was to be in U.S. dollars. If Dan objects to the evidence offered by Peter, how should the court rule? The evidence should be excluded, since the oral agreement was made prior to the writing The evidence should be excluded, only if the written contract was prepared by Dan The evidence should be admitted, since the evidence offered by Peter does not modify or contradict the written contract The evidence should be admitted, unless the writing is found to be a total integration of the agreement between the parties

C is the correct answer. The parol evidence rule does not apply here since the evidence is offered to interpret an ambiguity in the contract, the meaning of the term "dollar", making A and D wrong. B is wrong. Extrinsic (parol) evidence may be introduced to explain an ambiguity, no matter who caused it.

Question 3 0 / 2 pts Builder contracted with Al to construct a warehouse and an access driveway at highway level for $600,000. Shortly after commencing work on the driveway, which required for the specified level, some excavation and removal of surface material, Builder unexpectedly encountered a large mass of solid rock. Builder informed Al that because of the rock, the driveway as specified would require additional labor and cost at least $30,000 more than figured, and for that reason Builder demanded a total contract price of $630,000. Since Al already had customers signed up for the originally agreed upon completion date, he signed a writing promising to pay the additional $30,000. After the completion of the warehouse and driveway, which conformed to the contract in all respects, Al refused to pay Builder more than $600,000. What is the maximum amount to which Builder is entitled? $600,000, because there was no consideration for Al's promise to pay the additional $30,000. $600,000, because Al's promise to pay the additional $30,000 was exacted under economic duress. $630,000, because the modification was in good faith and made in the light of circumstances not anticipated by the parties when the original contract was made. $630,000, provided that amount reflected the reasonable value of Builder's total performance.

C is the correct answer. This is a common law contract and consequently, any modification requires new consideration. Here there was consideration since the large mass of rock was unexpected and required additional or different excavation work. Since there are no facts to indicate that the additional funds requested by Builder were not in good faith, the modification is enforceable, making the contract price $630,000. A is wrong because there is consideration. B is wrong because although the price had increased, there was no improper threat to support a claim of economic duress. D is wrong since the parties specified a price in their agreement, the reasonable value of the services is inapplicable.

Question 9 2 / 2 pts Builder contracted with Al to construct a warehouse and an access driveway at highway level for $600,000. Shortly after commencing work on the driveway, which required for the specified level, some excavation and removal of surface material, Builder unexpectedly encountered a large mass of solid rock, unheard of in the area. Builder informed Al that because of the rock, the driveway as specified would cost at least $30,000 more than figured, and for that reason Builder demanded a total contract price of $630,000. Since Al already had customers signed up for the originally agreed upon completion date, he signed a writing promising to pay the additional $30,000. After the completion of the warehouse and driveway, which conformed to the contract in all respects, Al refused to pay Builder more than $600,000. What is the maximum amount to which Builder is entitled? $600,000, because there was no consideration for Al's promise to pay the additional $30,000. $600,000, because Al's promise to pay the additional $30,000 was exacted under economic duress. $630,000, because the modification was in good faith and made in the light of circumstances not anticipated by the parties when the original contract was made. $630,000, provided that amount reflected the reasonable value of Builder's total performance.

Harriet's Homebuilding Company sent a purchase order to Fabulous Fixtures, ordering 500 light fixtures for some homes it was building at $5 per fixture. The purchase order stated that it was limited to its terms and it did not include an arbitration clause. Fabulous sent an acknowledgment stating that it would ship to Harriet the quantity of fixtures ordered at the price ordered. The back of the form stated in fine print, "This acknowledgment contains the following terms:" One of the terms indicated that all disputes would be subject to arbitration. If the light fixtures are not shipped and Harriet sues, a court will find that: No contract exists because of the mirror image rule. No contract exists because the acknowledgment was expressly conditional. A contract exists, because the acknowledgment was a definite expression of acceptance. No contract exists, because no goods were shipped.

C is the correct answer. UCC 2-207(1) provides that a response to an offer that contains different or additional terms can qualify as an acceptance, as long as it communicates the intent to accept with definite and seasonal (timely) terms. Here, Fabulous' acknowledgement agreed to the quantity and price of the goods in Harriet's offer/purchase order and appeared to be timely. Consequently, it was an effective acceptance, forming a contract. A is wrong since the mirror image rule does not apply to acceptance under the UCC. B is wrong since neither the offer nor acceptance was made conditional on specific terms. D is wrong since the failure to ship the goods is a breach of the contract.

Question 15 15 / 15 pts Alan owned a parcel of land in an urban area and wanted to have an office complex built on the site. Barbara was a well-respected architect and managing partner of Architect Specialists, Inc. (ASI). On June 1, Alan wrote to ASI, stating that he was interested in contracting with ASI to supervise the office building project on the condition that Barbara personally managed the job. On June 5, ASI responded with a fax stating that Barbara's fee for projects that she personally supervised was $30,000 and that ASI's fee for such a project was normally $40,000. After some negotiations between Alan and ASI, Alan wrote to ASI that the terms in ASI's June 5 fax were acceptable and that they had a deal. After ASI completed the project under Barbara's supervision, ASI sent an invoice for $70,000, indicating that $30,000 was Barbara's fee for her personal services and $40,000 was ASI's fee. Alan refused to pay, stating that the agreement was for Barbara's fee of $30,000 and ASI's fee of $10,000. ASI asserted a breach of contract action against Alan. At trial, ASI's president testified that in a phone call with Alan prior to signing of the contract, he had explained that Barbara's fee of $30,000 was in addition to ASI's fee of $40,000. Is the court likely to admit the testimony of ASI's president over Alan's objection? No, because the testimony should be excluded under the parol evidence rule No, because the testimony would supplement the contract Yes, because the testimony would explain an ambiguity. Yes, only if ASI's fee was customary in the industry

C is the correct answer. Under the parol evidence rule, evidence of prior or contemporaneous agreements is inadmissible if offered to contradict terms of a contract intended by the parties to be the complete expression of their agreement. Extrinsic evidence can be admitted to clarify contract terms that are ambiguous. Since the arrangement of fees stated in the June 5 fax have been interpreted differently by the parties, the testimony can be admitted to clarify the terms. Therefore, A is incorrect. B is incorrect since the testimony does not supplement the contract. D is wrong, since although usage of trade may be admitted to explain a contract term, it is not the only kind of evidence that is admissible.

Question 7 2 / 2 pts Dexter contracts in writing to sell his 2014 monster truck to Thomas for $55,000. Dexter agrees to deliver the truck on Friday, and Thomas promises to pay the $55,000 on the following Monday. On Thursday, Thomas tells Dexter that he changed his mind and will not buy the truck. Over the weekend, Thomas changes his mind again and tenders $55,000 to Dexter on Monday. Dexter told Thomas that he sold the truck to another party over the week-end. In an action by Thomas to enforce the contract, who is likely to prevail? Thomas, since he could retract his repudiation of the contract at any time before the time performance was due. Thomas, because Dexter breached the contract Dexter, since Thomas's repudiation released him from his duty to perform under the contract. Dexter, since he did not breach of their contract.

C is the correct answer. When Thomas told Dexter that he changed his mind and would not buy the truck on Thursday, that was a repudiation of the contract. On Monday, Thomas attempted to retract his repudiation by tendering the contract price to Dexter. A repudiation may be retracted until an event occurs to make the repudiation final. In most courts, the time for retracting a repudiation ends as soon as the other party changes his position materially in reliance on the repudiation. Consequently, when Dexter sold the truck to another buyer over the week-end, he detrimentally relied on Thomas' repudiation and Thomas could no longer retract it. A is wrong since his ability to retract the repudiation ended when Dexter detrimentally relied on it. B is wrong since Dexter did not breach the contract. D is wrong since although it is a true statement, it was Thomas' repudiation of the contract that caused Dexter's duty to perform to be extinguished.

Question 13 15 / 15 pts Penny owned a sporting goods clothing store and Dylan manufactured skateboards. On July 1, Penny sent Dylan a fax stating, "I wish to buy 20 skate boards at $30 each, as per your price list. Please ship immediately. Payment terms: 30 days." Dylan shipped the order on July 3. However, Dylan was running short on his supply of skateboards, so he sent 15 skateboards and 5 scooters. When the skateboards and scooters arrived at Penny's warehouse on July 5, Penny rejected them as not in conformity with the contract. Penny then purchased 20 skateboards from another manufacturer at $40 each and claimed the excess price of the substitutes from Dylan as damages for breach of contract. Dylan contends that Penny has no claim for damages because no contract was ever made. Who is likely to prevail? Dylan, because Dylan's shipment of 15 skateboards and 5 scooters was a counter-offer which Penny never accepted Dylan, because the non-conforming goods were offered as an accommodation Penny, because Dylan shipped non-conforming goods without timely notice to Penny that the goods were offered as an accommodation Penny, because Dylan rejected Penny's offer when he shipped the goods

Correct Answer C. C is correct since under UCC 2-206(1), unless the seller gives timely notification to the buyer that the shipment of non-conforming goods is offered as an accommodation, the prompt shipment of goods is an acceptance, whether or not those goods conform to the contract. Consequently, Dylan both accepted Penny's offer and breached the contract when he sent non-conforming goods. B is wrong since Penny, rather than Dylan, will prevail. A and D are wrong since the shipment of the goods operates as an acceptance.

Question 7 15 / 15 pts On June 1, Dexter, a well-known collector of old Mercedes Benz cars, put an advertisement in a local newspaper that read, "I will pay $500 for information that leads to my purchase of a Mercedes Benz from 1950 or older." On June 2, without knowing anything about the advertisement, Pete, another car collector, telephoned Dexter and offered to sell him a 1940 Mercedes Benz car. On June 3, Dexter inspected Pete's Mercedes Benz and purchased it. Later that day, Pete read Dexter's advertisement and asserted a claim against Dexter for $500. The court should find for: Dexter, because Pete was not aware of the reward when he sold the Mercedes Benz to Dexter. Pete, because he was successful in finding a Mercedes Benz car for Dexter to purchase. Pete, because he was a member of the public to whom Dexter's ad was directed. Pete, because he sold the car to Dexter after the advertisement was placed in the paper

Correct Answer: A. An acceptance is valid only if the offeree knows of the offer at the time he accepts it. Therefore, if a reward is offered for a particular act, a person who does the act without knowing about the reward cannot claim it. Here, since Pete did not know about Dexter's reward at the time that he sold the Mercedes Benz to him, he cannot claim the reward. For that reason, B and D are wrong. C is wrong since even an offer to the public cannot be accepted unless the offeree knows of the offer.

Question 17 15 / 15 pts On September 1, Lawyerly, a publisher of law books, posted the following notice on the bulletin board of a law school, "Lawyerly will award a complete set of legal encyclopedias to the student in each graduating class of the law school who attains the highest cumulative Grade Point Average (GPA). In the event that two of more students graduate with the same GPA, the Dean will select the winner from among them based on school service and community involvement." A student who had just started her final year of law school saw the notice and on September 15, she mailed a letter to Lawyerly saying, "I accept your offer for the award and I will do my best to win it." Lawyerly did not respond to the student's letter. Which of the following statements most accurately describes Lawyerly's notice? It was an offer for a unilateral contract It was an offer for a bilateral contract It was an offer for a unilateral or bilateral contract, at the offeree's option It was an offer for a unilateral contract that ripened into a bilateral contract, when the offeror achieved the highest GPA in the class

Correct Answer: A. An offer for a unilateral contract involves an offer to exchange a promise for an act. Since the notice offered a prize to the student achieving the highest GPA and did not ask students to make a promise or agreement that they would do so, it was a promise offered in return for an act. Therefore, B is incorrect. C is wrong since the offeree has the sole power to decide whether the offer can be accepted by an act or a promise. D is wrong since once a student achieved the highest GPA, there was nothing further for the student to do.

