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Contract Law and UCC Article 2 only




PART I;A. Please read carefully each of the following true/false questions, making sure to mark a response for each question;selecting the most correct response. Value: 1 point per question. (Note: Scantrons will be provided in class on;April 9th, when the exam is due.);(T)(F) 1. Contract law is one of the most significant areas of law relating to business and commerce.;(T)(F) 2. The party that breaches a contract will be subject to legal but not equitable penalties because a contract;is a legal document.;(T)(F) 3. An executed contract is one that has been fully performed.;(T)(F) 4. Quasi-contracts do not arise from a mutual agreement by the parties but are imposed by courts to avoid;unjustly enriching a party who should not profit from improper behavior.;(T)(F) 5. Advertisements are generally treated as offers, which if accepted, become immediately binding.;(T)(F) 6. A rejection of an offer by the offeree will not necessarily terminate an offer.;(T)(F) 7. Under the common law, the mirror image rule permitted the offeree's acceptance of a contract to vary to;some;degree from the offeror's offer.;(T)(F) 8. For the doctrine of promissory estoppel (detrimental reliance) to apply, there still must be a contract with;adequate consideration.;(T)(F) 9. In order for consideration to have "legally sufficient value", it must consist of goods or money.;(T)(F)10. In general, promises based on moral obligations are always enforceable due to the pre-existing duty rule.;(T)(F)11. A promise to do what one already has a legal duty to do is not consideration.;(T)(F)12. Parents still owe a legal duty to provide food, clothing, and shelter for their children regardless of;emancipation.;(T)(F)13. The fact that a minor has a right to disaffirm a contract permits an adult who is a party to that very same;contract to cancel it without penalty or liability.;(T)(F)14. In some states, some contracts for such things as student loans and insurance may not be disaffirmed by a;minor under any circumstances.;(T)(F)15. Only a legal guardian can enter into a legally binding contract on behalf of a person who has been;adjudicated;as mentally incompetent.;(T)(F)16. Mistakes in judgment as to value or quality will always be grounds to permit voiding a contract.;(T)(F)17. Fraudulent contracts may be voided based on the argument that the innocent party was unable to consent;to;the agreement due to the fraud.;(T)(F)18. Restrictive covenants and covenants not to compete are always struck down because they are;unreasonable;restraints of trade.;(T)(F)19. Impossibility, excusing performance of a contract, is measured objectively.;(T)(F)20. If Rose and Peter sign a contract in which Peter agrees to buy a handmade shawl from Rose, then the fact;that Peter decides to breach the contract will give Annie, a close friend of Rose, the right to sue Peter for;his breach.;(T)(F)21.;An accord and satisfaction discharges the original contract upon the offer of the accord.;(T)(F)22.;Because of the uncertainty that they add to contracts, conditions must be express.;(T)(F)23.;The termination of an enforceable contract by full performance of the duties is called discharge.;(T)(F)24.;Specific performance is the remedy customarily used when one party has breached a contract for the sale;of;ordinary goods.;(T)(F)25.;A third party who is not in privity of contract but who has rights under the contract and can enforce the;contract against the obligor is said to be an intended beneficiary.;B. Multiple Choice. Select the best answer to each of the following questions. Each correct answer is valued at 2;Page 1 of 5;4/10/2014;points each.;25. Seasonal Selections, Inc. sends a copy of its catalog to William along with a personalized computer-generated;letter inviting him to purchase any two items in the catalog at the advertized price. Has Seasonal Selections made an;offer?;A. Yes, the letter is an offer.;B. It is an offer only if William is already a customer.;C. The catalog and letter are an offer, because there is no room to negotiate a price.;D. Seasonal has not made an offer.;26. Moral obligations do not form an enforceable contract because what element is missing?.;A. Agreement.;B. Consideration.;C. Contractual capacity.;D. Lawful object.;27. Artist Annie works and displays her paintings in a local gallery. Millionaire Marty sees her work and is;particularly interested in a seascape painting. Annie says she will sell it for $50,000. Marty tells her he really likes;the painting, however, he will only buy it if the price is $45,000. Which of the following is correct?;A. Martys counteroffer terminates Annies offer of $50,000.;B. If Annie agrees to Martys offer, she will be bound by a contract to sell the painting for $45,000.;C. If Annie rejects