Q&A Hero

Q: If Continental Tires agreed to purchase all of the rubber that a particular Brazilian rubber plantation could produce, this would be: A. an output contract. B. an input contract. C. a requirements contract. D. a necessities contract.

Q: In the case of Rosenfeld v. Basquiat, Basquiat sold several paintings to Rosenfeld and provided him with a written receipt. Unfortunately Basquiat died before delivery, and Basquiat's heirs challenged the enforceability of the agreement. The court determined that: A. because the written agreement was completed in crayon on a scrap of brown packing paper, the writing did not meet the formality of a proper contract. B. because the written agreement did not contain the terms of delivery, the writing was too vague to form a contract. C. because the writing contained the names of the paintings, the price paid, and Basquiat's signature, the paper was sufficient to evidence a contract. D. because the writing was not signed by Rosenfeld, the paper was not sufficient to evidence a contract.

Q: In a shipping contract, the risk of loss passes to the buyer when: A. the contract is signed or finalized. B. the goods are delivered to the carrier. C. the goods are delivered to the buyer. D. the goods are en route and at least halfway to the buyer.

Q: Josh's Futbol World orders 500 U.S.A. replica soccer jerseys from Victory Apparel, a sports apparel manufacturer. The jerseys are to be delivered to Josh's place of business. When the shipment arrives, Josh's discovers that it has received 500 pairs of U.S.A. replica shorts but no jerseys. Before Josh's can notify Victory and return the shorts, a fire destroys Josh's building along with the shipment of shorts. A. This was a destination contract, and since the shorts were tendered to the destination, Josh's bears risk of loss until they can be returned. B. This was a destination contract, and the shorts were nonconforming goods, so Victory did not complete performance and retains risk of loss. C. This was a shipment contract, and Josh's assumed risk of loss when Victory delivered the goods to the carrier. D. This was a shipment contract, and Victory retained risk of loss until the goods were tendered to Josh's at Josh's establishment.

Q: The UCC will permit an incomplete or slightly ambiguous contract to be enforced using each of the following criteria except: A. past commercial conduct. B. industry standards or norms. C. judicial input of any terms necessary to maintain fairness. D. correspondence or verbal exchanges between the parties.

Q: Uncle Phil has lent you $10,000 to pay tuition and other school-related costs. You've now graduated, and Uncle Phil is asking about repayment terms. The loan was never evidenced in writing. This transaction falls under the UCC statute of frauds.

Q: The UCC permits terms to be added into a contract or filled in as gap fillers; however, the contract cannot be enforceable unless the parties have agreed to and specified a price in their agreement.

Q: A party holds title to goods when the goods have come into existence and the goods are identified to the contract.

Q: On February 1, Frank's Fedora Manufacturers sends an offer to Metropolitan Outfitters by letter with all price, quality, quantity, and delivery terms clearly stated, indicating that the offer will remain open until October 1. On September 1 Metropolitan sends an acceptance of the offer to Frank's with no material alterations to any of the stated terms in the offer. The acceptance makes the contract valid and enforceable.

Q: The only state that has not adopted the UCC is: A. California. B. Louisiana. C. Texas. D. Arizona.

Q: Which of the following would not be considered tangible? A. a car B. oxygen C. the right of ownership D. the pen or pencil you are using

Q: The UCC permits a contract to be considered formed entirely by the parties' conduct even if no definite time of formation can be determined.

Q: Betsy is moving to New Mexico and offers to sell her television to April. April isn't sure if she can afford it and asks for a week to decide. If Betsy agrees to hold the offer open for a week and makes the promise in writing, Betsy has given April a firm offer.

Q: In an installment contract, the buyer may reject an installment if the nonconformity substantially impairs the value of that installment or the nonconformity cannot be cured.

Q: If a party has been delivered nonconforming goods and has rejected them and is then forced to cover in order to maintain business operations, the party may sue the seller for the difference in price plus consequential damages.

Q: If a buyer knowingly accepts nonconforming goods, the buyer may still sue the seller for monetary damages based on the nonconformity.

Q: The United Nations Convention on Contracts for the International Sale of Goods does not recognize a formal writing requirement similar to the UCC statute of frauds requirement.

Q: In a shipping contract, the seller is obligated to deliver the good into the "hands" of the buyer.

Q: Article 2 rules for acceptance of offers are more rigid than common law rules.

Q: If the seller ships conforming goods, the buyer has a duty to accept them and may not reject the goods.

