quizes for test 2 law and business

Alais is a clothing fashion designer known for her French style of elaborate heirloom smocking combined with industrial elements. Planning for an upcoming show in Paris on September 26, she orders on September 10 300 yards of a custom reflective material from Rutherford Industries for her seamstresses to hand smock. The supplier promises to deliver the material before September 20, so Alais will have time for her staff to complete the sewing. When the cloth doesn't arrive until the evening of September 21, Alais files a claim for breach against Rutherford. Who prevails? a. Alais prevails because the breach was material. b. Rutherford prevails because they substantially performed under the contract. c. Rutherford prevails because the breach was minor. d. Alais prevails because the supplier has always delivered on time before.

a. Alais prevails because the breach was material.

Franklin hires Angela to paint his portrait. She is to be paid $50,000 if the painting is acceptable "in Franklin's sole judgment." At the big unveiling, 99 of 100 attendees think that Angela has done a masterful job. Franklin disagrees. He thinks the painting makes him look like a toad. Franklin refuses to pay, and Angela sues Franklin. Who wins and why? a. Angela loses because this is a personal satisfaction contract. b. Angela wins because she has substantially performed. c. Angela wins because Franklin's opinion is not reasonable. d. Angela loses because she has not substantially performed.

a. Angela loses because this is a personal satisfaction contract.

Jacobi is visiting Sheila at her apartment while she is redecorating, and Sheila asks him if he would like to buy her two sofas that she is replacing. Sheila tells Jacobi that the sofas are in great condition and are the most comfortable she has ever had. She acknowledges that some of the fabric on the sofas is slightly worn but says that is their only issue. Jacobi buys the sofas on the spot, but once they are back at his house he finds that one of them is infested with bed bugs. Jacobi has to throw out the infested sofa and pay a special exterminator to come and get rid of the insects. Jacobi sues Sheila. Assume their jurisdiction follows the majority approach. How will the court rule? a. If Sheila had a reasonable belief that she was telling the truth, Jacobi can rescind the contract, but he cannot collect damages. b. Sheila is not liable because Jacobi did not investigate her statements about the sofas. c. This is fraud because both sofas were infested with bedbugs, and Jacobi relied on Sheila's statements about their good condition. d. Sheila is not liable because her statements were mere puffery.

a. If Sheila had a reasonable belief that she was telling the truth, Jacobi can rescind the contract, but he cannot collect damages.

Jimmy's Luxury Cars was a used auto dealer located in Miami, Florida. On February 15, 2005, Jimmy's sold a 1995 Mercedes Benz with 126,000 miles to Marty for $17,546. Jimmy, the owner of the business, had driven the Mercedes as his personal vehicle for two years prior to selling it to Marty. He tells Marty during negotiations that the Mercedes has been "the best car he's ever driven." During his ownership, Jimmy had a few problems with the car's air conditioner, but he hadn't had any issues in recent months. When Marty tries to use the air conditioner two months later, in April 2005, it does not function at all. A trip to a mechanic discovers that one of Jimmy's prior repairs will complicate the resolution of the air conditioner's problem, costing about $3,500. Marty asks Jimmy to pay for the repairs, but he refuses. In a claim for the repair costs, what theory of warranty would best support Marty's case? a. Implied warranty of merchantability b. No warranty because the vehicle is used. c. Oral Express Warranty d. Implied warranty of fitness for a particular purpose

a. Implied warranty of merchantability

While shopping at a farm stand, Kara asks the farmer if she can purchase a particular turkey in a nearby pen. The farmer points to a Ferrari behind the farm stand and says he will give her a great price if she buys them both. Kara accepts. The next day the police tell Kara that the farmer had stolen both items from a veterinarian who lives nearby. Must Kara return the items? a. Kara must return the turkey and the Ferrari because they were stolen. b. Kara can keep the turkey and the Ferrari because she is a bona fide purchaser. c. Kara can keep the turkey, but must return the Ferrari because the farmer does not deal in cars. d. Kara must return the Ferrari but can keep the turkey because it is not a "good" covered by the UCC.

a. Kara must return the turkey and the Ferrari because they were stolen.

Byron brings his cell phone to his mobile provider's store to repair his cracked screen. When Byron returns to the store three days later to pick up his phone, he learns that the store sold his phone to Cecily, another customer. May Byron get his phone back from Cecily? a. No, Cecily may keep the phone because she is a buyer in the ordinary course of business. b. No, Cecily may keep the phone even if she knew that it belonged to Byron when she purchased it. c. Yes, Cecily may not keep the phone because the mobile store breached its contract with Byron. d. No, Cecily may keep the phone because Byron bore the risk of loss.

a. No, Cecily may keep the phone because she is a buyer in the ordinary course of business.

On August 15, Calvin offers to sell Clarissa his laptop for $500 cash. He tells Clarissa she can only accept the offer by mailing the money to arrive by September 2 at his university mailbox. Clarissa mails a check for $500 to Calvin, and the money arrives in the mailbox by August 30th, although Calvin doesn't retrieve his mail (along with Clarissa's payment) until September 4th. Did Clarissa accept Calvin's offer? a. No, because Clarissa didn't meet all the requirements of the offer. b. Yes, because Clarissa paid Calvin's asking price for the laptop. c. No, because Calvin did not actually receive the money until September 4th. d. Yes, because the money arrived at Calvin's mailbox before September 2nd

a. No, because Clarissa didn't meet all the requirements of the offer.

Oliver found some cozy-looking winter gloves for a great price in a catalog. He decided to purchase a pair for himself and additional pairs for every member of his extended family. He mailed in the order form, along with a check. Two weeks later the catalog company informed Oliver that it had run out of gloves and would not charge him. Oliver sues. What will result? a. Oliver will lose as long as the company can show it was acting in good faith. b. Oliver will win because he accepted the company's offer as soon as he mailed the order form. c. Oliver will lose because his order was a counteroffer so there was no contract. d. Oliver will win because the catalog was fraudulent and misleading.

a. Oliver will lose as long as the company can show it was acting in good faith.

Polyquan, Inc. emails a dozen companies, offering to sell them 100 sweatshirts in either blue, red, orange, black, or green. The sweatshirts are $6 each. Shirts-A-Lot Clothing emails back, "We accept your offer of 100 sweatshirts for $6 each. No orange sweatshirts." Bespoke Tourism emails back, "We accept your offer of 100 sweatshirts for $6 each on the condition that you do not include any orange sweatshirts." Does Polyquan have a contract with either company? a. Polyquan has a contract with Shirts-A-Lot but not with Bespoke Tourism. b. Polyquan has a contract with Bespoke Tourism but not with Shirts-A-Lot. c. No, Polyquan does not have a contract with either company. d. Yes, Polyquan has a contract with both companies

a. Polyquan has a contract with Shirts-A-Lot but not with Bespoke Tourism.

Richard and Michelle Kommit live in California, where gambling on credit is illegal. They travel to New Jersey, where they used their credit card to withdraw cash from an ATM conveniently located in the "pit"— the gambling area of a casino. They ran up debts of $5,500 and did not pay. The California National Bank (the issuer of the credit card) sued for the money in a California court. Who wins? a. Richard and Michelle Kommit b. The California National Bank c. The casino in New Jersey d. None of these will win.

a. Richard and Michelle Kommit

Rodolfo hires Tessa to paint the exterior of his house. Two days into the project, smoke from a nearby forest fire blows onto the property and stains her work. Tessa will have to start again. Tessa asks Rodolfo to pay for the additional labor and materials, and Rudolfo agrees. Tessa completes the job, but Rodolfo refuses to pay the additional fee. Tessa sues. What outcome? a. Rodolfo owes Tessa the additional money because Tessa promised to re-paint the stained areas of the house and needed more paint to do the job. b. Rodolfo owes Tessa the additional money because Tessa has done additional work. c. Rodolfo owes Tessa the additional money because he had a preexisting duty to pay her for the job. d. Rodolfo owes Tessa no additional money, because she had a preexisting duty to complete the project.

a. Rodolfo owes Tessa the additional money because Tessa promised to re-paint the stained areas of the house and needed more paint to do the job.

Rudolph hired Moe to walk his dog every weekday. Rudolph hands Moe a check for a month of excellent work. "Thanks!" says Moe. "This will help me pay for the silly citation I just got from the city, since I never licensed my dog walking business. They make us get licenses just to raise money for the city! What a scam." When Rudolph learns that Moe's business is unlicensed, he refuses to pay. What will result? a. Rudolph owes Moe money because the licensing issue is irrelevant to their agreement. b. Rudolph does not owe Moe money because Moe is unlicensed. c. Rudolph does not owe Moe money because their agreement was not in writing. d. Rudolph does not owe Moe money because their contract was based on Moe's fraud.

a. Rudolph owes Moe money because the licensing issue is irrelevant to their agreement.