the offer, Marty cannot then agree to the $50,000 price and bind Annie.;D. All of the above.;28. Under;A.;B.;C.;D.;this rule, the offeree must accept the terms made by the offeror.;Mirror image rule.;Proper dispatch rule.;Mailbox rule.;Acceptance upon dispatch rule.;29. Edward Employee has organized birthday parties for all the other employees in his office for 10 years. One day;Brenda Boss tells Edward he has done such a great job, she is going to pay him an extra $200 this month. However;when Edward gets his check, it is the same amount it has always been. Which of the following is correct?;A. Brendas promise is unenforceable because it is based on past consideration.;B. Brendas promise is unenforceable because it is based on an illusory promise.;C. Brendas promise is enforceable because Edward performed a service for the company and deserves to;be paid.;D. None of the above.;30. If a contract is a complete and final statement of the parties agreement, any prior or contemporaneous oral or;written statements that alter, contradict, or are in addition to the terms of the contract are inadmissible in court;regarding a dispute over the contract based on which one of the following legal concepts?;A. The integration clause.;B. The rule for international contracts.;C. The rule against perpetuities.;D. The parol evidence rule.;31. If you are the nonbreaching party, you must still do this to avoid or reduce damages caused by a breach of;contract.;A. Mitigation.;B. Nominal damages.;C. Recission.;D. Restitution.;32. The standard which a jury must use to weigh the evidence in a contract case is referred to as;A. The subjective standard of proof.;Page 2 of 5;4/10/2014;B. The statute of frauds.;C. The writ of mandamus.;D. The objective theory of contracts.;33.;Prior to signing a written agreement for hotel accommodations that provided for no refunds, the hotel;manager;stated to the guest, We will give refunds if you have a good reason. Assuming that there was no;fraud on the;part;of the hotel;A A. The guest can introduce evidence of the oral statement to prove her entitlement to a refund.;B B. The oral statement will take precedence over the terms of the written agreement.;C. The oral statement will be ignored by the court.;D. The contract is against public policy because of its mixture of oral and written terms.;34.;race;You go to the Cosmic Runners Supply Store, where the sales person shows you some shoes and says, In a;these shoes pick up the cosmic energy from the runners around you and channel it into your own legs. This;causes everyone with these shoes to run twice as fast as in normal shoes. In your next race, you do only;slightly better than usual and sue for fraud. What will happen?;A. You would lose because the statement did not contain any factual assertion.;B. You would lose because your reliance was not justified.;C. You would win if most runners do not go twice as fast is the cosmic shoes.;D. Proving only that the salesperson intended to deceive you is enough to win your fraud case.;Joe contracts with Woodworker to build a custom built-in walnut desk for $1,800, which Joe pays in;advance.;Woodworker gets the job 75% done and stops working. Joe shops around, and finds someone who;finishes the job for $800. How much could Joe recover from Woodworker in a breach of contract suit?;A. $0.;B. $450.;C. $800.;D. $1,800.;35.;36. Jerry Lee was a professional singer. He entered into a contract to sing at a concern sponsored by ABC Co. He;also entered into a contract to sell his house to Mary. Before either contract could be performed, Jerry dies. Both;ABC and Mary sue for breach. What results?;A. Jerrys estate wins, both contracts are unenforceable because of Jerrys death.;B. Both ABC and Mary win, both contracts are fully enforceable.;C. Mary wins, but ABC loses.;D. ABC wins, but Mary loses.;37. Which of the following is not a general rule of contract interpretation?;A. Ordinary words are given their ordinary meaning.;B. Specific terms qualify or override general terms.;C. Handwritten terms prevail over printed terms.;D. Ambiguities in a contract are resolved in favor of the party who drafted the contract.;38. The owner of a dance studio tells Rupert that if he takes just one dance lesson for $50, his life will change forever.;Rupert takes the lesson and his life remains the same. The dance instructors statements could be described as;A. Statements of fact.;B. Fraud in the inception.;C. Statements of opinion or sales talk.;D. Anticipatory repudiation.;39. What is required in order for a court to issue an injunction?;A. Any breach of contract will justify an injunction.;B. Any breach of contract that causes injury to the other party will justify this remedy.;C. Any situation that entitles the award of specific performance.;D. Any situation that demonstrates mitigation of damages.;E. A