BLAW Contracts PDF

Preview

Summary

Murphy...

Description

BLAW CONTRACTS EXAM Exam 1 1.To be enforceable, a writing evidence of an oral contract that must be in writing under the Statute of Frauds must have been signed by the party who seeks to enforce it. A. FALSE 2. An acceptance sent by means not expressly or impliedly authorized normally is effective when it is received by the offeror. A. TRUE 3. A quasi contract is an actual contract. A. FALSE 4. On July 1, Maria faxes Sal, offering to sell Sal her computer. On July 2, a lightning strike destroys the computer. On July 3, before he learns of the destruction of the computer, Sal faxes an acceptance. Given these facts, the parties DO NOT have a contract. A. TRUE 5. Fred contracts to buy a used car from Cars R Us. The printed contract specifies “no warranties.” But before signing the contract, Fred and the sales manager from Cars R Us handwrite into the contract a 90-day warranty on the transmission. If the transmission fails after 30 days, Fred is protected by a warranty on it. A. TRUE 6. A contract "to design a new website" for a local company for $2,500. A. No. This tests the one-year rule. This contract states no time for completion, so court will presume this can be done within a year. 7. A contract for one year's employment at KPMG, with work to begin immediately. a. Yes A. No 8. A contract to buy a new iPhone for $700. A. Yes 9. Menendez's promise to Lowe's Home Improvement that he will pay for the lawnmower Sherwood Landscaping is buying on credit if Sherwood fails to pay. Sherwood uses the mower to cut Menendez's lawn.

A. No 10. A "Good Samaritan" who returns a lost briefcase can claim a reward offered by the owner A. b. Knowing of the reward provides an inducement to return the briefcase. That provides consideration here. If the Samaritan did not know of the reward, his or her act of returning the briefcase was entirely gratuitous. 11. Because Chris is her favorite nephew, Aunt Sally offers him the use of her condo in Florida for spring break. He eagerly agrees to her offer. Is this a legally enforceable contract? A. d. No. Not all of the elements of a valid, enforceable contract are present. 12. An offer can no longer be accepted once it has been A. Rejected or Revoked 13. A coal company agrees in writing to sell at a certain price all the coal that Farmer's Lumber Co. wishes to purchase. This contract is: A. Illusory. 14. McDonald's Restaurants contracts in writing "to buy a carload of tomatoes from Lucky Farms for $1.00/pound, delivery on Nov. 18, 2018." Extrinsic evidence will be allowed to show that A. "carload" in the relevant commercial setting means a train carload, not a Chevy carload. 15. The primary aim of contract remedies is A. to put the nonbreaching party in the position he would have been in had the contract been performed. 16. Rick is selling his computer. He sends Emily an email, offering to sell it for $350. She promptly emails back, saying she will buy the item for $250. She hears nothing from Rick, so an hour later she stops by his apartment, where she learns he just sold the computer to Joe for $200. Emily sues Rick for breach of contract. What is the outcome? A. Emily loses, because she rejected Rick's offer. 17. Estrada is a general building contractor. He has a contract to build a new house for the Robinsons. Estrada delegates the duty to wire the house to ABC Electricians. If the wiring is not installed correctly, whom can the Robinsons likely hold liable? A. Both Estrada and ABC Electricians. 18. Whether a contract is considered unilateral or bilateral depends upon: A. what the offeree must do to accept the offer.

19. Antoine, a wealthy opera singer, has offered in writing to buy Eldred’s house for $500,000. Antoine promised orally “to give Eldred two weeks to think about it.” The day after Antoine made this offer, just as Eldred was ready to mail off an acceptance, he received a fax from Antoine stating, “Forget it! I revoke my offer. I decided to get a condo instead.” Under legal rules and given these facts, can Eldred still accept Antoine’s offer? A. No. 20. Taylor has offered in writing to sell Kelly his car for $1,000. Kelly sends off an acceptance, but later that day finds out that she has lost her job. She rushes off a rejection letter. Taylor receives the rejection first. Given these facts, which of the following statements is TRUE? A. Taylor and Kelly DO have a contract, and Kelly must perform or be in breach of contract. 21. Rex takes out a life insurance policy that names his daughter, Susan, as the beneficiary. Assume that after many years of paying premiums on the life insurance policy, Rex dies. The insurance company fails to pay Susan the value of the policy. Given these facts, Susan would be able successfully to sue A. the insurance company. 22. Assume that Matthew is injured in a store due to the store’s negligence. The store offers Matthew $5,000 if he will release the store from further liability resulting from the accident. Matthew believes that he was not seriously injured, so he agrees, in writing, to the release. A few months later, he finds that he has continuing, painful back problems caused by the accident, and that he will have to have long-term treatment to cure the problems. These treatments will cost at least $50,000. Given these facts, which of the following statements is TRUE? A. Matthew is unlikely to recover anything beyond the $5,000 originally received. 23. Ringo signs a loan contract with his bank. In the contract, Ringo agrees to pay a set rate of interest (5.95%) on a $100,000 loan amount, at monthly intervals, for two years. The debt here is A. liquidated. 24. A Notre Dame student signs a contract with Irish Flats, to lease an apartment for senior year. This contract could NOT properly include A. an exculpatory clause. 25. Linda signs a contract to work for KPMG as a consultant for two years, subject to passing a pre-employment drug test. Linda fails the drug test. Given this situation, A. Both parties are discharged. Please answer the following two questions based on these facts. Laredo Catering has contracted with Nibco to cater Nibco's upcoming holiday party. The owner of Laredo gets an unexpected