Question 3 15 / 15 pts In January, Patty, who lived in California, went on-line to book a ticket to Brazil to attend the World Cup in June. She found a good deal on the Fly Cheap Airline website and proceeded to make her purchase. After she entered her credit card information, a new screen displayed that contained a great deal of text under the heading "Terms of Service." Patty clicked on the "I accept" button without reading the text. The next screen displayed her confirmation number. Had Patty read the text on the screen, she would have seen a statement that read: "Purchaser agrees to resolve all disputes with Fly Cheap Airlines in binding arbitration in Alaska." In June, Patty went to Brazil and had a great trip. Her return flight, however, was horrible and Fly Cheap lost her luggage. Patty decided to sue Fly Cheap Airlines for her damages. Is Patty bound by the arbitration provision in her action against Fly Cheap airlines? Yes, because Patty assented to the Terms of Service Yes, because arbitration is a standard policy in consumer contracts No, because Patty was unaware of the arbitration clause in the Terms of Service No, because arbitration clauses are unenforceable

Correct Answer: A. Parties to a written contract have a duty to read the terms. Thus, a party to a contract who does not read the terms is still bound by the terms if she enters into the agreement. Here, the terms were available and Patty could have read them before she agreed to enter into the contract, but she did not. Thus, a valid contract was formed and A is correct. B is incorrect because it is not relevant. C is not correct because Patty had a duty to read the terms. D is not correct because it is an incorrect statement of the law.

Question 11 15 / 15 pts Ann received a brochure from Brian in the mail, offering laptops for sale. The brochure contained a photograph of a Model X laptop with a statement below it which read, "While they last, all Model X laptops on sale for 25% below manufacturer's list price." Ann immediately did some research and determined that the manufacturer's list price for the Model X laptop was $1,000. Ann then sent a check to Brian for $750 ($1,000 minus 25%) with a cover letter that stated, "I hereby accept your offer for the sale of a Model X laptop. My check is enclosed." Brian refused to cash Ann's check and did not send the Model X laptop to her. Brian's brochure is best described as: An invitation for an offer that ripened into an offer to purchase the Model X laptop when Ann learned of the manufacturer's list price for the laptop An invitation for an offer An invitation for an offer that ripened into an offer to purchase the Model X laptop when Ann relied on it by sending her check An offer for the sale of a Model X laptop

Correct Answer: B. An advertisement ordinarily is considered as an invitation to make an offer unless the circumstances indicate that the party placing the advertisement did so with the intent of empowering another to turn it into a binding contract simply by accepting it. Usually that intent is found only when the advertisement contains the number of items on sale, the method of acceptance and contains words indicating an intent to be bound. Here, the phrase "While they last" implies that the reader of the advertisement does not have the power to turn it into a binding contract by accepting and therefore, indicates an intent not to be bound. For those reasons, A, C, and D are wrong.

Question 8 0 / 15 pts On April 1, a farmer entered into a written contract with a worker in which the worker agreed to harvest the farmer's corn by May 1. The worker agreed to use his own harvester machine for the job and the farmer agreed to pay the worker $5,000 when all of his corn was harvested. The worker started the job and on April 15, the worker's harvester machine broke down. The worker told the farmer that the machine needed costly repairs that would take weeks to complete. The worker told the farmer that he could rent another harvester for $750, but he refused to rent the replacement harvester unless the farmer paid the entire rental cost. The farmer agreed to the extra $750 cost because he was afraid that the corn would lose its market value if it was not harvested by May 1. The worker rented the replacement harvester and completed harvesting the farmer's corn by May 1. However, the farmer refused to pay the worker more than $5,000. If the worker asserts a claim against the farmer for the additional $750 rental fee, who is likely to prevail? The farmer, since his promise to pay for the rental of the harvester was not in writing The farmer, since his promise to pay for the rental of the harvester was not supported by consideration The worker, since the farmer accepted his offer to finish harvesting the corn in exchange for the farmer paying the rental cost for the harvester. The worker, since there was mutual assent to the agreement for the farmer to pay for the rental of the harvestera

Correct Answer: B. As a general rule, a contract will not be enforceable without consideration, legally sufficient, bargained for exchange, which induces current performance, is a detriment to the promisee and a binding obligation on both parties. Here, the worker had a pre-existing duty to harvest the farmer's corn for $5,000 and consequently, there was no detriment to the worker by agreeing that the farmer would pay an additional $750 for the job to be completed. For this reason, B is correct and C is wrong. A is wrong. The contract does not fall under any of the categories required to be in writing under the Statute of Frauds since it is a rental, not a purchase agreement. D is wrong since the contract still cannot be enforceable without consideration.

Question 14 15 / 15 pts Bill is a chef who runs a business preparing and serving fine cuisine dinners for homeowners hosting parties. Bill contracts with Angela, a wealthy celebrity, to prepare and serve an elegant sit-down dinner for thirty people to celebrate New Years' Eve. The negotiated contract price is $50,000, 60% of the contract price represents the costs of the food, beverages, and place settings and 40% represents the fee for preparing and serving the meal. Under the majority rule, what is the governing law for the contract? The common law applies because cooking services are not a sale of goods The common law applies because the thrust of the contract is for the preparation of the food, not the sale of goods The UCC applies because under the gravamen test, contract provisions for goods can be severed from contract provisions for services The UCC applies because only one party, Bill, is a merchant

Correct Answer: B. B is correct. The majority of jurisdictions apply the predominant purpose test to hybrid contracts test to determine the primary purpose of the contract. Here, it appears that the value of the contract is in the food preparation and serving the meal, making it a common law contract. A is incorrect because although it is a correct statement, it does not apply the predominant purpose test. C is wrong since the gravamen test is not used by the majority of jurisdictions. D is wrong since whether or not the parties are merchants are irrelevant.

Question 4 0 / 15 pts Farmer is in the business of selling vegetables to grocery stores and offers to deliver 20 boxes of vegetables to Grocery Store Owner for $20 a box. Grocery Store Owner agrees and, on May 1, Farmer faxes a signed preprinted Purchase Order form that states "20 boxes of vegetables will be delivered to Grocery Store at a cost of $20 a box. Farmer to deliver product by May 10 and will unload the boxes by the back door of the store." On May 2, Grocery Store Owner returns the Purchase Order form signed and with a handwritten note stating, "Farmer will unload the boxes only during regular business hours by the back door of the store." On May 10, Farmer delivers the 20 boxes of vegetables, leaving them by the back door of the store at midnight. Sometime during the night, rodents get into the unattended vegetable boxes and destroy much of the vegetables. If Grocery Store Owner sues Farmer for breach of contract, which of the following facts, if proven, best supports Farmer's defense? The parties did not mutually agreed to delivery during regular business hours only The term of unloading the vegetables boxes only during regular business hours materially altered the contract The parties did not have an enforceable contract because the terms in the Purchase Order and Grocery Store's acceptance varied The parties did not have an enforceable contract because there was no meeting of the minds

Correct Answer: B. Under UCC 2-207(2), between merchants, additional terms that are not objected to by a party within a reasonable time are incorporated into the contract unless such terms would materially alter the terms of the contract. Thus, if unloading goods only during regular business hours materially altered the contract, it would not be incorporated into the agreement. A, C, and D are wrong since between merchants, a definite and seasonal expression of acceptance acts as an acceptance, even though it states terms that are additional to those contained in the offer [2-207(1)]. Here, even though the acceptance added the term for unloading the vegetables 'during regular business hours only', Grocery Store's response was still an acceptance.

Question 1 15 / 15 pts Who of the following is most likely not a merchant in the sale of mobile phones as defined by Article 2 of the Uniform Commercial Code? Debra, who works in a Verizon retail store Donna, who works as a programmer on mobile phones for Verizon Dana, a teacher, who regularly purchases old mobile phones and resells them in other countries for additional income Donald, who handles purchase ordering for Verizon

Correct Answer: B. Under the UCC, a merchant is one who regularly engages in the sale and/or purchase of a particular type of goods and has special knowledge of goods involved in the transaction. The only person who does not regularly engage in the sale/purchase of mobile phones is Donna (Answer B). Here, Debra sells mobile phones as her occupation. Thus, A is incorrect. Even though Dana's occupation is not in the mobile phone industry, she does regularly engage in the sale/purchase of the phones and has special knowledge, making C incorrect. Similar to Debra, Donald's profession involves regularly purchasing mobile phones, making D incorrect..

Question 16 15 / 15 pts Mark texted his friend, Ben, "I really want to sell my motorcycle. I would consider $2,500 for it." Ben immediately texted back, "I accept. I'll give you a check immediately!" Ben then wrote out a check for the motorcycle purchase and went out and bought a motorcycle helmet. The next day when Ben brought the check to Mark, Mark refused to give the motorcycle to him. If Ben asserts an action against Mark to enforce the sale of the motorcycle, the court likely will find for Ben, because he accepted Mark's offer Ben, because he detrimentally relied on Mark's offer Mark, because he was merely soliciting offers Mark, because he did not think that Ben would take his statement seriously since the motorcycle was worth around $4,000.

Correct Answer: C. A party who wishes to make a contract may make statements that are not offers, but rather solicitations of offers. These statements are the basis of preliminary negotiations and cannot be accepted. Here, Mark's phrase. "I would consider" shows his statement to be a mere solicitation of offers, not a true offer. Consequently, A is wrong. B is wrong because detrimental reliance usually refers to the other party beginning performance or making costly preparations in anticipation of a contract. Buying a helmet would not rise to this level. D is wrong whether or not Mark thought his statement would be taken seriously is irrelevant—it is the objective manifestation (or lack therefor) of intent to enter into a contract that matters.

Question 18 15 / 15 pts Jane was swimming in the ocean when she began to be pulled under the water by a strong undertow. She started screaming, "Won't someone please try to rescue me?" Upon hearing her appeal for help, Jeff went out in his rowboat and succeeded in pulling Jane to safety on his boat. Subsequently, Jeff asked Jane to pay him for his trouble, but she refused. If Jeff asserts a claim for payment against Jane on a theory of promissory estoppel, which of the following would be Jane's most effective argument in defense? It is not possible to place a monetary value on Jane's life Jane's cry for help was not an offer that could be accepted by Jeff going out in his rowboat to attempt a rescue No promise of payment could be reasonably inferred from Jane's cry for help There was no consideration for Jane's promise

Correct Answer: C. A promise that is unenforceable for lack of consideration may be enforceable under the doctrine of promissory estoppel if the promisee justifiably relied upon it to his detriment. If, however, no express or implied promise was made to the plaintiff, then promissory estoppel is not applicable. C is the only answer here that could support Jane's position. In a claim based on promissory estoppel, the promisee's recovery is not based on the value received by the promisor, but on either the promise made by the promisor or the detriment suffered by the promisee. Therefore, the value of Jane's life per se is not relevant and A is wrong. B is wrong since it is not reasonable to infer that Jane's cry for help reflected an intent to enter into a binding contract. D is wrong since under the doctrine of promissory estoppel, a promise can be enforced without consideration.

