Q&A Hero

Q: Maple Interiors, located in Boston, contracted to sell and ship sofas to Peach Furniture, located in Atlanta. The contract stated that the goods were to be shipped "F.O.B. Boston, via XYZ railroad." Maple delivered the sofas to XYZ railroad. They were shipped from Boston but never seen again. Both Peach and Maple had assumed that the other party had the risk of loss, so neither had obtained insurance. Who must bear this loss? A. Peach must bear the loss because the risk passed to it after the sofas were placed on the loading dock at Maple's warehouse. B. Peach must bear the loss because the risk passed to it after the sofas were delivered to XYZ railroad. C. Maple must bear the loss because the goods were never tendered to Peach. D. Maple must bear the loss because in any sale by a merchant, risk does not pass until the actual delivery of the goods to the buyer.

Q: A seller who has a _____ has the power to pass good title to a good faith purchaser for value. A. good faith title B. voidable title C. lease title D. lease deed

Q: Joe went to a music store; misrepresenting himself as James to the store attendant. He buys a plasma television on credit, charging it to James's account. He then sells that set to Mike. Mike buys the set in good faith. Which of the following is true in such cases? A. The store person can restore the TV from Mike. B. James can recover the TV from Mike. C. Mike will be held liable by the court for possessing stolen item. D. Mike will hold a good title; hence no harm can be caused to him.

Q: Megan has purchased two tickets for a lucky draw at the local supermarket, which are with the store's cashier. Tracy, her friend, who knows about this, convinces the cashier that she is Megan and takes the tickets. She then goes and sells the tickets to Anya, who has no knowledge of the case. Which of the following statements is true? A. Megan has the right to recover the tickets from Anya. B. Tracy cannot be charged with fraud since she sold the tickets to Anya. C. The cashier has the voidable title on the tickets. D. Anya is the good faith purchaser.

Q: If a buyer and seller of goods fail to specify in their contract when title is to pass, the UCC's "gap filler" provision provides that title will pass when: A. the goods are sent to the buyer's home. B. the contract is formed. C. the seller completes obligation with respect to physical delivery of the goods. D. the buyer pays the purchase price.

Q: Which section of the UCC states that title passes to the buyer when seller has completed physical delivery of the goods? A. 2-401 B. 2-305 C. 2-307 D. 2-201

Q: Brizon, a toy company enters into a five-year agreement with Toys Paradise (TP), a toy shoppe. The agreement states that Brizon is to provide all the toys required by the distinguished shop at a fixed rate. During the first 3 years of the contract, Brizon uses its excess capacity to meet-up with the anticipated requirements and delivers between 1.25-1.5 million toys to TP. However, in the 4th year of the agreement TP wants Brizon to deliver approximately twice as many toys, so that the toys can be used at other outlets owned by TP. In such a case: A. Brizon may be sued by TP if it does not comply. B. Brizon need not provide the required amount of toys. C. Brizon has to provide the required amount of toys by putting extra charges. D. Brizon can claim that the contract was always void.

Q: If a buyer rejects tender of the goods, title to those goods: A. will automatically be revested in the seller. B. will stay with him until he makes the payment. C. will remain undecided until the parties reach an agreement. D. belongs to neither of the parties.

Q: Which of the following is true of the Code's rules on title to goods? A. Buyers may reject the goods and yet keep title to them. B. Sellers are less important title holders to the goods in a contract. C. Parties cannot use a negotiable document of title for professional carriers. D. Title passes to a buyer only when the seller performs his duties completely.

Q: What section of the UCC will govern the supplying of a missing price in a commercial transaction? A. 2-306 B. 2-305 C. 2-307 D. 2-401

Q: In determining the quantity of goods to be produced or taken pursuant to an output or needs contract, the rule of _____ applies. A. good faith B. demand C. supply D. performance

Q: Which of the following is true of price terms in dispute in a contract? A. A fixed price term is essential for a binding sales contract. B. Price terms cannot be determined at a future date. C. No contract is created if price terms are not agreed on. D. A contract is void if price terms are omitted.

