Contracts Flashcards

Question

Who can accept an offer?

Answer 1

Only the party or parties who the offer was extended to.

Answer 2

communicated to the offeror.

Answer 3

promise to complete performance.

Answer 4

Meaningless. Think of the example of the offer of a reward for a lost dog. Accepting that offer does nothing for the dog owner. The dog owner wants the dog.

Answer 5

Yes, and yes. It names the parties, the subject, the price and the duration.

Answer 6

No. All essential terms are necessary for common law contracts, including the price.

Answer 7

No, it's missing a quantity term.

Answer 8

Yes, as a requirements contract.

Answer 9

Yes, assuming that this is not a unique item and that there are multiple ones.

Answer 10

No, the counteroffer terminates the original offer.

Answer 11

Yes, but also a breach. This is a special UCC rule.

Answer 12

Yes, unless I detrimentally relied on the rejection.

Answer 13

It depends on what I open first.

Answer 14

Likely, yes, because there is a past history of silence serving as acceptance.

Answer 15

No. Conditional acceptances are just counter offers because they don't meet the requirements of the mirror image rule.

Answer 16

No, because the purported acceptance is not timely.

Answer 17

No, because this is not a definite acceptance of the original offer.

Answer 18

No. Acceptance is made conditional upon acceptance of the additional term.

Answer 19

Yes, under 2-207(1). This is not a major part of the agreement, it was just one changed term, so there is still a contract.

Answer 20

(1) Both parties are merchants; (2) The new term does not materially alter the deal; (3) The initial offer did not expressly limit acceptance to its terms; and (4) The offeror does not object within a reasonable time to the new term. Acronym: Me,Ma,C,D(enial) (Family) Know that new terms very rarely come in.

Answer 21

No, I am not bargaining for you to come. This is a conditional gift - note that the party making the gift is not going to sue if the party receiving the gift doesn't come over to get it.

Answer 22

No, one dollar is inadequate.

Answer 23

No. There must be a way for the promisor to breach.

Answer 24

(1) The plaintiff confers a measurable benefit on the defendant; (2) The plaintiff reasonably expected to get paid; (3) It would be unfair to let the defendant keep the benefit without paying (look for an opportunity to decline or good reason why there was no opportunity to decline)

Answer 25

(1) The parties use a material term that is open to two or more reasonable interpretations (so the objective test cannot apply) (2) each side attaches a different meaning to the term and (3) Neither party knows, or should know, of the confusion.

Answer 26

No. This fits the elements of misunderstanding.

Answer 27

Yes. For $12.50

Answer 28

(1) Minors, (2) The mentally Ill if (a) the person cannot understand the nature and consequences of his actions or (b) the person cannot act in a reasonable manner in relation to the transaction (if the other side knows this) (3) Very intoxicated persons (if the other side knows this)

Answer 29

Yes. for Incapacity.

Answer 30

Yes. For Mutual Mistake. Mutual Mistake lets the adversely affected party rescind if (1) there is a mistake of fact existing at the time the deal is made (2) the mistake relates to a basic assumption of the contract and has a material impact on the deal. (3) The impacted party did not assume the risk of mistake.

Answer 31

No, this is a compromise of conscious ignorance.

Answer 32

(1) she can prove all of the elements of mutual mistake, plus (2) the other side knew of, had reason to know of, or caused the mistake.

Answer 33

No, Mickey has reason to know of the mistake.

Answer 34

(1) A misrepresentation of a present fact (not opinion) (2) That is material or fraudulent (intentional) and (3) That is made under circumstances in which it is justifiable to rely on the representation.

Answer 35

Maybe not, if this is an opinion.

Answer 36

Yes, due to intentional fraud.

Answer 37

Yes, due to material misrepresentation.

Answer 38

you trick someone into signing something that she doesn't even know is a contract.

Answer 39

Likely yes, because this is active concealment.

Answer 40

an improper threat that deprives a party from making a meaningful choice to contract.

Answer 41

when a party puts a very intense sales pressure on another party who often seems weak minded or susceptible to high pressure sales tactics.

Answer 42

M.SOUR. M - A contract made in consideration of marraige (eg - prenup) S - A contract promising to guarantee the debt of another. O - A contract that by its terms cannot be performed within one year from its making. U - Applies to goods contracts for a price of $500 or more. R - A contract for the sale of an interest in real property.

Answer 43

Yes, this is a contract for suretyship.

Answer 44

No, the main purpose of the suretyship is for the benefit of the surety, therefore, it isn't a suretyship and doesn't fall into the statute of fraud's land.

Answer 45

performance or a writing signed by the party against whom the contract is asserted which includes an indication that a contract has been made, an identification of the parties, and the essential elements of the deal.

Answer 46

Possession, payment, improvements to the land

Answer 47

(1) The writing must mention the quantity of goods sold. (If the writing leaves out the price it is fine) (2) the quantity delivered and accepted.

Answer 48

Yes, but only for 50 kegs.

Answer 49

Custom made goods

Answer 50

both parties are merchants, 10

Answer 51

No, because Mickey is not a merchant.

Answer 52

Yes, even though there is no signed writing by Whole Foods. This is because failure to object to a confirming memo within 10 days will satisfy the Statute of Frauds - if both parties are merchants.

Answer 53

Answer choice B is correct. At common law, a promise to perform a preexisting legal duty does not qualify as consideration because the promisee is already bound to perform. In this case, the landscaper had a preexisting legal duty to trim the tree, and thus there was no consideration to support the homeowner's promise to pay an additional $500. Answer choice A is incorrect because an enforceable contract may be renegotiated. Even when there is a preexisting legal duty, there will be consideration if the promisee gives something in addition to what is already owed or varies the preexisting duty. Answer choice C is incorrect because modification of a services contract must be supported by consideration. Or some circumstances that were not anticipated when the contract was made must have arisen, and modification is fair and equitable in light of those circumstances. Answer choice D is incorrect because the fact that the landscaper had to forego other work would not serve as consideration in this case because the landscaper was under a preexisting legal duty.

Answer 54

Answer choice D is correct. The mirror image rule, which states that acceptance must mirror the terms of the offer, does not apply to a sale of goods, such as a glass ornament. Answer choices A, B, and C are incorrect because they all support the customer's position that she does not have to pay for the ornament. Answer choice A is incorrect because the failure of the retailer to ship conforming goods (i.e., a red ornament) would constitute a breach of the retailer's contract obligations. Answer choice B is incorrect. Because the customer is not a merchant, any additional terms in the acceptance are treated as a proposal. This proposal must be separately accepted by the customer in order to become part of the contract. Answer choice C is incorrect because, if the acknowledgement is an acceptance, since the customer is not a merchant, a different term (i.e., an ornament of any color) is not part of the contract.

Answer 55

Answer choice C is correct. The doctrine of promissory estoppel (detrimental reliance) can be used under certain circumstances to enforce a promise that is not supported by consideration. A promise is binding if the promisor should reasonably expect it to induce action or forbearance, it does induce such action or forbearance, and injustice can be avoided only by enforcement of the promise. In this case, the student enrolled in a test preparation course, hired a private tutor, and quit his extracurricular activities in reliance on the promise. Moreover, the philanthropist should have reasonably expected such actions. Accordingly, the student will likely receive some relief, although he may receive reliance damages (e.g., money expended to pass the test) rather than expectation damages (i.e., payment of the student's college tuition). Answer choice A is incorrect because, although an offer can generally be revoked at any time before acceptance, an offeror's power to revoke an offer is limited when an offeree has detrimentally relied on the promise. Answer choice B is incorrect because the doctrine of promissory estoppel would likely apply to allow the student some relief despite the absence consideration. Answer choice D is incorrect because the offer could be accepted only by performance, that is, by achieving a perfect test score.