In March, Louisa's Hamburger Stand contracts with HydrationCorp to buy 100 bottles of lemonade for $100 and an additional 100 bottles of lemonade for $115 on May 1. After the purchase and delivery of the 100 lemonades in March, Louisa speaks with a HydrationCorp representative, and they agree that on May 1 HydrationCorp will instead sell Louisa 100 bottles of iced tea for $115. What will result? a. The new terms may be binding because an oral modification may be binding under the UCC. b. The new terms are binding because the parties created an accord and satisfaction by check. c. The new terms are not binding. An oral modification is only permissible when it is supported by consideration. d. The new terms are not binding because contract modifications must be in writing.

a. The new terms may be binding because an oral modification may be binding under the UCC.

Tom and Harriet, adult siblings, are taking their parents on a weekend trip. They pick up their father, Luther, at his house where he is singing a goodbye song to each of his 20 plants, and eating pancakes out of his coat pocket. Next, they drive to an assisted living facility, to collect their mother, Augusta, who has lived there since a judge declared her mentally incompetent a few years ago. When they arrive at their hotel, Luther writes postcards to his plants, Augusta knits a sweater, Harriet goes for a walk, and Tom orders a glass of scotch. When Harriet returns, she learns that a hotel guest sold Tom and her parents each a souvenir snow globe for $1,000. The snow globes are for sale in the hotel gift shop for $5. Harriet is furious. Can her family members get their money back? a. The sale to Augusta is void; the sales to Luther and Tom may be voidable. b. The sales to Augusta and Luther are both void; the sale to Tom is valid. c. The sale to Tom is voidable; the sales to Luther and Augusta are both void. d. All three sales are voidable.

a. The sale to Augusta is void; the sales to Luther and Tom may be voidable.

Omar signs an agreement with Arid Lumber for the purchase of 25,000 pounds of lumber. The contract states that Arid will deliver the lumber to Omar within four business days. The next day, Arid's warehouse floods, and the lumber is ruined. Arid and Omar's contract does not specify when the risk of loss passes from the buyer to the seller. What result? a. This is a destination contract, so the risk of loss has not yet passed from Arid to Omar. b. This is a shipment contract, so the risk of loss passed to Omar when he obtained documents entitling him to possession of the lumber. c. Arid must pay for the loss because it breached the contract. d. This is a destination contract, so the risk of loss has passed from Arid to Omar.

a. This is a destination contract, so the risk of loss has not yet passed from Arid to Omar.

Vivica is a sales associate at Sir LampsALot lighting store. She tells a customer, "This lamp gives the most beautiful lighting and is virtually indestructible. You'll change the bulbs once a year at most." The customer purchases the lamp and signs a sales contract that states, "Customer will be able to use a single lamp to safely light an entire living room. However, Sir LampsALot makes no warranty with respect to this product. Any statements made by a salesperson or printed in this sales contract are disclaimed and form no part of this contract." Are Vivica's statements and the sales contract promises disclaimed? a. Vivica's statements are disclaimed, but the promise in the contract is not. b. Vivica's statements are valid, but the promise in the contract is disclaimed. c. Both are disclaimed. d. Neither is disclaimed.

a. Vivica's statements are disclaimed, but the promise in the contract is not.

While negotiating with Stewart to purchase his house, Yasmine asks him about the condition of the roof. "Excellent," he replies. "It is only 2 years old, and should last 25 more." In fact, Stewart knows that the roof is 26 years old and has had a series of leaks. The parties sign a sales contract for $600,000. A week before Yasmine is to pay for the house and take possession, she discovers the leaks and learns that a new roof will cost $35,000. What kind of contract exists between Yasmine and Stewart? a. Voidable by Yasmine b. Valid c. Voidable by Stewart d. Unenforceable

a. Voidable by Yasmine

Richard hires Paul to paint his kitchen in two eight-hour days of work for $500. At the end of the first day, the kitchen is 85 percent complete. Richard asks Paul to stay late and finish. Paul agrees to stay and complete the painting if Richard pays him a total of $750 for the job. Richard agrees. Does Richard owe Paul the additional $250? a. Yes, Paul provided the additional consideration of working overtime and completing the work in a shorter time period than originally agreed. b. No, Paul was already required to paint the kitchen, so there was no consideration. c. No, because the agreement was not signed in writing. d. Yes, but only if the parties agreed prior to the start of work that additional hours would require additional pay.

a. Yes, Paul provided the additional consideration of working overtime and completing the work in a shorter time period than originally agreed.

While visiting Sarah's art gallery, Mark spots what he believes is an original painting by the artist Vincent van Gogh and agrees to buy the painting from Sarah for $1,000,000. Upon returning home, Mark has the painting appraised and learns that it is not a Van Gogh and is worth only $100,000. Mark sends Sarah a letter saying that he bought the painting under false pretenses and will pay only the fair market value of the painting, enclosing a check for $100,000 with "payment in full" written in the memo line. Before depositing the check, Sarah crosses out Mark's note and writes "first partial payment" over it. The next day Sarah learns that Mark's check has bounced. If Sarah sues Mark, will the court find in her favor? a. Yes, as there was no satisfaction of the debt because Mark's check bounced. b. No, because there was accord and satisfaction of the debt. c. Yes, because there can be no accord and satisfaction of liquidated debt. d. Yes, as there was no accord for the settlement of the debt because Sarah changed Mark's "payment in full" notation on the check

a. Yes, as there was no satisfaction of the debt because Mark's check bounced.

The McAllisters had several serious problems with their house, including leaks in the ceiling, a buckling wall, and dampness. They repaired the buckling wall by installing I-beams to support it, but never resolved the leaks or the dampness. When they decided to sell the house, they said nothing to prospective buyers about the problems. If asked, they stated that the I-beam had been added for reinforcement. The Silvas bought the house for $60,000 and immediately began to have problems with leaks, mildew, and dampness. Are the Silvas entitled to any money damages? a. Yes, the Silvas are entitled to damages for both fraud and nondisclosure. b. Yes, the Silvas are entitled to damages for fraud because the McAllisters claimed the I-beams were added only for reinforcement. c. No, the Silvas are not entitled to any money damages. d. Yes, the Silvas are entitled to damages for nondisclosure because the McAllisters did not mention any problems.

a. Yes, the Silvas are entitled to damages for both fraud and nondisclosure.

Mary pledges $30,000 to a school for the blind. In reliance on Mary's promise, the school hires an architect to build a cafeteria. Two months later Mary takes back her promise. The school sues, and the judge will likely rule that __________________. a. the school will be able to enforce the promise with "moral consideration" b. the school will not be able to enforce the promise because it did not rely on it c. the school will not be able to enforce the promise because it provided no consideration

a. the school will be able to enforce the promise with "moral consideration"

When Alistair drops off his tuxedo at Whett Dry Cleaners for dry-cleaning, he signs Whett's standard exculpatory clause, which releases Whett from all liability in the event that any item of clothing is damaged, lost, or stolen while in its care. When Alistair returns to pick up his tuxedo, he is informed that the garment tore during the dry cleaning process. Alistair sues. Which of the following results is most likely? a. Alistair wins because dry-cleaning is vital to the public. b. Alistair loses because this is a valid exculpatory clause. c. Alistair wins because his tuxedo could have ripped only as a result of an intentional tort. d. Alistair wins because bailees owe a high duty of care to bailors.

b. Alistair loses because this is a valid exculpatory clause.

Cornucopia Hardware has agreed to sell its goods to both Becky and Zanzibar. Its contract with Becky requires Cornucopia to bring the goods to Dozey's Long Haul Trucking, which will transport the goods to Becky. Cornucopia's contract with Zanzibar requires Cornucopia to deliver the goods directly to Zanzibar. After delivering the goods to Dozey's (but before making delivery to Zanzibar), Cornucopia's vehicle collides with Dozey's truck, destroying both Becky's and Zanzibar's goods. Who must pay for the lost goods? a. Neither Becky nor Zanzibar must pay Cornucopia for the goods because they never received anything. b. Becky must pay Cornucopia, but Zanzibar does not have to pay. c. Both Becky and Zanzibar must pay Cornucopia for the goods because they had each signed a valid contract. d. Zanzibar must pay Cornucopia, but Becky does not have to pay.

b. Becky must pay Cornucopia, but Zanzibar does not have to pay.