opportunity to visit relatives on the date of the Nibco party. Laredo finds another caterer, Sunny, who would agree to handle the Nibco party. Laredo explains the situation to Nibco. Laredo, Nibco, and Sunny agree that Sunny will take Laredo's place under the terms of the original contract.

26. Please refer to Fact Pattern A. This arrangement is called a A. A novation 27. Please refer to Fact Pattern A. If Sunny fails to cater the holiday party, what recourse would Nibco have? A. Sunny is liable for compensatory damages. Please answer the following four questions based on these facts. Able Contractors, Inc., enters into a contract with Coastal Marina, to remodel the marina, using products from Delta Lumber & Marine. Eatwell Café is next to Coastal Marina. Halfway through the project, Able Contractors refuses to finish the job. 28. Refer to Fact Pattern B. The contract can be enforced against Able Contractors by A. Coastal Marina only. 29. Refer to Fact Pattern B. Delta Lumber will realize a profit from the sale of products to Able to remodel Coastal Marina. Delta Lumber is A. an incidental beneficiary. 30. Please refer to Fact Pattern B. Assuming Able's refusal to complete the job is unjustified, the appropriate remedy is A. cost of completion. 31. Please refer to Fact Pattern B. Which of the following, if proven by Able, would justify its refusal to complete the job? A. Coastal Marina has failed to make payments for the work already completed, as required by the contract. 32. Mai is a third party beneficiary under a contract between Novia and Otis. Novia and Otis can modify or rescind their contract without Mai’s consent A. after Mai’s rights have vested. 33. Only an offeror can A. Revoke.

34. Murphy contracts to sell her house to Everett for $200,000. The written contract provides that "all appliances are included." When Everett gets the keys, she finds that the refrigerator is missing. Murphy A. both c and d are true. (has substantially performed &is discharged)

35. A contract between Recreational Games & Rides, Inc., and Summer Fair Corporation includes a provision excluding liability as a result of fraud. This provision is A. Not enforceable 36.Marisa contracts in writing to buy an emerald ring from LJ Jewelers for $10,000, "on the condition that the ring is independently appraised at no less than $10,000. An appraiser then values the ring at $8,000. Given these facts, A. Both parties are discharged. 37. First Source Bank makes a loan to Frieda. Before Frieda has paid back the entire amount, she dies. Given these facts, A. Frieda is in material breach of contract 38. Generally, which of the following transfers will be valid without the consent of the other party? A. he assignment by a patent holder of the right to receive royalties. 39. Skippy, a minor, forms a voidable contract. What does this mean, in terms of what will happen to the agreement? A. Skippy may honor the contract if he wishes, or may avoid his obligations if he wishes. 40. Dim threatens physical harm to force Ed to sell his business, Flowers, Inc., to Dim for a below-market price. This is A. duress. 41. Sara contracts to work exclusively for Thermal Company during July for $5,000. On June 30, Thermal cancels the contract. Sara finds a similar job for the month of July but earns only $3,000. Sara files a suit against Thermal. As compensatory damages, Sara can recover A. $2,000.