Answer 56

Answer choice D is correct. An offer is terminated by rejection. A modification of the terms of the offer acts as a rejection of the original offer and as a new counteroffer. In this case, the contractor's first voicemail served as a rejection of the homeowner's original offer of $9,000 and a counteroffer of $9,500. The original offer was terminated; the contractor could not later accept the homeowner's offer. Accordingly, no contract was formed. Answer choices A, B, and C are incorrect because the contractor rejected the homeowner's offer and thus there was no contract.

Answer 57

Answer choice A is correct. The Statute of Frauds applies to suretyship agreements (i.e., one person's promise to pay the debts of another). Here, the daughter ordered food and was obligated to pay for the food. However, the father also promised to pay for the food if the daughter did not. This promise created a suretyship agreement. Since this agreement was not in writing, the restaurant cannot enforce it. Note that some oral suretyship contracts can be enforced (indemnity contracts and contracts wherein the surety's main reason for paying the debt is the surety's own economic advantage), but those circumstances are not present here. Answer choice B is incorrect because third parties may be liable for the debts of another if they agree to be sureties. In such cases the surety agreement must generally be in writing. Answer choice C is incorrect because, although the father did promise to pay for the food if his daughter failed to do so, the Statute of Frauds applies to a suretyship agreement. Since the agreement was not in writing the father's promise is unenforceable. Answer choice D is incorrect because, although a parent is liable for necessities, such as food, provided by a third party to a minor child, a parent is not liable for necessities provided to an adult daughter or son.

Answer 58

Answer choice C is correct. A recovery of$90,000 represents the builder’s expectation measure of recovery and gives him the benefit of the bargain. The general measure of damages for the owner’s failure to pay the contract price, in whole or in part, is the profits that the builder would have earned ($20,000), plus any costs incurred by the builder ($80,000), less the amount of any payments made by the owner to the contractor ($0) and any materials purchased by the contractor that are used by the contractor on another job or sold to a third party ($10,000). This amount would place the builder in the position he would have been in but for the breach. It is also the greatest amount the builder is able to recover. Answer choice A is incorrect because it is a restitutionary measure of damages that will not allow for damages related to benefit of the bargain. Answer choice B is incorrect. Not only does answer choice B also fail to consider the benefit of the bargain, but answer choice B would be the Builder’s reliance damages, and there are no circumstances in this fact pattern that would cause the builder to seek reliance damages over expectation damages. Answer D is incorrect because it fails to subtract the loss avoided by the builder’s sale of the windows to the contractor.

Answer 59

Answer choice C is correct. The sale of goods by auction is complete when the auctioneer accepts the highest bid by the fall of the auctioneer’s hammer or in any other customary way. Here, because the auctioneer had gaveled the museum bid, the painting belongs to the museum (assuming, of course, that the museum does ultimately pay). Answer choice A is incorrect because the auctioneer had gaveled the bid. In the absence of language to the contrary, the auction of an item is with reserve, and the items may be withdrawn from sale any time before the completion of the sale is announced. In this case, however, the sale was completed upon the auctioneer gaveling the museum’s bid. The fact that the auction itself had not concluded is irrelevant. Answer choice B is incorrect. After the auctioneer accepted the museum’s bid, the collector could not withdraw the painting from auction. The museum had a reasonable time to pay for the painting, and did not have to do so before the auction ended (unless the terms of the auction stated otherwise, and there is no indication that they did). If the museum did not pay for the painting within a reasonable time, then the collector would be able to retain the painting. Answer choice D is incorrect because, by default, an auction is with reserve unless specified to be a no-reserve auction.

Answer 60

Answer choice D is correct. A performance that is subject to an express condition cannot become due unless the condition occurs or its nonoccurrence is excused. The subscriber’s entitlement to the reward was subject to three conditions—the provision of a satisfactory photograph, the provision of that photograph by April 1, and the use of the photograph on the cover of the magazine’s May issue. The first two conditions were satisfied when the subscriber delivered the photograph to the magazine. The third condition did not occur, but its nonoccurrence is excused under the doctrine of prevention, which requires that a party refrain from conduct that prevents or hinders the occurrence of a condition. In this case, the magazine itself prevented the May 1 publication condition from occurring. Answer choice A is incorrect because the failure of this condition is excused under the doctrine of prevention. Answer choice B is incorrect because in an offer for a unilateral contract, an offeree who accepts by rendering the requested performance is required to give notice only if the offeree has reason to know that the offeror would not otherwise learn of the performance with reasonable certainty and promptness. Such is not the case here. Answer choice C is incorrect because all of the express conditions of the offer have not been satisfied. The photograph of the sparrow did not appear on the cover of the May issue of the magazine. However, his nonperformance of the publication condition is excused by the doctrine of prevention.

Answer 61

Answer choice C is correct. The company’s contract with the replacement singer as a substitute for the original singer’s services constituted a material change in position and thus terminated the original singer’s ability to retract her repudiation. Answer choice A is incorrect because acting in reasonable reliance on an unequivocal repudiation does not violate the doctrine of prevention. Answer choice B is incorrect because the company’s material change in position happened before the original singer tried to retract her repudiation. Answer choice D is incorrect because, even if this personal service contract could be delegated, the original singer’s suggestion that the company hire the replacement singer does not constitute an effective delegation of her contractual duties.

Answer 62

Answer choice B is correct. At common law, a promise to perform a preexisting legal duty does not qualify as consideration because the promisee is already bound to perform. In this case, the landscaper had a preexisting legal duty to trim the tree, and thus there was no consideration to support the homeowner’s promise to pay an additional $500. Answer choice A is incorrect because an enforceable contract may be renegotiated. Even when there is a preexisting legal duty, there will be consideration if the promisee gives something in addition to what is already owed or varies the preexisting duty. Answer choice C is incorrect because modification of a services contract must be supported by consideration. Or some circumstances that were not anticipated when the contract was made must have arisen, and modification is fair and equitable in light of those circumstances. Answer choice D is incorrect because the fact that the landscaper had to forego other work would not serve as consideration in this case because the landscaper was under a preexisting legal duty.

Answer 63

Answer choice B is correct. Most contracts can be assigned. Even if the contract by its terms prohibits assignment, a party retains the power to assign, although an assignment operates as a breach of the contract. Consequently, the truck manufacturer has a claim against the delivery company, but cannot refuse to recognize the assignment to the truck driver. Consequently, it must disburse the remainder of the insurance proceeds to her. For that reason, answer choice C is incorrect. Answer choice A is incorrect because a novation is the substitution of a new contract for an old one; in this case, a novation could only have occurred with the consent of the truck manufacturer, which was not sought, much less given. Answer choice D is incorrect because the truck driver's status as either an intended or incidental beneficiary of the contract does not bear upon the validity of the assignment of the contract to her.

