Q&A Hero

Q: Which of the following statements is true about leases? A. It is a transfer of the ownership of goods from one merchant to another. B. It is a transfer of the rights to possess and use the goods belonging to another. C. Article 2 of the UCC deals exclusively with leases of goods. D. It is governed by the same principles of common law that predominantly govern service contracts.

Q: Under Article 2 of the UCC, in which of the following cases is the seller a "merchant"? A. Barbara, an accountant, sells her car to her nephew. B. Ted, a veterinarian, sells his tractor to his neighbor. C. Tec-E, a software company, contracts to sell a database program to a local NPO. D. Tom, a used-car dealer, sells his microwave to Gary.

Q: Adam offered to buy automobile batteries from Ben. Adam's purchase order was complete with respect to all material terms except price, which was omitted. If Ben accepts Adam's offer, and the price of automobile batteries is well established in the industry, does a contract exist between Adam and Ben? A. No contract was formed between Adam and Ben. B. A contract was formed between Adam and Ben only if it can be proved that the parties intended to enter a contract and orally discussed the price. C. A contract was formed between Adam and Ben, but the price will be treated as a proposed addition to the contract which must be accepted by both parties. D. A contract was formed between Adam and Ben even though the price term was omitted.

Q: Under the UCC, if the contract is silent about the place of delivery, the goods are to be delivered: A. at the site of the goods. B. at the seller's place of business. C. at the seller's residence, if it is not his place of business. D. at any place the seller deems convenient.

Q: When a contract is silent about the time for performance: A. the UCC takes the same position as the common law. B. performance must be tendered within what the buyer considers to be a reasonable time. C. payment for the goods is due at the time and place which the seller accepts. D. the contract can be terminated by either party without giving any notice.

Q: Marking of goods by the seller is a way of identification of goods.

Q: The Code requires both the original owners as well as the good faith purchasers of goods to bear the burden of collecting from their fraudulent buyers.

Q: Anyone who entrusts goods to a merchant who regularly deals in such goods gives that merchant the power to give good title to a buyer in the ordinary course of business.

Q: Ex-ship not only specifies the particular ship on which the goods are to be placed but also places the expense and risk on the buyer.

Q: A seller may entrust goods to a potential buyer to give him/her a chance to decide whether or not to buy the goods.

Q: Which of the following is governed by Article 2 of the UCC? A. Lee contracted to build Sal's house. B. Chris leased 1,500 square feet of retail space from Anne. C. Sue contracted to sell 500 pairs of shoes to a department store. D. Kim contracted to dress Sally for her wedding.

Q: If a contract requires the seller to ship the goods, title passes to the buyer when the seller delivers the goods to him.

Q: Parties to a sales contract act in good faith but the contract as a whole is unconscionable. In this case, courts do not have the right to refuse to enforce the contract.

Q: Under the UCC, when parties to a sales contract omit a price term, the contract is void because there is no "meeting of the minds."

Q: When a sales contract obligates a buyer to purchase a seller's output of a certain item and the good faith outputs are grossly disproportionate to prior normal outputs, the UCC requires that the buyer purchase the disproportionate amount.

Q: In exclusive dealing contracts, the UCC says that sellers have a duty to use their best efforts to supply their buyers, who in turn have a duty to use their best efforts to sell the goods.

Q: Article 2 of the UCC applies to transactions involving real and personal property.

Q: Article 2 of the UCC does not apply to the sale of real estate.

Q: If a contract is for the sale of goods, the principles of common law are exclusively applicable.

Q: Article 2A of the UCC deals exclusively with leases of goods.

Q: The UCC distinguishes between merchants and nonmerchants by holding merchants to a higher standard in all cases.

Q: Explain the meaning of discharge in legal terms. Mention the different situations in which a party's duty to perform could be discharged.

Q: A mandatory injunction: A. occurs when a court orders a party to refrain from doing a certain act. B. occurs when a court orders a party to do a certain act. C. is ordered to induce irreparable injury. D. is used to compel personal service.

Q: Injunctions are: A. never used to compel specific performance. B. not a form of equitable relief, which is granted depending on the equities of a case. C. used to compel personal service, like specific performance. D. available when a breach of contract threatens to produce an irreparable injury.

Q: Fully explain the concept of substantial performance.

Q: Kent Construction Company contracted to build four garages for Magnum, Inc., for $100,000 according to specifications provided by Magnum. Kent substituted two-by-fours for the more expensive two-by-sixes called for in the contract. An inspection reveals that the garages are sturdy, but that they are worth only $85,000 due to Kent's failure to conform to Magnum's specifications. To what is Kent entitled, if anything, and why?