Exam 2 1. Fred offers in writing to sell his 2017 Toyota RAV4 car to Ellis for $10,000. He sends the offer by U.S. mail, and Ellis receives it on Nov. 1. Ellis writes, "I accept your offer," and drops this

acceptance in the U.S. mail on Nov. 3. (U.S. mail normally takes 2-3 days to arrive.) Later that same day, Nov. 3, Ellis loses his job, and now is in no position to buy the car. It is too late at that point for Ellis to reject the offer, because a contract already exists A. True 2. Essentially, adequacy of consideration concerns the fairness of the bargain. A. False. To the contrary, courts do not generally concern themselves with the fairness of the bargain, but rather just with making sure some price was paid. Recall the peppercorn theory 3. If a party against whom enforcement of an oral contract is sought admits under oath that a contract for sale was made, the contract will be enforceable. A. True 4. If a voidable contract is ratified, the parties must fully perform their respective legal obligations. A. True 5. Contracts are automatically discharged by the death of either party. A. False 6. Maria offers in writing to sell her computer to Mike for $800. The offer indicates that he should respond via email, because Maria is traveling and not at home to receive things sent by U.S. mail. The offer also indicates that it will expire on Nov. 5. On Nov. 3, Mike prints out Maria's email containing the offer, writes "I accept" on it, and drops it in the U.S. mail. The post office delivers Mike's acceptance to Maria's unoccupied house on Nov. 6. Having not received any email response from Mike by Nov. 5, Maria sells her computer to Alex on Nov. 7. Maria has NOT breached any contract with Mike by doing so A. True 7. Nominal damages are designed to punish a wrongdoer and set an example to deter similar conduct in the future A. False 8. Two parties can mutually agree to rescind a contract only if one of the parties has fully performed his or her duties under the contract. A. False 9. Anticipatory repudiation discharges the repudiating party’s obligations under a contract. A. False

10. The assignment of the same contract right to two different parties automatically cancels both assignments. A. False 11 . A price list is an invitation to negotiate. A. True 12.. Most ads—“This house for sale--$150,000”—are offers. A. False 13. When parties sign a contract that is a form contract with some handwritten terms added, the handwritten terms will prevail over the pre-printed terms. A. True. See the rules for contract interpretation 14. An integrated contract is a contract with more than one subject or part. A. False 15. Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OptiBank through Newt’s investment firm. Unknown to Mona, Newt realizes a commission from the investment. Most likely, Mona may rescind the contract on the basis of A. D undue influence 16. Rhonda contracts in writing to sell her house to Barbara. Although the written contract unconditionally and unambiguously says the price is $100,000, Barbara now claims the price the parties agreed to was actually $80,000. Rhonda sues to recover the $100,000. A. c. Court orders Barbara to pay $100,000, 17. Kroger signs a contract to build a store in South Bend, then breaches the contract and backs away from the deal. Which of the following third parties may sue to enforce the contract? A. d. neither of the above. 18. Angela owns a software consulting company. Zach, who is starting a travel business, asks Angela to design a software package to keep track of his clients. Angela says she would be willing to perform this service for $2,000. Zach immediately agrees. This agreement A. d. is valid and enforceable. 19. . Amber grows and sells pumpkins. Wick's Pies agrees in writing to buy all of Amber's crop, but the exact price was not specified in the contract. Amber delivers the pumpkins. A dispute arises over the price. Wick's sends Amber a check with a letter stating the amount is "payment in

full." Amber cashes the check. She then files a lawsuit for breach of contract, claiming that she is owed more. Amber will A. d. lose the lawsuit, because of the accord and satisfaction. 20. Contractors LLC agrees to build a store for Discount Retail, Inc., at a specific location. Before construction begins, the local zoning law is changed to prohibit commercial buildings at that location. In this situation A. c. the contract is discharged. 21. Ricardo enters into an oral contract to sell $600 worth of sweaters to John, with one-third of the sweaters to be delivered each month for the next three months. Ricardo delivers the first shipment of sweaters, and John accepts the delivery. John is now refusing to take any more shipments. Given these facts, A. a. John must pay for the first delivery, but Ricardo cannot enforce the rest of the agreement 22. John enters into a contract with Katie’s Coin-op Laundry to move fifteen dryers from one of Katie’s locations to another. John subsequently transfers this duty to Loren. Loren is A. a. a delegatee 23. . Rob rolls back the mileage on a car he sells to Mary, and Mary discovers the deception. The contract is A. b. Voidable. 24. Brad says to a shopkeeper, "I may buy 20 of your steaks for $10 each, or I may buy none of them. Depends on how many people say they will come to my party next week." The shopkeeper says, "I agree. We have a deal." This contract A. b. is illusory 25. . Noncompetes in employment contracts are A. c. common for upper-level management positions. 26. Dino hires Eve to perform at Dino’s Club, but Eve later breaches the agreement to accept a higher-paying job at Five Star Arena. Dino files a suit against Eve. The court will most likely A. a. award damages to Dino. 27. Leif contracts to sell his Micro Brewery & Pub to Naomi on April 1. On March 15, Leif tells Naomi that he will not go through with the deal. Naomi can recover A. c. the Micro Brewery & Pub.