Question 9 15 / 15 pts Mark promises to buy his girlfriend, Penny, a new sports car with the extra money that he started earning at his new job. He takes Penny to a dozen car dealers and they test drive several different models until Penny decides that she wants a particular black convertible with taupe leather interior. In anticipation of receiving the new car, Penny sells her old beat-up van, and rents another car for $300/week to be able to get to work until her new car arrives. Unfortunately, Mark's new job does not pay him the money he had hoped it would and Mark decides that he can no longer buy the car for Penny. Mark cancels the order for Penny's new car. If Penny asserts an action against Mark for breach of his promise to buy her the car, who is likely to prevail? Mark, because the promise is not enforceable due to lack of consideration. Mark, because the promise was not in writing. Penny, for damages based on her reasonable detrimental reliance on Mark's promise. Penny, because there is consideration for the agreement.

Correct Answer: C. Promissory estoppel (or detrimental reliance) can serve as a substitute for consideration where the promisor reasonably should expect their promise to induce action or forbearance of a definite or substantial character and such action or forbearance is induced. Here, by his actions, Mark should reasonably have expected that Penny would rely on his promise to buy her a car. Consequently, Penny would be entitled to reliance damages (eg, car rental charges). A and D are wrong since Penny can enforce Mark's promise on the theory of promissory estoppel, which provides a substitute for consideration. B is wrong since this contract does not fall under any of the categories required to be in writing under the Statute of Frauds.

Question 2 15 / 15 pts Alice was going on an overseas trip for the month of September. Even though her neighbor offered to watch her house, Alice wanted someone to stay in her house to water her plants while she was gone. She sent a letter to her friend Betty. The letter said: "Betty--I'm going on a trip for the month of September. If you would stay at my place and water my plants for the month, I'll pay for all of your expenses while you are here. Take your time to think about it, but make sure that you let me know by August 30, so I know whether to get my neighbor to help instead. Thanks. Alice" Betty received Alice's letter on August 1. She liked the idea of living for free for a month and wrote back to Alice accepting her offer. Betty mailed the letter on August 2 but wrote the wrong house number on the envelope. A neighbor received the letter on August 5 and delivered the letter to Alice on August 8. By the time Alice received the letter, she remembered that Betty didn't know how to take care of plants and decided she didn't want Betty staying in her house. On August 9, Alice sent Betty a letter telling her that someone else had agreed to take care of her plants and that Alice did not need Betty to stay at her place while she would be gone. Did Alice and Betty have a valid contract? No, because the offer was for a unilateral contract that could only be accepted by performance No, because Betty incorrectly addressed her acceptance letter Yes, because Alice received Betty's acceptance prior to her revocation Yes, because Alice was required to keep the offer open until August 30

Correct Answer: C. Unless an offer specifies, an offer for a unilateral contract may be accepted either by performance or by a promise. Here, Betty notified Alice of her acceptance when Alice received Betty's letter on August 8, forming a valid contract. A is an incorrect statement of the law. B is incorrect because the letter was received by Alice before her attempt to revoke the offer. D is incorrect because Alice could revoke the offer any time prior to Betty's acceptance.

Question 9 2 / 2 pts Randy, age 16, decided to purchase a car from his neighbor Nell, who was older and no longer could drive. Nell said she would sell the car to Randy for $5,000, payable at $500 per month. Randy paid Nell the first $500, and then decided he really did not like the car. He parked the car at Nell's house and told her he no longer wanted it. If Nell sues Randy for breach of contract, who is likely to prevail? Nell, because Randy took possession of the car. Nell, because Randy partially performed the contract by making the first payment. Randy, because the contract was not in writing. Randy, because he can disaffirm the contract and return the consideration.

D is the best answer because a minor can disaffirm a contract and return the consideration in his possession. C is incorrect because even though the contract was not in writing, it was partly performed, so the statute of frauds would not render it unenforceable. A and B are incorrect because Randy has the right to disaffirm the contract since he is a minor.

Question 20 15 / 15 pts When Patricia was accepted into law school, her mother was so proud of her that she said, "If you successfully complete your first year of law school, I will buy all of your books for the following two years and give you $300 for each grade of A that you earn." The mother died while Patricia was in her first year of law school, but Patricia succeeded in earning two "A"s in her first year and she completed school in two additional years. If Patricia asserts a claim against her mother's administrator for the cost of the books that she purchased in her second and third years of law school, which of the following would be the most effective argument of the mother's administrator against Patricia's claim? The agreement between Patricia and her mother was not enforceable because the mother had a pre-existing duty to pay for her daughter's books The agreement between Patricia and her mother was not enforceable because Patricia had a pre-existing duty to complete law school and get "A" grades The mother's promise was not supported by consideration The agreement between Patricia and her mother was not enforceable because it was not in writing

Correct Answer: D is the correct answer. Under the Statute of Frauds, a promise that cannot be performed within a year from the execution of the contract must be in writing. Since the mother's promise to buy books for a two-year period could not be performed within one year, it violated the Statue of Frauds. A is wrong since there is no duty on a parent to pay for their child's law school books. B is wrong since Patricia had no duty to receive a particular grade or complete law school. C is wrong since the agreement did have consideration, Patricia had the detriment of working hard to achieve excellent grades in her first year in exchange for receiving the benefit of payment for her law books.

Question 19 15 / 15 pts Peter, the owner of a bakery, entered into a written contract with Don, a wholesaler of pies. Under the contract terms, Peter agreed to purchase his pie requirements for a year from Don. The contract provided that "Peter will have no obligation to receive any specified quantity of pies from Don, but only his daily requirements" and Don "agrees to supply such requirements" at the fixed price of $2.50 per pie. For six months, Peter's requirements of pies for his bakery averaged approximately 10 dozen per week. In the seventh month, Don made an agreement with a large restaurant chain to supply the restaurants' pies at a price of $3.50 per pie and decided that he could no longer supply Peter's requirements at the price set in their agreement. If Don asserts that the agreement is not binding on him because of a lack of consideration, will Don prevail? Yes, because requirements contracts lack mutuality of obligation. Yes, because the contract provision stating that Peter had no obligation to receive any specified quantity made the contract unenforceable. No, because requirements contracts do not need consideration to be enforceable. No, because Peter's agreement to buy his requirements was sufficient consideration for Don's agreement to supply those requirements.

Correct Answer: D. D is the correct answer. This is a Requirements and Output contract which is enforceable under the UCC. UCC 2-306 provides that a term which measures the quantity by the output of the seller or the requirements of the buyer is enforceable, even in the absence of a stated estimate. Any normal or otherwise comparable prior output or requirements may be tendered or demanded. Here, the parties agreed that Don will supply Peter's daily demands of pies to Peter, approximately 10 dozen per week. A is wrong since requirements contracts have mutual consideration. Peter's agreement to buy his requirements was sufficient consideration for Don's agreement to supply those requirements. B is wrong since this is a requirements and output contract which is enforceable under the UCC, even in the absence of a stated monthly quantity of goods. Any normal or otherwise comparable prior output or requirements may be tendered or demanded. Here, the parties agreed that Don will supply Peter's daily demands of pies. C is wrong since requirements contracts have mutual consideration. Peter's agreement to buy his requirements was sufficient consideration for Don's agreement to supply those requirements.

Question 5 15 / 15 pts Dennis was a college student who had a car loan with a Bank. The loan agreement entitled Bank to repossess the car if Dennis missed two or more monthly loan payments. After Dennis lost his job and was unable to make future car payments, his mother wrote to the Bank on June 1 as follows: "I don't want my son to lose his car. If you will wait 90 days to repossess my son's car for nonpayment, I promise that I will pay any missed loan payments he owes." Bank received the letter. Although the Bank did not respond directly to Dennis' mother, the Bank did not repossess the car, although Dennis missed two payments. By October, when the son had still failed to resume making payments, the Bank sued the mother for the months of payments that the son had missed. Will the Bank recover the missed payments from Dennis' mother? No, because there was no consideration for the mother's promise. No, because the bank never notified the mother that it was accepting her proposal. Yes, because a mother is legally responsible for contracts made by her adult child. Yes, because the mother's promise to make the missed payments was enforceable.

Correct Answer: D. There is an enforceable contract between Dennis' mother and Bank. Consideration is bargained-for-exchange that requires both detriment and benefit to each party. Here the mother's promise to pay constitutes consideration because a benefit that she desired was given to her son. Thus, A is incorrect. B is incorrect because the mother made an offer for a unilateral contract—she asked the bank to refrain from repossessing the car for 90 days and the bank did so. C is an incorrect statement of law.

Question 15 0 / 15 pts Both Andrea and Bob were in the real estate business. On September 1, by a written memorandum signed by both parties, Andrea agreed to sell and Bob agreed to buy Andrea's property. The contract called for closing of title on October 15 and fixed all other terms, but it did not indicate the price to be paid for the property. On October 15, Bob tendered $150,000 cash, but Andrea refused to convey the property. Bob subsequently asserted an action against Andrea to enforce the contract and offered evidence that $150,000 was the fair market price for the property. In defense, Andrea asserted that the memorandum failed to satisfy the requirements of the Statute of Frauds. Bob's action against Andrea likely will: Succeed, because Andrea and Bob are both in the real estate business Succeed, because under the UCC, a contract that fails to state the price is presumed to call for payment of fair market value Succeed, because it is likely that both parties expected the transaction to be for the fair market value of the property Fail, because the written contract (memorandum) did not fix the price to be paid

Correct Answer: D. Under the Statute of Frauds, a contract for the transfer of an interest in property must be in writing and the writing must contain all essential terms. The price is an essential term in a contract for the sale of property and the court will be unable to fashion a remedy without it. A is incorrect since the fact that both parties are merchants does not affect enforcement of a real estate contract missing the price. B is incorrect since price is an essential term in a contract for the sale of property and the court will be unable to fashion a remedy without it. C is wrong- since the contract does not satisfy the requirements of the Statute of Frauds, it is unenforceable even though the parties may have had a specific intention regarding the price.

Question 6 15 / 15 pts In an e-mail on Thursday, Donna offered to sell her car to Patrick for $10,000. The writing was complete in all material respects. By a return e-mail, Patrick responded immediately, "I'd like to think about it over the week-end." Donna responded with another e-mail, "OK. Let me know on Monday." Two days later, Patrick saw someone other than Donna driving and parking what appeared to be Donna's car. After the driver got out of the car, Patrick asked him: "Is this your car?" The driver responded, "Yes, I bought it yesterday." Patrick examined the car and correctly concluded that the car was the same one Donna offered to sell him. Later that day, Patrick called Donna by phone and said, "I accept your offer to sell me your car." Donna responded, "I'm sorry, it's sold." Patrick sues Donna for breach of contract. Which of the following facts best supports Donna's claim that she is not in breach of contract? When Donna offered to sell Patrick her car, she was only joking By the time Patrick attempted to accept Donna's offer, she had already sold her car to someone else Donna, in making her offer, did not expressly provide that the offer would be irrevocable Before attempting to accept Donna's offer, Patrick learned that Donna had sold the car to another party

D Revocation of an offer is effective upon receipt of notice, whether direct or indirect, by the offeree. Even though Donna agreed to keep the offer open until Monday, she was not obligated to do so. Moreover, when Patrick saw the car with the buyer and confirmed that the car was the one Donna had offered to sell him, he was indirectly notified that Donna had revoked her offer. Thus, D is the best answer. A is wrong since contractual intent is determined by objective manifestations. Here, a reasonable person would think that Donna made an offer to Patrick in her e-mail on Thursday. B is wrong since a revocation is only effective when the offeree has notice of it. C is incorrect because the term 'irrevocable' is not required for an option contract to be valid. Here since Donna is not a merchant who deals in the sale of cars, an option contract requires consideration. Thus, Donna was not obligated to keep her offer open until Monday.

