Q&A Hero

Q: On May 1, City Auto & Truck Sales agrees to sell a car to Dino. Five days later, Dino refuses delivery and cancels the contract. City is enti­tled to a. force Dino to accept the car. b. recover any damages from Dino but not resell the car. c. resell the car and recover any damages from Dino. d. resell the car but not recover any damages from Dino.

Q: Undisclosed agencies are not lawful in the United States.

Q: A partially disclosed agency can be created by mistake.

Q: Relax Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Relax tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may a. await performance, sue Relax, or suspend its own performance. b. only await Relax's performance for a commercially reasonable time. c. only sue Relax for breach of contract. d. only suspend its own performance.

Q: Summit Supply Company contracts for a sale of medical equipment to Valley Immediate Care Corporation. Summit can enforce its right to payment a. only after Valley has actually inspected the goods. b. only after Valley has had an opportunity to inspect the goods. c. only before Valley has inspected the goods. d. whether or not Valley has had the chance to inspect the goods.

Q: In a partially disclosed agency, the contracting third party transacts directly with the principal and does not know the identity of the agent.

Q: Mineral Resource Company contracts to provide several manufacturers with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Mineral Resource so that it cannot fulfill its contracts, the distributor a. can substitute some other material for the tin. b. is excused from the performance of its contracts. c. is liable for breach of contract. d. must still supply the tin needs of its customers.

Q: In a fully disclosed agency, an agent is not liable on the contract if he or she guarantees that the principal will perform the contract.

Q: Vehicle Leasing Agency (VLA) and Wander Trucking Company enter into a contract for a lease of eight cargo vans. VLA delivers eight vans, but they are not cargo-sized. Wander a. cannot reject the entire shipment. b. can reject the entire shipment. c. must accept the entire shipment. d. must reject the entire shipment.

Q: The agent is not liable on the contract in a fully disclosed agency.

Q: Food Packaging, Inc., agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy Company. Food can obtain only 20,000 of the 6-ounce contain­ers, but also ships 30,000 more expensive 8-ounce containers for the same price. Under these circumstances, Golden a. cannot reject delivery, and Food cannot later replace the containers. b. cannot reject delivery, but Food can later replace the containers. c. may reject delivery, and notice to Golden of Food's intent to cure will give Food a reasonable time to replace the containers. d. may reject delivery, but Food cannot later replace the containers.

Q: A fully disclosed agency results if a third party entering into a contract knows the actual identity of the principal.

Q: Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a sale of hybrid seeds. Under the perfect tender rule, Genuine Seed must ship or tender seeds to Hillside that a. approximately conform to all of the details of the contract. b. entirely conform to the contract except in one or two details. c. exactly conform to the contract in every detail. d. substantially conform to the contract in most details.

Q: The work-related test puts liability on the agent if the agent commits an intentional tort within a work-related time and space.

Q: Primo Pools Company and Aquatic Recreation, Inc., enter into a contract for a sale of prefabricated swimming pools. Under either a shipment contract or a destination contract, the seller must a. allow the buyer to reject the goods for any reason. b. deliver the goods to a particular destination. c. place the goods into the hands of a carrier. d. provide the buyer with any necessary documents of title.

Q: A principal is liable for the intentional and innocent misrepresentations made by an agent acting within the scope of his or her employment.

Q: An agent is strictly liable for any intentional or innocent misrepresentation made by the principal in a transaction.

Q: Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that a. approximately conform to all of the details of the contract. b. entirely conform to the contract except in one or two details. c. exactly conform to the contract in every detail. d. substantially conform to the contract in most details.

Q: The principal is not liable for an agent's negligence while the agent is on a dual-purpose mission.

Q: Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting. Under a shipment contract, the seller must a. allow the buyer to reject the goods for any reason. b. deliver the goods to a particular destination. c. inspect the goods before shipping them. d. place the goods into the hands of a carrier.

Q: The coming and going rule says that a principal is generally not liable for injuries caused by its agents and employees while they are on their way to or from work.

Q: Clear Day Company, which is based in Delaware, agrees to sell fifty windows, currently stored in Florida, to Great Vu, Inc., which is based in Hawaii. Absent an agreement to the contrary, the place of deliv­ery is in a. California. b. Delaware. c. Florida. d. Hawaii.

Q: A principal is liable for an agent's tortious conduct during a substantial frolic and detour.

Q: International Gem Corporation agrees to sell Jewel Outlets, Inc. (JOI), fifty new diamonds, but the contract does not specify a place of delivery. JOI is expected to pick up the goods. The place of delivery is a. International's place of business. b. JOI's place of business. c. the Annual Gems and Jewels Convention. d. the U.S. Postal Service office nearest to JOI's place of business.