Melnick built a house for Gintzler, but the foundation was defective. Gintzler agreed to accept the foundation if Melnick guaranteed to repair any damage that was caused by the defects in the future. Melnick agreed, but when Gintzler called Melnick two years later to repair water damage resulting from the foundation defects, Melnick refused to make any repairs. Gintzler sued, and Melnick argued that his promise to make future repairs was unsupported by consideration. Who will win the suit? a. Melnick will win because his promise was illusory. b. Gintzler will win because he gave consideration. c. Melnick will win because the deal was not supported by consideration. d. Gintzler will win because the foundation was defective

b. Gintzler will win because he gave consideration.

Interactive Data Corp. hired Foley as an assistant product manager, and over the next six years, Interactive steadily promoted him. Interactive officers repeatedly told Foley that he would have his job as long as his performance was adequate. They also distributed an employee handbook that specified termination guidelines that included a mandatory seven-step pre-termination procedure. Foley learned that his supervisor was under investigation by the FBI, and he told Interactive officers. Shortly thereafter, Interactive fired Foley. He sued, claiming that Interactive could fire him only for good cause after the seven-step procedure. Who wins? a. Interactive wins because the seven steps were only an implied, not express, condition to its employment contract with Foley. b. Interactive loses because it had an implied employment contract with Foley that incorporated the seven steps. c. Foley wins because he and Interactive had a bilateral, express employment contract that incorporated the seven steps. d. Foley loses because he and Interactive had a unilateral, express employment contract that incorporated the seven steps.

b. Interactive loses because it had an implied employment contract with Foley that incorporated the seven steps.

The town of Sanford, Maine, decided to auction off a plot of land owned by the town. The town advertised that it would accept bids through the mail, up to a specified date. Arthur and Arlene mailed in a bid that turned out to be the highest of all the bids the town received. When the town refused to sell them the lot, they sued. Who will win? a. The town of Sanford will win. b. It will depend on whether the auction was with or without a reserve, or minimum price. c. Arthur and Arlene will win but will have to pay a higher price. d. Arthur and Arlene will win.

b. It will depend on whether the auction was with or without a reserve, or minimum price.

Mrs. Martin tells some neighborhood kids that she will pay $100 if any of them mows her lawn. Jake goes to a hardware store, purchases a lawnmower for $60, and then mows Mrs. Martin's lawn. Jake has entered into which types of contract? a. Jake has made a bilateral contract with Mrs. Martin and a unilateral contract with the hardware store. b. Jake has made a unilateral contract with Mrs. Martin and a bilateral contract with the hardware store. c. Jake has made a bilateral contract with Mrs. Martin and a bilateral contract with the hardware store. d. Jake has made a unilateral contract with Mrs. Martin and a unilateral contract with the hardware store.

b. Jake has made a unilateral contract with Mrs. Martin and a bilateral contract with the hardware store.

TuffGrip ran an advertisement for its brake pads in several national automotive industry journals. The ad listed a range of prices for the brake pads and a few technical specifications. At the bottom, the ad stated that TuffGrip had no liability in the event of a malfunction. Three large mechanic chains purchased the brake pads after seeing the ad, and signed standard TuffGrip purchase orders. Many of the brake pads that these mechanic chains installed in customers' cars failed, causing severe injuries to drivers who could not stop their cars. TuffGrip claimed it had no liability to the mechanic chains. Is TuffGrip correct? a. Yes, TuffGrip is not liable because they sold the brake pads to other merchants. b. No, TuffGrip is liable unless the purchase orders also included the limitation of liability. c. Yes, TuffGrip is not liable because the limitation of liability was a term clearly stated in the ad. d. No, TuffGrip is liable because the chains that purchased the brake pads had no notice that TuffGrip had disclaimed liability.

b. No, TuffGrip is liable unless the purchase orders also included the limitation of liability.

Oceanview Enterprises offers scenic cruises to exotic destinations in the South Pacific, such as Tahiti and the Marshall Islands. In December of each year, the cruise line provides customers an opportunity to enter a lottery for a limited number of exclusive tickets sailing to a "hidden" unnamed island. Malik is fortunate enough to win the right to buy two of the expensive cruise tickets for herself and best friend Jecala. When she receives the purchased tickets through the mail, Malik notices the back of each has the following statement: "The purchaser and/or passenger of this ticket agrees that any claim against Oceanview Enterprises or its employees will only be resolved in courts of Oceanview's home state of Alaska. This ticket is non-refundable." Is it likely the clause on the ticket would be enforceable against Malik? a. Yes, because these clauses are common practice in the transportation industry. b. No, because Malik did not have notice of the clause before the ticket purchase. c. Yes, because she is the purchaser of the ticket. d. No, because a limit to Alaska courts is unreasonable.

b. No, because Malik did not have notice of the clause before the ticket purchase.

For his 17th birthday, Asher bought himself a used car from a car dealer for $10,000. The dealer purchased it for $6,000, repaired it, and then sold it to Asher. Eighteen months later, Asher has almost finished paying off the car when he totals it by accidentally driving it into his neighbor's swimming pool. Asher's mother is a lawyer and tells him to rescind the contract. Will Asher be able to recover any money from the dealer? a. No, because he is no longer a minor. b. No, because he ratified the contract. c. Yes, because he was a minor when he entered into the contract. d. Yes, but the amount he receives back will depend if his state follows the status quo rule.

b. No, because he ratified the contract.

Guyan Machinery, a North Carolina manufacturing corporation, hired Albert Voorhees as a salesman and required him to sign a contract stating that if he left Guyan he would not work for a competing corporation anywhere within 250 miles of North Carolina for a two-year period. Later, Voorhees left Guyan and began working at Polydeck Corp., another North Carolina manufacturer. The only product Polydeck made was urethane screens, which comprised half of 1 percent of Guyan's business. Is Guyan entitled to enforce its noncompete clause? a. Yes, because the noncompete clause is essential to the employee. b. No, because it is not essential to the employer. c. Yes, because the noncompete clause is fair to the employer. d. No, because the noncompete clause was not fair to the employer.

b. No, because it is not essential to the employer.

Just before turning 18 years old, Caitlynn goes to the local Driver Examination Office to test for her driving license. When she passes with a perfect score, her parents allow her to go alone to the local car dealership and purchase her first car. She signs a contract to buy a used lemon-yellow Volkswagen Beetle with payments of $225 per month for 3 years. Unbeknownst to Caitlynn and her parents, the car was a trade-in, and the dealer was still waiting to receive the title. Caitlynn drives the car until six months after she turns 18, making the payments each month, but then decides she hates the yellow color, and returns it to the dealer. The dealer refuses to take the car back. Is Caitlynn obligated to the car purchase contract? a. No, because the contract is only voidable by the dealer. b. No, because the original contract was void. c. No, because she was a minor at the time of purchase. d. No, because she disaffirmed the contract.

b. No, because the original contract was void.

Florian, a busy surgeon, reads about a new state-of-the-art surgical mask developed by Myriad Medical Devices (M.M.D.) and thinks it would be useful for his practice. Florian enters into a contract with M.M.D. in which M.M.D. agrees to sell the doctor all the masks he needs in the next six months. Shortly thereafter, a fire burns down Florian's practice, and he will be unable to see patients for at least 9 months. Florian will not need a single mask until the practice is back up and running. If M.M.D. sues Florian for breach of contract when Florian does not order any masks, will M.M.D. win? a. No. The consideration for this agreement was based on a preexisting duty, and therefore this was not a valid contract. b. No. This is a requirements contract, and Florian acted in good faith. c. Yes. This is a requirements contract based on an illusory promise. d. Yes. This is an output contract, which the UCC permits for the sale of goods.

b. No. This is a requirements contract, and Florian acted in good faith.

Jonah is 12 years old and absolutely loves soccer trading cards. At the local hobby shop, he finds a "Lionel Messi" trading card in the case, which has a handwritten tag by it that reads "9/00-." The employee at the front desk interprets this to mean $9.00 and sells Jonah the card for that amount. A few days later, Ronaldo, the card shop owner calls Jonah and asks for the card back because it is worth around $900. Jonah refuses, and Ronaldo sues. Which of the following is Jonah's strongest argument? a. That Ronaldo mislabeled the price tag and now has to live with the consequences. b. That neither Ronaldo nor Jonah knew the real value of the card. c. That Jonah is a minor so the contract is voidable. d. That both Ronaldo and Jonah thought the card was a limited edition soccer sticker (with a market value of about $10) and did not realize it was a valuable trading card.

b. That neither Ronaldo nor Jonah knew the real value of the card.