Q: Wrongfully revoking an acceptance will constitute a breach of contract by the buyer.

Q: Jones Corp. is set to deliver goods ordered by Smith Inc., and calls to confirm that the goods will be delivered the next day. Smith Inc., on the phone, notifies Jones Corp. that it has found the same goods available cheaper from another seller and will not accept delivery. In order for Smith Inc., to officially be in breach of contract, Jones Corp. must deliver and tender conforming goods and have Smith Inc., wrongfully reject them.

Q: UCC gap fillers will not be used and are not applicable to contracts when the contract clearly specifies a contract term or condition.

Q: If two companies enter into a sales contract and the shipping terms are omitted from the agreement, the contract will automatically become a shipping contract.

Q: If a seller has delivered nonconforming goods that have been rejected, upon notice of an intent to cure, the seller automatically then has 15 days to deliver conforming goods.

Q: While the common law recognizes commercial impracticability as a means to terminate a contract, the UCC rejects and does not recognize commercial impracticability.

Q: UCC risk of loss provisions will govern the terms of a contract even if the parties have specified risk allocation in the contract.

Q: The 2003 revisions to the UCC have been adopted by only about half of the states.

Q: Some courts have determined that the inclusion of an arbitration clause in an acceptance as a means of dispute resolution constitutes a material alteration of the offer in a merchant transaction.

Q: Just as in common law, the UCC recognizes the concept of anticipatory repudiation, allowing a breach to be declared prior to performance being due.

Q: If a merchant sells goods to a buyer who is not a merchant, Article 2 of the UCC will not apply.

Q: Your cousin, who is a CPA, calls you and says that a client paid him in diamonds and he's selling them. If you purchase one of those diamonds, at the time of the sale your cousin would be considered a merchant of those diamonds.

Q: Johnson Builders is selling a newly built home to Sheila. JRK Realtors is handling the transaction. This sale is covered under Article 2 of the UCC.

Q: If goods are to be picked up at the seller's place of business by the buyer and the seller is a merchant, the seller retains risk of loss until the buyer takes possession of the goods.

Q: Shovels R Us sends a purchase order to Acme Snow Shovel Inc., for 500 shovels to be delivered by September 30, 2014, in time for the winter season. Acme returns an acknowledgment form indicating that the shovels will be delivered on March 1, 2015. The acknowledgment letter forms a valid contract.

Q: If one party to a contract has reasonable grounds to believe that the other party will not or cannot perform the contract, that party has the right to demand ________ from the other party concerning performance.

Q: When a buyer rejects nonconforming goods and purchases the appropriate goods from a different seller, the buyer is said to be _______.

Q: ________ is the legal term for the right of ownership in goods.

Q: An irrevocable offer made by one merchant to another is called a _______.

Q: A significant change or deviation from the terms of a contract is called a ________ change.

Q: A ________ is one that is regularly engaged in the sale of a particular good.

Q: In a destination contract, the ________ bears risk of loss until the goods reach the destination.

Q: Abbreviations published by the International Chamber of Commerce that are meant to avoid confusion in international business transactions are called ________ terms.

Q: Harry entered into a contract with Sally in which she was to pay $50,000 for Harry's hunting cabin. All negotiations, witnessed by various third parties, stated the $50,000 figure as the sales price. When the contract was written, a typographic error was made indicating a price of $5,000. At settlement, Sally tendered $5,000 and demanded the deed in accordance with the written contract. Must Harry sell the cabin for $5,000?

Q: The Sportsman's Club is planning its annual banquet and fund-raiser and has decided to feature a speaker who will attract a huge crowd. The club contracts with Hall of Fame football announcer John Madden to be the keynote speaker. A week before the event, John calls and says that he would like to give his brother Fred the opportunity to speakJohn would sit in the audience rather than speak. What options does the Sportsman's Club have?

Q: Fred's Flooring (FF) contracted with Harry homeowner to install wood flooring throughout Harry's home. Harry was to purchase the flooring, and the contract was solely for installation. Payment was to be 20 percent at the time that the work commenced and 80 percent once the flooring was installed. Harry purchased the flooring materials and paid the 20 percent, so FF began work. When FF's work was halfway completed, Harry realized that he didn't have the money to pay FF on completion, so he bolted the doors and refused access. If FF wants to rescind the contract and be paid for work completed, FF would sue for: A. compensatory damages. B. consequential damages. C. restitution. D. liquidated damages.