Answer 64

Answer choice B is correct. Where a party to a contract breaches the contract and the only remaining duty with respect to the contract is the payment of money in installments, this breach does not give the other party a claim to damages for total breach. Consequently, the dealer is only entitled to damages based on the payments that are currently due and owing. Answer choice A is incorrect because, in a contract for the sale of goods, the risk of loss generally passes to the buyer upon delivery of the goods to the buyer. Since the store had had possession of the truck for a year, the store bore the risk of loss with respect to the truck. Answer choice C is incorrect because, even though the dealer had fully performed its contractual obligation by transferring the truck to the store, the store’s contractual obligation was spread out over a three-year period. Answer choice D is incorrect because, even though the store repudiated its contractual obligation and such repudiation would usually give the dealer the right to treat the store as having totally breached its contractual obligation, this treatment does not apply where the only remaining duty is the payment of money in installments.

Answer 65

Answer choice A is correct. An offer is terminated by rejection. A counteroffer acts as a rejection of the original offer and creates a new offer. A terminated offer may be revived by the offeror, however. As with any open offer, the revived offer can be accepted by the offeree. In this case, the contractor rejected the homeowner’s original offer of $5,000 and made a counteroffer of $5,500. The homeowner rejected the counteroffer and revived her offer of $5,000, and invited the contractor to accept the offer by beginning performance. The contractor accepted the revived offer by appearing at the homeowner’s house ready to remodel the bathroom. Answer choice B is incorrect because, although the contractor made a counteroffer of $5,500, the homeowner did not accept it. Answer choice C is incorrect because, as noted with respect to answer choice A, the parties entered into a contract at a price of $5,000. Also, as a construction contract, the contract is controlled by the common law, which, unlike the UCC which governs the sale of goods, generally requires that the parties agree on a price. Answer choice D is incorrect because the homeowner revived her original offer, and the contractor accepted the offer by appearing at the homeowner’s house ready to remodel the bathroom.

Answer 66

Answer choice A is correct. A contract may be rescinded on the ground of duress when an improper threat deprives a party of any meaningful choice to refuse to enter the contract. The bakery’s threat to fire the delivery person deprived him of any meaningful choice with regard to entering into the release. Answer choice B is incorrect because, unless the source of the duress is a threat to inflict physical violence, a contract entered into under duress is merely voidable, not automatically void. Answer choice C is incorrect because a contract may be voidable due to duress, even where the duress is not caused by a party to the contract. In any event, the manager’s acts would likely be attributable to the bakery, itself. Answer choice D is incorrect because threatening a civil action is not improper here and does not constitute duress, because party being threatened does have the meaningful choice of defending against the suit.

Answer 67

Answer choice C is correct. If an offer invites acceptance by performance, the offeree’s beginning of performance creates an option contract which precludes the offeror from revoking its offer. Because the customer had begun his meal before the flyer was taken down and because he finished in the allotted time, the restaurant is bound to the contract. Answer choice A is incorrect because, once the customer began his meal, the unilateral offer became irrevocable. Answer choice B is incorrect because, although the restaurant may have a claim against the customer for failure to pay for the five entrées, this claim does not negate the customer’s claim against the restaurant for free dining for a year. Answer choice D is also incorrect because the customer’s ordering of five entrées may have given the restaurant notice the customer intended to accept its challenge, but the customer could not accept this unilateral offer unless the customer finished the five entrées in one hour.

Answer 68

Answer choice A is correct. The mailbox rule states that a timely sent acceptance is effective upon posting, not upon receipt. However, if a communication is sent rejecting the offer, and a later communication is sent accepting the contract, the mailbox rule does not apply, and the first one to be received by the offeror prevails. Here, the salon owner rejected the offer, then sent an acceptance. Since the acceptance was received by the offeror first, the acceptance prevails. Answer choice B is incorrect because, as noted with respect to answer choice A, the mailbox rule does not apply when an acceptance is sent after a rejection. Answer choice C is incorrect because, while a rejection’s effect is to terminate an offer, to be effective, the rejection must be communicated to the offeror. When a rejection is sent before an acceptance, the mailbox rule does not apply and the first communication received by the offeror prevails. Answer choice D is incorrect because a contract was formed when the manufacturer received the acceptance before the rejection. The fact that the manufacturer received the rejection the following day may affect the damages to which the manufacturer is entitled if the salon owner refuses to honor the contract, but it does not control the issue of the formation of a contract.

Answer 69

Answer choice B is correct. In general, an offer can be revoked by the offeror at any time prior to acceptance, even if the offer states that it will remain open for a specific amount of time. A revocation is not effective until communicated. If the offeree acquires reliable information that the offeror has taken definite action inconsistent with the offer, the offer is automatically revoked. In this case, because the book was a unique item, the offer was revoked when the colleague learned that the professor had already sold the book. Answer choice A is incorrect because an option contract, in which an offeree gives consideration to limit an offeror’s power to revoke an offer, may be valid even if entered into by parties who are not merchants. In this case, however, no consideration was provided to keep the offer open, and thus it was not a valid option contract. Answer choice C is incorrect because the offer was effectively revoked when the colleague learned that the book had already been sold. Answer choice D is incorrect because the firm offer rule, under which an offer may be irrevocable if contained in an authenticated writing, applies only when the offeror is a merchant. Because the professor was not a merchant, the fact that the offer was in writing is not relevant.

Answer 70

Answer choice A is correct. For a contract to exist, the terms of the contract must be certain and definite, or the contract fails for indefiniteness. Under common law, all essential terms – the parties, subject matter, price, and quantity – must be specified in the agreement or the contract fails. Under the UCC, a court may supply missing terms, but a contract must still specify the parties, subject matter, and quantity. Here, the contract is governed by the UCC, and because it is missing the key term of quantity, it is therefore invalid. Answer choice B is incorrect because the increased profitability would not discharge the retailer’s duty to perform if performance had been required. Answer choice C is incorrect because under the UCC, the court may not supply a missing quantity term. Answer choice D is incorrect because although the parties intended to form a contract, they failed to adequately define the terms of the contract.

Answer 71

Answer choice B is correct. Where the goods are required to be delivered to a specific place (e.g., the buyer’s place of business) and delivery is to be made by a third-party carrier (i.e., a destination contract), the risk of loss does not pass to the buyer until the goods are tendered to the buyer at the designated place. Since this was a destination contract, the risk of loss remained with the wholesaler because the flowers were destroyed prior to reaching the buyer. Due to the condition of the flowers, the wholesaler failed to make a perfect tender, and the florist had the option to reject the goods. Consequently, the florist is entitled to a return of its $5,000 payment. When the wholesaler refused to ship other goods despite notification of the florist’s rejection, the florist could seek a return of his payment. Answer choice A is incorrect because, although a shipment contract (i.e., a contract that requires the seller to deliver the goods to a third-party carrier rather than the buyer) is the default type of contract, the parties are free to specify the place of delivery. In this case, the parties entered into a destination contract specifying the local florist as the delivery location. As a consequence, the risk of loss did not pass to the local florist. Answer choice C is incorrect because, although the loss of the flowers was not due to the fault of either party, the risk of loss is not shared in such case. Answer choice D is incorrect because payment, in part or full, by the buyer of the purchase price does not shift any portion of risk of loss to the buyer.