Central Maine Power Co. (CMPC) made a promotional offer in which it promised to pay a substantial sum to any homeowner or builder who constructed new housing with electric heat. To qualify for the offer, Motel Services, Inc. (MSI) decided to install electrical heat in a housing project it was constructing in Waterville, Maine. MSI built the units and requested payment for the full amount of the promotional offer. Is CMPC obligated to pay? Why or why not? a. No, CMPC is not obligated to pay because MSI did not make a serious offer. b. Yes, CMPC is obligated to pay because this was a unilateral contract, and MSI performed. c. No, CMPC is not obligated to pay because this was a bilateral contract, and MSI did not promise to perform. d. Yes, CMPC is obligated to pay because this was a bilateral contract, and MSI performed.

b. Yes, CMPC is obligated to pay because this was a unilateral contract, and MSI performed.

Susan drops by Dean's garage sale and buys a painting for $10 that both she and Dean think is a copy of a piece by Matisse, a well-known painter. Later, Susan is delighted to discover that the painting is actually an original Matisse and is worth $50,000,000. Dean hears the news and wants the painting back. Will he get it? Why or why not? a. No, Dean is not entitled to rescind. He has made a unilateral mistake because he made an important factual error. b. Yes, Dean is entitled to rescind. This is a mutual mistake because both parties made an important factual error. c. No, Dean is not entitled to rescind because an innocent misrepresentation has occurred. d. Yes, Dean is entitled to rescind because Susan has violated the relationship of trust between them.

b. Yes, Dean is entitled to rescind. This is a mutual mistake because both parties made an important factual error.

Xuechen graduated from culinary school at the top of her class, and signed an employment contract to work as a chef for one of Chicago's best restaurants for a period of three years. Additionally, Xuechen signed a non-competition agreement that stated she agreed not work as a chef for any other restaurant in the Chicago city area for a period of five years. Shortly after she began working, Xuechen left her employer to work as a manager at another Chicago restaurant. Has Xuechen breached either of the contracts she signed? a. No, contracts have not been breached. b. Yes, the employment contract has been breached, but the non-competition agreement has not been breached. c. No, the employment contract has not been breached, but the non-competition agreement has been breached. d. Yes, both contracts have been breached.

b. Yes, the employment contract has been breached, but the non-competition agreement has not been breached.

The Hoffmans owned and operated a successful small bakery. Lukowitz, an agent of Red Owl Stores, told them that for $18,000 Red Owl would build a store and fully stock it for them to operate. The Hoffmans sold their bakery and purchased a lot on which Red Owl was to build the store. Lukowitz then told the Hoffmans that the price had gone up to $26,000. The Hoffmans borrowed the extra money from relatives, but then Lukowitz informed them that the cost would be $34,000. Negotiations broke off and the Hoffmans sued. The court determined that there was no contract. Can the Hoffmans recover any money? a. No. Based on the facts, there is no contract. b. Yes. They can most likely recover damages based on promissory estoppel. c. Yes. They can most likely recover damages based on judicial restraint. d. Yes. They can most likely recover damages based on quasi-contract.

b. Yes. They can most likely recover damages based on promissory estoppel.

Andy agrees to buy Charlotte's house. The purchase and sale agreement states that if the house passes an inspection, the parties are obligated to go through with the deal. The clause about the inspection is: a. A concurrent condition. b. A requirement for substantial performance. c. A condition precedent. d. A condition subsequent.

c. A condition precedent. (an event which must occur, unless its non-occurrence is excused, before performance under a contract becomes due)

American Bakeries had a fleet of over 3,000 delivery trucks. Because of the increasing cost of gasoline, the company was interested in converting the trucks to propane fuel. It signed a requirements contract with Empire Gas, in which Empire would convert "approximately 3,000" trucks to propane fuel upon American Bakeries' potential request, and would then sell American Bakeries all required propane fuel to run the converted trucks. American Bakeries never requested a single conversion. Empire sued for lost profits. Who wins? a. Empire wins because this was a requirements contract, and American Bakeries agreed to convert the trucks. b. American Bakeries wins because there was no consideration. c. American Bakeries wins because this was a requirements contract which does not require any purchase from Empire. d. Empire wins based on a preexisting duty requiring all the trucks to be converted.

c. American Bakeries wins because this was a requirements contract which does not require any purchase from Empire.

CeCe Hylton and Edward Meztista, partners in a small advertising firm, agreed to terminate the business and split its assets evenly. Meztista gave Hylton a two-page document showing assets, liabilities, and a bottom line of $35,235.67, with half due to each partner. Hylton questioned the accounting and asked to see the books. Meztista did not permit Hylton to see any records and refused to answer her phone calls. Instead, he gave her a check in the amount of $17,617.83, on which he wrote "Final payment/payment in full." Hylton cashed the check, but she wrote on it, "Under protest—cashing this check does not constitute my acceptance of this amount as payment in full." Hylton then filed suit, demanding additional monies. Meztista defended on the grounds that the parties had made an accord and satisfaction. What is the likely result? a. Meztista still owes the money to Hylton because writing "Final payment/payment in full" on a check does not settle the debt. b. Meztista still owes the money to Hylton because Hylton's notes on the check prevent accord and satisfaction. c. Hylton's debt is discharged because there has been an accord and satisfaction. d. Meztista still owes the money to Hylton and must give the books to Hylton to review.

c. Hylton's debt is discharged because there has been an accord and satisfaction.

Ibtihal occasionally had garage sales at her home, and also sells a few items each month on Ebay. In one garage sale, she sold a defective ice cream maker to Brian. When Brian tried to use the device, he received a severe electric shock. Ibtihal had no idea the machine was defective. She had never used it, and it was still in its original box. If Brian brings a warranty claim against Ibtihal for selling him the defective appliance, who prevails? a. Brian, because Ibtihal is a dealer in used goods. b. Brian, because everyone in the chain of manufacturing and distribution is liable. c. Ibtihal, because she is an occasional seller. d. Ibtihal, because the ice cream maker is new merchandise.

c. Ibtihal, because she is an occasional seller.

You are considering joining an online club. Before continuing to the membership page, the site presents you with hundreds of lines of dense legalistic text and asks you to agree to them. You click the "I agree" box. Will you be bound by the terms? a. Yes, but only if you read all of terms. b. No, unless you were actually aware of the contents of all of the terms. c. It depends on what state you are in. d. Yes, even if you did not read all of the terms.

c. It depends on what state you are in.

Chef Jacquie is scheduled to teach a cooking class to three students. The class tuition is $1,100 per student. In the class, each student cooks a French meal under Jacquie's expert supervision and receives a cookbook (worth $30) and a cooking pan (worth $150). Tory, one of the students, tells Jacquie the day before the class that she will be unable to attend and requests a refund. Jacquie denies the refund and Tory sues. Tory claims that the UCC should govern the contract, and Jacquie argues that it should be covered by the common law. Who is right? a. Jacquie, because the agreement was a bilateral contract. b. Tory, because everyone in the class receives a cookbook, pan, and food. c. Jacquie, because the class is primarily a service. d. Tory, because the cost of the class was more than $500.

c. Jacquie, because the class is primarily a service.

A national beverage company ran a promotion where consumers could collect "points" by purchasing the company's products, then redeem the accumulated points for items such as baseball caps and t-shirts. One television ad showed a teenager landing a $33.8 million-dollar aircraft in his schoolyard while "Harrier Jet: 7,000,000 points" flashed across the screen. After the commercial aired, John gathered the 7 million points and asked for a Harrier jet, yet the company refused to comply. Two days later the points for the jet had changed in the ad from 7,000,000 to 700,000,000. If John sues for the airplane, what is the probable outcome? a. John wins, because the advertisement showed specific terms, and anyone could accept the offer. b. John wins, because he accepted the company's offer by gathering 7,000,000 points. c. John loses, because no reasonable person would believe the advertisement was a serious offer. d. John loses, because an advertisement is never an offer.

c. John loses, because no reasonable person would believe the advertisement was a serious offer.