Q: Explain destruction of subject matter as an excuse for nonperformance with an example. Under what circumstance will it not be used as an excuse for nonperformance?

Q: Maxwell construction made an apartment block for Riverside. After 5 years of the construction Riverside sued Maxwell for the leakages in its ceiling. Is this lawsuit valid?

Q: An employee with special skills who has agreed not to work for a competitor may be enjoined from breaching his or her contract and working for that competitor by: A. a mandatory injunction. B. liquidated damage provisions. C. a prohibitory injunction. D. nominal damage provisions.

Q: The word "Mitigate" denotes: A. a legal scandal in the early 1970's which established remedies for breaches made in bad faith. B. a legal term which means to reduce, avoid, or minimize. C. a legal term which means to sue or take to trial. D. a legal term which means to recover damages for injuries that could have been avoided.

Q: Roy was doing repair work in the apartment of Melinda. He saw a deep crack in the floor but did not repair it at the time. Later while doing ceiling work, his ladder got stuck in the crack and he injured himself. Can he recover damages from Melinda? A. He can impose consequential damages on Melinda. B. He can recover under the specific performance provision. C. No, he cannot recover for injuries that could be easily avoided. D. No, he cannot recover damages till he gets an injunction.

Q: Which of the following may require specific performance? A. Sale of a real estate (a house or tract of land). B. Sale of a very expensive personal property (a car or big-screen TV). C. Personal service. D. Anything that may cause irreparable injury.

Q: Martha entered into a contract with Terry, an art dealer. According to the contract Terry was to supply 18th century artifacts to Martha for the play she was directing. Martha was paying $50,000 for this. Another director needed the same wigs and was ready to pay $60,000. Terry decided not to sell the artifacts to Martha. In this case, the court may order Terry to: A. specifically perform the contract. B. repudiate the contract. C. pay nominal damages. D. substantially perform the contract.

Q: An award for a purely technical breach of contract (usually $1.00) is: A. nominal. B. punitive. C. liquidated. D. compensatory.

Q: Ronny hires a car from Greens Transport with global positioning system (GPS) for his holiday in Las Vegas. The rent for the car was $175 a day and was hired for 7 days. The contract did not state anything regarding speed. At times Ronny drove at a high speed of which the GPS kept a record and Greens imposed damages worth $4000 for the wear and tear caused due to high speed. What kind of damage is this? A. Compensatory damages. B. Penalty damages. C. Liquidated damages. D. Punitive damages.

Q: The duty to mitigate damages: A. is a non-equitable doctrine frowned upon by modern courts. B. requires the non-breaching party to take steps only in case of physical injuries. C. holds the non-breaching party liable to a minimal amount. D. requires the non-breaching party to take steps to minimize the damage.

Q: Punitive damages: A. are usually unavailable. They are sometimes awarded for bad faith breach. B. are so called because they are small in amount, not more than $10.00. C. usually punish and are frequently available as a performance remedy. D. are so called because they are small in amount and are usually specified in the contract.

Q: A liquidated damages provision will be enforced only when: A. the subject matter of the contract has a value which cannot be put in monetary terms. B. the amount specified is reasonable and actual damages would be difficult to determine. C. the nature of the contract is such that damages would not be difficult to determine. D. the amount agreed on is not the injured party's only remedy.

Q: Rebecca contracted Matthew Properties to repair her apartment for $20,000. Matthew Properties repaired the apartment and handed it over to her. She saw that the garages and the attic had not been properly worked upon. She filed a suit against them but the court said that Matthew Properties had been discharged from obligations by a(n): A. statute of limitations. B. waiver. C. occurrence of condition subsequent. D. altercation.

Q: The time limit set by the UCC statute of limitations for contracts involving the sale of goods is: A. four years. B. five years. C. ten years. D. twenty years.

Q: Which of the following statements is not true about discharge by alteration? A. If the parties' agreement is represented by a written instrument, a material, intentional alteration of the instrument by one of the parties discharges the other party. B. If a party consents to an alteration or does not object to it after learning of it, even then he or she will be discharged. C. Alterations by third parties without the knowledge or consent of either contracting party will affect the parties' rights. D. Since contracts are created by mutual agreement, they are not allowed to be altered by either of the parties.

Q: Consequential damages: A. occur when the special circumstances of the plaintiff cause him to suffer losses that would not ordinarily be foreseeable as a result of breach. B. are usually recoverable unless the defendant had reason to foresee them at the time the contract was created. C. are measured by the loss in value of the promised performance. D. are not limited to losses that would occur as a result of breach of contract.