Question 10 15 / 15 pts At Anna's retirement party, her boss Greg announces, "In recognition of Anna's 20 years of service to the company, the company is giving her an all-expense paid trip around the world. We'll pay for your plane tickets and accommodations." Anna, who had already been planning on taking a vacation through South America, is ecstatic to hear the news. Over the next week, Anna starts window-shopping to see what she will need for her trip. Later that week, Greg calls to tell her that the company made a mistake in its accounting and cannot afford to pay for her trip as promised. If Anna sues for breach of contract, what result? Anna will win the amount totaling the cost of the tickets and accommodations because she had a valid contract with the company. Anna will win because she detrimentally relied on the company's promise. Anna will lose because it was unreasonable for her to believe that the company would pay for the tickets and accommodations. Anna will lose because there was no valid consideration to support the company's promise.

D is correct because a contract generally requires consideration. Here the only consideration was Anna's past services to the company. Past performance does not constitute valid consideration. A is incorrect because a valid contract requires consideration, which is absent here. B is incorrect because she did not take action in reliance on the company's promise; therefore the requirements for the application of the doctrine of promissory estoppel are not met here. C is incorrect because it is not relevant to the analysis of Anna's breach of contract claim.

Question 3 2 / 2 pts On May 1, Jaime, the owner of several resorts, received from Mattress Company a letter offering to sell Jaime 1,000 specially designed mattresses. Mattress Company's letter stated that the offer would remain open until May 20, but that Jaime's acceptance must be received on or before that date. On May 16, Jaime sent by mail a letter of acceptance. On May 17, Mattress Company sent a fax to Jaime notifying Jamie that it was revoking the offer. Jaime read the letter on May 17. Mattress Company received Jaime's letter on May 21. As of May 22, which of the following is a correct statement? The fax revoking the offer was effective upon receipt. The offer was revocable at any time for lack of consideration. The mail was the only authorized means of revocation. Under the terms of Mattress Company's offer, Jaime's attempted acceptance was ineffective.

D is correct. An offeror can dictate the manner of acceptance. Here, the offer specified that it would remain open until May 20 and that acceptance must be received on or before that date. Here, Jaime's acceptance was not received until May 21, past the required date. Thus, Option D is the only correct statement. Option A is incorrect because Mattress Company issued a firm offer, which is not revocable for three months. Option B is not correct because as a merchant who sent a signed writing, Mattress Company issued a firm offer, which does not require consideration. Option C is incorrect because there is no law to support it.

Question 9 0 / 2 pts When Don inherited a valuable painting, he asked Patty, an art dealer, if she was interested in purchasing it. On June 15, after looking at the painting at Don's home, Patty said that she would not have enough cash to purchase the painting until July 1. At Patty's request, Don signed a document containing a written offer to sell the painting to Patty for $50,000 and a promise to hold the offer open until July 2. On June 25, Don sold the painting to another art dealer for $55,000. Patty learned of the sale on the following day from the art dealer who had purchased the painting from Don. On June 27, Patty went to Don's home with $50,000 in cash and demanded the painting. Don told her that he sold the painting to another buyer. If Patty asserts a claim for damages resulting from Don's sale of the painting to another art dealer, is she likely to prevail? Yes, because she accepted Don's offer before Don sold the painting to another. Yes, because Don promised in writing to hold the offer open until July 2. Yes, because a merchants' firm offer can be held open for three months. No, because when Patty tendered payment for the painting, she knew that Don had already sold the painting.

D is correct. Don's offer terminated when he revoked it by selling the painting to another person. This is not a merchant's firm offer since there are no facts to suggest that Don was a merchant. When Patty learned of the revocation, her power to accept Don's offer by tendering the payment terminated.

Question 7 0 / 2 pts Kate was a tax preparer who worked very hard during the tax season. Leo hired Kate to prepare his tax return for a fee of $500, to be paid once the return is completed. Leo changed his mind a week later and told Kate he wanted to do his own tax return. If Kate sues Leo for damages, she can recover Nothing, because lost profits are not recoverable. $500 but only if she does not obtain other work. Only expenses she incurred in reliance on Leo's agreement, if any. Lost profits, even if she obtains additional work, under a lost volume theory.

D is the best answer because a lost volume seller can obtain recovery of lost profits, even if they are able to obtain additional work. A is incorrect because lost profits are recoverable. B is incorrect because lost profits are recoverable even if she does obtain additional work. C is incorrect, because expectation damages are available.

Question 2 2 / 2 pts Jill agreed to provide construction services for some interior cabinetry for Hanna's new home for $20,000. Before she started the contract, Jill became very busy with more lucrative contracts and assigned the contract to her sister, Jan, who was also a contractor. Hanna was a little concerned when she saw Jan involved rather than Jill, but thought she would wait and see how everything went. Unfortunately, it went badly, and Jan failed to complete the cabinetry when communications broke down after numerous disagreements concerning the design and materials. What are Hanna's rights? Jill is relieved of any obligations to Hanna based on a novation. Hanna can only sue Jill for breach of contract. Hanna can only sue Jan for breach of contract. Hanna can sue both Jill and Jan for breach of contract.

D is the best answer because although Jill delegated her duties to Jan, Hanna's silence or even acquiescence does not effectuate a novation and therefore Jill is not released from her obligations under the contract. A is incorrect because there is no novation given that Hanna never expressly agreed to look exclusively to Jan for the performance of Hanna's agreement with Jill. B is incorrect because there is no novation, so Jill remains liable and Hanna can sue Jan as well, because by accepting the contract, Jan agreed to perform Jill's duties. C is incorrect because Jill remains liable to Hanna in the absence of a novation.

Pat agreed to purchase Dan's home for $500,000. The home was located near the pool and park in a beautiful planned use development. After the parties signed a written agreement in which Dan agreed to the terms of the deal, the real estate market started to go up and Dan thought he could get more money for the home. Dan refused to perform the contract. Pat wants to do whatever he can legally to obtain title to the home. Assuming Pat sues Dan, what law should the court apply? The UCC applies to this transaction. The UCC applies to this sale of goods. Common law applies if the parties' agreement so states. Common law applies to this transaction.

D is the best answer because real property is not a good. C is incorrect because common law applies even if the parties' agreement does not so state. A and B are incorrect because the UCC applies only to sales of goods which are tangible movable things.

Question 14 2 / 2 pts Seller owned a restaurant located in San Francisco, which Seller wished to sell in order to move to Southern California. Seller agreed to sell his restaurant to Buyer, provided that Buyer could find a purchaser for his current restaurant for at least $50,000 cash. Buyer made no effort to find a purchaser for his restaurant, but the evidence indicates that, if Buyer had made such an effort, Buyer could have found a purchaser for his restaurant for $75,000. If Buyer does not go through with the purchase of Seller's restaurant in San Francisco, and Seller sues Buyer for failure to perform, who is likely to prevail? Buyer will prevail because the condition did not occur. Buyer will prevail because Buyer had no obligation to find a purchaser for his business. Seller will prevail because the sale of Buyer's restaurant was not a condition of the Buyer's purchase. Seller will prevail because the condition is excused by Buyer's lack of good faith efforts

D is the best answer because the condition was excused by the lack of effort by Buyer. A is incorrect because Buyer has a good faith duty to try to make the condition occur before the condition is excused. B is incorrect because the Buyer has a duty to make a good faith effort to sell his restaurant. C is incorrect because the sale of Buyer's restaurant was a condition of the purchase of Seller's restaurant.

Hotel entered into a verbal contract with Designer to pay Designer $3,000 to create a proposal for a remodel of the Hotel's interior lobby areas. Designer promised to research the design and provide the proposal within 30 days in a presentation to Hotel management. What is the applicable governing law? This is a hybrid contract, and the predominant purpose test requires application of the UCC. The UCC is applicable to this contract. This contract is governed by common law, because it is not in writing. This contract is governed by common law because it involves services.

D is the best answer because the contract involves services by the designer. A is incorrect because this is a contract for services, not a hybrid contract, so the predominant purpose test does not apply. B is incorrect because the UCC does not apply to a contract for services. C is incorrect because the application of law is not determined by whether the contract is in writing.

Art, a retired attorney, agreed to sell his car to Bryan, an accountant. Art sent Bryan an email in which Art offered to sell it for $20,000. Bryan replied by email and said he would only pay $15,000, over three years. Art sent Bryan an email in which he agreed to the price, and terms, but Art also said that he wanted Bryan to agree to arbitrate any dispute over the car. Bryan never responded, but brought the check for $15,000 to Art on the date agreed to, and Art tendered the car to Bryan. Which of the following statements is correct? The arbitration term is included in the parties' agreement. There is no consideration for the agreement. The agreement is not enforceable due to lack of a writing. The arbitration term is not part of the parties' agreement.

D is the best answer because the parties are not merchants, so any new term is a proposal for addition to the agreement, which is not part of the contract unless it was accepted. A is incorrect because of the foregoing. B is incorrect because there is a bargained for exchange of money for the car here. C is incorrect because the emails may constitute a writing, and because the contract was performed when the funds were tendered and the car was tendered.

Question 6 0 / 2 pts Ron entered into an agreement with Linen Supply to supply 100 clean and pressed cloth napkins per week to his restaurant, for $100 per week, to be picked up and replaced at the end of the week, for use in operating the restaurant, for a period of one year. In the first three months of the contract, Linen Supply delivered 100 cloth napkins each week. The following week the delivery was short by five napkins. Ron called Linen Supply who promised to bring five extra napkins the following week, which satisfied Ron. What are the rights of the parties? Linen Supply is in material breach. Linen Supply has violated the perfect tender rule. Ron can declare the contract in breach and sue for damages. Linen Supply substantially performed and can cure.

D is the best answer because this contract is not a contract for sale of goods, and the standard of performance is substantial performance, and a minor breach is subject to cure, where cure is likely. A is incorrect because the breach is not likely material, give it is only a one week delay of five napkins. B is incorrect because the perfect tender rule applies to a sale of goods, and this is not a sales contract. C is incorrect because the Ron seems to have agreed to permit cure of the short delivery the following week.

Question 9 0 / 2 pts Gerald operates a music store and sells a high volume of musical instruments. Jack agreed to purchase a violin from Gerald for $250. Gerald has a very reliable supplier and never has trouble getting violins in stock at a cost of $100 to Gerald. A few weeks later, Jack advises Gerald he's decided not to buy the violin. Gerald put the instrument back into his inventory and sold it to Jill for $250. What damages if any would Jack owe to Gerald? None, because Gerald was able to re-sell the violin at the same price. Only incidental damages. Damages based on the difference between the contract price and the resale price. $150 since Gerald is a lost volume seller.