Thirty-five members of the Ortiz extended family were spread across three states—Illinois, New York and Florida—and they rarely were able to get everyone together. For Thanksgiving 2018, Mary Elizabeth Ortiz decided to surprise her family by booking a mountain retreat for the entire clan. She especially wanted to celebrate her uncle's return from overseas military service. On September 15, 2018, Mary rented a spectacular lodge in the Tennessee Smoky Mountains with over 20 bedrooms and an incredible view, paying in advance the full $2,500 per night fee for 3 evenings, but not purchasing travel insurance. The lodge had the following cancellation policy: "A sixty (60) day notice is required for cancellation. Cancellations that are made within 60 days of the arrival date, for any reason, forfeit the full advance payment and reservation deposit. You are advised to purchase travel insurance separately if cancellation costs are a concern." The rental contract also stated that the only exception would be for "acts of God, such as fires or earthquakes." One week before Thanksgiving, Mary's uncle had a heart attack and was hospitalized. The next day, November 16, 2018, Mary cancelled the reservation, and requested a full refund, which the lodge refused to provide. Does Mary have a claim for the return of her $7,500? a. Yes, due to the theory of frustration of purpose because her uncle could not participate. b. Yes, due to the theory of impossibility because her uncle could not participate. c. No, Mary has no theory that supports her claim. d. Yes, due to the Force Majeure clause and "an act of God" which resulted in her uncle not being able to participate.

c. No, Mary has no theory that supports her claim.

Mallory hires Raghav to work for one year as an assistant manager at $5,500 per month, reserving the right to cancel the contract at any time. After two months, Mallory fires Raghav because the company's order volume drops. Can Raghav recover payment for the remaining 10 months on the contract? a. Yes, because Raghav was willing to perform his obligations under the contract. b. Yes, because the contract terms specified that he would be employed for one year. c. No, because both parties are not bound by the contract. d. No, because Mallory reserved the right to cancel the contract at any time.

c. No, because both parties are not bound by the contract.

Charles places a stool he recently purchased on top of his toilet and climbs on top of it in order to change a light bulb. As he is unscrewing the bulb, he loses his balance and crashes face first into the side of his bathtub, shattering his nose and fracturing both wrists. If Charles sues the stool manufacturer, will he win? a. Yes, because the manufacturer breached the implied warranty of merchantability. b. No, because he is not in privity with the manufacturer. c. No, because he was misusing the stool. d. Yes, because this is a personal injury suit.

c. No, because he was misusing the stool.

After going through her old clothes, Farra asks her friend Michelle if she would like to buy any of them, stating she is hoping to get at least $50. Michelle responds that she will pay $5 for each piece that she would like to buy. The next day, Michelle tells Farra that she does not want any of the clothes. Has Michelle violated the agreement with Farra? a. Yes, because she did not reserve the right not to purchase any of the clothes. b. Yes, because she knew Farra was expecting to receive $50 for the clothes. c. No, because of Michelle's illusory promise, she and Farra did not have an enforceable agreement. d. No, if she genuinely did not like any of the clothes, she does not have to buy any of them.

c. No, because of Michelle's illusory promise, she and Farra did not have an enforceable agreement.

Mina, a real estate developer, reads that the tiny town of Lakeview is considering building a large shopping center and adding public transportation from the nearby city to Lakeview. Mina knows that these types of changes would greatly increase the demand for real estate in Lakeview. She buys 10 acres of land in Lakeview from Arlen, so that she can build houses and take advantage of the town's economic boom. There is no reference in the purchase and sale agreement or deed to the possible development in Lakeview. A few weeks later, the town declares that, due to changes in zoning laws, it is not building the shopping center or adding the public transportation. Can Mina rescind on her contract with Arlen? a. Yes, because this is a case of mutual mistake. b. Yes, because this is a case of unilateral mistake. c. No, because she understood the risk she was assuming. d. Yes, because the parties were mistaken about the value of the land.

c. No, because she understood the risk she was assuming.

Jackie offers to sell Mel a concert ticket for $50, and Mel replies, "I'll give you $40." Jackie refuses to sell at the lower price, and Mel says, "OK, OK, I'll pay you $50." Has a contract been formed? At what price? a. Yes. Mel must pay $45, the average of the two prices. b. Yes. Mel must pay $50. c. No. Mel made a counteroffer, which Jackie rejected. d. Yes. Mel must pay $40.

c. No. Mel made a counteroffer, which Jackie rejected.

When discussing the sale of a used Beechcraft Baron airplane, a United Technologies agent told Thompson the plane was "excellently maintained" and said it had been inspected for airworthiness every 100 hours. Thompson signed a sales agreement that stated in large, bold letters that the plane was sold "AS IS" and that there were "no representations or warranties, express or implied, including the condition of the aircraft, its merchantability, or its fitness for any particular purpose." The sales contract did not say anything about the plane's maintenance history or current condition. When Thompson tried to fly the plane after purchasing it, he immediately experienced problems with its brakes, steering, ability to climb, and performance while cruising. Can Thompson successfully sue United for breach of express and implied warranties? a. Yes. United breached an express warranty. b. Yes. United Technologies breached the implied warranty of fitness for a particular purpose. c. No. The aircraft was sold "as is." d. Yes. United breached the implied warranty of merchantability.

c. No. The aircraft was sold "as is."

Omkara, a furniture manufacturer, contracts with Foam Gnome for $50,000 worth of foam, which Omkara will use for making ten sofas she has agreed to make for Duke's Furniture. A day before Gnome is going to ship the foam to Omkara, a flood destroys its entire inventory. Gnome tells Omkara it cannot send her the foam in time, but tells her that FirmFoam can supply her with an identical shipment for $65,000. This increase in price will wipe out twenty percent of Omkara's profit from her contract with Duke's. Omkara wants to get out of both contracts. Can she? a. Omkara's agreements with Duke and Gnome are both discharged due to frustration of purpose. b. Omkara's agreement with Gnome is discharged due to true impossibility. Omkara's agreement with Duke is discharged due to commercial impracticability. c. Omkara's agreement with Gnome is discharged due to true impossibility. Omkara's agreement with Duke's is not discharged and she must perform. d. Gnome is liable to Omkara for breaching the agreement. Omkara's agreement with Duke's is not discharged and she must perform.

c. Omkara's agreement with Gnome is discharged due to true impossibility. Omkara's agreement with Duke's is not discharged and she must perform.

Evans built a house for Sandra, but the house had some problems. The garage ceiling was too low. Load-bearing beams in the "great room" cracked and appeared to be steadily weakening. The patio did not drain properly. Pipes froze. Evans wanted the money Sandra promised for the job, but Sandra refused to pay. Who wins? a. Evans wins because he strictly performed. b. Sandra wins based on anticipatory breach. c. Sandra wins because Evans did not substantially perform. d. Evans wins because it was a personal satisfaction contract.

c. Sandra wins because Evans did not substantially perform.

Silas has agreed to dig five wells on Noreen's property over the next month, working each weekday. One Friday, after Silas has completed three wells for Noreen, he informs Noreen that on Monday he is going to start a project digging sixty wells for Romeo and that job will take him about a year. What does this mean for Noreen? a. Silas has committed an anticipatory breach. Noreen cannot hire someone new until Silas fails to show up for work on Monday. Noreen may sue Silas for breach of contract. b. Silas has committed an anticipatory breach. Noreen may not sue Silas for breach of contract because he has acted in good faith, and Noreen will be able to hire someone new to dig the wells. c. Silas has committed an anticipatory breach. Noreen is discharged and may immediately hire someone else to dig the wells. She may also sue Silas for breach of contract. d. The agreement will be discharged due to frustration of purpose because it has no value to Silas.

c. Silas has committed an anticipatory breach. Noreen is discharged and may immediately hire someone else to dig the wells. She may also sue Silas for breach of contract.

Sophie is an accomplished plastic surgeon who has lost her medical license due to her addiction to illegal drugs. Vanessa hires Sophie for a "filler party" in which Sophie, using a simple medical procedure designed to reduce wrinkles, injects a filler into the foreheads of Vanessa and ten of her friends. Vanessa fails to pay Sophie, and Sophie sues. What will result? a. Sophie will win if her license has been reinstated by the time she sues Vanessa. b. Sophie will win because she and Vanessa had a binding contract. c. Sophie will lose because she does not have a medical license. d. Sophie will lose because filler parties are legal but immoral.

c. Sophie will lose because she does not have a medical license.

Cozette hires Baldrick to cook dinner for her family three nights per week for an entire year. Nine months into the agreement, Baldrick dies of food poisoning. Baldrick's estate sues Cozette for Baldrick's salary for the rest of the year. What result? a. The agreement will be discharged due to frustration of purpose. b. The agreement will be enforced unless the suit violates the statute of limitations. c. The agreement will be discharged due to true impossibility. d. The agreement will be enforced because it is not commercially impracticable.

c. The agreement will be discharged due to true impossibility.