Q: An award for loss in value of a promised performance is: A. nominal. B. punitive. C. liquidated. D. compensatory.

Q: Adam contracts to sell Ben 100 widgets for $100 for use in Ben's factory. Adam does not know that Ben's factory is closed as it is waiting for supply of widgets from Adam. Will Adam be liable for the damages caused due to late delivery? A. Will be liable for compensatory damages. B. Will be liable for consequential damages. C. Will not be liable for any damages. D. Will be liable for nominal damages.

Q: In which of the following situation a party's duty to perform cannot be discharged? A. The nonoccurrence of a condition subsequent B. The nonoccurrence of a condition precedent C. Anticipatory breach D. Material breach

Q: Farmer Logan had agreed to supply maize to Roxy Inc. There was a terrible winter in his state which destroyed his crop and later he fell sick and ultimately died. Farmer Logan can be excused for nonperformance on grounds of: A. commercial impracticability. B. illness or death of the promisor. C. nonoccurrence of condition subsequent. D. destruction of subject matter.

Q: Which of the following statements is true? A. Personal service contracts, like all contracts, terminate with the promisor's death. B. Personal service contracts are the only contracts which terminate with the promisor's death. C. Personal service contracts are the only contracts which cannot terminate with the promisor's death. D. Personal service contracts can terminate under any circumstance.

Q: In which of the following situations can a party's duty to perform be discharged? A. Statutes and legislation that make a performance more difficult. B. When something that is essential to the promisor's performance is destroyed through no fault of the promisor but its substitute is available. C. When events occur after the formation of the contract that would make the return performance of the other party worthless to the promisor. D. When the promisor impliedly assumed the risk that the event would occur.

Q: "Frustration of venture": A. is the same as "commercial frustration." B. is the same the same as "commercial impracticability." C. occurs when the return performance becomes worthless for the promisee. D. occurs when the promisor expressly assumes the risk that the event occurred.

Q: Metz and Desman contracted for Metz to build a house for Desman on Desman's lot according to specifications provided by Desman. The contract provided that Metz would be paid $125,000 for this. Metz unintentionally deviated from the specifications in several minor respects. The house is soundly constructed and Metz completed the work within the promised time. Desman refused to pay Metz any of the $125,000, arguing that the house did not conform to the specifications. In this case: A. Desman can get a decree of specific performance. B. Metz has no right to be paid for any of his work because he breached the contract. C. if the court finds that Metz has substantially performed, he will be able to recover the contract price less any damages caused by his failure to perform as promised. D. if the court finds that he substantially performed, Metz will be able to recover the contract price less any damages caused to him because of the delay in payment.

Q: Which of the following is true of "anticipatory repudiation"? A. It occurs if promisors, prior to the time for performance, indicate an intent not to perform their duties under the contract. B. Its indication can arise only from implicit actions and the other party can sue after two weeks for breach of contract. C. It occurs when the promisee's performance fails to reach the degree of perfection the other party is justified in expecting under the circumstances. D. Its indication can arise only in the form of an express statement by the promisor and the other party can sue for the breach immediately.

Q: Which of the following is true about building and construction contracts? A. The promisee who is dissatisfied with the mechanical fitness, utility, or marketability may reject the performance without liability, even if doing so is unreasonable. B. The engineer's or architects certificates, which are often issued at each stage of completion, indicate that the work is done to the satisfaction of the architect or engineer. C. These contracts require the builder to give the owner an engineer's certificate for satisfactory performance after the owner has paid the builder for the project. D. In contracts involving matters of personal taste and comfort most courts require the promisee to accept performance that would satisfy a reasonable person.

Q: Kids Corner ordered for a supply of stuffed toys looking like Santa Claus from Toyland Inc. The toys were to be supplied by 1st of December but were sent to Kids Corner on 25th of December. There has been a _____ of contract. A. compensatory breach B. anticipatory breach C. material breach D. non-occurrence of concurrent condition

Q: Conditions in contracts: A. must be created in writing to be binding. B. can be created only by the use of special words. C. can be implied. D. must always occur concurrently.

Q: Normally, both parties to a contract are discharged when they have completely performed their contractual duties.

Q: Punitive damages are recoverable for breach of contract.

Q: The plaintiff in a contract action has no duty to mitigate his damages because he is the injured party.