Q: Toby and Roy are car dealers; Toby makes a deal with Roy to sell a 1978 Buick. However, they failed to reach any agreement regarding the price of the car and decided to leave the matter to a future date to be decided once Toby delivers the car. Which of the following is true about this deal? A. According to the Code, a reasonable price will be put on delivery. B. According to the common law, this contract is definite and legal. C. According to the common law, Roy can sue Toby. D. According to the Code, it is an illegal contract due to absence of intent.

Q: Ryan enters into a contract with Dave, the neighborhood grocer, to supply fresh vegetable daily. After four months, the grocery store expands its business considerably and attracts customers from the neighboring areas as well. As a result, Dave demands that Ryan triple his supply as he cannot keep up with the demand? Which of the following will apply in determining the amount that can be supplied in such circumstances? A. Rule of reasonable price B. Rule of requirements C. Rule of needs D. Rule of good faith

Q: Mayker, Inc. and Oylco contracted to have Oylco be the exclusive provider of Mayker's fuel oil for three months. The stated price was subject to increases of up to a total of 10% if the market price increased. The market price rose 25% and Mayker tripled its normal order. Oylco seeks to avoid performance. Oylco's best argument in support of its position is that: A. There was no meeting of the minds. B. The contract was unconscionable. C. The quantity was not definite and certain enough. D. Mayker ordered amounts of oil unreasonably greater than its normal requirements.

Q: Which of the following is most likely to be considered a sale of goods to which the UCC applies? A. A dentist places a crown over a patient's tooth. B. A gas station sells a new battery for a car. C. A hairstylist uses a crme rinse in styling a client's hair. D. A spinal readjustment from a chiropractor.

Q: Which article of the UCC specifically addresses and governs leases of goods? A. Article 3 B. Article 2 C. Article 2A D. Article 4

Q: Baker and Able signed a contract which required Able to purchase 600 books from Baker at 90 per book. Subsequently, Able, in good faith, requested that the price of the books be reduced to 80. Under the circumstances, the oral agreement is: A. unenforceable, because Able failed to give consideration, but proof of it will be otherwise admissible into evidence. B. unenforceable, due to the statute of frauds, and proof of it will be inadmissible into evidence. C. enforceable, but it is not a valid agreement. D. enforceable, and proof of it will be admissible into evidence.

Q: Which of the following characterizes an output contact? A. The buyer must accept whatever amount the seller produces, no matter how large. B. The buyer must accept a reasonable amount from the seller, but no more. C. The buyer must accept any amount that is reasonably proportionate to any stated estimate in the contract. D. The buyer must accept a conscionable amount from the seller, but no more.

Q: If the delivery term of the contract is _____ the place at which the goods originate, the seller is obligated to deliver to the carrier goods that conform to the contract and are properly prepared for shipment to the buyer, and the seller must make a reasonable contract for transportation of the goods on behalf of the buyer. A. CFR B. FOB C. CIF D. DAF

Q: Under Article 2 of the UCC, why does it matter whether a party to a contract is a merchant? A. It is the test for applying Article 2 of the UCC. B. Merchants are treated differently than other parties. C. All contracts in which one or both parties are merchants are handled under Article 2A of the UCC. D. Article 2 does not concern itself with cases regarding the transactions of goods.

Q: If the Uniform Commercial Code recognizes the fact that the parties to sales contract frequently omit terms from their agreements or state ambiguous terms, then the Code: A. can fill in the blanks with reference to common trade practices. B. has no power to fill in the blanks. C. declares such a transaction as a void one. D. penalizes both parties for such lacunae.

Q: Which of the following is a transfer of the right to possess and use goods belonging to another? A. Bailment B. Lease C. Deed D. Easement

Q: Frank, a business law professor who has never sold a car before; sells his 1995 Honda Civic to Wanda. This sale is governed by: A. The common law of contracts. B. Article 2 of the UCC. C. Article 2A of the UCC. D. Section 208 of Restatement (Second) of Contracts.

Q: In a "mixed" contract for the sale of both goods and services, the court will apply the contract rules of the UCC or of the common law, depending on whether: A. the contract price of the goods portion of the contract is $500 or more. B. the contract is in writing. C. the predominant purpose of the contract is goods or services. D. the parties are both merchants.

