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- Business Law - Exam 3
Business Law - Exam 3
About this deck
By: Nicole Mecham
Created: 2012-11-10
Size: 113 flashcards
Views: 426
Created: 2012-11-10
Size: 113 flashcards
Views: 426
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Rob agrees to sell to Sue, for $1,500, a remote parcel of land. They believe the land to be worthless, but Sue later sells it for $15,000. A court would
a. cancel the contract due to Rob's failure to know the land's real market value.
b. cancel the contract due to Sue's failure to accurately estimate the real price of the land.
c. cancel the contract due to the difference between the price of the land and its later market value.
d. enforce the contract.
d. enforce the contract.
At an auction for the first time, Sally raises her hand to bid on an object, believing that the auctioneer requested an amount smaller than the price actually asked. Sally is
a. liable on the bid.
b. not liable on the bid only if she truly misunderstood the price.
c. not liable on the bid only if the object is truly overpriced.
d. not liable on the bid if she truly misunderstood the price or if the object is truly overpriced.
a. liable on the bid.
Alpha Cable Company, a subcontractor, understates it bid on a project for Beta Communications, Inc., the general contractor, due to an addition error. Alpha can most likely
a. recover damages from Beta for not catching the error.
b. require Beta to pay the difference between the bid and the true cost.
c. rescind the contract.
d. none of the above.
c. rescind the contract.
Network Systems, Inc, offers to sell a computer system to Office Supplies Company but mistakenly transposes some of the digits in the price so that $5,300 appears in the offer as $3,500. Office accepts the written offer. Office's acceptance is
a. enforceable because Network must bear the responsibility for its mistake.
b. enforceable because Network should have reviewed the offer more closely before sending it out.
c. not enforceable because Office must bear the responsibility for the mistake.
d. not enforceable because Office should have reviewed the offer more closely before accepting it.
a. enforceable because Network must bear the responsibility for its mistake.
Network Systems, Inc, offers to sell a computer system to Office Supplies Company but mistakenly transposes some of the digits in the price so that $5,300 appears in the offer as $3,500. Office accepts the written offer. Network's best defense against enforcement of the contract is that Office
a. did not need a computer system.
b. knew Network provided notoriously inaccurate estimates.
c. knew Network recently rejected an offer of $3,900 for a similar system.
d. knew the price was far below the prices of comparable systems.
d. knew the price was far below the prices of comparable systems.
Owen, a famous chef, sells to Pat a restaurant that Owen closed years ago. Pat discovers in the restaurant a collection of Owen's recipes, which are considered valuable. In a suit to obtain the recipes, Owen will likely
a. not prevail because he should had known that the recipes were in the restaurant.
b. not prevail because the sale of a restaurant includes everything in it.
c. prevail because there was no mutual assent.
d. prevail because the sale of a restaurant includes nothing on it.
c. prevail because there was no mutual assent.
Gamma Corporation agrees to buy seven servers from Omega Computer Products, Inc. If he servers have less capacity than Gamma and Omega believe, Gamma may
a. avoid the contract only.
b. enforce the contract only.
c. avoid or enforce the contract.
d. none of the above.
c. avoid or enforce the contract.
Local Investment Company and Midstate Properties, Inc., contract for the sale of a retail mall. A mutual mistake of fact will make it possible for either party to rescind the contract
a. if the mistake of fact is immaterial.
b. if the mistake of fact is material.
c. under any circumstances.
d. under no circumstances.
b. if the mistake of fact is material.
Paula and Quinn contract for the sale of Paula's horse for $1,000. Unknown to either party, the horse has died. Quinn is
a. entitled to another horse of equivalent value.
b. not required to pay due to the mutual mistake.
c. not required to pay due to the unilateral mistake.
d. required to pay because she assumed the risk the horse might die.
b. not required to pay due to the mutual mistake.
Through fraudulent means, Frank induces Ethel to sign a contract to invest with him the profits from her business. When Ethel learns the truth, she may
a. only enforce the contract.
b. only recover what she invested with Frank.
c. enforce the contract or recover what she invested with Frank.
d. do nothing.
c. enforce the contract or recover what she invested with Frank.
Ira persuades Jake to buy his horse by telling Ira that the horse rides "like the wind." Ira's statement is
a. duress.
b. fraud.
c. puffery.
d. undue influence.
c. puffery.
Todd sues Owen for fraud. Todd must prove that he suffered an injury
a. to recover damages.
b. only in certain situations involving physical injury.
c. if there was a mutual mistake by the parties.
d. none of the above.
a. to recover damages.
Greg uses threats of physical harm to force Kim to enter into a contract. This is
a. duress.
b. fraud.
c. puffery.
d. undue influence.
a. duress.
Tom and Sally enter into an oral contract under which Tom agrees to provide delivery service for Sally for six months. This contract is
a. enforceable by Tom only.
b. enforceable by Sally only.
c. enforceable by either party.
d. not enforceable.
c. enforceable by either party.
Jill agrees to build a warehouse for Ken and orders supplies from Larry for the job. Ken promises Larry that Ken guarantees payment for the supplies. Ken's promise is
a. enforceable only if it is in writing.
b. enforceable only if it is oral.
c. enforceable whether it is oral or in writing.
d. not enforceable.
c. enforceable whether it is oral or in writing.