Q: Tony contracted to buy wheat from farmer Brown. It was contracted that Tony would pay farmer Brown, three days after the delivery of the wheat. Brown's delivery would be a _____ of Tony's duty to pay. A. constructive condition B. condition subsequent C. constructive concurrent condition D. constructive condition precedent

Q: Tim and Sam entered into a bilateral contract that does not state a time for performance. In this case the law infers that each party's performance is a: A. condition subsequent. B. constructive concurrent condition of the other party's duty to perform. C. constructive condition precedent of the other party's duty to perform. D. condition concurrent.

Q: Emma had contracted with Queen Arts to perform a ballet. A day before the program there was a fire and the dance floor was burnt and Emma could not perform. Since Emma cannot perform her contractual duties, she is liable for material breach.

Q: Contracts can be created by mutual agreement, but cannot be discharged by mutual agreement.

Q: If time is not of the essence of a contract, the promisee must accept late performance rendered within a reasonable time of when performance was due.

Q: Rob contracted to play football for the United Lions in May 2007. However, he had an accident and he died. His death will terminate his contract.

Q: The destruction of items that the promisor intended to use in performing would not excuse nonperformance if it just made performance more difficult for the promisor.

Q: The doctrine of substantial performance applies when a promisor willfully fails to completely perform.

Q: A building that deviates slightly from the contract's specifications would not qualify as substantial performance.

Q: A promisor who is guilty of material breach has no right of action under the contract.

Q: Anticipatory repudiation may never be implied.

Q: Rob's construction firm did not give Casey a certificate issued by Timothy Engineering Firm indicating that the work has been done to satisfaction. Casey has no duty to pay Rob's firm.

Q: Promisors in complete performance contracts who do not completely perform can always recover the contract price.

Q: Explain what types of contracts are assignable and name the types of contracts that are not assignable.

Q: What is an implied guarantee?

Q: Ford owned an apartment complex and was converting the complex to a cooperative by selling individual units. Each purchaser was required to pay Ford an extra $30 per month for utilities, taxes, and insurance. Ford sold all his rights in the complex to Roberts and assigned the purchasers' contracts to him. Roberts failed to pay the applicable property tax, and Crowe, a purchasing tenant, sued him to compel payment of the tax. Roberts argued that in purchasing Ford's interest, all he bought was the right to collect the payments made by tenants and that he assumed no duties. Is Roberts liable for the property tax?

Q: Who is a creditor beneficiary? Can he/she enforce the contract?

Q: An underground water main burst in Manhattan and flooded the building where the Acme electric company has an electricity supply substation. A fire resulted and disrupted electric power for four days. This occurred during the biannual "Buyers Week" when merchandisers from around the world were in town to visit fashion showrooms and place orders for future seasons. Some 200 merchandisers brought suit against Acme. Some of the businesses had no direct contractual relationship with Acme. They argued that their lease agreements with their landlords, who were the direct contracting entities with Acme, obligated them to pay a share of the electricity expenses and therefore they could sue under the contracts between the landlords and Acme. Are they correct?

Q: If an event must occur before a party's duty to perform arises, it is called a condition precedent.

Q: GP had been contracted by the city of Kingston to install a monitoring system at all public places. This was to be done in two phases and the city had the right to terminate the contract. GP had plans to use a subcontractor, Rex, whom they usually hired for the last phases of projects executed by them. After two weeks of the work, the city of Kingston found that things were not going properly and terminated GP's contract. Can Rex sue the city of Kingston? A. Yes, because Rex is a third-party donee beneficiary. B. No, because Rex is only an incidental beneficiary. C. Yes, because Rex is involved in a novation. D. No, because donee beneficiaries cannot enforce a contract.

Q: The municipality of College Town enters into a contract with Streetz to have the town's roads repaired. Katie is a resident of College Town and is considered a(n): A. donee beneficiary. B. incidental beneficiary. C. implied beneficiary. D. creditor beneficiary.

Q: X, a builder, contracts with the city of Y to build a new convention center. Z, a hotel owner, stands to benefit once the convention center is built, so Z is angry when X backs out of the contract. Z wants to sue X. Can Z sue X? A. Z is a creditor beneficiary and can sue X. B. Z is a donee beneficiary and can sue X. C. Z can sue X because Z is a citizen of Y, with whom X contracted. D. Z is an incidental beneficiary and cannot sue X.

Q: In the will, Lydia's mother has named Lydia as the owner of her farm and named her as a beneficiary in her insurance policy. Lydia is: A. a donee beneficiary. B. an incidental beneficiary. C. the assignee by novation. D. a creditor beneficiary.