Answer 72

Answer choice C is correct. The owner made an offer to sell the bike to his manager for $100. Since the owner’s offer was not directed to his assistant, the assistant’s statement, “I’ll buy it for $75” constituted an offer, which the owner accepted. Consequently, the owner must sell the bike to his assistant for $75. Answer choice A is incorrect because the owner accepted his assistant’s offer prior to the manager’s acceptance of the owner’s original offer. Therefore, the owner is bound by his contract with the assistant and cannot sell the bike to the manager. Answer choice B is incorrect because the owner’s acceptance of his assistant’s offer and the manager’s awareness of that acceptance effectively revoked the owner’s offer prior; the manager could not subsequently accept the owner’s offer. Answer choice D is incorrect because, although the owner could have accepted his manager’s counteroffer of $50 for the bike, the owner’s acceptance of his assistant’s offer of $75 and the manager’s awareness of this acceptance operated as a rejection of the manager’s counteroffer. Therefore, the owner may not accept the manager’s offer of $50.

Answer 73

Answer choice A is correct. The Statute of Frauds applies to suretyship agreements (i.e., one person’s promise to pay the debts of another). Here, the daughter ordered food and was obligated to pay for the food. However, the father also promised to pay for the food if the daughter did not. This promise created a suretyship agreement. Since this agreement was not in writing, the restaurant cannot enforce it. Note that some oral suretyship contracts can be enforced (indemnity contracts and contracts wherein the surety’s main reason for paying the debt is the surety’s own economic advantage), but those circumstances are not present here. Answer choice B is incorrect because third parties may be liable for the debts of another if they agree to be sureties. In such cases the surety agreement must generally be in writing. Answer choice C is incorrect because, although the father did promise to pay for the food if his daughter failed to do so, the Statute of Frauds applies to a suretyship agreement. Since the agreement was not in writing the father’s promise is unenforceable. Answer choice D is incorrect because, although a parent is liable for necessities, such as food, provided by a third party to a minor child, a parent is not liable for necessities provided to an adult daughter or son.

Answer 74

Answer choice D is correct. Under UCC Article 2, a warranty of merchantability is implied whenever the seller of goods is a merchant. To be merchantable, goods must be fit for their ordinary purpose and pass without objection in the trade. A breach of this warranty must have been present at the time of the sale. However, if the buyer, before entering into the contract, has examined the goods as fully as the buyer desires, or has refused to examine the goods, there is no implied warranty with respect to defects that an examination would have revealed to the buyer. Here, the manufacturer declined to closely inspect the machine, even after learning of the unusually low sales price. Had he done so, he would have discovered the damaged motor when he opened the motor housing, which the seller had offered to do. Because the manufacturer refused to examine the goods, he waived any implied warranty of merchantability that would have otherwise attached to the sale. Answer choice A is incorrect because the manufacturer waived the implied warranty of merchantability when he declined to inspect the machine. Answer choice B is incorrect because the seller did not cause the manufacturer’s unilateral mistake; rather, the seller offered to open the motor housing, and the manufacturer declined the offer. Answer choice C is incorrect because the warranty of merchantability is implied in all sales of goods and need not be expressly stated by the seller. If the defect could not have been uncovered by a reasonable inspection, the manufacturer would have had a valid claim against the seller for violation of the implied warranty of merchantability, even though the seller had not expressly made any such claims.

Answer 75

Answer choice D is correct. Although expectancy damages normally are awarded in a breach-of-contract action, restitutionary damages are permitted in cases where the nonbreaching party has partially performed a below-market-price contract. Otherwise, the breaching party would profit from its breach. Consequently, the paving company may recover the benefit conferred upon the developer as measured by the amount the developer would have had to pay to secure the same performance as that rendered by the paving company. Answer choice A is incorrect because, although the increase in the defendant’s property value due to the plaintiff’s performance is one measure of restitutionary damages, that amount is less than the paving company’s restitutionary damages as measured by the cost to the developer of obtaining the same performance rendered by the paving company. Answer choice B is incorrect because the paving company’s reliance damages are exceeded by both its expectancy and restitutionary damages. Answer choice C is incorrect because the paving company’s expectancy damages, based on the cost incurred by the company plus its profit on the contract, are less than the company’s restitutionary damages.

Answer 76

Answer choice D is correct. In a sale-of-goods transaction, such as the purchase of shirts, the Uniform Commercial Code (UCC) requires that the goods tendered by the seller conform in all respects to the contract. Although the shirts shipped to the school conformed to the specifications of original contract, this contract was modified by the subsequent emails between the principal and the seller. Answer choice A is incorrect because the fact that the shirts were specially manufactured goods is relevant only when the buyer is claiming the statute of frauds as a defense. The fact that the goods were specially manufactured is irrelevant to the validity of the written agreement to modify the original contract in this case. Answer choice B is incorrect because the UCC, rejecting the preexisting duty rule, does not require consideration in order for the good-faith modification of a contract to be valid. Answer choice C is incorrect because the school’s status as a non-merchant is irrelevant to determining the terms of this contract or its breach.

Answer 77

Answer choice B is correct. Because the agreement involves a sale of goods, the UCC governs. Under the UCC, a contract is formed if both parties intend to contract and there is a reasonably certain basis for giving a remedy. As long as the parties intend to create a contract, the UCC “fills the gap” when a contract is silent as to a term, such as the time or place for delivery, or even the price for the goods. Although under the Statute of Frauds a sale of goods contract for $500 or more must be evidenced by a writing in order to be enforceable, the writing need only i) indicate that a contract has been made; ii) identify the parties; iii) contain a quantity term; and iv) be signed by the party to be charged. These elements are satisfied by the writing on the napkin. Answer choice A is incorrect because the contract concerns the sale of goods for at least $500, and must therefore satisfy the statute of frauds; an oral argument will not suffice. Answer choice C is incorrect because, although the parol evidence rule applies to introduction of prior extrinsic evidence as to the terms of a written contract, the oral agreement in this case merely establishes the fact that there was an agreement and reflects the quantity term contained in the writing. Answer choice D is incorrect because, although the price term is missing, under the UCC, a court can fill in gaps in a contract when the contract is silent as to certain of its terms, including price. Here, because the court has an objective way of determining a reasonable price for the aluminum, the contract will not fail for want of a price term.

Answer 78

Answer choice D is correct. An individual who is the subject of a court-ordered guardianship over that individual’s property lacks the capacity to enter into a contract. Consequently, any contract purportedly entered into by such an individual is void. Since the father was under a court-ordered guardianship, his contract to purchase the furniture was void. (Note: If the furniture is a necessity, the store may be able to recover the furniture’s reasonable value in restitution under a quasi-contract action, but cannot enforce the contract of sale between the store and the father.) Answer choice A is incorrect because, although where a contract for the sale of goods exists the delivery of the goods by the seller to the buyer generally shifts the risk of loss to the buyer, here the purported contract entered into by the father for the purchase of the furniture was void. Answer choice B is incorrect because, where a guardianship over an individual’s property has been recognized by a court, the seller’s lack of actual knowledge of the guardianship or the individual’s inability to contract is irrelevant. Answer choice C is incorrect because, since the father’s contract with the store was void rather than merely voidable, the daughter’s lack of opportunity to contact the store is irrelevant.