For the past seven years, Sommerset Storage, Inc. has hired Mountbatten Tax Associates to prepare its annual tax return. This year the parties agree to their usual $1,000 fee, but Mountbatten finds a loophole in the tax code and gets Sommerset a refund four times the usual amount. Mountbatten then requests that Sommerset pay $4,000 to reflect the increased tax refund. There is nothing in their contract about increased fees, but Mountbatten argues it would be unjust for Sommerset not to pay extra. Sommerset refuses, and Mountbatten sues. What will result? a. The court will rely on promissory estoppel, and Mountbatten will win. b. The court will find that there is an implied contract, and Mountbatten will win. c. The court will uphold the original contract, and Mountbatten will lose. d. The court will apply a quasi-contract, and Mountbatten will win.

c. The court will uphold the original contract, and Mountbatten will lose.

Helena shares with her family her two goals for her senior year in college: join a synchronized swim team and shoot a bald eagle. Helena's cousin Anika is concerned about the utility of both of these goals and urges Helena to spend the year looking for a job, promising, "If, upon graduation, you have secured a job, have refrained from synchronized swimming, and have not shot any bald eagles, I will give you $10,000." Helena immediately accepts the terms of the agreement and at graduation has met all three criteria, but Anika refuses to pay. What argument will be most helpful for Anika in court? a. Helena gave no consideration, so the agreement is not binding on Anika. b. The entire agreement is invalid because Anika did not benefit from it, only Helena benefitted. c. The element of the agreement about the bald eagle is not enforceable because shooting bald eagles is illegal. d. There was no way for Anika to know if Helena would actually go through with the deal because Helena made an illusory promise; therefore, the agreement is invalid.

c. The element of the agreement about the bald eagle is not enforceable because shooting bald eagles is illegal.

Mariposa Middle School is in need of more sports equipment, so a school administrator contacts Kiko's Sporting Goods. The administrator speaks to Kiko herself, and Kiko offers Mariposa 15 percent off its order. Kiko tells the administrator she can order whenever she is ready and still enjoy the discount. Kiko faxes the administrator a handwritten note that reads "Pursuant to our conversation, I hereby grant Mariposa Middle School a 15% discount off the final sales price of their purchase. Offer good for one use only. Offer open for the next 5 months. Signed, Kiko" The administrator tries to use the discount four months later but Kiko says she has revoked the offer. What will result? a. The offer is governed by the UCC and will be enforced because it is signed and in writing. b. The offer will not be enforced because the administrator is not a merchant. c. The offer will not be enforced because the offer is open too long. d. The offer will be enforced because the terms are definite.

c. The offer will not be enforced because the offer is open too long.

Universal Consolidated Co. contracted with Pittsburgh Industrial Furnace Co. (Pifcom) to engineer and build equipment for its mill. The contract required Pifcom to deliver the finished equipment to a trucking company to be transported to Universal. Shortly after Pifcom delivered the goods to the trucking company as scheduled, Universal notified Pifcom that it was cancelling the deal and ordered Pifcom to stop work. The next day, the trucking company arrived at Universal with all of the equipment. Both Pifcom and Universal claim to have title to the equipment. Who is right? a. Title passed to Universal when Universal accepted the shipment from the trucking company. b. Title remains with Pifcom until Universal pays for the equipment. c. Title passed to Universal when Pifcom delivered the goods to the trucking company. d. None of these answers is correct.

c. Title passed to Universal when Pifcom delivered the goods to the trucking company.

When Tremaine arrived in Cincinnati, he rented an SUV from a car rental company in the airport terminal. A month after the trip, he noticed that the charge on his credit card for the SUV was much higher than he anticipated because the rental company had charged him $30 per gallon to refill the gas tank. He reviewed the eleven-page rental contract and noticed on page seven a provision about the gas charge. He saw another provision on page ten stating that in order to file a dispute with the company he would be charged a $750 "Investigation Fee" for his claim to be reviewed. Tremaine sues the rental company. Which of the following outcomes is most likely? a. Tremaine will lose because the contract was not substantively unconscionable. b. Tremaine will lose because transportation is a public necessity. c. Tremaine will win because the contract was procedurally and substantively unconscionable. d. Tremaine will lose because he signed the contract and agreed to the terms.

c. Tremaine will win because the contract was procedurally and substantively unconscionable.

Sixteen-year-old Travis Mitchell brought his Pontiac GTO into M&M Precision Body and Paint for body work and a paint job. M&M did the work and charged $1,900, which Travis paid. Travis later complained about the quality of the work. M&M did some additional work, but Travis was still dissatisfied. He demanded his $1,900 back, but M&M refused to refund it because all of the work was "in" the car and Travis could not return it to the shop. The state of Nebraska, where this occurred, follows the majority rule on this issue. Does Travis get his money? a. No, Travis will not get his money because he cannot make restitution or return the consideration. b. No, Travis will not get his money because he is over the age of 16 and is considered a legal adult who has entered into a fair contract with M&M. c. Yes, Travis will get his money because a minor is permitted to disaffirm a contract and get a full refund of his money, even if he is unable to make restitution. d. Travis will get the amount of his payment that M&M took as profit.

c. Yes, Travis will get his money because a minor is permitted to disaffirm a contract and get a full refund of his money, even if he is unable to make restitution.

Alex, a 25-year-old banker, joined his friends at a "pub-hopping" trip that had participants visiting six bars in a two hour span of time. Between the fifth and final pub stop, a highly intoxicated Alex stopped to use the bathroom at a local luxury car dealer, who was holding a special evening sales event. Seeing all the cars and thinking he was signing up for training as a race car driver, Alex mistakenly signed a contract to purchase the $188,425 emerald-green Ferrari displayed in the showroom. The next day, a sober Alex found the contract paperwork at the foot of his bed, and with no memory of the previous evening, quickly headed to the dealership. As he began to explain to the sales manager Janine about the drunken purchase mistake, he changed his mind, and decided to keep the car. Manager Janine, however, took the contract copy from Alex and ripped it up, saying "You're not responsible enough to own this car." Does Alex keep the Ferrari? a. Yes, because now the car is considered used and can't be returned. b. No, because Alex lacked legal capacity at the time he signed the contract. c. Yes, because Janine can't void the contract. d. No, because either party is entitled to void the contract.

c. Yes, because Janine can't void the contract.

Ellen and Allen are interested in renting Lyle's country house for the summer. Lyle tells them about the house, volunteering the property's square footage, the number of bedrooms, and stating that the house has a heated pool and a hot tub. The next day, Lyle learns that the pool is going to be drained for the summer as it undergoes repair. Must Lyle disclose this information to the potential renters? a. Only if Ellen and Allen are interested in swimming. b. No, because Lyle did not know about the repairs when he told Ellen and Allen about the pool. c. Yes, because Lyle previously told them about the pool. d. No, because there is nothing in writing about the condition of the pool.

c. Yes, because Lyle previously told them about the pool.

For seven years, Stanford Owens has run a successful practice that helps small businesses file their taxes, become incorporated, and perform other legal tasks. Stanford moves his practice to NYC, and is happy to find his first local client, DiggyWerx, almost immediately. They negotiate a flat fee of $5,500 for six months of Stanford's services. A month later, Stanford is more familiar with the local business landscape and realizes that most people offering his services in NYC charge around $13,000 for six months of work because of the higher costs to do business in NYC. Is the deal between Stanford and DiggyWerx enforceable? a. No, because it is unconscionable due to the difference in bargaining power. b. Yes, because Stanford is still receiving a fair price for his services. c. Yes, because Stanford and DiggyWerx each receive a benefit and incur a detriment. d. No, because there is insufficient consideration.

c. Yes, because Stanford and DiggyWerx each receive a benefit and incur a detriment.

Alonzo graduates with a 3.8 GPA in Accounting from a New York university and receives offers of employment from three of the Big Four accounting firms. While considering his options, a mid-sized firm in California calls and offers him twice the starting salary of his top offer. The only caveat is he needs to be in Los Angeles within the next week. Alonzo excitedly decides to take the California job. He refuses the other employment offers, breaks his lease in New York, sells or gives away most of his possessions, buys a new car, and heads for L.A. the next day. When he arrives three days later, the firm apologizes and informs Alonzo that the position is no longer available due to the loss of a major client. Based on these facts, does Alonzo have a potential claim against the accounting firm? a. Yes, on the theory of fraud. b. Yes, on the theory of breach of contract. c. Yes, on the theory of promissory estoppel. d. No, Alonzo has no potential claim.

c. Yes, on the theory of promissory estoppel.

Riley, age 16, and Samuel, age 36, enter into a contract in which Riley will sell Samuel his car for $11,000. The next day, Samuel decides he no longer wants the car and tries to get out of the contract. Samuel argues that because Riley is a minor, the contract is void. If Riley wants to enforce the contract, will he be able to? a. Yes, Riley can take the $11,000, and he has no legal obligation to give Samuel the car. b. No, the contract is voidable, and either party can cancel it. c. Yes, the contract is voidable, and only Riley can cancel it. d. No, the contract is void because Riley is a minor.

c. Yes, the contract is voidable, and only Riley can cancel it.