Q: In Hadley v. Baxendale, when Hadley sued because Baxendale took unnecessary time to get a crankshaft repaired, causing Hadley's mill to close for an extended time, the court found: A. Baxendale owed Hadley compensatory damages because the mill was shut down for an extended time directly as a result of Baxendale's delayed delivery. B. Baxendale owed Hadley consequential damages because the mill was shut down for an extended time as a result of Baxendale's delayed delivery and the shutdown was a foreseeable indirect result of Baxendale's delay. C. Baxendale did not owe Hadley consequential damages because the extended closing time was not foreseeable despite Baxendale's delay in delivery. D. Baxendale did not owe Hadley either compensatory or consequential damages but did owe punitive damages due to the unreasonable delay in delivery.

Q: Beth has just signed a contract to work for a bank. A clause in the contract says that before she begins work, she must pass a drug test and should drug use be discovered, the contract becomes void. This clause would be a: A. condition precedent. B. condition subsequent. C. concurrent condition. D. nothing of consequence since Beth has already signed the contract.

Q: In which of the following situations is a court most likely to find substantial performance? A. KM Corporation orders 500 boxes of copy paper from MK supply, but MK can deliver only 450 boxes. B. Young orders a set of four specially made chrome rims for her car, but the supplier can deliver only three. C. Olivia orders 3 gallons of paint for the exterior of her house, based on square footage covered and needed, but the paint supplier can deliver only 2 gallons. D. April orders a fully equipped car from a dealer, but although perfect in every way, the car delivered has an automatic transmission rather than the manual transmission that she ordered.

Q: Lon has just come home from serving in the Marines and contracts with a local car dealership to purchase a car. The car must be ordered, and payment is to be made when the car arrives. The next day, Lon receives orders to return to active duty. Realizing that he doesn't need the car, he brings Tony to the dealership and asks that Tony substitute for him. Tony will take delivery and ownership of the car, and Tony will pay the dealership upon delivery. The dealership agrees to have Tony substitute for Lon. What has occurred? A. an assignment B. a novation C. a delegation D. an accord and satisfaction

Q: Which of the following is rarely awarded in contract cases? A. consequential damages B. compensatory damages C. punitive damages D. liquidated damages

Q: In which of the following scenarios would enforcement of specific performance be appropriate? A. Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day. B. You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons. C. You order a current-model name-brand television from a department store, and a few days later the store breaches by not ordering it from the manufacturer. D. You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute.

Q: When examining and enforcing conditions precedent and conditions subsequent, courts: A. give stricter enforcement to conditions precedent and find conditions subsequent rarely enforceable. B. give stricter enforcement to conditions subsequent and find conditions precedent rarely enforceable. C. maintain that procedurally, with respect to who bears the burden of proof, conditions subsequent and conditions precedent differ. D. hold that, under modern law, both conditions subsequent and conditions precedent should only rarely be enforced.

Q: Punishment damages are called: A. nominal damages. B. consequential damages. C. punitive damages. D. compensatory damages.

Q: Which of the following is not classified as an equitable remedy? A. specific performance B. damages C. reformation D. injunctive relief

Q: Oscar is speeding and driving inattentively when he runs into Felix, who is driving very cautiously. As a result of the accident, Felix's car needs $2,500 worth of repairs and Felix loses a week's salary because he has to take off from work to recover from injuries sustained during the crash. A. Both the repairs and the lost wages are compensatory damages. B. The repairs are compensatory damages, and the lost wages are consequential damages. C. The repairs are consequential damages, and the lost wages are compensatory damages. D. Both the repairs and the lost wages are consequential damages.

Q: Which of the following will not allow for an anticipatory repudiation to occur? A. Tom calls Dick and says that he can't find the raw materials to complete performance and doubts he can meet the contract's performance deadline. B. Sally is buying Jane's car, with the money and car to be exchanged in a week; however, Sally meets Betty, who tells her she just bought Jane's car. C. Mary Beth is scheduled for knee surgery next month with Dr. Slice but reads in the paper that Dr. Slice has lost his license to practice medicine. D. Manny calls Moe and tells him that the sculpture he's creating for him is coming along slower than anticipated but he's pretty sure he'll be done by the contract deadline.

Q: Which of the following involves a third-party substitution? A. novation B. accord and satisfaction C. substitute agreement/modification D. rescission

Q: In a delegation situation, the nondelegating party is called the: A. obligee. B. delegate. C. delegator. D. obligor.