D is the best answer because, given an unlimited supply of violins, Gerald will qualify as a lost volume seller and be able to recover the lost profits. A is incorrect because a lost volume seller can recover lost profits, less expenses saved. B is incorrect here, as there do not appear to be any incidental damages in the form of additional expenses incurred. C is incorrect because there is no difference in the contract price of $250 and the resale price of $250, so this measure would not yield any damages.

Question 14 0 / 2 pts Beth agreed with Local High to provide 10 uniforms for the high school cheer team, in the team colors of lime green and tangerine, for $1,000. Beth owed Saul $500 and told him about the agreement with Local High. Beth arranged for Local High to pay Saul $500 of the uniform contract and included a provision in her contract with Local High to this effect. When Beth delivered the uniforms to Local High, the school rejected them because she had used mint green for them rather than lime green, and refused to pay. If Saul sues Local, he will Prevail because he is an intended creditor beneficiary of the contract with Local. Prevail because Beth directed Local to pay Saul. Not prevail because he was an incidental beneficiary. Not prevail because Local can assert Beth's breach as a defense.

D is the best answer here because Saul is an intended beneficiary and he may sue the promisor Local on the contract, but Local will have the same defenses it would have against Beth, the promisee. The breach of contract here will be a valid defense to Saul's claim. A is incorrect because, even though he is an intended beneficiary, Saul's claim remains subject to the defenses Local could assert against Beth. C is incorrect because Saul is not an incidental beneficiary, but is an intended beneficiary.

Question 12 2 / 2 pts Tom, a college student, ordered a new model 400A tablet computer from Pearson Computers for $1,000, filling out a purchase order for the device. Pearson acknowledged the order with a form including a detailed disclaimer of warranty. When Tom received the device, it was defective. Is the disclaimer provision applicable to the dispute between Tom and Pearson? Yes, the additional term becomes part of the contract because Tom did not object. Yes, the additional term becomes part of the contract because it is not material. No, because the acceptance was not a mirror image of the offer. No, because Tom is not a merchant.

D is the best answer under 2-207, which requires that both parties be merchants in order for the additional term to automatically become part of the contract, if it is not material and no objection is made. Here, even though the acknowledgment/acceptance differed from the purchase order because of the addition of a term (the disclaimer) the acknowledgment formed a contract. Since Tom was not a merchant, the additional term does not become part of the contract unless Tom assents to it. A is incorrect because the lack of objection on the part of Tom would only result in the term becoming part of the contract is Tom was a merchant. B is incorrect because the term probably is material, and in addition, Tom is not a merchant. C is incorrect because the mirror image rule applies in common law transactions, but this is a sale of goods.

Question 4 0 / 2 pts Tom, a college student, ordered a new model 400A tablet computer from Pearson Computers for $1,000, filling out a purchase order for the device. Pearson acknowledged the order with a form including a detailed disclaimer of warranty. When Tom received the device, it was defective. Is the disclaimer provision applicable to the dispute between Tom and Pearson? Yes, the additional term becomes part of the contract because Tom did not object. Yes, the additional term becomes part of the contract because it is not material. No, because the acceptance was not a mirror image of the offer. No, because Tom is not a merchant.

Question 1 2 / 2 pts On August 1, a wholesaler of office supplies contracted by phone to sell 50 cases of printer cartridges to a business equipment retailer at a total price of $300. On August 10, the wholesaler phoned the retailer and told him that because of a shortage of materials, the price that the wholesaler had to pay for printer cartridges had increased drastically. The wholesaler said that if he delivered the cartridges at the price of $300, he would lose a great deal of money. He told the retailer that he should just pay the higher price, suggesting that the retailer pass the increase along to his customers. After further discussion, the retailer and wholesaler agreed to change the price of the order from $300 to $499. On August 15, the retailer succeeded in purchasing 50 cases of cartridges from another supplier for $400. On September 1, the wholesaler delivered 50 cartridge cases to the retailer, along with a bill for $499. The retailer refused to pay. In an action by the wholesaler against the retailer for breach of contract, which of the following would be the retailer's most effective argument in defense? The wholesaler's demand for more money was unconscionable, since printer cartridges are available at a lower price. The Aug 10 agreement increasing the price was not in writing. The retailer's promise to pay $499 was not supported by consideration. An increase in the wholesaler's cost resulting from a shortage of materials was foreseeable on Aug 1.

D is the best answer. A modification under the UCC is not enforceable if it is in bad faith. As a businessman, the wholesaler should have foreseen that there was a shortage of materials requiring him to raise the price of the goods ten days after making the contract. A is wrong since charging an excessive price is generally not considered to be unconscionable in the commercial context between merchants. B is incorrect, since the contract price is not $500 or above, it does not have to be in writing to be enforceable. C is wrong since a modification under the UCC does not require consideration.

Jim is an interior decorator and the owner of Jim's designs, a business that specializes in sales of upscale furniture, lamps, art work and rugs to residential customers. Jim contracted with a celebrity to decorate and furnish one of his summer estates in State. The negotiated contract price is $750,000. 40% of the contract price represents the cost of furniture, 5% represents the cost of painting the estate, 25% is the cost for lamps, art work and rugs and the remaining 30% represents the costs of labor and Jim's decorating fee. Assuming that State follows the majority test, what is the law that governs the contract between Jim and celebrity? -Common law governs because the sale of decorating services is not considered a sale of goods. -Common law governs because both of the parties are not merchants. -The UCC governs because under the gravamen test, the contract can be divided into separate provisions for services and sales. -The UCC governs because the costs of the goods in the contract exceeds the costs of services.

D is the correct answer since under the predominant purpose test used by the majority, a hybrid contract is controlled by the UCC when the contract primarily involves a sale of goods. Since the costs of goods in this contract is 65% and the nature of Jim's business is the sale of upscale furniture, lamps, art work and rugs, the UCC would be the controlling law. A is incorrect since this contract is a hybrid contract, involving both the sale of goods and services. B is incorrect since whether or not the parties would be considered 'merchants' under the UCC is not a factor to be considered in determining whether or not the contract is controlled by the UCC or common law. C is wrong since the gravamen test is only used by a minority of jurisdictions.

Question 6 2 / 2 pts Amy owns a computer store and Techno manufactures computers. Techno offers to sell 20 new computers to Amy for $350 each and Amy accepts. Before signing the written agreement, Amy tells the Techno representative that she wants to be able to exchange any unsold computers whenever an upgraded model becomes available. The Techno representative orally agrees. However, the final written agreement states that Amy cannot exchange the computers for upgraded models under any circumstances. Amy sells 15 of the computers when a new upgraded model from Techno becomes available. Amy tries to exchange the remaining five computers, but Techno refuses because this was not part of their agreement. If Amy sues Techno and tries to introduce evidence of the Techno representative's oral statement agreeing to an exchange, how will the court rule? The oral statement is admissible, because it supplements the writing. The oral statement is admissible to interpret the writing, because it is ambiguous. The oral statement is not admissible because the writing is fully integrated. The oral statement is not admissible because it contradicts the writing.

D is the correct answer under UCC 2-202. Under UCC 2-202, terms that are set forth in a writing intended by the parties to be a final expression of their agreement with respect to these terms, may not be contradicted by evidence any prior agreement , but may be explained or supplemented by course of performance, course of dealing or usage of trade. The oral agreement here contradicts the written contract regarding the right to exchange laptops and is therefore, inadmissible. A is wrong because the oral statement contradicts, rather than supplements, the writing. B is wrong because there is no ambiguity in these facts. C is wrong because although the agreement may be fully integrated, the statement does not come in because it contradicts the writing.

Question 3 2 / 2 pts Alex was the owner of a lot and building that contained two residential apartments. Alex lived in the upstairs apartment and rented the downstairs apartment to a tenant on a month-to-month basis. Bob was interested in buying the property from Alex. After negotiations, Alex and Bob entered into a written contract that provided that Alex would sell the apartment building to Bob for $150,000 and that delivery of title was to take place on or before July 1. Alex promised that at the time title was delivered, the upstairs apartment would be vacant and the downstairs apartment would be vacant within three months thereafter. Bob promised to pay $140,000 upon delivery of title and the balance of $10,000 three months later. The agreement provided that "Bob's obligation to pay $10,000 three months after delivery of title shall be voided if the downstairs apartment has not been vacated by that time." Which of the following concerning the order of performance is the LEAST accurate? Alex's delivery of title on or before July 1 and Bob's obligation to pay $140,000 are concurrent obligations Vacancy of the upstairs apartment is a condition precedent to Bob's obligation to pay $140,000 upon delivery of title Payment by Bob of $140,000 is a condition precedent to Alex's obligation to deliver title Payment by Bob of $10,000 is a condition subsequent to Alex's obligation to have the downstairs apartment vacated within three months after delivery of title

D is the correct answer. A condition subsequent discharges a duty that is already in existence. The language of the agreement makes it clear that Alex's promise to have the downstairs apartment vacated was to be performed prior to payment by Bob. Since it could not be undone once it was performed, there can be no condition subsequent to it. Therefore, D is not accurate. A, B and C are accurate statements since performances that are exchanged simultaneously are usually found to be concurrently conditioned on each other.

Question 11 2 / 2 pts Debby hired Peter, an artist, to make a sculpture that could be installed in the entryway of Debby's large home. Peter was to be paid $100,000 by Debby upon completion of the sculpture, provided that Debby was personally satisfied with the sculpture piece. When Debby saw the completed sculpture many months later, Debby told Peter that she did not like it and refused to pay. Peter asserted a claim against Debby for breach of contract. At trial, several artists and art critics testified that the sculpture was a major new piece of art and worth around $1 million. In fact, the sculpture had already appeared in several art magazines and had won several art awards. Assuming that Debby's dislike of the sculpture was genuine, who is likely to prevail? Peter, because Debby's dislike of the sculpture was unreasonable Peter, because Debby did not put on evidence from other art critics who disliked the sculpture Debby, because payment was due upon completion of the sculpture, and until Debby was satisfied with the sculpture, work on it was not completed Debby, because she did not like the sculpture

D is the correct answer. A contract can make performance expressly conditional on one person being satisfied. Consequently, even if that person is unreasonable in their failure to be satisfied, the condition will not be deemed to have occurred and the contract cannot be enforced. Here, since the contract expressly stated that Debby had to be 'personally satisfied', her satisfaction with the sculpture was all that mattered. Consequently, A is wrong. B is wrong because Debby did not need to rebut the testimony if she was genuinely unhappy with the sculpture. C is wrong because the work appeared to be completed when Debby viewed the sculpture and there was no provision in the contract for Peter to keep working on the sculpture until she was satisfied.