showing that the party requesting the injunction would suffer irreparable injury without the injunction.;Page 3 of 5;4/10/2014;40. When an employer breaches an employment contract, what obligation does the employee have in seeking;substitute employment?;A. Because it was the employer who breached, the employee has no obligation to seek substitute;employment.;B. The employee must accept any employment available with the same employer, but is not required to seek;employment with a different employer.;C. The employee is obligated to accept any employment for which the employee is qualified.;D. The employee is obligated to accept substitute employment only if it is comparable employment.;41. Benefit of the bargain is another way to refer to which type of damages?;(a) Compensatory damages.;(b) Punitive damages.;(c) Reliance damages.;(d) Liquidated damages.;42. The provisions for cure and cover under Article 2 of the UCC;A. Encourage the filing of lawsuits quickly when any breach occurs.;B. Promote buyers and sellers working together to resolve their differences in the event of any breach.;C. Have nothing to do with breach.;D. Relate only to sales of goods which have not been identified to the contract.;43. The doctrine of caveat emptor means;(a) Let the seller beware.;(b) Let the buyer beware.;(c) Let the seller be liable for all damages.;(d) That the legal remedy must be just and fair.;44. Which of the following would be a breach of the implied warranty of merchantability?;(a) A lawnmower that does not cut the grass.;(b) A cherry pit in a cherry pie, if using the foreign substance test.;(c) Gasoline designed for automobiles that a consumer uses in a kerosene stove, causing an explosion.;(d) A stereo that has been stolen by the seller.;45. The basic philosophy of the drafters of the Uniform Commercial Code reflects which of the following;beliefs?;(a) That since law professors were appointed to draft the Code, their legal theories and ideas of how;business should be run were the only ones to consider.;(b);That a common sense approach, incorporating the ways businessmen actually operate, was;the best way to rewrite commercial law.;(c) That reliance on the Code Merchant of England was the way to reform modern commercial law.;(d) That it should be left up to each state to devise its own modern code, since each state is sovereign.;46. The implied warranty of fitness for human consumption;(a) Applies to food purchased anywhere from a merchant.;(b) Is applied using one of two tests to determine if the warranty has been breached.;(c) Does not require a stated warranty.;(d) Applies only to situations where a non-food item has caused the injury.;(e) A, B, and C are all correct.;47. Reviewing the requirements for buyers and sellers who are considered merchants under the Code, the;element that makes all these provisions function well is;(a) The combined concepts of void and voidable title.;(b) The concept of identification to the contract.;(c) The concept of good faith, as honesty in fact and acting in a commercially reasonable manner.;Page 4 of 5;4/10/2014;(d) The imposition of harsh penalties for failure to fully perform a contract and the frequent use of;punitive damages.;48. A logical outgrowth of the application of warranty provisions under Article 2 resulted in;(a) Changes in the law regarding intentional torts.;(b) Changes in the law regarding professional errors and omissions.;(c) Changes in the law of tort, extending strict liability to products.;(d) No other changes in the law.;49. A statement that a trailer has a capacity of 3,000 pounds would be treated as;(a) A statement of opinion.;(b) An implied warranty.;(c) An express warranty.;(d) Sellers puff.;50. Once goods have been identified to the contract;(a) The buyer has greater rights to the goods than the seller.;(b) The sellers creditors cannot take the goods.;(c) The buyer has an insurable interest in the goods.;(d) All of the above.;BONUS: For up to 5 additional points, please analyze the following: (Note: this only requires a few sentences;to answer, but be sure to include your legal theory.);Kerry finds a big green ring in the street. She shows it to Leroy, who says, Wow. That could be valuable.;Neither Kerry nor Leroy knows what the ring is made of or whether it is valuable. Kerry sells it to Leroy for $100;saying, Dont come griping if it turns out to be worth two dollars. Leroy takes the ring to a jeweler who tells him it;is an unusually perfect emerald, worth at least $75,000. Kerry sues to rescind the contract. What will the court;decide (i.e. does Kerry win or lose), and what legal theory will be used to determine if Kerry gets the ring back?;Page 5 of 5;4/10/2014dditional Requirements;Level of Detail: Only answer needed


Paper#17837 | Written in 18-Jul-2015

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