Q: Which section of the UCC defines what a merchant is? A. 2-104(1) B. 2-302 C. 2-305(2) D. 2-306

Q: UCC 9-307 states that a buyer purchases a good in a normal type transaction is a good faith purchaser and owns the good free and clear of previous security liens on goods.

Q: When determining the risk of loss, it makes no difference whether the goods delivered by the seller conform to the contract or not.

Q: At common law, the risk of loss for shipped goods falls upon the person or party who had "technical title" at the time the goods were damaged or destroyed.

Q: If the seller contracts to deliver goods to a certain destination and the contract says "Ex-ship," the seller bears the risk of loss until it delivers the goods to a shipper.

Q: A bicycle manufacturer sells 100 bikes to Bill's Bike Shop. The contract says that Bill's may return any bike not sold within six months, and he will be reimbursed for them. Bill's Bike Shop burns down in one week after the delivery of the bikes, which are destroyed in the fire. Bill's bears the risk of loss for the 100 bikes.

Q: A sale or return contract is a contract for goods that are primarily for buyer's use.

Q: Under the UCC title passes to the buyer when the seller has delivered the goods.

Q: A seller of goods can never pass "better title" to those goods than the title that she has.

Q: A department store sells a TV set to Wilson, who pays with a bad check. Wilson immediately sells the TV to Davis for $500. Davis knew nothing about how Wilson acquired the TV from the store. Davis has good title to the TV and will prevail against the store if it sues Davis for the TV or its value.

Q: Lisa took her computer to ABC Computer Sales and Repair, Inc. ABC mistakenly sold her computer to Rafi. Lisa may successfully sue Rafi for return of the computer.

Q: In Exclusive Dealing Contracts under the UCC, sellers have an obligation to use their best efforts to supply the goods to the buyers.

Q: The importance of the terms FOB and FAS in contracts for the sale of goods is that they obligate the buyer to pay immediately upon delivery of the goods.

Q: Mei issues purchase order to June for goods which costs $25,000. June agrees to provide the same but she doesn't sign the purchase order. Mei can file a suit for the breach of contract.

Q: Parties to sale contract should not necessarily act in a commercially reasonable manner and good faith.

Q: Law of sale of goods codified in the Article 2 of the UCC is modified to accommodate current practices of the merchants.

Q: In mixed goods-services situations, courts determine whether the contract is for the sale of goods by determining whether the good or the service is the dominant part of the transaction.

Q: Article 2 of the UCC determines the rights of the seller, the buyer, and third parties irrespective of who has title at any given moment.

Q: Article 2A of the UCC deals exclusively with the leasing of goods.

Q: Paul contracts to sell his home to Dee for $100,000. The sale, which was negotiated by a broker for two parties who never met, was set to close on September 1. On July 15, Paul discovers the identity of the buyer, and immediately writes Dee to tell him that there's no way he'll ever sell his house to "some hippy." Must Dee wait until September 1 to sue Paul for breach of contract?

Q: Landlord has leased the property to the tenant. Tenant has to pay $5 as a late charge for the late payment of rent. Tenant pays his rent late for five month, but landlord accepts it without objection. Can landlord afterward recover the late charges?

Q: Article 2 of the UCC mandates that the parties to a sales contract state in specific and unambiguous language the exact terms of the contract. Otherwise, courts will declare the contract unenforceable.

Q: Which of the following are also called special damages? A. Nominal damages B. Liquidated damages C. Punitive damages D. Consequential damages

Q: What is an injunction? A. The awarding of compensatory damages B. A court's order requiring a person to do something C. The cancelation of a contract regarding real estate D. A lawsuit for damages brought by the nonbreaching party

Q: Mike contracts with Bob to purchase Bob's boat. Mike promises to pay Bob $5,000 upon delivery of the boat to Mike's beach house. Bob arrives at Mike's house without the boat, and demands full payment before the boat is to be delivered. Is Mike obligated to pay Bob the money? Why or why not?

Q: Richard contracts with Yuan to buy Yuan's house for $100,000 "unless my horse does not win the Kentucky Derby." This is a condition subsequent, or at least an attempted condition subsequent. Rephrase it as a condition precedent with the same effect. If you can do this, why does the law bother to distinguish conditions precedent from conditions subsequent?

