Quiz 4

Oxley contracts to buy a pizza oven from Restaurant Supplies Warehouse (RSW) for $2,500, but RSW fails to deliver. Oxley buys the appliance else-where for $3,500. Oxley's measure of damages is...

$1,000 plus incidental damages.

After an accident with a vehicle licensed to Guardian Security Company, Heidi signs a covenant not to sue Guardian Security for damages in a tort action if it pays for the damage to her car. This covenant is...

A bar to recovery if Guardian Security pays.

Talk, Inc., offers to buy from Ultra Corporation 1,000 phones. Without notifying Talk, Ultra timely ships phones of a different quality. With respect to the offer and a possible contract, this shipment is an acceptance and....

A breach

Leslie pays Mobile Electronics $600 for a new phone. Under the UCC, this is...

A sale

Flo tells Ginger during a phone call that she will buy her textbook from last semester for $65. Ginger agrees. These parties have...

An express contract.

Lyle and Miranda agree that Lyle will fix the refrigeration unit in Miranda's Buns n' Burgers in exchange for her payment of a debt that Lyle owes to New Credit Corporation. New Credit is...

An intended beneficiary.

Chet, a minor, signs a contract with Denise, an adult. The contract is voidable at the option of....

Chet only.

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that...

Confrom to the contract description in every way.

Pavers Inc. contracts to buy some heavy equipment from Earthmovers, Inc. Before either party performs, Earthmovers sells its assets to Excavation Corporation. On learning of the sale, Pavers is concerned about its contract with Earthmovers. Pavers should...

Demand assurances of performance from the seller

Lou offers to service Millie's heating and air conditioning system for one year for $500. Under the mirror image rule, Millie's response will be considered an acceptance if the terms of the acceptance...

Exactly mirror those of the offer.

​Kali contracts to sell Leony her car for $3,000. This contract will be fully discharged when Kali and Leony...

Exchange the car for the $3,000

Eliza buys a new motorcycle from Fab Cycles, Inc. The most important factor in determining whether an express warranty is created is whether...

Fab Cycle's promise becomes part of the basis of the bargain.

(t/f) A contract that has been fully performed by the parties is an executory contract.

False

(t/f) A covenant not to complete included in the sale of an ongoing business is never enforceable.

False

(t/f) A person who is intoxicated can avoid liability on any contract due to the intoxication.

False

(t/f) An express contract must be in writing.

False

(t/f) Any breach discharges the non breaching party from the contract.

False

(t/f) Contracts entered into by persons previously adjudged to be mentally incompetent can be vaild.

False

(t/f) Expenses that are caused directly by a breach of a contract are know as "primary damages"

False

(t/f) Intangible property has conceptual existence and thus comes under Article 2.

False

(t/f) Most ads - "this property for sale"- are offers.

False

(t/f) The risk of loss in a "shipment" contract passes to the buyer when the goods are delivered to the buyer at the specified destination.

False

(t/f) The seller's right to cure does not affect the right of the buyer or lessee to reject the goods.

False

(t/f) Under the UCC, an offeree can accept an offer to buy goods only by a promise to ship conforming goods.

False

(t/f) When a change in the law renders the performance of a contract illegal, the nonperforming party is normally held in breach of contract.

False

Household Products Corporation sells Ideal-brand vacuum cleaners to Jolly Discount Stores and other retailers. Household will have an insurable interest in the cleaners as long as...

Household retains title to the goods.

Equipment Rentals Corporation (ERC) agrees to lease two backhoes to Dig & Fill Construction, Inc. Before any interest in the backhoes can pass from ERC to Dig & Fill, they must be...

In existence and identified as the goods in the contract.

Leon contracts to install automatic watering troughs in Kendall's dairy barn. Leon then becomes seriously ill and contracts with Jake to install the troughs. Jake is unreliable and never shows up to install the troughs. In most states, Kendall can sue...

Jake or Leon

Isaac holds one ton of perishable fruit in storage for Juice Smoothies Corporation. Juice Smoothies does not pay for the storage. Isaac sells the fruit to Kayo Beverage Company. This sale represents...

Mitigation of damages

Idina admires Jules's collection of guitars. Jules says, "I plan to sell the collection when I get tired of it." Jules's statement is...

Not an offer because Jules expressed only an intent to enter into a future contract.

Carlos and David contract for the sale of five hundred head of Carlos's cattle for $95 per head. Unknown to either party, an unforeseen storm has struck the herd and many of the cattle have died. David is...

Not required to pay due to the "bilateral" mistake

Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting to be delivered under a shipment contract. This contract requires Elegant Carpets, the seller, to...

Place the goods into the hands of a carrier

Renee contracts with Scott to pay him $25,000 for his work on Renee's new album "Hip Pop." After Scott performs, they sign an accord, in which Renee promises to pay him $21,000 within thirty days instead of $25,000 later. But she does not pay. Scott can sue Renee on...

The accord of the original obligation.

Tile & Grout contracts to resurface the insides of the pools at WaterWorld Park. Tile & Grout knows that without the resurfacing, WaterWorld will have to delay its seasoning opening. Tile & Grout does not perform as promised. As consequential damages, WaterWorld can recover...

The loss of profit from the delayed opening.

​Lucy owns a condominium that she leases to Marie, gives her son Neal $450 on his sixteenth birthday, and sells her car to her neighbor Odalles for $1,500. UCC Article 2 covers...

The sale to Odalles

Ruth owns Skyview, a complex under construction that will include commercial and residential suites, and a parking garage. She allows Town Contracting, the contractor, to complete a stage of the project late. This waives Ruth's right to sue for...

This delay

(t/f) A "lessor" is a party who transfer the right to the possession and use of goods under a lease.

True

(t/f) A contract will be discharged if unforeseeable circumstances make it impossible to attain the contract's purpose.

True

(t/f) A forum-selection clause specifies that any contract dispute will be settled in a particular jurisdiction.

True

(t/f) After a contract is made, a supervising event may make performance impossible and discharge the contract.

True

(t/f) An effective offer requires reasonably definite terms.

True

(t/f) Legally sufficient consideration is something of value in the eyes of the law.

True

(t/f) Revocation of acceptance is effective on notice to the seller or lessor.

True

(t/f) Terms in a shrink-wrap agreement have been enforced in the same way as the terms of other contracts.

True

(t/f) Unless the parties agree otherwise, the buyer or lessee has an absolute right to inspect the goods before making payment.

True

(t/f) When a seller refuses to deliver goods that are unique, a buyer can obtain specific performance.

True

(t/f) When an anticipatory repudiation occurs, it is treated as a material breach of contract.

True

(t/f) When the risk of loss for goods passes from a seller to a buyer is generally determined by the contract between the parties.

True

Gene, an accountant, convinces his client Hazel to sign a contract to invest her savings in 2Gether, a nonexistent social-networking Web site. There is clear and convincing evidence that Hazel did not act out of her free will. This is...

Undue influence

Fresh Gro, Inc. offers to deliver produce to the customers of Grocer's Mart for a certain price. Fresh's intent to extend a serious offer to grocer's Mart is determined by references to Fresh's...

Words and action