Q: Vicarious liability is liability with fault.

Q: A merchant can disclaim an implied warranty of merchantability.

Q: Based on the doctrine of respondeat superior, principals are liable for the negligent conduct of agents acting within the scope of their employment.

Q: Express warranties displace all inconsistent implied warranties.

Q: A principal is not liable for the intentional torts of agents and employees that are committed outside the principal's scope of business.

Q: A contract cannot contain both implied and express warranties.

Q: Battery committed by an agent on the principal's premises and during the scope of employment is considered an unintentional tort.

Q: A seller must provide a written warranty for consumer goods.

Q: A principal and an agent are each personally liable for their own tortious conduct.

Q: An implied warranty of merchantability arises in every sale or lease by a merchant who deals in goods of the kind sold or leased.

Q: The principal is liable for the tortious conduct of an agent who is acting within the scope of his or her authority.

Q: Merchants are required to warrant that the goods they sell are fit for their ordinary purpose.

Q: If an independent contractor enters into a contract with a third party on behalf of the principal without express or implied authority from the principal to do so, who among the following is liable on the contract? A) the principal B) the independent contractor C) the third party D) both the principal and independent contractor

Q: A client hires a lawyer as an independent contractor to represent her in a civil lawsuit against a defendant to recover monetary damages. If the client authorizes the lawyer to settle a case within a certain dollar amount and the lawyer does so, which of the following is true? A) The agreement is invalid after the lawyer's contract with the principal terminates. B) The agreement is void because independent contractors cannot enter into contracts. C) The agreement is binding only when there is no financial settlement involved. D) The settlement agreement is binding for the client.

Q: A product is unmerchantable if an accident could arise in connection with the goods.

Q: An expression of opinion by a seller will not usually create a warranty.

Q: Business Unlimited Corporation employs Harriet as its marketing manager. Harriet is driving her automobile to attend a meeting with a client on behalf of her employer. On her way to the meeting, Harriet is involved in an automobile accident that is caused by her negligence. Several people are seriously injured because of Harriet's negligence. Which of the following is an accurate statement regarding liability to the injured parties? A) Harriet is not liable, as she was acting within the course and scope of her employment at the time of the accident. B) Business Unlimited Corporation is not liable, since the accident did not occur on company property. C) Harriet is personally liable to the injured parties but Business Unlimited Corporation is not, as they did not control Harriet's actions at the time of the accident. D) Harriet is personally liable to the injured parties, and Business Unlimited Corporation is also liable because Harriet was acting within the scope of her employment when the accident occurred.

Q: A seller must use words such as "warrant" to make an express warranty.

Q: Which of the following is true of an independent contractor's liability? A) The agent is liable for torts committed by an independent contractor. B) The independent contractor is personally liable for the torts he or she commits. C) The principal is liable for the independent contractor's torts. D) Both the principal and the independent contractor are liable for the contractor's torts.

Q: Advertisements can include express warranties.

Q: On the advice of her colleague, Stacey hires Harold, a lawyer and an independent contractor, to represent her in a court case. While driving to the courthouse to represent Stacey at trial, Harold negligently causes an automobile accident in which a bystander, Mildred, is severely injured. Who is liable to Mildred? A) Stacey B) Harold C) Stacey's colleague D) the firm that represents Harold

Q: Jamie is a lawyer who runs her own law firm and specializes in real estate law. Raymond, a real estate developer, hires Jamie to represent him in the purchase of land. Jamie is the ________. A) principal B) agent C) third-party D) independent contractor

Q: If the parties to a sales contract state that a certain remedy is exclusive, then it is the sole remedy.

Q: Which of the following is true of an undisclosed agency? A) The third party has no knowledge of the agency. B) The third party knows the agent, not the principal. C) All transactions with the third party are made by the principal without involving the agent. D) Transactions under the agency are considered unlawful.

Q: A buyer who accepts nonconforming goods cannot revoke the acceptance.

Q: A buyer who rightfully rejects nonconforming goods can resell the goods and keep the proceeds.

Q: Which of the following best describes a partially disclosed agency? A) an agent with multiple principals who do not know each other's identities B) a transaction in which the third party does not know the identity of the agent C) a transaction in which the third party knows the agent, not the principal D) an agent who discloses only the name of his or her principal in a transaction

Q: A buyer may reject a seller's goods under any circumstances.

Q: Which of the following is true of a fully disclosed agency? A) The third party does not know the identity of the principal. B) The third party knows the name of the principal but all transactions are done with the agent. C) The contract is between the principal, agent, and the third party. D) The principal is liable on the contract with a third party.

Q: A buyer who obtains substitute goods to replace goods that a seller did not deliv­er can also recover damages from the seller.