Q: On October 31, a Congressional candidate orders a quantity of campaign literature from a local printer. The stated time of performance is November 2. November 8 is Election Day. The printer is not delivered until November 9. Thus, the candidate refuses to pay the printer one cent. Is this position justified? Why or why not? Assume that nothing was said in the contract about time being of the essence.

Q: Stacey wanted someone to paint her house. Jessica offered to do it for $300 while Nancy offered to do it for $250. A few days after Stacey entered into a contract with Nancy, the latter increased her fees to $400. By this time, Jessica was not interested in entering into a contract with Stacey anymore. Stacey can seek to be compensated on the basis of a _____. A. quasi-contract B. part performance C. reliance interest D. compensatory damages

Q: Which of the following is the starting point in calculating the compensatory damages that the plaintiff had the right to expect? A. Loss in value of performance B. Loss in value of the contract C. Time taken for the performance D. Delay from the expected time of performance

Q: Where the parties to a contract wish to cancel their contract and be in the same position as they were prior to forming the contract, they should seek to obtain a(n) _____. A. rescission B. novation C. accord and satisfaction D. revocation

Q: Which of the following characterizes the statute of limitation? A. The time period fixed by the statute of limitations is uniform throughout the states. B. The recording of the contract stops the running of the statute of limitations. C. The time period fixed by the statute of limitations begins when the contract is recorded. D. The time period for oral contracts is different from that of written ones.

Q: Bing engaged Dill to perform personal services for $2,200 a month for a period of four months. The contract was entered into orally on July 1, 1984, and performance was to commence September 1, 1984. On August 10, Dill anticipatorily repudiated the contract. As a result, Bing: A. may not assign his rights to damages under the contract to a third party. B. can obtain specific performance. C. may not enforce the contract against Dill since the contract is oral. D. can immediately sue for a breach of contract.

Q: Which form of damages involves a court ordering a party to a contract to perform his/her obligations under the contract? A. Quasi-contract B. Specific performance C. Rescission D. Promissory estoppel

Q: On May 2, 1972, Mix, CPA, entered into an oral contract with Dell to provide certain accounting services to Dell. The contract was fully performed by both parties in 1974. On April 25, 1988, Dell commenced a breach of contract action against Mix claiming that Mix had improperly performed the accounting services. Mix's best defense to the action would likely be: A. Parol evidence rule B. Statute of limitations C. Statute of frauds D. Lack of consideration

Q: Sklar, CPA, purchased from Wiz Corp. two computers. Sklar discovered material defects in the computers 10 months after taking delivery. Three years after discovering the defects, Sklar commenced an action for breach of warranty against Wiz. Wiz has raised the statute of limitations as a defense. The original contract between Wiz and Sklar contained a conspicuous clause providing that the statute of limitations for breach of warranty actions would be limited to 18 months. Under the circumstances, Sklar will: A. win because the action was commenced within the four-year period as measured from the date of delivery. B. win because the action was commenced within the four-year period as measured from the time he discovered the breach or should have discovered the breach. C. lose because the clause providing that the statute of limitations would be limited to 18 months is enforceable. D. lose because the statute of limitations is three years from the date of delivery with respect to written contracts.

Q: Price signed a contract to sell Wyatt a parcel of land for $90,000. The entire sales price was payable at the closing. Price has decided to keep the land. If Wyatt commences an action against Price, what relief is Wyatt most likely to receive? A. Specific performance B. Compensatory damages and specific performance C. Punitive damages D. Compensatory damages and punitive damages

Q: Damages that are agreed upon at the time the contract is entered into are called _____. A. compensatory damages B. consequential damages C. liquidated damages D. mitigation of damages

Q: Maria and Joe entered into a contract for the sale of Maria's car. Delivery of the car and payment were to be made on March 1. Joe clarified that he needed the car so that he can commute between San Francisco and Oakland to his new job that is starting on March 2. Maria broke the contract and failed to deliver the car on March 1. Joe needed a car to commute so he rented a car at $30 per day for 20 days, which was the reasonable amount of time it took him to locate and buy another car. Joe sued Maria for his losses, including the $600 car rental. The $600 makes up the _____ damages. A. liquidated B. consequential C. punitive D. specific performance

