Contracts

Question 1

A communication will not be considered to be definite and certain enough to be an offer if it is for the sale of goods and

Answer 1

is missing a quantity term.

Question 2

A revocation generally is effective _____

Answer 2

when received.

Question 3

An acceptance generally is effective when

Answer 3

dispatched.

Question 4

Under the mailbox rule, if the offeree dispatches an acceptance before he receives a revocation sent by the offeror,

Answer 4

a contract is formed

Question 5

An ordinary option contract is a distinct contract in which

Answer 5

the offeree gives consideration for a promise by the offeror not to revoke an outstanding offer.

Question 6

A merchant’s firm offer arises when

Answer 6

a merchant offers to buy or sell goods in a signed writing and the writing gives assurances that the offer will be held open.

Question 7

An offer for a bilateral contract may be accepted either by

Answer 7

a promise to perform or by the beginning of performance.

Question 8

Under the doctrine of substantial performance,

Answer 8

even though the party who has substantially performed is able to enforce the contract, the other party will be able to mitigate by deducting damages suffered due to the first party’s incomplete performance (only applies if breach is minor)

Question 9

Anticipatory repudiation occurs when

Answer 9

a party to a contract, prior to the time set for performance, indicates that he will not perform when performance is due.

Question 10

Prospective unwillingness to perform occurs when

Answer 10

a party has reasonable grounds to believe that the other party will be unable or unwilling to perform when performance is due.

Question 11

When a party having the benefit of an ancillary condition under a contract indicates by words or conduct (and without receiving any additional consideration) that she will not insist on that condition being met, this is called __________.

Answer 11

waiver

Question 12

Estoppel waiver`

Answer 12

when a party indicates that she is “waiving” a condition before it is to happen, and the person addressed detrimentally relies on the waiver

Question 13

A repudiating party may at any time before his next performance is due withdraw his repudiation unless

Answer 13

the other party has canceled, materially changed her position in reliance on the repudiation, or otherwise indicated that she considers the repudiation final.

Question 14

Withdrawal of the repudiation may be in any manner that

Answer 14

clearly indicates intention to perform.

Question 15

Whenever a party indicates that he is waiving a condition before it is to happen and the person addressed detrimentally relies on the waiver, courts will find

Answer 15

a binding estoppel waiver.

Question 16

The doctrine of “substantial performance” generally does not apply to __________.

Answer 16

contracts for the sale of goods

Question 17

In the case of an anticipatory repudiation, the nonrepudiating party has four basic alternatives:

Answer 17

First, the nonrepudiating party may choose to treat the anticipatory repudiation as a total repudiation and sue immediately. The nonrepudiating party could choose to suspend his own performance and wait to sue until the performance date. He could also treat the repudiation as an offer to rescind and treat the contract as discharged. Lastly, the nonrepudiating party could simply ignore the repudiation and urge the promisor to perform, but this is not the same as demanding assurances. If the promisor then chose to perform, this would result in a retraction of the repudiation.

Question 18

A condition states that

Answer 18

an event must occur or fail to occur before a party has a duty to perform under a contract.

Question 19

Anticipatory repudiation applies only if there is a _____contract with executory (unperformed) duties on both sides.

Answer 19

bilateral

Question 20

The elements necessary to establish frustration are:

Answer 20

(i) some supervening act or event leading to the frustration; (ii) at the time of entering into the contract, the parties did not reasonably foresee the act or event occurring;(iii) the purpose of the contract has been completely or almost completely destroyed by this act or event; and (iv) the purpose of the contract was realized by both parties at the time of making the contract.

Question 21

__________ is an agreement in which one party to an existing contract agrees to accept, in lieu of the performance that she is supposed to receive from the other party to the existing contract, some other, different performance.

Answer 21

An accord

Question 22

The death of a party of a contract discharges the contract if

Answer 22

that party was necessary to effectuate the contract

Question 23

__________ exists if the purpose of the contract has become valueless by virtue of an unforeseeable supervening event.

Answer 23

Frustration

Question 24

A contract may be discharged by a new contract that substitutes a new party to receive benefits and assume duties that had originally belonged to one of the original parties under the terms of the original contract. This is known as a discharge by:

Answer 24

novation

Question 25

A mutual agreement between two parties to a contract that each will give up her respective rights to performance from the other is known as:

Answer 25

a mutual recission

Question 26

The elements for a valid novation are:

Answer 26

(i) a previous valid contract;(ii) an agreement among all parties, including the new party (or parties) to the new contract; (iii) the immediate extinguishment of contractual duties as between the original contracting parties; and (iv) a valid and enforceable new contract.

Question 27

Under the UCC, if both parties to a contract are merchants, additional terms in an acceptance will be included in the contract unless

Answer 27

(i) they materially alter the original contract; (ii) the offer expressly limits acceptance to the terms of the offer; or (iii) the offeror has already objected to the particular terms, or objects within a reasonable time after notice of them is received.

Question 28

Under Article 2, unless the contract provides otherwise, a buyer has a right to inspect the goods __________.

Answer 28

at the buyer’s own expense before she pays for the goods

Question 29

When should the nonbreaching party treat an otherwise minor breach as a material breach?

Answer 29

When the breach is coupled with an anticipatory repudiation

Question 30

In a noncarrier case, for proper tender of delivery, the seller must:

Answer 30

Put and hold the goods at the buyer’s disposition for a time sufficient for the buyer to take possession and give the buyer reasonable notice to enable the buyer to take possession of the goods

Question 31

Under a U.C.C. Article 2 shipment contract, the seller need not ___________ but must ___________.

Answer 31

See that the goods reach the buyer; promptly notify the buyer of the shipment

Question 32

If a seller gives no instructions within a reasonable time after notification of rejection, the buyer may _________________ the goods

Answer 32

Reship, store, or resell

Question 33

Under Article 2, in a noncarrier case, in the absence of an agreement otherwise, the place of delivery is generally__________.

Answer 33

The seller’s place of business

Question 34

After a reasonable time, a buyer may resell rejected goods only if:

Answer 34

The buyer holds the proceeds for the seller’s account

Question 35

The UCC gives a seller the right to cure a defective shipment within a reasonable time beyond the original time for performance in the contract if:

Answer 35

Prior dealings with the buyer led the seller to reasonably believe that the defective shipment would be acceptable

Question 36

Under the U.C.C., what is required to cure a defective delivery in a single delivery contract?

Answer 36

Reasonable notice of the intention to cure and a new tender of delivery of conforming goods within the time for performance

Question 37

Unless the contract provides otherwise, in a shipment contract, payment is due __________.

Answer 37

When the goods are put in the hands of the carrier

Question 38

Generally speaking, if a contract does not address the importance of timeliness of performance in its terms, a failure by the promisor to perform at the time stated in the contract will result in __________.

Answer 38

A minor breach of contract

Question 39

After a buyer rejects a tender of nonconforming goods, the seller has a right to cure beyond the original contract time:

Answer 39

if the seller reasonably believed that the nonconforming goods would be acceptable to the buyer with or without a money allowance.

Question 40

Under Article 2, a merchant’s firm offer arises when

Answer 40

a merchant offers to buy or sell goods in a signed writing that gives assurances that the offer will be held open.

Question 41

A promise to perform an existing legal duty is not valuable consideration, unless

Answer 41

an exception to the preexisting legal duty rule applies, e.g., new or different consideration is promised, or a minor’s ratification of a voidable contract upon reaching the age of majority.