Answer 79

Answer choice D is correct. The UCC provides that a court may modify or refuse to enforce a contract or part of a contract on the ground that it is unconscionable, that is, when it is so unfair to one party that no reasonable person in the position of the parties would have agreed to it. The contract or part of the contract at issue must have been offensive at the time it was made. Here, the farmer contracted with the distributor to sell peaches at $10 per bushel, which was a fair market price at the time the parties entered the contract. The fact that intervening events caused prices to rise only means that the farmer did not receive as good a deal as he could have if he had waited; this, however, is the risk inherent in business dealings and does not make the transaction unconscionable. Answer choice A is incorrect because this addresses only half of the analysis; the unfairness must also exist at the time of contracting. Answer choice B is incorrect because foreseeability is not a relevant factor in an unconscionability inquiry. Answer choice C is incorrect because, while the defense of unconscionability is often used when there is a contract between parties with vastly unequal bargaining power, that is not the only way that a contract could be unconscionable. In other words, this contract still could have been unconscionable, even if the bargaining power of the two parties was relatively equal.

Answer 80

Answer choice B is correct. Unlike a contract for goods, modification of a contract for services must be supported by consideration. Where a contract has both services and goods elements, the predominant purpose test applies. Since the cost of the carpenter’s services exceed those of the materials used to make the cabinets, this contract is likely to be classified as a contract for services. Consideration can be found when there is a change in a party’s duties, even where that change is financially beneficial to the party. Answer choice A is incorrect because, although the homeowner did agree to pay the higher amount, this promise is unenforceable under the pre-existing duty rule unless there is variation in the carpenter’s duties. In this case, the carpenter agreed to use different hardware on the cabinets. Answer choice C is incorrect because, although the carpenter did not suffer a financial detriment as a result of the change in the type of hardware to be used on the cabinets, the carpenter’s duties were varied. Generally, a court will not evaluate the adequacy of consideration where the consideration is given as part of a bargained-for exchange. Answer choice D is incorrect because, although the Statute of Frauds applies to a contract that, as modified, falls with its provisions, this contract, being one for services, does not violate the Statute of Frauds. Even if the value of the materials used by the carpenter is $500 or more, the UCC Statute of Frauds provision does not apply because the contract will be classified as one for services, not goods.

Answer 81

Answer choice B is correct. An annuity contract requires the payment of a fixed amount periodically for the duration of a person’s life. The purchaser assumes the risk that the person on whose life the annuity is based will die before the price paid for the annuity is recouped, and the issuer of the contract assumes the risk that that person will live beyond the recoupment date. This assumption of the risk is inherent in the nature of the annuity contract. Answer choice A is incorrect because the husband, as one of the parties to the annuity contract, did not surrender his contract rights merely because the contract was entered into by the ex-husband for the benefit of his ex-wife. Answer choice C is incorrect because, although the ex-wife’s death did prevent her from receiving any benefit from the annuity, her death, while unanticipated, could not be characterized as unexpected. Instead, the occurrence of the ex-wife’s death was a basic assumption on which the contract was based. The termination of the insurance company’s obligation was specifically linked to her death. Answer choice D is incorrect because, in order for a contract to be avoided due to a mutual mistake, this risk of the mistake cannot have been assumed by the party seeking to avoid the contract. The ex-husband, as purchaser of the annuity, assumed the risk his ex-wife would die before the purchase price of the annuity could be recouped by her.

Answer 82

Answer choice C is correct. When a party performs an unrequested service for another party that constitutes a material benefit, the person may be entitled to recover to the extent that the other person has been unjustly enriched. Note that if the benefit to the neighbor from the tree service’s actions is less than $4,000, the tree service could only enforce the neighbor’s promise to the extent of that benefit. Answer choice A is incorrect because, while a unilateral contract is accepted by performance, at the time of the tree service’s performance, the neighbor did not extend any offer for the service to accept. Answer choice B is incorrect because the neighbor’s plan to have the tree removed did not create an implied in fact contract. The neighbor was not aware of the tree service’s cutting down and removing her tree until after these acts had been completed and thus could not be said to have tacitly consented to them. Answer choice D is incorrect because, under the First Restatement approach, the tree service was neither a creditor nor donor beneficiary of the agreement between the homeowner and his neighbor, and under the Second Restatement approach, the tree service was merely an incidental beneficiary of the agreement. Consequently, the tree service did not have enforceable rights as a third party beneficiary of the agreement.

Answer 83

Answer choice D is correct. Generally, when contractual obligations are delegated, the delegator is not released from liability, and recovery can be had against the delegator if the delegatee does not perform. Consequently, the lumberyard remained liable on the contract. Answer choice A is incorrect because, while a party to a contract may be released from liability if the other party agrees to release that party and substitute a new one (a novation), mere acceptance of a delegation does not constitute a novation, and the lumberyard remained liable on the contract. Answer choice B is incorrect because the mere fact that a party to a contract delegates its duties in good faith does not eliminate its duties to perform under the contract. Answer choice C is incorrect because it misstates the law. There is no UCC provision that prevents the delegation of duties unless the contract specifically provides for it.

Answer 84

Answer choice C is correct. Restitutionary damages restore to the plaintiff (here, the electrician) whatever benefit was conferred upon the defendant (here, the landlord) prior to the breach. If the plaintiff breached the contract, his damages are generally limited to the amount of wealth conferred upon the defendant, which would take into consideration any damages suffered by the defendant. In this case, the electrician conferred roughly $2,000 of benefit on the landlord (two-tenths of the value of the original contract, assuming the contract price reflected the value conferred), and the landlord incurred $800 in extra costs as a result of the electrician’s breach (an extra $100 per unit x eight units). Accordingly, the electrician is entitled to $1,200, or the amount of benefit the electrician conferred upon the landlord. Answer choice A is incorrect because the electrician was in breach and did not substantially perform his contractual obligations. Consequently, he is not entitled to recover the full contract price ($10,000) less damages incurred by the landlord because of the electrician’s breach ($100 x 8, or $800). Answer choice B is incorrect. Had the electrician sought expectation damages under the contract, he may have been entitled to $2,000 if it was determined that the contract was divisible, because he completed two out of the ten units. However, this amount fails to take into account the cost of completion. Answer choice D is incorrect because the electrician would be entitled to recover some amount of damages, namely the amount of wealth incurred upon the landlord.

Answer 85

Answer choice C is correct. An offer involving subject matter that is destroyed is terminated. Here, when the car was destroyed in the accident, the offer terminated as well. Therefore, the buyer could not have accepted it or demanded a similar car. Answer choice A is incorrect because performance would not apply when the offer was only an option. Further, the destruction of the car terminates the option. Answer choice B is incorrect because it is not an accurate statement of the law; the manner in which the car was destroyed is irrelevant here. Answer choice D is incorrect because the fact that the buyer did not accept the offer during the phone call would not affect his ability to do so, had the car not been destroyed.

Answer 86

Answer choice A is correct. As between merchants, an additional term contained in the acceptance is automatically included in the contract unless the offer expressly limits acceptance to the terms of the offer, the offeror has already objected to the additional terms or does so within a reasonable time, or the term materially alters the original contract. A seller can accept a buyer’s offer by shipping the goods, which the commercial seller did in this case. Since the manufacturer did not object to the notice regarding the shortened limitations period and since a term that limits remedies, such as this notice, typically does not constitute a material alteration of a contract, the seller is likely to be able to successfully raise the one-year limitations period contained in the notice as a defense to the manufacturer’s lawsuit. Answer choice B is incorrect because, while any parties to a sale of goods, not just merchants, can shorten the limitations period in which a lawsuit can be brought, there is a one-year floor below which the period cannot be reduced. In addition, parties to a sale of goods cannot extend the limitations period beyond four years. Answer choice C is incorrect because, as noted with respect to answer choice A, the one-year limitation term became part of the contract upon the failure of the manufacturer to object to this term within a reasonable time. Answer choice D is incorrect because, as noted with respect to answer choice B, the statutory limitations period can be shortened by the parties to as little as one year.