Seth finds a lost dog and returns her to her owners. The overjoyed owners promise Seth $500, but never send him the money. Seth: a. cannot collect the money because the owners did not foresee losing the dog. b. cannot collect the money because Seth had a preexisting duty to return the dog. c. cannot collect the money because it was offered in response to something Seth had already done. d. can collect the money because it was promised in response to his charitable action.

c. cannot collect the money because it was offered in response to something Seth had already done.

Amy, a baker, has found her dream home, but cannot afford the down payment. Amy's brother agrees to loan her $30,000 for the down payment, and Amy agrees to pay him back in one year. Next year, Amy offers to bake her brother's wedding cake for his wedding next month instead of paying back the loan, so that she can buy new equipment for her bakery. Amy's brother agrees. How much money does Amy owe her brother? a. $30,000 because agreements to accept less than full payment of liquidated debt are non-binding. b. $30,000 less the cost of the wedding cake because agreements to accept less than full payment of liquidated debt are non-binding. c. $0 because there has been accord and satisfaction. d. $0 because an agreement to accept different performance in lieu of full payment of liquidated debt is binding

d. $0 because an agreement to accept different performance in lieu of full payment of liquidated debt is binding

On Monday, Billy receives an offer from Andrew to buy Billy's house for $500,000. On Tuesday, Billy mails Andrew a reply, "I'll sell it to you for $600,000, and not a penny less." On Wednesday, Billy reconsiders so he mails Andrew the following note: "I accept your offer for $500,000, the house is yours." On Thursday, Andrew receives Billy's first note. On Friday, Andrew receives Billy's second note. What result? a. Billy and Andrew have a contract for $600,000. b. Billy and Andrew do not have a contract. c. Billy and Andrew have a contract for the fair market value of the house. d. Billy and Andrew have a contract for $500,000.

d. Billy and Andrew have a contract for $500,000.

KwikKash is a payday loan company that gives cash to borrowers for a large fee. KwikKash recently loaned Claudette $1,000 and required that she pay back $1,500 within 30 days. Claudette fails to repay the loan, and KwikKash sues. What is the most likely result? a. KwikKash will win because loans are necessary for the public good. b. KwikKash will win because the loan was not ancillary to a legitimate agreement. c. Claudette will win because the contract was unconscionable. d. Claudette will win because the loan violates usury laws.

d. Claudette will win because the loan violates usury laws.

Tim's Lumber Co. agrees to provide Deckbuilders, Inc. with all of the wood that Deckbuilders requires for the next five years. Deckbuilders agrees not to buy wood from any other vendors. What is the primary restriction on how much wood Deckbuilders may demand? a. There is no restriction. b. All changes in Deckbuilders' demand must be approved by Tim's Lumber Co. c. Deckbuilders cannot increase its demand more than 10% from the previous year's demand. d. Deckbuilders' demand for wood must be made in good faith.

d. Deckbuilders' demand for wood must be made in good faith.

Over her objections, Carlene's husband Silvio borrows $10,000 from his friend Evan so that he can achieve his dream of swimming with great white sharks in South Africa. Carlene knows Silvio has a reputation for being reckless, but she still finds it pretty alarming that Evan and Silvio's friend Constantine and Silvio's business partner Persephone each take out a life insurance policy on Silvio a month before his trip. Who can legally have an insurance policy on Silvio? a. Carlene and Persephone. b. Evan and Constantine. c. Carlene, Constantine, Evan and Persephone. d. Evan, Persephone and Carlene.

d. Evan, Persephone and Carlene.

Round Tire Co. sells 1,000 tires to Green Rent-a-Car for use on Green's fleet. They sign a sales agreement that includes the following: "LIMITATION OF REMEDIES. Round agrees to repair or replace any tire that Round determines is defective within 12 months of the effective date of this agreement or 25,000 miles, whichever is earlier. Green agrees that this is Green's SOLE REMEDY; Green is not entitled to consequential or incidental damages or any other remedy of any kind." Upon discovering that all 1,000 tires are defective, Green immediately purchases substitute tires from another manufacturer at a cost of $12,000. Green loses $75,000 in rental payments while it replaces all of the tires on its cars. If Green sues Round to recover money damages, how will the court rule? a. Green will win because the limitation of remedies clause is unconscionable. b. Green will win because the Uniform Commercial Code (UCC) does not allow limitation of remedy clauses. c. Green will win because Round breached the contract. d. Green will lose because the parties are bound by the limitation of remedy clause.

d. Green will lose because the parties are bound by the limitation of remedy clause.

Krug International contracted with Iraqi Airways to build equipment for training pilots. Krug then contracted for Power Engineering to build the specialized gearbox to be used in the training equipment for $150,000. Power did not know that Krug planned to resell the gearbox to Iraqi Airways. When Power had almost completed the gearbox, the Gulf War broke out and the United Nations declared an embargo on all shipments to Iraq. Krug notified Power that it no longer wanted the gearbox. Power sued. Please rule. a. Power wins based on anticipatory breach. b. Power wins because they strictly performed. c. Power wins because it was a personal satisfaction contract. d. Krug wins because of true impossibility.

d. Krug wins because of true impossibility.

Lisa makes hand-crafted beads. Lisa approaches Julia, a successful jewelry maker, and offers to sell her beads exclusively to Julia if Julia agrees to buy all of the beads that Lisa makes. Julia agrees to buy all of the beads Lisa produces each month if, after inspecting them, Julia thinks they will sell well. Do Lisa and Julia have an enforceable contract? a. No, Lisa has made an illusory promise. b. Yes, Lisa and Julia have a valid output contract. c. Yes, Lisa and Julia have a valid requirements contract. d. No, Julia has made an illusory promise.

d. No, Julia has made an illusory promise.

While staying overnight at Lily's house, Martin indicates that he would like to buy her car. Lily says she'll think it over. The next day Martin finds a note on the kitchen counter from Lily that reads, "I might be able to sell the car for about $22,000." Martin writes her a check for $22,000, takes the car keys off the hook by the front door and drives off in the car. Have Lily and Martin formed a binding contract? a. Yes, this is a binding contract. b. No, Lily's note was an offer, but Martin did not properly accept. c. Yes, Lily's note was a unilateral offer that Martin accepted when he left her a check. d. No, Lily's note was an invitation to bargain, not an offer.

d. No, Lily's note was an invitation to bargain, not an offer.

Rothman's clothing store had a 20-year lease in a shopping center in Phoenix, Arizona owned by Foundation Development. In addition to monthly rent, Rothman's was obligated to pay common-area charges four times a year. The lease stated that if Rothman's failed to pay on time, Foundation could send a notice of default. Then if the store failed to pay all money due within 10 days, Foundation could evict. On February 23, Foundation sent to Rothman's the common-area charges for that quarter. Rothman's believed the bill was in error and sent an inquiry on March 18. On April 10, Foundation insisted on payment of the full amount within 10 days, but it sent the letter to Rothman's Phoenix office, which was not responsible for paying the bill. The Phoenix office forwarded the bill to the relevant executive in New York, who received it on April 20. Rothman's issued a check for the full amount on April 24 and mailed it the following day. On April 28, Foundation sued to evict. On April 29, the company received Rothman's check. Will Foundation be able to evict Rothman's? a. Yes, because it was a condition precedent contract. b. Yes, because Foundation strictly performed. c. Yes, based on anticipatory breach. d. No, based upon the "good faith" requirement.

d. No, based upon the "good faith" requirement.

Ted and Aisha enter into a contract that states that Aisha will buy Ted's vintage sports car after Ted replaces the engine and fixes the transmission. The contract contains a "time is of the essence" clause, requiring Ted to have the car ready for the sale by February 13. On February 12, Ted calls Aisha and says he needs two more days to complete the repairs. Aisha declines and buys another car. Did Aisha breach the contract? a. Yes, because Ted acted in good faith. b. No, because this was a personal satisfaction contract. c. Yes, because this was not a material breach. d. No, because the contract contained a "time is of the essence" clause.

d. No, because the contract contained a "time is of the essence" clause.

