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Regulation CPA review Seller delivers goods to...




Regulation CPA review Seller delivers goods to Buyer who agrees to pay the $5,000 price in 60 days. Seller transfers its right to receive the price to Bank at a 10% discount. Which of the following is false? A. Seller is obligated to pay the assignee in the event the obligor fails to pay, unless the assignment was specifically without recourse. B. After notice of the assignment, Bank (the assignee) can sue Buyer directly if Buyer does not pay. C. Seller (the assignor) has no right to make further assignments or collect payments for its own benefit. D. Upon receipt of notice of the assignment, Buyer (the obligor) must pay Bank to discharge its obligations. Mary agrees to sell her home to Marisol for $100,000. The contract is silent regarding the time of payment and the time of delivery of the deed. Thus, payment or tender of the price is a condition of tender or delivery of the deed and vice versa. The conditions involved are A) Implied in law B) Subsequent C) Implied in fact D) Express Bill Cratchett leased an apartment from Grendel. Cratchett was a person of limited means in a locality where low-income housing was scarce. Shortly after signing the agreement, he fell in an unlit stairwell when a step unexpectedly gave way. In a suit for damages, Grendel relied on a clause in the lease stating, ?Tenant agrees to hold Owner harmless from any claims for damages no matter how caused.? Cratchett should A. Lose because exculpatory clauses are usually upheld in the interest of freedom of contract. B. Win because the exculpatory clause was unenforceable as a violation of public policy. C. Lose because nothing indicates that the lease was unconscionable as a whole. D. Win because the lease was a contract of adhesion Phil Fairbanks was approached by Nickle Corporation to write the history of Nickle for $15,000. The president of Nickle told Fairbanks the job was his if he would agree to cleverly defame Nickle?s leading competitor, Mogul Corporation, using sly innuendo and clever distortion of the facts. Fairbanks wrote the history. It turned out that the Mogul passages were neither sly nor clever, although they were defamatory, and Mogul obtained a judgment against Nickle. Fairbanks is seeking to collect the final $5,000 installment of the contract. Nickle refuses to pay and seeks to recover the $10,000 it has paid. In the event of a lawsuit, A. Fairbanks will recover in quantum meruit for the value of his services. B. The court will deny relief to either Fairbanks or Nickle. C. Nickle will recover $10,000. D. Fairbanks will recover $5,000 7? On June 15, 20X1, Alpha, Inc. contracted with Delta Manufacturing, Inc. to buy a vacant parcel of land Delta owned. Alpha intended to build a distribution warehouse on the land because of its location near a major highway. The contract stated: ?Alpha?s obligations hereunder are subject to the vacant parcel being rezoned to a commercial zoning classification by July 31, 20X2.? Which of the following statements is true? A. If the parcel is not rezoned by July 31, 20X2, and Alpha refuses to purchase it, Alpha would not be in breach of contract. B. If the parcel is rezoned by July 31, 20X2, and Delta refuses to sell it, Delta?s breach would not discharge Alpha?s obligation to tender payment. C. The contract is not binding on either party because Alpha?s performance is conditional. D. If the parcel is rezoned by July 31, 20X2, and Alpha refuses to purchase it, Delta would be able to successfully sue Alpha for specific performance. Steele, Inc. wanted to purchase Kalp?s distribution business. On March 15, 20X2, Kalp provided Steele with copies of audited financial statements for the period ended December 31, 20X1. The financial statements reflected inventory in the amount of $1.2 million. On March 29, 20X2, Kalp discovered that the December 31 inventory was overstated by at least $400,000. On April 3, 20X2, Steele, relying on the financial statements, purchased all of Kalp?s business. On April 29, 20X2, Steele discovered the inventory overstatement. Steele sued Kalp for fraud. Which of the following statements is true? A. Steele will lose because Kalp was unaware that the inventory valuation was incorrect at the time the financial statements were provided to Steele. B. Steele will prevail but will not be able to sue for damages. C. Steele will lose because it should not have relied on the inventory valuation in the financial statements. D. Steele will prevail because Kalp had a duty to disclose that the inventory value was overstated. 10? Axel rented from Lester a room overlooking the main thoroughfare of Coastal City. The purpose of the transaction, known to Lester, was to provide Axel with a view of a large parade that was a highlight of the holiday season. Unexpectedly, a late season hurricane struck Coastal City, causing cancelation of the event. Axel refuses to pay the agreed rental. If Lester sues, who should prevail? A. Lester, because the subject matter of the contract was not destroyed. B. Lester, because the lease was commercially practicable. C. Axel, because the contract was impossible to perform. D. Axel, because of frustration of purpose 12? Jones, CPA, entered into a signed contract with Foster Corp. to perform accounting and review services. If Jones repudiates the contract prior to the date performance is due to begin, which of the following is false? A. Foster could successfully maintain an action for breach of contract prior to the date performance is due to begin. B. Foster can obtain a judgment for the monetary damages it incurred as a result of the repudiation. C. Foster can obtain a judgment ordering Jones to perform. D. Foster could successfully maintain an action for breach of contract after the date performance was due to begin.


Paper#7688 | Written in 18-Jul-2015

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