Q: In a fully disclosed agency, the contract is between ________. A) a principal and an agent B) a principal and a third party C) an agent and a third party D) a principal, an agent, and a third party

Q: If a buyer wrongfully refuses to accept goods that conform to a contract, the seller may recover damages.

Q: Which of the following torts committed by an agent is the liability of the principal? A) substantial frolic and detour B) accidents caused by an agent on the way to work C) accidents caused by an agent on the way from work D) negligence

Q: If a buyer wrongfully refuses to accept goods that conform to a contract, the seller can maintain an action to recover the damages sustained.

Q: Which of the following is true of misrepresentation? A) An intentional misrepresentation by an agent is not considered fraud or deceit. B) The principal is not liable for an agent's intentional misrepresentation. C) A third party cannot recover damages from the principal due to an agent's intentional misrepresentation. D) The principal is liable for an agent's innocent misrepresentation.

Q: If a buyer breaches a contract while the seller is still in possession of the goods, the seller can resell the goods and hold the buyer liable for any loss.

Q: A ________ is a deceit in which an agent makes an untrue statement that he or she knows is not true. A) partially disclosed agency B) misrepresentation C) respondeat superior D) dual-purpose mission

Q: Under the ________ test, if the agent committed an intentional tort to promote the principal's business, the principal is liable for any injury caused by the tort. A) work-related B) motivation C) promotional D) dual agency

Q: A buyer's breach of a contract will usually give the seller the right to cancel the contract.

Q: In which of the following cases is a motivation test used to establish the employee's motive? A) An employee commits a tort to promote the principal's business outside work premises. B) An employee commits an intentional tort against another employee on work premises. C) An employee commits an unintentional tort that helps promote the principal's business. D) An employee assaults another employee due to personal reasons.

Q: If, before the time for performance, a buyer communicates an intent not to perform, the seller can consider the buyer in breach and pursue a remedy.

Q: Which of the following is considered an intentional tort? A) negligence B) innocent misrepresentation C) fraud D) dual-purpose mission

Q: If goods fail to conform to a contract in any way, the buyer or lessee must reject them.

Q: In general, a buyer's duty to pay for tendered goods becomes absolute be­fore the buyer has had an opportunity to inspect the goods.

Q: A dual-purpose mission is a situation that occurs when ________. A) an agent works for two or more principals with conflicting interests B) a principal requests an agent to run an errand when the agent is on his or her own personal business C) an agent works for more than two principals but has similar agency relationships with all D) an agent competes with the principal in a business with interests similar to the principal's business after their agency has ended

Q: Unless the parties agree otherwise, the buyer must make payment at the time and place that the goods are received.

Q: Fiona works for Open Heart Hospital and lives 10 miles away from her place of work. The hospital has provided her with a car to commute and also pays for its upkeep. If she accidentally injures a person while driving to work in the morning, which of the following will be true? A) Open Heart Hospital will be completely liable for the injury. B) The injured person can sue Open Heart Hospital but can only recover reimbursement for his or her medical expenses due to the injury. C) Both Fiona and Open Heart Hospital will be liable to the injured person. D) Only Fiona will be liable for her negligence.

Q: If goods identified to a contract are destroyed through no fault of either party, both parties are excused from performance.

Q: According to the coming and going rule, what is the liability of the principal for injuries caused by its agents and employees while they are on their way to or from work? A) complete liability B) vicarious liability C) limited liability D) no liability

Q: The doctrine of commercial impracticability only extends to problems that could have been foreseen.

Q: ________ is a situation in which an agent does something during the course of his or her employment to further his or her own interests rather than the principal's. A) Respondeat superior B) Frolic and detour C) Vicarious liability D) Dual-purpose mission

Q: An installment contract is breached if a buyer accepts any nonconforming goods.

Q: ________ occurs where a principal is liable for an agent's tortious conduct because of the employment contract between the principal and agent, not because the principal was personally at fault. A) Vicarious liability B) Negligence C) Liability with fault D) Misrepresentation

Q: Minksine Corporation employs Sandy as its marketing manager. Sandy is driving her automobile to attend a meeting with a client on behalf of her employer. On her way, Sandy is involved in an automobile accident that is caused by her negligence. Several people are seriously injured. Which of the following is true of this case? A) Sandy is solely liable for damages caused by the accident. B) The injured parties cannot recover damages from Sandy. C) Minksine Corporation is liable for the injuries caused by Sandy. D) The injured parties can only claim medical reimbursement from Minksine Corporation.

Q: If a contract specifies a certain carrier, a substitution of a different carrier for any reason breaches the contract.

Q: What is vicarious liability? A) non-liability B) liability for multiple torts C) liability without knowledge D) liability without fault