Simon, aged 10, is invited to a classmate's birthday party at an exclusive ski resort on March 15th. The day will include 4 hours of snowboarding, lunch and birthday cake. Simon's mother checks a box on the invitation that says "YES, we will attend" and returns it to the classmate's address. Unfortunately, they later don't attend the party when Simon comes down with the flu. On March 17th, Simon's mother receives an invoice in the mail from Simon's classmate for $35 that says, "Party No-Show Fee." Can Simon's classmate collect the fee? a. No, because Simon was ill and that is a reasonable excuse to not attend. b. Yes, because the classmate has a case for quasi-contract. c. Yes, because Simon's mother checked the "YES" box on the invitation, creating a contract obligation. d. No, because there was no intent to form a contract by Simon's mother.

d. No, because there was no intent to form a contract by Simon's mother.

Roy Newburn borrowed money and bought a $49,000 truck from Treadwell Ford. A few months later, the truck began having transmission problems. Newburn learned that the truck had 170,000 more miles on it than the odometer indicated. Treadwell admitted the mileage error and promised to install a new transmission for free. When Newburn came to pick up the truck with the new transmission installed by Treadwell, the company refused to turn over the truck until Newburn signed a general release of the dealership's liability for any claims based on the inaccurate mileage, which Newburn signed. One month later, the truck broke down, and the resulting delays cost Newburn so much income that he fell behind on his loan payments and lost the truck. He sued Treadwell, which defended based on the release. Is the release valid? a. Yes, the release is valid. Both parties understood the terms of the release form, and there is nothing to indicate that Treadwell intended to commit fraud. b. No, the release is not valid. This is a case of unilateral mistake, as Newburn signed the release under a mistaken assumption. c. No, the release is not valid. Treadwell, the stronger party, engaged in improper persuasion and exerted undue influence over Newburn. d. No, the release is not valid. This meets all of the criteria of a clear case of economic duress. Treadwell made an improper threat, forcing Newburn to enter into the contract.

d. No, the release is not valid. This meets all of the criteria of a clear case of economic duress. Treadwell made an improper threat, forcing Newburn to enter into the contract.

Olivia agrees that she will bring Desiree a cherry pie every Monday for one month in exchange for $15 per week. Olivia delivers a pie to Desiree for four weeks, and Desiree pays her each time. Olivia continues to deliver Desiree pies every Monday, and Desiree continues to pay for another five weeks. On the tenth week, Olivia brings a pie and Desiree refuses to pay. Olivia sues for payment. What will result? a. Desiree will win because the contract was not express. b. Desiree will win because the contract was voidable by either party. c. Desiree will win. Olivia assumed the risk of not getting paid when she continued to bring pies beyond than the month-long contract. d. Olivia will win. The court will rule that they had an implied contract.

d. Olivia will win. The court will rule that they had an implied contract.

Alex contracts with Rashard to purchase thirty umbrellas. Rashard ships the umbrellas to Alex, and Alex mails Rashard payment. When the umbrellas arrive, Alex is shocked to see that the fabric canopy at the top of each umbrella is made out of paper towel and is not waterproof. Alex sues, and Rashard argues that he never indicated that the umbrellas were made out of waterproof material. What result? a. Rashard will win because the contract did not require personal satisfaction. b. Rashard will win because he has offered substantial performance. c. Alex will lose because the contract did not promise anything about the materials used to make the umbrellas. d. Rashard will lose. The parties did not agree on the exact specifications of the umbrella, but the court will imply a condition that the umbrellas be waterproof.

d. Rashard will lose. The parties did not agree on the exact specifications of the umbrella, but the court will imply a condition that the umbrellas be waterproof.

John C. Clark, using an alias, rented a luxury car from EZCar in California. Clark never returned the car to EZCar and obtained a California "quick title" using forged signatures. He then sold the car to Terry for $34,000 in cash. Terry made improvements to the car and had it insured, registered, licensed, and titled in the state of Utah. When EZCar reported the car stolen, the Utah Department of Motor Vehicles seized the auto and returned it to EZCar. Terry sued EZCar. The trial court concluded that Terry had purchased the car for value and without notice that it was stolen, so he was a bona fide purchaser entitled to the car. EZCar appealed. Please rule. a. Terry must return the car to EZCar. b. EZCar has no rights to the car anymore. c. Terry must return the car to Clark. d. Terry can keep the car.

d. Terry can keep the car.

For 20 years, Art's Flower Shop relied almost exclusively on advertising in the Yellow Pages to bring business to its shop in a small West Virginia town. One year, the Yellow Pages printer accidentally did not print Art's ad, and Art's suffered an enormous drop in business. Art's sued for negligence and won a judgment of $50,000 from the jury. The printing company appealed, claiming that under an exculpatory clause in the contract, the company could not be liable to Art's for more than the cost of the ad (about $910). Art's claimed that the exculpatory clause was unconscionable. Please rule. a. The clause is enforceable because $50,000 is an unconscionable claim. b. The clause is enforceable because both parties are sophisticated corporations. c. The clause is valid and enforceable. d. The clause is unenforceable because it is unconscionable.

d. The clause is unenforceable because it is unconscionable.

Zazzles Jewelry sells Chic Boutique 150 necklaces. Zazzles sues when Chic defaults on its payments, and the court finds that some of the repayment terms in the contract are unconscionable because they place undue burdens on Chic. Zazzles is willing to make the repayment terms more favorable to Chic but wants the rest of the contract enforced. What is likely to occur? a. The contract will be decided under common law, so the court will refuse to uphold the unconscionable contract. b. The contract is governed by the UCC, so the unconscionable terms will mean the entire contract must be void. c. The contract violates usury laws, so the court will refuse to enforce it. d. The contract is governed by the UCC, so the court may choose to enforce the remainder of the contract.

d. The contract is governed by the UCC, so the court may choose to enforce the remainder of the contract.

While George travels for two months, Mary agrees to housesit and care for George's three horses at her stables. The parties agree that Mary will pick up the horses on the first day of George's trip, and George will pay Mary when he returns. George returns home from his travels and finds that Mary never picked up the horses. George sues. What will result? a. The court will apply the UCC, and Mary will lose. b. The court will apply the UCC, and Mary will win. c. The court will apply common law, and Mary will win. d. The court will apply common law, and Mary will lose.

d. The court will apply common law, and Mary will lose.

Maybelline falls down a well and is saved when her neighbor Ruben makes a very daring rescue. Ruben hoists her to safety, and Maybelline hugs him and promises him a check for $100,000 for his kindness. Ruben is delighted and when Maybelline visits him the next day and again mentions the $100,000, he tells her that he is going to quit his job as a preschool music teacher and use the money to start a business. Two days later he resigns from the nursery school and calls Maybelline and asks when he can expect his money. He is startled when she replies that she is not going to give him a cent. Will a court enforce Maybelline's promise? a. No, because Ruben did not know about the $100,000 before he rescued Maybelline. b. No, because the promise is supported by past consideration. c. Yes, because Ruben provided moral consideration. d. Yes, because Ruben relied on the promise.

d. Yes, because Ruben relied on the promise.

Professional Basketball teams have been pursuing Cody, a recently graduated high school athlete, for nearly two years. Cody and his father hired an experienced agent to represent him in contract negotiations with the various teams. Unfortunately, just before meeting with the agent to review contracts, Cody's father was hospitalized in critical condition following a car accident. Despite knowing that Cody would be alone, the agent insisted that they meet and Cody decide on a team to work with. The agent convinces Cody to sign a lucrative contract with a top-rated team, but the agreement contains a non-competition clause that would keep Cody bound to that team for his entire career. The contract has a 10-day grace period for review and cancellation with no penalty. After Cody's dad recovers and returns home from the hospital two weeks later, they discuss the contract and seek to cancel it. Is it likely that Cody will be able to avoid the contract? a. No, because Cody signed the contract, and it was a good deal. b. Yes, because Cody's dad was not present at the signing. c. No, because Cody did not cancel within the 10-day grace period. d. Yes, because the non-competition clause is oppressive.

d. Yes, because the non-competition clause is oppressive.

The Tufte family leased a 260-acre farm from the Travelers, Inc. Toward the end of the lease, Travelers mailed the Tuftes an option to renew the lease. The option arrived at the Tuftes' house on March 30 and stated that they had until April 14 to accept. On April 13, the Tuftes signed and mailed their acceptance, which Travelers received on April 19. Travelers claimed there was no lease and attempted to evict the Tuftes from the farm. May the Tuftes stay? a. Yes, because the Tuftes intended to stay, and that is all that is necessary. b. No. Travelers will win because of the mirror image rule. c. No. The Tufte family must leave because the Travelers' offer expired before Travelers received the Tuftes' acceptance. d. Yes, because under the mailbox rule, an acceptance is generally effective when mailed.

d. Yes, because under the mailbox rule, an acceptance is generally effective when mailed.