Practice Set 5

Question 1

When can a buyer reject a nonconforming tender in an installment contract?

Answer 1

Only if (1) the nonconformity substantially impairs the value of that shipment to the buyer AND (2) cannot be cured

Question 2

When is non-disclosure of a known fact even without affirmative conduct to conceal considered misrepresentation?

Answer 2

1. Previous assertion not to become fraudulent
2. When (a) other party has mistake about a basic assumption AND (b) failure to correct = breach of good faith / fair dealing
3. Correct a mistake of the other party about contents / effect of a writing evidencing their agreement; OR
4. Confidential or fiduciary relationship

Question 3

What is required for modification of common law contracts?

Answer 3

Consideration, which can be in the form of modified duties

Question 4

What happens when a bid is made contemporaneous with the falling hammer at an auction?

Answer 4

The auctioneer may, at his discretion, treat the bid as continuing the bidding process or declare the sale completed at the fall of the hammer

Question 5

When is trade usage admissible under the UCC?

Answer 5

Evidence of trade usage reasonably consistent with an agreement’s express language is admissible to interpret or supplement an agreement

Question 6

What makes trade usage consistent with express language in a UCC contract?

Answer 6

Trade usage is presumed consistent unless it completely negates specific express language