Contracts

Question 1

Upon receiving nonconforming goods, a buyer may….

Answer 1

1. Accept all
2. Reject all or
3. Accept any commercial unit and reject the rest.

Question 2

If the buyer accepts goods that breach one of the seller’s warranties, the basic measure of damages is the difference between…

Answer 2

the value of the goods as delivered and the value they would have had if the if they had been conforming and according to the contract.

Question 3

A buyer who has rejected goods as non-conforming is entitled to:

Answer 3

1. Any prepayment, or

2. If the seller refuses to refund, to resell the goods and apply the proceeds to what is owed him from the seller.

Question 4

The general rule is that an offer can be accepted by:

Answer 4

1. Performance or

2. Promise to perform UNLESS the offer clearly limits the method of acceptance.

Question 5

The buyer of goods may obtain specific performance where a seller refuses to deliver goods if the goods are what…

Answer 5

unique or circumstances are otherwise proper

Question 6

Specific performance is granted when:

Answer 6

1. There is a valid contract
2. The legal remedy is inadequate
3. enforcement is feasible; and
4. mutuality of remedy is present

Question 7

For a contract to be enforceable, ______ must exist on both sides which means….

Answer 7

consideration

each party’s promise must create a binding obligation.

Question 8

Where a builder in a construction contract breaches during the construction, the nonbreaching party is entitled to:

Answer 8

The cost of completion plus compensation for any damages caused by the delay in completing the building.

Question 9

The parol evidence prohibits prior oral agreements or contemporaneous agreements that

Answer 9

contradict the writing. Terms of the writing may be explained or supplemented by consistent additional terms UNLESS court determines from all circumstances that the writing was intended as a complete and exclusive statement of the parties’ agreement.

Question 10

Where there is no contractual relationship between the parties, an ___________ action will prevent unjust enrichment of one party to the detriment of another.

Answer 10

implied-in-law contract

Question 11

An implied-in-fact contract is a contract formed by:

Answer 11

Manifestations of assent other than oral or written language ( conduct). The manifestations of mutual assent are analyzed OBJECTIVELY under contract law.

Question 12

In a construction contract, if the owner breaches the contract after the builder has already begun his performance, the builder will be entitled to:

Answer 12

any profit he would have derived from the contract plus any costs he has incurred to date.

Question 13

A third-party donee beneficiary usually has no cause of action against the promisee because the promisee’s act is gratuitous and he may not be held to it UNLESS:

Answer 13

1. the promisee tells the beneficiary and

2. the beneficiary reasonably relies to his detriment

Question 14

A contract may be rescinded based upon mutual mistake if:

Answer 14

1. The mistake concerns a basic assumption on which the contract was made
2. The mistake has a material effect on the agreed-upon exchange; and
3. the party seeking avoidance did not assume the risk of the mistake.

Question 15

What is a firm offer?

Answer 15

1. Offer
2. by a merchant
3. to buy or sell goods
4. in a signed writing that by its terms
5. gives reasonable assurances that it will be held open

is not revocable for lack of consideration during the time stated, or, if not time is stated, for a reasonable time (not to exceed three months).