Peter was a professional gambler who made a living by accepting illegal bets on horse races and other sporting events. Because he suspected that the police had discovered his operation, Peter began looking for a new location for his illegal activities. After searching the neighborhood, Peter entered into a six-month lease with Donald, the owner of an empty storefront building. The contract provided that Peter would pay $1200 a month to lease Donald's premises for six months, beginning on January 1 Peter paid the first month's lease amount of $1200 on December 1 and subsequently, he was arrested on charges of illegal bookmaking. Since Peter was convicted and sentenced to nine months in jail, Peter's attorney contacted Donald and informed him that Peter would not be able to move into the leased premises. When Peter was released from jail, he demanded that Donald return the $1200 he had previously paid. Donald refused on the ground that the contract between Donald and Peter was illegal. If Peter asserts an action against Donald to recover the $1200, who is likely to prevail? Donald, since the court will not award damages for an illegal contract Donald, since he and Peter were not in pari delicto regarding the illegality of the lease agreement Donald, since the lease had an illegal purpose Peter, since the lease agreement was not illegal

D is the correct answer. A contract for the lease of realty is not illegal even though the lessee might have an illegal activity in mind when they enter the lease. For the same reason, C is wrong. A and B would only be correct if the contract between the parties was illegal. Quiz Score: 16 out of 20

S4 Question 1 0 / 2 pts On April 1, Frank, who is sixteen years of age, signs a contract to sell his car to Paul for $10,000 on April 10. On the following day, Sam makes a better offer for Frank's car, since he was willing to purchase Frank's car for $12,000. On April 5, Frank gives title to his car to Sam in exchange for $12,000. On April 10, when Frank tells Paul that he has already sold his car, Paul asserts an action against Frank to enforce the contract. Who is likely to prevail? Paul, since Frank is liable to Paul because Paul accepted Frank's offer to sell the car. Paul, since Frank is liable to Paul for breach of contract and must sell him the car. Frank, since he is not liable to Paul because he is a minor. Frank, since he is not liable to Paul because the sale of the car to Sam disaffirmed their deal.

D is the correct answer. A minor (usually defined as an individual under the age of 18 years) does not have the legal capacity to bind himself in a contract and may avoid a contractual commitment by disaffirming it. Generally speaking, the law is very solicitous about protecting minors from contractual liability. In most cases, a minor's lack of contractual capacity makes the contract voidable but not void; that is, a minor may choose to avoid (disaffirm) the contract on the grounds of incapacity or to keep it in force. A minor may disaffirm a contract, expressly or by conduct, at any time before reaching the age of majority or within a reasonable time after reaching majority. Once the contract is disaffirmed, it is void and cannot be resurrected: Frank disaffirmed the contract when he sold the car to Paul. C is wrong because Frank's lack of liability stems from his disaffirmance of the contract, not only the fact that he is a minor. A and B are wrong, A and B would be correct statements of law, but for the fact that Frank is a minor who disaffirmed the contract.

Question 15 2 / 2 pts Alex contracted in writing to deliver to Baker 100 bushels of wheat on August 1 at $3.50 per bushel. Because his suppliers had not delivered enough wheat to him by that time, Alex had only 95 bushels of wheat to fulfill his contract with Baker on August 1. If Alex tenders 95 bushels of wheat to Baker on August 1, and Baker refuses to accept or pay for any of the wheat, which of the following best states the legal relationship between Alex and Baker? Alex will prevail on a breach of contract action against Baker, because Alex has substantially performed his contract. Alex is excused from performing his contract because of impossibility of performance. Alex is excused from performing his contract because of impracticability. Baker will prevail on a breach of contract action against Alex for Alex's failure to deliver 100 bushels of wheat.

D is the correct answer. Alex has breached the contract by tendering nonconforming goods. Under UCC 2-206, a party can accept an offer for prompt shipment of goods by shipping nonconforming goods, as long as the seller has not notified the buyer that the goods are being shipped as an accommodation. The buyer can then reject the goods. A is wrong for the same reason. C is wrong since there are no facts provided to indicate that it was objectively impossible for Alex to perform as he could have sought another supplier. C is wrong since difficulty obtaining goods or lack of financial advantage does not support an excuse based on impracticability. Quiz Score: 16 out of 30

Question 3 2 / 2 pts David owns a major construction company. He agreed to build a large enclosed shopping mall for Peter, the property owner. After long hours of deliberation, the parties agreed on the price of $10 million. The contract was signed on January 1. The completion of the new mall was set for May 1. As David started digging, he struck a thick layer of stone. Removing this stone would increase his costs of excavation by $300,000. Other builders who made bids had been aware of the thick stone and had submitted much higher bids. The most probable outcome is: David, the contractor, will be excused from performance. David, the contractor, and Peter, the property owner will split the increased costs. The contract is void due to impracticability.! David, the contractor will be bound to finish the work originally contracted for and will suffer the increased costs

D is the correct answer. Business persons involved in commercial contracts implicitly assume the risk of which are regarded to be reasonable, commercial interpretations form the circumstances. Here, especially since other builders were aware of the thick stone on the construction site, David would be seen to have assumed the risk that he encountered. A is wrong since none of the excuses due to unanticipated changed circumstances apply to these facts. B is wrong since unless the parties agreed to modify their contract, there is no rule requiring the parties to split the increased excavation costs. Where a party's purpose in entering into a contract is destroyed by superseding events, most courts will discharge the party from performing. In the defense of frustration of purpose, the party is not claiming that it is impossible for him to perform but, rather that it makes no sense to perform because what he will get in return does not have the value he expected when he entered into the contract. C is wrong since this doctrine does not apply because David should have anticipated the possibility of a more difficult excavation.

Question 1 0 / 2 pts In December 2009, the seller, a manufacturer of packaging materials, entered into a written agreement with the buyer, a wholesaler of melons. The agreement provided that the buyer would purchase from the seller all the boxes required by the buyer for packaging melons in 2010, but that in no event, would the number of boxes required be less than 2,000. After the agreement was executed, the price of melons fell from $1 per melon to .80¢ per melon. As a result, the buyer notified the seller in January 2010 that he intended to package melons in bags instead of boxes and that he would not order any boxes from the seller in 2010. The seller asserted an action for damages against the buyer in January 2010. At trial, the buyer attempted to testify that in the melon industry, it was generally understood that minimum requirements set forth in contracts for the supply of packaging materials were of no effect when the price of melons fell drastically. Should the court admit the buyer's testimony over the seller's objection? Yes, because evidence of a regularly observed business practice may be offered to explain the terms of a written agreement No, if the parties did not expressly state that industry standard should prevail No, if the parties did not contemplate a decline in the price of melons No, because the fact that the parties specified a minimum requirement of 2,000 boxes shows that they did not intend to be bound by any preexisting industry standards

D is the correct answer. In interpreting contract terms, courts will strive to preserve the contractual intent of the parties, as found in their language or inferred from other circumstances. In the absence of an express term, usage of trade can be admitted to interpret a contract term in dispute. However, since the parties here expressly set a minimum number of boxes that the buyer can purchase, those terms would prevail over usage of trade. Consequently, A and B are incorrect. C is wrong since in any commercial contract, fluctuation in the price of the contract goods would reasonably be considered by the parties in bargaining the terms of the contract, including the contract price.

Question 3 0 / 15 pts Patty owns a sporting goods store. Patty entered into a written contract with Don in which Patty bought 100 jogging outfits in various men's and women's sizes. In addition to this description of the goods, the contract stated the names and addresses of the parties, the price of $30 per outfit, subject to a 10% discount for cash payments, payment terms (30 days after delivery) and delivery date. It also contained a clause stating that the writing was intended to be "the complete and final expression of all terms agreed to by the parties." Both parties signed the writing and Don delivered the jogging outfits on the due date. Five days after the jogging outfits were delivered. Patty sent a money order for $3,000, less a 10% discount. Don objected, stating that 'cash payments' meant cash on delivery, so Patty was not entitled to any discount. Patty claimed that prior to signing the contract, Don told her that payment within a week of delivery qualified as 'cash'. If Patty sues Don to enforce the 10% discount, will evidence of the oral agreement between the parties be admitted? Yes, the evidence would be admissible, because it is a consistent additional term to the contract. Yes, the evidence would be admissible, because it contradicts the term "cash" in the contract. No, the evidence would not be admissible, because the agreement is not integrated. No, the evidence would not be admissible, because the agreement is fully integrated.

D is the correct answer. Contracts often contain a merger clause, a clause stating that the writing constitutes the sole agreement between the parties. Most courts find that the presence of a merger clause is strong evidence that the parties intended the agreement to be totally integrated; other courts find that a merger clause offers strong, but not presumptive evidence, of a totally integrated agreement. Here the contract does contain a merger clause and looking at all the circumstances, it is likely the court would find the contract to be fully integrated. A is wrong since the oral agreement that payment within one week is the equivalent of cash, is not a 'consistent, additional term, but an agreement that contradicts the written contract. B is wrong since if the evidence contradicts the contract, it would not be admitted under the parol evidence rule. C is wrong since the agreement is integrated (as evidenced by the merger clause).

Question 3 2 / 2 pts Radio Corporation, a radio manufacturer, and Storeco, a retailer, entered into a written agreement in which Radio agreed to sell and Storeco agreed to buy all of its requirements of radios, estimated at 20 units per month, during the period from January 1, 2014 and December 31, 2014, at a price of $50 per unit. A dispute arose in October, when Storeco returned 25 non-defective radios to Radio for full credit, since it had found a cheaper supplier. In an action by Radio against Storeco for damages due to return of the 25 radios, Radio introduces the written agreement, which expressly permitted the buyer to return defective radios for credit, but was silent as to return of non-defective radios for credit. Storeco seeks to introduce evidence that during the first nine months of the agreement, it had returned, for various reasons, 50 non-defective radios, for which Radio had granted full credit. Radio objects to the admissibility of this evidence. The trial court will probably rule that the evidence offered by Storeco is inadmissible, because the express terms of the agreement did not address the return of the non--defective radios admissible, because course of dealing evidence, when available, is considered the best indication of what the parties intended the writing to mean admissible, because usage of trade evidence, when available, is considered the best indication of what the parties intended the writing to mean admissible, because course of performance evidence, when available, is considered the best indication of what the parties intended the writing to mean

D is the correct answer. Course of performance evidence (sequence of conduct between the parties to a particular transaction, is admissible if one party, with the opportunity for objection to the other party's performance, accepted the performance without objection) is considered the best evidence of the parties' intent. A is wrong since extrinsic evidence would be admissible to interpret the parties' contractual intent. B is wrong since course of dealing (a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct) is not considered the best evidence of the parties' intent. C is wrong because usage of trade evidence (a practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question) is not considered the best evidence of the parties' intent.

Question 2 2 / 2 pts Paul owns a sports club including tennis courts. Paul enters into a contract with Don wherein Don was to provide surface material for Paul's tennis courts by April 1 for a tournament to begin May 1. The contract specifies an amount to be paid if the contract is breached. Don delivers 95% of the surface material by May1 which prevented the tournament from going forward on that date. A court will likely find that: Don substantially performed on the contract Paul is not entitled to monetary damages to compensate him for the deficiency Don's failure was not a substantial breach, even though the tournament could not be held Don's failure was a material breach because the tournament could not be held

D is the correct answer. Courts consider certain factors to help determine whether a breach is material or whether or not a breaching party has still substantially performed. These facts include, among others, the extent to which the non-breaching party is deprived of the benefit which the party reasonably expected and whether 'time is of the essence', making the need for prompt performance apparent. A short delay may not be deemed 'material' unless the circumstances show that the delay seriously damages the other party. Since the delay here damaged Paul by preventing the tournament from taking place, Don's breach would be considered material. For this reason, A and C are wrong. B is wrong because based on Don's material breach, Paul would be entitled to monetary damages.