Q: Alan has accepted a new job. Which of the following is not a contract condition related to that job? A. Medical and dental benefits will start after Alan has worked for six months. B. Alan will receive a bonus provided that he obtains six new clients within 30 days. C. Alan's salary will be $1,000 a week. D. Alan cannot begin work unless he passes a drug and alcohol screening.

Q: Pete has been fired from his job and believes that he has been wrongfully terminated. As he decides how to fight the perceived injustice, how can he best mitigate damages? A. file his suit as soon as possible while the evidence is available and witnesses' recollections are fresh B. file for unemployment insurance as quickly as possible so that he doesn't sink too far into debt C. call his former employer to determine the real reason he was fired D. actively seek new employment as soon as possible

Q: Which of the following is classified as an equitable remedy? A. consequential damages B. reformation C. restitution D. liquidated damages

Q: Max has contracted with Lew to have his house painted. The contract specifically stated that the job was to be completed by August 25. Lew completes the job on August 26. Max has suffered no loss due to the delay. The job was otherwise done exactly to all contract requirements and specifications. If Max sues Lew for breach of contract due to the missed completion date and if the courts were to award damages, what type of damages would most likely be awarded? A. punitive damages B. consequential damages C. restitution D. nominal damages

Q: Moe has entered into a contract with Larry. Subsequently, Moe assigns his rights in that contract to Curley. Which of the following would not prevent that assignment? A. The contract contains an antiassignment clause. B. The assignment would materially alter Larry's duties and cause an increased burden or risk to Larry. C. Larry protests the assignment and demands that Moe not make the assignment. D. The assignment would violate public policy matters.

Q: A delegation will be allowed in which of the following situations? A. a surgeon performing brain surgery B. an actor hired to perform in a play C. a sculptor hired to sculpt your bust D. a painter hired to paint your home

Q: Sally has just purchased a home and wants to have an in-ground pool installed. She calls Cool Pools, the company that put in her neighbors' pools. When the company rep comes to her property, he does some soil tests that are standard for the industry and gets the same results as he got when the other pools were put in, so the company gives her a price quote of $16,000. When Cool Pools begin excavating, it discovers solid rock 4 feel below ground level. The neighbors had no such rock. Cool Pools stops work and informs Sally that it will have to use explosives to remove the rock and the cost of the pool will now be $32,000. A. Sally is under contract and will have to pay the new price. B. Sally can have the contract discharged based on impracticability. C. Sally can have the contract discharged based on impossibility. D. Sally can have the contract discharged based on frustration of purpose.

Q: Clyde contracts with Seaside Resorts to rent an oceanfront room for a romantic weekend with his girlfriend Anne. In fact, Clyde intends to propose to Anne on the beach under the full moon during their stay. He made this decision after booking the room. The contract with Seaside Resorts requires a $250 deposit with the remaining $250 due upon check-in. The deposit is nonrefundable unless the reservation is canceled at least 48 hours prior to check-in. The day before they are to leave for the resort, Clyde and Anne have a huge fight and break up. Clyde calls Seaside and cancels the reservation and demands a refund of his deposit. A. Clyde will get the refund because of impossibility; he can't propose if they are no longer speaking. B. Clyde will get the refund because of impracticability; he can't stay at a romantic seaside room if he has no one to share it with. C. Clyde will get the refund because of frustration of purpose; his intention was to propose and that is no longer possible. D. Seaside is not required to provide a refund.

Q: Sharon has contracted with Craig to buy Craig's car. She will pay $5,000 in cash, and he will provide the title and registration. They agree to meet at 10 a.m. on Wednesday to exchange their consideration. Unfortunately, Craig dies Tuesday evening. A. The contract automatically terminates due to impossibility caused by Craig's death. B. The contract automatically terminates due to impracticability caused by Craig's death. C. The contract is still valid and Craig's heirs must go through with it based on the agreed terms. D. The contract is still enforceable; however, Craig's heirs may renegotiate the terms because they are now the owners of the car.

Q: Toy Tech (TT) has ordered 50,000 aluminum widgets from the Acme Widget Corporation (AWC) with delivery to be made on November 1. These widgets will be used in TT products to create toys for the holiday season. Under which circumstance may TT claim an anticipatory repudiation? A. The cost of aluminum has risen, lowering AWC's profit margin, yet AWC insists that it will honor the contract. B. The demand for widgets has suddenly decreased, and TT isn't sure it can sell the 50,000 widgets it ordered. C. AWC's sole manufacturing plant burned down on October 1, yet AWC insists that it will rebuild and honor the contract. D. TT has found another manufacturer that can provide less expensive widgets of the same quality as AWC's widgets.