Q: Which form of damages can have the effect of reducing the liability of the party guilty of a breach of contract? A. Incidental damages B. Consequential damages C. Liquidated damages D. Mitigated damages

Q: The equitable remedy of specific performance is most likely to be awarded by a court in which of the following circumstances? A. Sale of a Da Vinci original where the seller refuses to deliver B. Sale of a perfume bottle which the seller refuses to deliver C. A promisee's failure to perform at a charity event D. A promisee's failure to deliver a contract of employment

Q: The legal remedy of _____ requires the defendant to pay the value of the benefits that the plaintiff has conferred on him. A. restitution B. waiver C. compensatory damages D. accord and satisfaction

Q: Someone who attempts to recover for breach of contract: A. can recover only for those losses that he can prove with reasonable certainty. B. can recover for all consequences of the breach, whether foreseeable or not. C. can only do so for consequential damages. D. has no duty to mitigate (or minimize) damages.

Q: Winston contracts to sell a plot of land called Blackacre to Paris for $500,000. Winston breaches the contract and Paris sues him. Blackacre's reasonable market value at the time of the breach was $525,000. Paris can recover: A. nothing, for he hasn't really suffered any harm. B. nothing, because specific performance is his only remedy here. C. only $25,000. D. the entire $500,000.

Q: Which form of damages is intended to give the victim of the breach of contract the "benefit of the bargain"? A. Compensatory B. Punitive C. Nominal D. Liquidated

Q: Which of the following circumstances is a valid reason for the delay of a lawsuit once the statutory period is over? A. Illegality of the contract B. Change of mind of the nonbreaching party C. Minority of the nonbreaching party D. Addition of a third party

Q: Which of the following instances is sufficient reason to cause commercial impracticability? A. Increased cost B. War C. Collapse of market D. Shortage of good

Q: When a promisee who has an existing claim agrees with the promisor that he will accept some performance different from that which was originally agreed on, both parties can use the remedy of: A. specific performance. B. accord and satisfaction. C. waiver. D. rescissions.

Q: The relinquishment of rights by a party in a contract is called a(n) _____. A. waiver B. recission C. impossibility D. reliance interest

Q: Kyle promised to mow Heidi's lawn for $20 and clean Heidi's gutters for $50, but only mowed the lawn. Which of the following is true of Kyle? A. He is the nonbreaching party and can, therefore, sue Heidi. B. He cannot be sued by Heidi because he has performed one of the promises. C. He can recover the contract price for the activity he performed. D. He will be directed by the court to complete the entire contract for free.

Q: Which of the following allows a party who has materially breached a contract to recover the reasonable value of any benefits he has conferred on the promise? A. Quasi-contract B. Anticipatory repudiation C. Specific performance D. Accord and satisfaction

Q: What is a remedy for a party that is in material breach of a contract but has incurred economic harm by already performing substantially for the contract? A. Liquidated damages B. Quasi-contract C. Bilateral contract D. Incorporation

Q: When is a person's duty to perform discharged on grounds of impossibility? A. When a substitute is available B. When there is a delay in the delivery of goods C. In the presence of supervening illegality D. A promisee's dissatisfaction with the performance

Q: Adrienne had contracted to convey real estate to Rich. However Adrienne died before the conveyance is completed. What is the status of the parties? A. Adrienne is excused for nonperformance. B. Rich will be directed by the court to end the contract. C. Adrienne's performance was impossible. D. Rich can enforce the contract against Adrienne's estate.

Q: Mr. Green contracts with Mr. Brown to repair his roof. Mr. Brown is about 75% done when the deadline of the contract occurs. Which legal standard would prevent Mr. Brown from being considered to be in breach of his agreement with Mr. Green? A. Substantial performance standard B. Strict performance standard C. Reasonable person standard D. Egg shell person standard

Q: Nina has breached a contract between Milo and her, but not so materially. This means that Milo can: A. sue only for damages caused by the breach B. sue for damages for a total breach of the contract C. cancel the contract D. withhold his performance, even if the breach is remedied