Cleaning Company placed flyers around the city that lists all of its available services. The flyer also states: "This coupon is worth $20 off the price if you call within 24 hours and order a top-to-bottom house-cleaning for $300. Also, feel free to ask about our other available services" Which of the following accurately states the legal significance of the flyer? The flyer is an offer for a unilateral contract. The flyer is an offer because it identifies what is being sold, the price of the transaction and how an offeree can accept. The flyer is an invitation to make an offer for the services listed on the flyer. The flyer is both an offer and an invitation to make an offer.

D is the correct answer. Here, the ad specifies the terms for a deal—$300 for a top-to-bottom house-cleaning—and identifies how a person may accept—calling within 24 hours. Thus, the ad is an offer. The ad also lists all of the available services provided by Cleaning Company. Such ads are invitations to make an offer. Since the ad makes an offer and invites offers, D is correct. Even though the ad requests that the offeree call to accept, the offeree will have to perform its obligation by paying for the services. Thus, the offer is not for a unilateral contract and Option A is incorrect. The ad specifies the terms for a deal—$300 for a top-to-bottom house-cleaning—and identifies how a person may accept—calling within 24 hours. Thus, the ad is an offer. The ad also lists all of the available services provided by Cleaning Company. Such ads are invitations to make an offer. Since the ad makes an offer and invites offers, B and C are incorrect.

Question 13 0 / 15 pts Patrick was seeking a contractor to build a hotel on property he had acquired near the seashore. He posted a solicitation of bids for construction of the building. Donald prepared an estimate of the job. Although Patrick's plans called for construction of a 25 story building, Donald mistakenly believed that the building was to be 20 stories. Donald estimated the costs accordingly and submitted the bid to Patrick. Donald's bid offered to build the hotel according to Patrick's plans for $1,000,000. Patrick had already received five other bids on the job, all in excess of $1,500,000. Upon receiving Donald's bid, Patrick immediately e-mailed Donald stating, "I accept your offer to build the hotel according to the plans that I sent you. The entire job to be completed for $1,000,000." Before Donald began construction, he learned that the hotel actually was to be 25 stories and consequently, that his bid was miscalculated. Donald sent an e-mail to Patrick asking for renegotiation of the contract, but Patrick indicated his intent to hold Donald to his original offer. Donald advised Patrick that he regarded the contract as void and that he would not perform. In an action by Patrick against Donald for breach of contract, who is likely to prevail? Patrick, because Donald's mistake was not Patrick's fault. Patrick, because Donald's mistake was unilateral. Donald, because it would be unfair to require him to complete construction of the hotel at the contract price Donald, if Patrick had reason to know that Donald's bid was the result of a mistake.

D is the correct answer. In usual circumstances, a unilateral mistake does not excuse performance. However, where the other party knew or should have known of the mistake, the mistake does provide grounds for excuse for non-performance. A is wrong since there are several bases for the doctrine of unilateral mistake to operate, and even where the unilateral mistake if not the fault of the other party, the doctrine of unilateral mistake will still operate where the other party had reason to know of the mistake. B is wrong for the same reason. C is wrong since unless it is unconscionable at the time the contract was formed, a contract will be enforced even though some unfairness may result.

Big Ben, Inc. and Electric Company were negotiating the costs of having Electric Company replace the electrical system in an aging office building owned by Big Ben. On March 1, Big Ben sent a fax to Electric Company stating "We will pay you $20,000 to replace the electric system in our office building according to the specifications that we sent you previously. We must have your reply no later than March 15." Electric Company replied by a letter that stated "We will not complete the job you requested for less than $27,000." Big Ben received the letter on March 7. On March 10, Electric Company wrote another letter to Big Ben that stated, "We have reconsidered and now agree to do the work for $20,000. Unless we hear from you to the contrary, we will begin work on March 25." Big Ben received the March 10 letter on March 15, but did not reply to it. Without Big Ben's knowledge, Electric Company began working on the electric system in Big Ben's office building on March 25. Is there a contract between Big Ben and Electric Company as of March 25? Yes, a contract was formed on March 10 when Electric Company posted its letter. Yes, a contract was formed on March 15 when Big Ben received Electric Company's letter. Yes, a contract was formed on March 25 when Electric Company began work on the building. No, there was no contract between Big Ben and Electric Company.

D is the correct answer. On March 1, Big Ben made an offer to Electric Company for replacement of the electrical system. Since the mirror image rule applies to service contracts, Electric Company's response to the offer, received by Big Ben on March 7, was a counter-offer since it proposed a change of price from $20,000 to $27,000. This extinguished Electric Company's power to accept the offer by Big Ben from March 1. Consequently, Electric Company's letter of March 10 had no legal effect. Therefore, since there was no acceptance, there is no contract between the parties. A, B and C are incorrect since there is no contract.

George, a resident of New York, wanted to purchase a franchise for Yogurtland. He contacted the franchisor, Fred. After a series of negotiations over the telephone, Fred told George that he could purchase a Yogurtland franchise operation in California for $25,000. George quit his job, sold his home, and moved to California with his family. George also put a $10,000 deposit on a parcel of commercial property in Los Angeles, perfect for a Yogurtland store. After George had moved and purchased the property, Fred told George that there were no longer any available franchises. George sued Fred to enforce the original agreement. How should the court rule? The agreement is not enforceable because there was no written contract. The agreement is not enforceable because it lacks consideration. The agreement is enforceable because Fred's offer was not revoked. The agreement is enforceable because George justifiably relied on Fred's promise.

D is the correct answer. Promises which foreseeably induce reliance on the part of the promisee will often be enforceable without consideration, under the promissory doctrine. Here, George justifiably relied on the promise of s a franchise and thus, he would be entitled to reliance damages. A is wrong since oral promises can be enforced under a promissory estoppel theory. B is wrong since promises which foreseeably induce reliance on the part of the promisee will often be enforceable without consideration, under the promissory doctrine. C is wrong since Fred's offer is not enforceable under contract theory because there was no mutual consideration.

Peter lived in Texas. He was a huge fan of the Rolling Stones and bought a ticket to a Rolling Stones concert in Los Angeles through the Ticketweb website. A week before the concert, Mick Jagger got laryngitis and the Rolling Stones decided to reschedule the show. Ticket holders were not told about the rescheduling until the day prior to the concert. By then, Peter had already incurred the expense of plane tickets and hotel reservations in Los Angeles. Peter sued Ticketweb and the Rolling Stones on several theories, including breach of contract against Ticketweb. Ticketweb defended by the fact that their website had a notice that the user agrees to Ticketweb's terms of use by clicking the "Look for Tickets" button. The notice had a link to the terms of use, including a term that Ticketweb did not have an obligation to notify ticketholders of cancellations and that precluded lawsuits against Ticketweb for damages related to cancelled shows. Is Peter likely to prevail on his breach of contract case against Ticketweb? Yes, the court will rule that Ticketweb's terms were not part of the contract since the Ticketweb website required Peter to follow a link to access the terms. Yes, since late notice of the cancellation of the concert caused Peter to suffer economic loss. No, since a reasonable person would know that there is always a risk that a concert can be rescheduled due to illness. No, since the Ticketweb website provided sufficiently conspicuous notice of the concert terms.

D is the correct answer. Regardless of whether or not Peter actually read the terms, he was bound by them because they were sufficiently conspicuous. A is wrong since the link was clearly visible on the website, making notice of the terms reasonably conspicuous B is incorrect since damages alone are not enough for Peter to prevail without the court finding that Ticketweb had an obligation to provide adequate notification of the cancellation of a show. C is incorrect. While it may be correct that a reasonable person would know that cancellation of a concert is a risk, the issue here is whether Peter is entitled to damages because Ticketmaster had an obligation to provide notice of cancellation.

Question 10 2 / 2 pts Dexter, a property owner, made an agreement with Paul to complete the grading and excavation of a hillside upon which Dexter's home was to be constructed. The contract price was $50,000. After the project began, Paul discovered that embedded deep in the ground of the property were massive amounts of rock. After extensive negotiations, Dexter and Paul agreed that Dexter would pay an additional $25,000 for the additional work required to excavate the property. After the work was completed, Dexter refused to make the extra $25,000 payment and Paul asserted an action for breach of contract. How is the court likely to rule? The modification is unenforceable due to lack of consideration. The modification is unenforceable because it was not in writing. The modification is unenforceable because Paul acted in bad faith. The modification is enforceable due to unforeseen circumstances.

D is the correct answer. This is a modification under the common law which is supported by new consideration, the extra work required to excavate the property. Therefore, the modification is enforceable due to the unforeseen circumstances of embedded rock, being undertaken in good faith. Consequently, C is wrong. A is wrong since there is new consideration, the extra work required to excavate the property. B is wrong since the Statute of Frauds does not require this service contract to be in writing.

On March 1, Patty's Pets, Inc. received from Fish, Inc., a letter offering to sell Patty 1,200 goldfish suitable for sale in Patty's pet store. The Fish, Inc. offer stated that it would remain open until March 20, but that Patty's acceptance must be received on or before that date. On March 16, Patty posted a letter of acceptance. On March 17, Fish, Inc. faxed a letter to Patty advising that it was revoking the offer. The fax successfully reached Patty on March 17, but Patty's letter did not arrive at Fish, Inc.'s address until March 21. As of March 22, which of the following is a correct statement? Patty's March 16 attempt to accept the offer was effective under the mailbox rule. The Fish, Inc.'s offer was not revocable once Patty mailed her acceptance on March 16. The mail was the only authorized means of revocation, making Fish, Inc.'s March 17 attempt at revocation ineffective. Under the terms of Fish, Inc.'s offer, Patty's attempted acceptance was ineffective.

D is the correct answer. The offeror is the master of the offer. Here, Fish, Inc.'s offer dictated that acceptance is only effective when it was received by it, assuming the receipt occurred on or before March 20. Therefore, the mailbox rule did not apply, making Patty's attempted acceptance by mail on March 16 ineffective. A is wrong. The offeror is the master of the offer. Here, Fish, Inc.'s offer dictated that acceptance is only effective when it was received by it, assuming the receipt occurred on or before March 20. Therefore, the mailbox rule did not apply, making Patty's attempted acceptance by mail on March 16 ineffective. B is wrong since until Fish, Inc. received the acceptance, it was free to revoke its offer, which it did on March 17. C is wrong since Fish-Inc. as the offeror, dictated the proper method of acceptance by receipt of the offer, not be mailing.

Mutt and Jeff have a verbal agreement for Jeff to act as a general contractor on an extensive renovation of Mutt's home for the cost of $75,000. Mutt wanted to add a second story, reconfigure the downstairs, and add a larger garage, landscaping and a swimming pool in the backyard. Although Mutt and Jeff did not discuss the specific length of time that it will take to complete the renovation, adding the second story alone is estimated to take eight months. Around six months after Jeff started work on the renovation, Mutt fired Jeff because the job was taking longer than he planned. Jeff sued to enforce the contract and sought damages. Mutt claims that the Statute of Frauds makes their agreement unenforceable. What is the likely outcome? The Statute of Frauds will bar enforcement of the contract because actual performance will take more than one year. The Statute of Frauds will bar enforcement of the contract because the contract price exceeds $500. The Statute of Frauds will bar enforcement of the contract because the subject matter is real property. The Statute of Frauds will not bar enforcement of the contract.