28. 8. Ralph enters into a contract with Skye to buy her farmland based on Skye's assertion that the land would be perfect for a housing development. After the sale, Ralph learns that obtaining the necessary zoning changes to allow residential development involves a lengthy and highly uncertain legal process. Ralph can A. a. not avoid the contract because persons are assumed to know the law. 29. A mistake by one party will not invalidate the contract unless A. a. the other party knew of the mistake. 30. Molly’s motorcycle is damaged in an accident caused by Luc’s negligence. Luc agrees to pay Molly $25,000 if she agrees to release him from further liability. Molly agrees. If Molly’s damages ultimately exceed $25,000, she can A. d. not recover the balance. 31. . Regarding the Statute of Frauds, which of the following statements is true? A. c. Home mortgages must be in writing to be enforceable 32. Excavate n’ Fill, Inc., enters into a contract with Fred to fill and landscape an abandoned quarry on Fred’s land. Fred advances Excavate n’ Fill 10 percent of its cost. The parties rescind the contract. Excavate n’ Fill’s refund of the payment is A. c. restitution. 33. Joy and Kris enter into a contract for Kris to lay sod in Joy’s yard for which she agrees to pay Kris. When Kris’s schedule conflicts, she contacts Leza, to whom Kris “assigns all rights under the contract.” Kris is A. c. liable to Joy if Leza does not perform. 34. . Moving to a new city, Rex finds a house for sale that he loves. Rex is concerned that he may not be able to afford the house. He is also concerned that another buyer may make an offer to buy the house before Rex can arrange for financing with the bank. To give himself time to make those financing arrangements and ensure a chance to make a successful offer, Rex should A. b. form an option contract. 35. . In 2015, Ted obtained a 15-year mortgage loan through 1st Source Bank to buy a house. 1st Source later assigned its rights to future payments to Old National Bank. In 2019, Ted stopped making payments on the loan. Which party or parties could successfully sue Ted for breach of contract? A. a. Old National only 36. Luis contracts with Irish Row to provide an apartment for his daughter. This is

A. c. a third party beneficiary contract. 37. . Moe asserts that a deal he entered into with Nina to sponsor and host a motivational conference for independent sales representatives is an unenforceable contract. Defenses to the enforcement of a contract include A. d. the lack of a party’s voluntary consent. 38. Ren offers to pay Sara to pick up and deliver certain business documents within thirty minutes. Sara can accept the offer only by completing the task within the deadline. If she does, Ren and Sara will have A. b. a unilateral contract. 39. Which of these statements regarding minors and contracts is false? A. b. If the minor elects to disaffirm a contract, he or she must do so before turning 18. 40. Red purchased Laura's car. Before selling the car, Laura told Red, "This car runs great. Last week I drove the car all the way from Seattle to San Francisco and back to visit my mother." In fact, Laura was not telling the truth: she had driven the car to San Francisco on a business trip. May Red rescind the contract? A. d. No 41. . Which of the following is generally a legally binding promise? A. d. None of the above. 42. A bilateral contract is formed A. a. when the offeree promises to perform. 43. . Oceans Inc., a seafood distributor, agrees to buy from Paul, a commercial fisherman, any “overstock” of fish that Paul catches in excess of his legal limit. This agreement is most likely A. c. void.

Exam 3 1.Express terms are given more weight than course of dealing. A. True 2. An offer terminates automatically when the time specified in the offer has passed. a. True A. True 3. An acceptance can materially change or add to the terms of the original offer without rejecting it. A. False 4. In contract law, the term consideration refers to the serious thought that underlies a party’s intent to enter into a contract. A. False 5. For consideration to have “legally sufficient value,” it must consist of goods or money. A. False 6. Apex contracts in writing to buy 5,000 tons of steel for $300/ton. The seller delivers the steel. Apex's debt under this contract is liquidated. A. True 7. Ordinarily, minors can disaffirm contracts even when they have misrepresented their age. A. True 8. Scienter clearly exists if a party knows a fact is not as stated A. True 9. As a favor, Lewis agrees to lend her neighbor, Haag, her laptop computer so that Haag can make a PowerPoint presentation at work. Lewis then changes her mind. Lewis’ promise to l...