Answer 87

Answer choice B is correct. A promise to make a gift generally does not create an enforceable contract because there is no consideration for the promise. While the promise of a charitable donation is enforceable under the doctrine of promissory estoppel (i.e., detrimental reliance), and some courts recognize the application of this doctrine without explicit proof that the charity relied on the promise, in order to enforce such a promise, the Second Restatement requires that the promise be in writing. Answer choice A is incorrect because, in order to be enforceable, a promise to make a charitable contribution need not be supported by consideration, but can be enforceable under the doctrine of promissory estoppel. Answer choice C is incorrect because, since the philanthropist’s promise was not in writing, it did not qualify as a charitable subscription. Answer choice D is incorrect because, while some courts do not require that a charity establish that it has relied on a donor’s promise in order to enforce that promise, the Second Restatement does require that such a promise be in writing in order to be enforceable.

Answer 88

Answer choice B is correct. Under UCC § 2-509(1), a contract that requires the seller to ship goods to the buyer by a third-party carrier is either a shipment or a destination contract. When the contract requires shipment by a third-party carrier, a shipment contract is presumed unless the contract indicates otherwise. Because this is presumed to be a shipment contract, the risk of loss would pass from the manufacturer to the merchant when the manufacturer duly delivered the clock to the third-party carrier. Therefore, answer choice B is correct. Answer choice A is incorrect because UCC § 2-509(1)(a) and (b) do not pass the risk of loss from the seller to the buyer at the time of contract formation. Answer choice C is incorrect because, due to the presumption of a shipment contract when the contract requires shipment by a third party carrier, this is not a destination contract. Answer choice D is incorrect because, although UCC § 2-510 places the risk of their loss on the seller when a tender or delivery of goods so fails to conform to the contract as to give a right of rejection, since the merchant shipped the clock identified in the contract to the seller, the merchant’s act of identifying the clock as conforming to the contract does not alter the passing of risk to the merchant when the clock was delivered to the carrier and proper contract for its carriage was made.

Answer 89

Answer choice C is correct. A statement is an offer only if the person to whom it is communicated could reasonably interpret it as an offer. The primary test of whether a communication is an offer is based on the objective theory of contracts; i.e., whether an individual receiving the communication would believe that he could enter into an enforceable agreement by satisfying the condition. Here, although the salesman made a specific offer with a specific method to accept the offer, no reasonable person would believe that the dealer intended to provide buyers with an additional car of the same value. Answer choice A is incorrect because the customer’s subjective belief does not determine whether a contract exists. Answer choice B is incorrect because no reasonable person would believe that the offer and acceptance reflected a free car in exchange for the purchase of another car (though a reasonable person may believe that the dealer intended to provide buyers with a free set of tires, or some other type of less-expensive vehicle, or, as here, a free bicycle). Answer choice D is incorrect because the salesman cannot generally invalidate the offer and acceptance in order to avoid performance, if the customer wanted to go through with the sale.

Answer 90

Answer choice A is correct. An action in restitution is based on the restoration to the plaintiff of the benefit conferred on the defendant. Here, the homeowner did not receive a benefit from the furniture maker; the chairs had not been delivered to the homeowner. Consequently, in a suit seeking restitution, the furniture maker is not entitled to any recovery. Note that a real-world plaintiff would likely sue for the legal remedy of breach of contract and demand $800 in damages. Answer choice B is incorrect because $800 represents the difference between the contract price for the three chairs ($1,500) and the amount received from selling those chairs ($700), not the amount of the benefit received by the homeowner from the furniture maker. Answer choice C is incorrect because $900 represents the amount that the furniture maker expended in reliance on the contract, not the amount of the benefit received by the homeowner from the furniture maker. Answer choice D is incorrect because $1,500 represents the pro rata contract price of the three chairs that the furniture maker did construct, not the amount of the benefit received by the homeowner from the furniture maker.

Answer 91

Answer choice A is correct. The owner’s contract with the woman to serve as the captain of the ferry boat constituted an anticipatory breach of the owner’s contract with the man, since the owner would not have been able to employ both the man and the woman as the captain of the ferry boat. An anticipatory breach may be effected by an act as well as by words. Despite this breach, the owner’s duty to pay damages to the man was discharged by the man’s inability to have served as the captain of the ferry boat. Answer choice B is incorrect. Although the owner did tell the man about the owner’s contract with the woman prior to the date on which the man was to begin serving as captain, this information constituted an anticipatory breach of the owner’s contract with the man rather than a reason for excusing the owner from honoring that contract. Instead, it is the man’s inability to serve as captain of the ferry boat during the summer months that discharges the owner’s duty to pay damages. Answer choice C is incorrect because, although the owner’s contract with the woman to serve as captain of the ferry boat did constitute an anticipatory breach of the owner’s contract with the man, the owner’s duty to pay damages to the man as a consequence of this breach was discharged by the inability of the man to have served as captain of the ferry boat during the summer months. Answer choice D is incorrect because, while the owner’s delay in telling the man about the other contract was almost certainly not in good faith, there is no indication that this delay caused the man to forego other employment. Moreover, even had the man been able to secure alternative employment for the summer months, the man’s physical condition would have prevented him from being employed during that time.

Answer 92

Answer choice D is correct. When a contract fails to specify the assortment of goods, the duty to select the assortment falls on the buyer. If the buyer fails to specify the assortment of goods, then the seller can treat the failure as a breach by failure to accept the contracted-for goods only if the buyer’s failure materially impacts the seller’s performance. Since there is no indication that the store’s failure to select the assortment of party kits by October 15 would affect the company’s ability to satisfy the store’s order, the company could not treat that failure as a breach. Consequently, the company’s own failure to ship the store’s selections constituted a breach of contract for which the store is likely to recover damages. Answer choice A is incorrect because, under the UCC, a contract that is otherwise sufficiently definite is not invalid merely because the agreement fails to specify the assortment of goods to be delivered to the buyer. Answer choice B is incorrect because, even though the selection of the assortment was not made by October 15, the UCC provides that seller can treat the failure as a breach by failure to accept the contracted-for goods only if the buyer’s failure materially impacts the seller’s performance. Here, that is not the case. Answer choice C is incorrect because, while the company is required to act in a commercially reasonable manner when the buyer fails to make a selection of the goods to be shipped, the company as the seller is not required to make the selection.