D is the correct answer. The subject matter of this contract, a home renovation, does not fall in any of the categories required to be in writing under the Statute of Frauds. A is wrong. If a promise in a contract is incapable of being fully performed within one year after the making of the contract, the contract must be in writing. Keep in mind that the one-year period is measured from the time of execution of the contract, not the time it will take the parties to perform. If the contract can possibly, but not probably, be performed in one-year, the contract is not within the Statute of Frauds. Here, since adding the second story is estimated to take eight months, it is possible that the contract can be completed within one year of its execution and the Statute of Frauds would not apply. B is wrong since this is a service contract, not controlled by the UCC, the contract does not fall under the Statute of Frauds provision that requires that contracts for the sale of goods of $500 or more must be in writing. C is wrong because this contract does not involve the sale of an interest in Mutt's land and consequently, it does not fall under the Statute of Frauds.

Question 9 0 / 2 pts Dylan, a general contractor, contracted with Parker to complete the grading and excavation of a parcel of property upon which an office building was to be constructed. The contract price was $50,000. After the project began, Parker unexpectedly discovered that embedded deep in the ground of the property were massive amounts of concrete and steel debris. After extensive negotiations, Dylan and Parker agreed that Dylan would pay an additional $25,000 for the additional work required to excavate the property. After the work was completed, Dylan refused to make the extra $25,000 payment and Parker asserted an action for breach of contract. How is the court likely to rule? The modification is unenforceable due to lack of consideration The modification is unenforceable because it was obtained through duress. The modification is unenforceable because Parker acted in bad faith The modification is enforceable due to unforeseen circumstances.

D is the correct answer. There are no facts to indicate that Parker should have anticipated the massive amounts of concrete and steel debris on the property. Since the contract now required additional work to excavate the property and the increased contract price was extensively negotiated between the parties, the modification is enforceable. A is wrong since there is consideration, additional work to excavate the property. B is wrong since duress requires an improper threat, not present here. C is wrong since no facts suggest that Parker acted wrongly or in bad faith.

On December 15, 2010, Cal, the owner of Cal's Café, entered into a written contract with Dan, owner of Dan's Pastries, under which Cal agreed to purchase his pastry requirements for the calendar year 2011 from Dan. The contract provided that "Cal will have no obligation to receive any specified quantity of pastries, but only his daily requirements" and Dan "agrees to supply such requirements" at the fixed price per dozen specified in the contract, "cash on delivery." During 2010, Cal's requirements of pastries for his café averaged approximately 40 dozen per week. Early in 2011, Dan experienced a significant increase in his costs and decided that he could no longer afford to supply Cal's requirements at the price set in their agreement. If Dan asserts that the agreement is not binding on him because of a lack of consideration, will Dan prevail? Yes, because requirements contracts lack mutuality of obligation. Yes, because the contract provision stating that Cal had no obligation to receive any specified quantity made the contract unenforceable. No, because requirements contracts do not need consideration to be enforceable. No, because Cal's agreement to buy his requirements was sufficient consideration for Dan's agreement to supply those requirements.

D is the correct answer. This is a Requirements and Output contract which is enforceable under the UCC. UCC 2-306 provides that a term which measures the quantity by the output of the seller or the requirements of the buyer is enforceable, even in the absence of a stated estimate. Any normal or otherwise comparable prior output or requirements may be tendered or demanded. Here, the parties agreed that Dan will supply Cal's daily demands of pastries to Cal, approximately 40 dozen per week. A is wrong since requirements contracts have mutual consideration. Cal's agreement to buy his requirements was sufficient consideration for Dan's agreement to supply those requirements. B is wrong since this is a Requirements and Output contract which is enforceable under the UCC. UCC 2-306 provides that a term which measures the quantity by the output of the seller or the requirements of the buyer is enforceable, even in the absence of a stated estimate. Any normal or otherwise comparable prior output or requirements may be tendered or demanded. Here, the parties agreed that Dan will supply Cal's daily demands of pastries to Cal, approximately 40 dozen per week. C is wrong since requirements contracts have mutual consideration. Cal's agreement to buy his requirements was sufficient consideration for Dan's agreement to supply those requirements.

Ann owned a boutique clothing store and Bill manufactured denim jeans and jackets. On May 1, Ann sent Bill an email stating, "I wish to buy 200 pairs of jeans in assorted sizes at $75 per pair, as per your price list. Please ship immediately. Payment terms: 30 days." Bill shipped the order on May 2. However, Bill's company mistakenly sent 200 denim skirts instead of denim jeans. When the skirts arrived at Ann's warehouse on May 3, Ann rejected them as not in conformity with the contract. Ann then purchased denim jeans from another manufacturer at $90 per pair and claimed the excess price of the substitutes from Bill as damages for breach of contract. Bill contends that Ann has no claim for damages because no contract was ever made. Who is likely to prevail? Bill, because Bill's shipment of denim skirts was a counter-offer which Ann never accepted. Bill, because the non-conforming goods were offered as an accommodation. Ann, because Bill rejected Ann's offer when he shipped the goods. Ann, because Bill shipped non-conforming goods without timely notice to Ann that the goods were offered as an accommodation.

D is the correct answer. UCC 2-206(1)(b) provides that an order or other offer to buy goods for prompt or current shipment is construed as inviting acceptance by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods, but such a shipment is not acceptance if seller seasonably notifies buyer that goods offered only as an accommodation to buyer. Here, since Bill shipped non-conforming goods (denim skirts instead of denim jeans) to Ann without notice that the goods were being shipped as an accommodation, the act of shipping the goods was both an acceptance and a breach. Therefore, there is a contract that was breached by Bill, for which Ann can claim damages. A is wrong because Bill's shipment of denim skirts was acceptance of Ann's offer since no notice that goods provided as accommodation. B is wrong; the shipment was not sent as an accommodation since goods sent in error. C is wrong since Bill's shipment was an acceptance, not a rejection because no notice of accommodation was given.

Question 12 0 / 2 pts Seller contracted in writing to deliver to Buyer, 10,000 cartons of milk on May 1 at $1.00 a carton. Because the farmers who supplied Seller with his milk did not deliver enough milk, Seller only had 9,000 cartons of milk to fulfill his contract with Buyer. If Seller tenders only 9,000 cartons of milk to Buyer on May 1, and Buyer refuses to accept, or pay for any, which is the best statement regarding their contractual relationship? The doctrine of impossibility of performance excuses Seller from performing the contact. Seller can sue Buyer since Seller substantially performed the contract. Buyer is obligated to give Seller time to cure. Buyer has a cause of action against Seller for Seller's failure to deliver 10,000 cartons of milk.

D is the correct answer. UCC §2-508 states that where any tender or delivery by the seller is rejected because of non-conformance, and the time for performance has expired, the buyer may properly reject the non-conforming tender. Here, Buyer properly rejected Seller's tender of the milk that was short 1,000 cartons, because the time for Seller's performance had expired. A is incorrect because the contract is not objectively impossible to perform. B and C are incorrect statements for the reasons stated in the explanation to answer D.

Question 15 2 / 2 pts Vaughn owns a beautiful violin that he inherited from his family that he would like to sell, and believes it is a rare Stradivarius. Bette, a famous concert violinist and well known soloist, highly knowledgeable about violins, inspects and agrees to purchase the violin for $1 million also concluding it is a rare Stradivarius. In fact Bette learns after taking possession of the violin that it is a fake, and therefore nearly worthless. Bette cancels the payment to Vaughn. If Vaughn sues Bette to enforce the deal what is Bette's best argument? Mutual mistake based on the mutual understanding that the violin was a Stradivarius. Unilateral mistake based on Bette's understanding that the violin was a Stradivarius. Fraud by Vaughn in connection with the sale of the violin to Bette. Duress by Vaughn in connection with the sale of the violin to Bette.

Duress by Vaughn in connection with the sale of the violin to Bette. A is the best answer because both Vaughn and Bette were operating under the same mistaken assumption. B is incorrect because there is no indication that Vaughn had any reason to know of the mistake. C is incorrect because there is no indication of Vaughn intentionally misleading Bette. D is incorrect, because Vaughn did not take any conduct that might support an argument for duress. Quiz Score: 22 out of 30

Question 11 0 / 2 pts Pam, a 17 year old, purchased a used truck from Dave for $5,000. The reasonable market value of the truck was $3,500. After Pam owned the truck for two months, the brakes failed while she was driving it, causing her to collide with another car. Although Pam was not hurt, the truck sustained $1,000 worth of damage. Pam returned the truck to Dave and demanded her money back, but Dave refused to refund the money. If Pam asserts a claim against Dave, the court should award Pam the amount of $5,000, the purchase price of the truck $3,500, the reasonable market value of the truck $4,000, the purchase price minus the damage it had sustained Nothing

THIS ANSWER IS WRONG, AND WAS WITHDRAWN. B is the correct answer. A minor may disaffirm a contract on the ground of incapacity. If the disaffirming minor is a plaintiff in an action for restitution, her recovery may be offset by the reasonable value of the benefit she received. Therefore, Pam would receive the value of the truck, not the contract price. Consequently, A is wrong. C is wrong since the damage that the truck sustained is not related to the benefit that she received. D is wrong since it fails to recognize the minor's right to disaffirm the contract.

Paula and Dennis were in a romantic relationship. During an argument, Dennis slammed a glass door against Paula, causing her to sustain serious cuts on her hand. Dennis was prosecuted criminally for the injuries that he had inflicted on Paula. Paula told Dennis' mother that the prosecutor had asked Paula to testify against Dennis at the court proceeding. Dennis' mother begged Paula not to do it. Finally, Paula said that if Dennis' mother paid her $1,000, she would not testify against Dennis. Dennis' mother agreed to do so. However, after thinking it over, Dennis' mother decided not to pay $1,000 to Paula. If Paula asserts a claim against Dennis' mother based on Dennis' mother's failure to pay $1,000 to her, which of the following would be the mother's most effective argument in defense? Dennis' mother was not legally obligated to protect her son against unfavorable testimony at trial. Dennis' mother's promise to pay $1,000 to Paula was not supported by consideration. Dennis' mother's promise to pay $1,000 to Paula is enforceable if Paula detrimentally relied on it. Dennis' mother was free to revoke her offer to pay Paula $1,000.

The correct answer is B. Dennis' mother's promise to pay $1,000 is enforceable only if it is supported by consideration. Consideration is something of value—either benefit to the promisor or detriment to the promisee, given in exchange for the promise. A promise to do something that the promisor has no legal right to do cannot be regarded as consideration because it has no value. Generally speaking, no person has a right to refuse to testify in a criminal prosecution. Certainly, no person may do so in return for payment. Therefore, Paula's promise not to testify was a promise to do something that she had no right to do, so it is not consideration for the mother's promise to pay $1,000. A is wrong. Although a true statement of the law, it does not provide a defense to Paula's contract claim. C is wrong since reliance is not a substitute for consideration here. D is wrong since while Dennis' mother accepted Paula's offer to pay Paula $1,000 in exchange for Paula not testifying against her son, the agreement was not enforceable due to lack of consideration.

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