Q: In DiFolco v. MSNBC, a TV commentator e-mailed her supervisors indicating that she wished to have a meeting to discuss her exit from the shows and to give MSNBC ample time to replace her, but she also wrote that she wanted to be part of the MSNBC team "for a long time to come." MSNBC claimed anticipatory repudiation. The court: A. found DiFolco did not manifest a clear and unequivocal repudiation and ruled in her favor on the issue of anticipatory repudiation. B. found DiFolco's e-mails were unambiguous in expressing her intent to leave and ruled in MSNBC's favor on the issue of anticipatory repudiation. C. found DiFolco's e-mails were ambiguous but her past employment issues were sufficient to indicate refusal to perform. D. dismissed DiFolco's claim and ruled that the e-mails constituted DiFolco's anticipatory repudiation.

Q: You have booked a hotel room for a conference at a rate of $100 per day for five days. When you arrive to check in, you are told that the hotel is full and that it overbooked and cannot supply you with a room. You are forced to go to the only hotel in town with available rooms and pay $150 per night. If you sue for damages: A. you are entitled to compensatory damages in the amount of $250. B. you are entitled to consequential damages in the amount of $250. C. you are not entitled to any damages because the additional costs were not foreseeable. D. you are entitled to liquidated damages in the amount of $250.

Q: The Chicago Cubs major-league baseball team is in the playoffs and doing well. Behind the left-field wall there is an apartment building, and the owner advertises, "Space available on the apartment building roof with a clear view of the field for the World Series. Bring a lawn chair, your radio, and a cooler and enjoy the game. Just $50 per game." Bart, a lifelong fan, answers the ad and pays the building owner $100 to reserve space for the first two games. Unfortunately, the Cubs start playing poorly and don't make it to the World Series. A. The building owner does not have to refund the money because Bart reserved space and the space is still there for him to use whether the games are played or not. B. The building owner does not have to refund the money because it's not her fault that the Cubs didn't make it to the World Series. C. Bart will get a refund because of impracticability. D. Bart will get a refund because of frustration of purpose.

Q: Sam has contracted with Dave to purchase Dave's racing bike, with payment and delivery of the bicycle to be in 10 days. Three days later Sam hears that Dave is going to sell the bike to Gene in three days at a higher price. If Sam really wants the bike, what should he do? A. Immediately sue for specific performance. B. Immediately seek injunctive relief. C. Immediately sue for compensatory damages. D. Immediately sue for consequential damages.

Q: Each of the following is a discharge by mutual consent except: A. accord and satisfaction. B. novation. C. rescission. D. frustration of purpose.

Q: Harry sees an AK-47 automatic assault rifle in a gun shop window. He inquires about the price and is told that it is $2,500. Harry signs a contract promising to pay the $2,500 on Friday, taking possession of the rifle when payment is made. On Thursday, a law is enacted making the ownership, sale, or possession of an automatic rifle illegal. This contract: A. automatically terminates due to impossibility. B. automatically terminates due to impracticability. C. automatically terminates due to frustration of purpose. D. is enforceable and not affected by the new law because it was entered into before the law took effect.

Q: Anticipatory repudiation may be used when a party has knowledge that either a complete or a partial breach will occur by the other party.

Q: George has entered into a contract with Mark to supply raw materials to Mark's factory. The contract does not contain an antidelegation clause. George then delegates his duty to supply the raw materials to Wayne, a competitor of Mark. This is a valid delegation.

Q: Lisa is doing some landscaping around her house and ordered a delivery of topsoil. Her agreement says that the delivery will be made on Wednesday and payment for the soil will be due when the truck arrives at her house. This is an example of a concurrent condition.

Q: Patios R Us contracts with Karl's Concrete to have 35 yards of concrete delivered to a job site it is working on. Payment is to be made 30 days after delivery. Five days after the concrete is delivered, Patios R Us files for bankruptcy and the filing is accepted by the court. Karl's cannot sue to enforce the contract and receive payment.

Q: Lance is an avid bicyclist and sends in a $150 fee to participate in an across-the-state ride in the Midwest. A week before the ride, he breaks his leg. Unless the contract specifically provides for no refunds under any conditions, he will be able to receive a refund based on impossibility.