Answer 93

Answer choice A is correct. A seller’s shipment of nonconforming goods with a notice of accommodation does not constitute an acceptance and breach, but rather a counteroffer, which the buyer is free to either accept or reject. However, an offer calling for prompt shipment can be accepted either by a prompt promise to ship or by the prompt shipment of goods. Under the mailbox rule, an acceptance is effective when mailed. Consequently, on May 15 when the supplier mailed his acceptance to the coach, a contract for 20 red jerseys was formed, even though the coach did not receive this acceptance until May 19. With regard to the May 16 shipment of blue jerseys by the supplier that the coach received on May 18, the coach may accept or reject these jerseys as nonconforming goods and, in either event, recover damages, if any. Answer choice B is incorrect. Although a seller’s shipment of nonconforming goods with a notice of accommodation does not constitute an acceptance and breach, but rather a counteroffer, which the buyer is free to either accept or reject, this is only true if the seller has not already accepted the buyer’s offer. Here, the supplier had earlier mailed its acceptance of the coach’s offer to supply red jerseys, so the supplier’s shipment of the blue jersey constitutes a breach of contract. Consequently, the coach may reject the blue jerseys without waiving any remedy for breach of contract. Answer choice C is incorrect because the supplier’s shipment of the blue jerseys did not constitute an acceptance of the coach’s offer, but a breach of the contract that had already been formed for the shipment of red jerseys. Answer choice D is incorrect because, although typically an accommodation shipment constitutes a counteroffer rather than an acceptance and breach of the contract, here the shipment, despite being designated as an accommodation, cannot be a counteroffer because the supplier had already accepted the coach’s offer.

Answer 94

Answer choice D is correct because a revocation of an offer is only effective if the offeree has received the revocation. Here, the acceptance by phone came before the revocation by mail was received. Answer choice A is incorrect because, although generally an offer must be supported by consideration in order to be irrevocable, the offer had not been revoked at the time of its acceptance. Answer choice B is incorrect because the mailbox rule does not apply to a revocation, only to an acceptance. Answer choice C is incorrect because, since the offer was not supported by consideration, it could be withdrawn by the offeror at any time prior to acceptance by the offeree.

Answer 95

Answer choice D is correct. A party’s duty to perform can be discharged by impracticability. The defense of impracticability is available if: (i) an unforeseen event occurs; (ii) the non-occurrence of which was a basic assumption on which the contract was based; and (iii) the party seeking discharge is not at fault. Here, the weather conditions in southern China were unprecedented, and the parties could not have foreseen a massive mudslide that destroyed the only thulium supply, making it impossible for the manufacturer to produce more portable X-ray machines. The manufacturer was not at fault for the weather in China, and therefore, would be able to raise a valid defense of impracticability. Answer choice A is incorrect because the facts do not indicate that the manufacturer had assumed the risk of a world shortage of thulium, either expressly or impliedly. Answer choice B is incorrect because although the UCC has adopted the perfect tender rule, it also recognizes the defense of impracticability, which discharges the manufacturer’s duties in this case. Answer choice C is incorrect because in order for mutual mistake to apply, the mistaken fact must have been in existence at the time the parties entered the contract.

Answer 96

Answer choice B is correct. A fraudulent misrepresentation gives the person defrauded the chance to avoid a contract with the person who made the fraudulent assertion. Nondisclosure of a known fact is tantamount to an assertion that the fact does not exist, if the party not disclosing the fact knows that disclosure would correct a mistake of the other party as to a basic assumption of the contract, and the failure to disclose would constitute lack of good faith and fair dealing. Here, the salesperson (1) made a false assertion about an existing fact (non-disclosure to the elderly woman of the fact that the sewing machine could not handle quilts); (2) which was fraudulent (i.e., knowingly and intentionally misleading) or at least material; and (3) the elderly woman actually and justifiably relied on the salesperson’s assertion in entering the contract. Accordingly, the woman would be able to avoid the store’s final sale policy. Answer choice A is incorrect because the salesperson owed a duty not to misrepresent facts to the woman, but not a fiduciary duty, to the woman. Answer choice C is incorrect because, although the salesperson informed the woman that the sale was final, the salesperson’s bad-faith nondisclosure rendered the sale voidable at the woman’s election. Answer choice D is incorrect because nondisclosure of a known fact is treated as an assertive misrepresentation in this case.

Answer 97

Answer choice B is correct. In construction contracts, the general measure of expectation damages for failing to perform is the difference between the contract price and the cost of completion by another builder. Here, that difference is the $550,000 cost to hire the replacement contractor minus the $400,000 contract price, or $150,000. Further, consequential damages may be awarded for reasonably foreseeable losses to a nonbreaching party that go beyond expectation damages, such as loss of profits. Damages are recoverable if they were the natural and probable consequence of breach, or if they were in the contemplation of the parties at the time the contract was made, and may be calculated with reasonable certainty. Here, lost profits due to room cancellations is a natural and probable consequence of ongoing construction at the hotel because guests may have specifically wanted to stay in a hotel with a pool or else avoided a hotel that had ongoing construction on the premises. Further, the hotelier had specifically told the contractor that she planned to specifically advertise the pool terrace to boost sales. Additionally, the hotelier had detailed documentation to support her claim of lost profits. Therefore, a court could award her the $70,000 in lost profits. Finally, the hotelier would be able to recover the $150,000 that she originally paid to the first contractor as a deposit. Therefore, the correct measure of damages would be the $70,000 in lost profits, (consequential damages) plus the $150,000 in expectation damages, plus the $150,000 deposit, for a total of $370,000. Answer choice A is incorrect because this assumes the hotelier would receive the entire $550,000 replacement contract price (an incorrect measure of expectation damages). It also ignores the $70,000 in consequential damages and the deposit. Answer choice C is incorrect because it correctly measures expectation damages and consequential damages, but fails to take into account the deposit. Answer choice D is incorrect because it incorrectly omits the $70,000 in consequential damages and the deposit that the court could award.

Answer 98

Answer choice B is correct. Since the electrician and the homeowner entered into an accord for which the homeowner failed to provide the required satisfaction, the electrician may seeks damages under the accord of $8,000 or may seek damages under the original contract of $10,000. Since $8,000 is less than $10,000, answer choice C is incorrect. Answer choice A is incorrect because, even though the homeowner has breached both the original contract and the accord by failing to pay the electrician, the electrician must elect to receive damages under either the original contract or the accord. Answer choice D is incorrect since the homeowner has breached both the accord and the original contract.

Answer 99

Answer choice A is correct. Any promise, affirmation, description, or sample that is part of the basis of the bargain is an express warranty, unless it is merely the seller’s opinion or commendation of the value of the goods. In this case, the associate’s assurances that the paint selected was appropriate for the job created an express warranty. That warranty was breached, and the customer would prevail. Answer choice B is incorrect because the implied warranty of fitness for a particular purpose can be disclaimed by use of language such as “as is,” which calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty. However, such disclaimer must be in writing and conspicuous. Answer choice C is incorrect because disclaimer clauses that conflict with express warranties are ignored. Thus, any attempt to disclaim the warranty with the language “as is” would be ignored. Answer choice D is incorrect because express warranties may be made by a merchant or a non-merchant. Moreover, the associate in this case was a merchant.

Answer 100

Answer choice C is correct. When an auctioneer knowingly accepts a bid by the seller or on her behalf, or procures such a bid to drive up the price of the goods, the winning bidder may avoid the sale or, at her option, take the goods at the price of the last good-faith bid prior to the end of the auction. There are two exceptions to this rule, which are that (i) a seller may bid at a forced sale and (ii) a seller may bid if she specifically gives notice that she reserves the right to bid. In this case, the bank conducted a forced sale of the owner’s delivery van. As a result, the owner (seller) was permitted to bid on the van at the auction, even without first disclosing his interest in the van and reserving the right to bid. Therefore, the sale cannot be voided. Answer choice A is incorrect. While the owner of goods subject to an auction is generally required to disclose his ownership interest in the goods and reserve the right to bid prior to bidding in the auction or run the risk that the buyer can void the sale, this disclosure is not required when the goods are sold at a forced sale. Answer choice B is incorrect because there is no prohibition on an owner who is a merchant from bidding on his own goods at a forced sale auction. Answer choice D is incorrect because there is no statutory time period under the U.C.C. in which the buyer at an auction must act in order to void the sale.

Answer 101

Answer choice A is correct. A misrepresentation is an assertion that is contrary to the existing facts. A fraudulent misrepresentation exists if the misrepresentation is made knowingly, without confidence in the assertion, or when the person making the assertion knows there is no basis for the assertion. A fraudulent misrepresentation need not be material, and may make the contract voidable at the adversely affected party’s option. The contract is no longer voidable, however, if, following a misrepresentation but before the deceived party has avoided the contract, the facts are cured so as to be in accord with the facts that were previously misrepresented. Here, although the professor made a fraudulent misrepresentation, she cured the misrepresentation by having the stereo restored to factory condition before the buyer avoided the contract. Therefore, the contract is binding on the buyer, and his failure to pay constitutes a breach. Answer choice B is incorrect because a fraudulent misrepresentation need not be material for the contract to be voidable. Moreover, a misrepresentation is considered material if it is likely to induce a reasonable person to manifest assent or the seller knows that the misrepresentation is likely to induce the buyer himself to manifest his assent. In this case, the misrepresentation would likely be considered material. Answer choice C is incorrect because a misrepresentation can be cured at any point before the adversely affected party avoids the contract. Answer choice D is incorrect because the buyer’s right to terminate the contract was subject to whether the professor had first cured the defects underlying her misrepresentation.

Answer 102

Answer choice A is correct. Generally, contract rights are assignable unless the assignment materially increases the duty or risk of the obligor or materially reduces the obligor’s chance of obtaining performance. Here, because the right assigned is the right to receive payment and the painter has performed his obligation under the contract by painting the portrait, this right may be assigned and enforced by the charity through a breach of contract action. Answer choice B is incorrect because, although the charity does benefit from the contract by virtue of the son’s gratuitous assignment, the charity is not a donee beneficiary of the contract because the painter and mayor did not enter into contract with the intent to benefit the charity. Answer choice C is incorrect because, as assignee of the son’s contractual right to receive payment from the mayor, the charity can enforce those rights without the need to establish that it detrimentally relied on the mayor’s promise. Answer choice D is incorrect because, although the assignment of contractual rights in violation of a prohibition against the assignment of rights does constitute a breach of contract, prohibition is not enforceable against the assignee to prevent the assignee from enjoying the assigned rights.

Answer 103

Common Law: Whether, under the circumstances, an extrinsic term of the agreement would "naturally be omitted" from the writing. UCC: Presume that the writing is at most only a partial integration, unless the parties would have "certainly" included a disputed term in the writing.

Answer 104

(1) Evidence of a second, separate deal. | (2) Evidence of a prior communication designed to interpret an ambiguous term in the agreement.

Answer 105

Express Warranties; Implied Warranty of Merchantability; Implied Warranty of Fitness for a Particular Purpose

Answer 106

A promise that affirms or describes the goods and that itself is part of the basis of the bargain is an express warranty unless it is merely the seller’s opinion. The use of a sample or model good creates an express warranty that the goods sold will be like the sample.

Answer 107

(Only triggered when the seller is a merchant, and furthermore, when the seller regularly deals with the goods at issue) The seller makes an implied warranty that the goods are fit for ordinary commercial purposes.

Answer 108

Most conditions use the Objective Standard. If most reasonable people would be satisfied, then the condition is satisfied. HOWEVER Contracts involving aesthetic taste, such as art or tutoring services, will measure whether any satisfaction conditions are met with a subjective standard. The party can still breach if they claim dissatisfaction in bad faith.

Answer 109

The party receiving the protection of the condition may waive the condition in two ways (1) words (2) conduct Also, a condition can be waived if the other party wrongfully interferes or hinders the occurrence of the condition. (Good Faith Standard)

Answer 110

there is no MATERIAL breach (according to the doctrine of substantial performance) Think of material breach as a "big deal."

Answer 111

the minor breach was willful

Answer 112

The cost to complete performance. However, sometimes it is more appropriate to be awarded diminution in market value.

Answer 113

Not on the contract, but maybe in quasi contract.

Answer 114

the various units of performance are divisible into distinct parts. Recovery is limited to the amount promised for the segment of the contract performed.

Answer 115

Seller's place of business.

Answer 116

Buyers place of business.

Answer 117

(1) Get the goods to a common carrier. (2) Make arrangements for delivery. (3) Notify the buyer

Answer 118

The seller must get the goods to the buyer's business and notify the buyer.

Answer 119

(1) Check whether the parties have already dealt with the risk by contract. If so, their agreement will control. (2) If not, ask whether either party has breached (typically another part of the contract) (3) If there is no breach, and the goods are being shipped, ask what type of delivery contract it was: If it's a shipment contract, then the risk of loss during delivery is with the buyer. If it's a destination contract, then the risk of loss during delivery rests with the seller. (4) In all other cases, ask whether the seller is a merchant. If yes, the risk of loss stays with the seller until the buyer receives the goods. If not, the risk of loss moves to the buyer when the seller tenders the goods.

Answer 120

Performance becomes illegal after the contract is formed. The subject matter of the contract is destroyed A services contract is with a special person and the performing party dies or is incapacitated HOWEVER Something that just makes performance more expensive than expected will not normally excuse. Look for something that hinders the ability to perform, not just the cost.

Answer 121

No, the estate takes the place of the party, unless the person is a special person.

Answer 122

Performance can still occur, but something has happened to undermine the entire reason for the creation of the contract. Note that this is very rare, and the event must be extreme and not previously allocated to one of the parties.

Answer 123

Yes, as long as there is some performance remaining from each side. Otherwise, there is no consideration for this modification.

Answer 124

The parties to an earlier contract agree that performance will be satisfied instead by the completion of a different performance. o The new performance is called the “accord.” o The excusing of the initial performance obligation is called the “satisfaction.”

Answer 125

What happens if the accord is not performed? In that case, the other side can sue on either the original obligation or the new promise.

Answer 126

This arises when BOTH parties agree that a substitute person will take over the contractual obligations.

Answer 127

(1) Treat the repudiation as a breach and sue immediately for damages. (2) Ignore the repudiation, demand performance, and see what happens But if the non breaching party has completely performed and is just waiting for payment, they cannot sue early

Answer 128

If you refuse to mitigate, the law will calculate damages as if you did mitigate. The defendant bears the burden of proving a mitigation failure.

Answer 129

No, this runs counter to mitigation, it would be running up the damages.

Answer 130

Expectation Damages = Contract Price – Amount already Paid – Amount that Would Be Needed to Finish the Job

Answer 131

Cost to complete - except when this would drastically overcompensate the plaintiff - then, if appropriate, use diminution in market value.

Answer 132

intended; incidental.

Answer 133

rights; duties

Answer 134

The answer depends on whether the assignee has paid consideration for the rights: o If the rights are assigned without consideration, then the last assignment controls. o If the rights are assigned for consideration, then the first assignment for consideration will typically hold. Limited exception: A later assignment will take priority if the second assignee does not know of the initial assignment and is first to obtain payment or a judgment.