Eve borrows $10,000 from First National Bank. Frank orally promises the bank that he will repay the loan if Eve does not. Frank's promise is
a. enforceable by Eve only.
b. enforceable by First National ann only.
c. enforceable by either Eve or First National Bank.
d. not enforceable.
d. not enforceable.
Alan and Beth enter into an oral contract for Ala''s sale to Beth of eight DVD players for $100 each. After Beth takes possession of the players, but before she makes payment, this contract is
a. enforceable only if it is in writing.
b. enforceable only if it is oral.
c. enforceable whether it is oral or in writing.
d. not enforceable.
c. enforceable whether it is oral or in writing.
Nano Corporation offers to sell a robotic device to Onyx Assembly, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Onyx accepts the written offer. Onyx's best argument in favor of enforcement of the contract is that
a. a bilateral mistake does not afford relief from a contract.
b. a mistake of value does not afford relief from a contract.
c. a unilateral mistake does not afford relief from a contract.
d. the price was below the prices of comparable devices.
c. a unilateral mistake does not afford relief from a contract.
Nano Corporation offers to sell a robotic device to Onyx Assembly, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Onyx accepts the written offer. Nano's best defense against enforcement of the contract is that Onyx knew
a. a bilateral mistake supports the cancellation of a contract.
b. a mistake of value supports the cancellation of a contract.
c. a unilateral mistake supports the cancellation of a contract.
d. the price was below the prices of comparable devices.
d. the price was below the prices of comparable devices.
d. the price was below the prices of comparable devices.
Able Corporation agrees to buy 1,500 acres of land from Baker Properties, Inc. If he actual plot is smaller than Able and Baker believe, Able may
a. avoid or enforce the contract.
b. avoid the contract only.
c. enforce the contract only.
d. neither avoid nor enforce the contract.
a. avoid or enforce the contract.
Ann and Burt sign a contract in which Ann agrees to paint Burt's house for $2,000. They agree later that Burt will pay Ann's supplier, City Pain Store, the $2,000 directly. City Paint Store is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. an intended beneficiary.
b. an assignee.
Retail Outlets, Inc., contracts with Superior Contractors to build a store. Superior assigns the contract to Town Builders, which has a poor record of completing projects. Retail could most successfully argue that the contract cannot be assigned because
a. Retail did not consent to the assignment.
b. Retail did not receive adequate consideration for the assignment.
c. the assignment will materially increase the risk of nonperformance.
d. none of the above.
c. the assignment will materially increase the risk of nonperformance.
Adam attempts to free himself from the duties of his contract with Beth by telling Beth to find someone else to perform them. This is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. none of the above.
d. none of the above.
Carl promises to trim the hedge in Donna's yard in exchange for Donna's promise to fix Evan's mailbox. This is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. none of the above.
c. a third party beneficiary contract.
Vicky makes a contract with Warren with the intent to benefit Alex. This is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. none of the above.
c. a third party beneficiary contract.
Lois takes out a life insurance policy that names her son, Matt, as the beneficiary. This is
a. a delegation.
b. an assignment.
c. a third party incidental beneficiary contract.
d. a third party intended beneficiary contract.
d. a third party intended beneficiary contract.
Bob and Carol sign a contract that intentionally confers a benefit on Doug. Doug's rights under the contract will vest
a. only if he materially alters his position in detrimental reliance on the contract.
b. only if he demonstrates manifest assent to the contract.
c. if he demonstrates manifest assent to the contract or materially alters his position in detriment reliance on it.
d. none of the above.
c. if he demonstrates manifest assent to the contract or materially alters his position in detriment reliance on it.
Ron makes a contract with Sue that indirectly benefits Tim, although neither Ron nor Sue intended that result. Tim is
a. a delegatee
b. an assignee.
c. an incidental beneficiary.
d. none of the above.
c. an intended beneficiary.
Jake contracts to develop a marketing strategy for Delta Candy Company for $1,500. This contract will, like most contracts, be discharged by
a. accord and satisfaction.
b. agreement.
c. operation of law.
d. performance.
d. performance.
Jay and Kim enter into a contract by which Jay agrees to sell Kim his laptop computer for $500. The contract will be fully discharged when
a. Jay and Kim sign the contract.
b. Jay gives possession of he computer to Kim.
c. Kim pays Jay $500.
d. both b and c.
d. both b and c.
General Contractors, Inc., contracts to build an office building for RP Properties Company. If General substantially performs, RP is entitled to
a. damages.
b. rescission.
c. specific performance.
d. none of the above.
a. damages
Local Delivery Service contracts to sell its business to Regional Transport Corporation (RTC). Before the deal is completed, they contract to sell RTC's rights in the deal to National Distribution, Inc. This new contract will discharge the original contract if the new contract is supported by
a. mutual agreement to rescind.
b. consideration.
c. performance by all of he parties.
d. none of the above.
b. consideration.
Toolmakers, Inc., contracts to sell its business to United Hardware Corporation. Before either party has performed, rescission of this contract requires
a. mutual agreement to rescind.
b. consideration.
c. performance by all of the parties.
d. none of the above.
a. mutual agreement to rescind.
Bob contracts with Ace Plumbing, Inc., to pay $700 over six-month period for its services. After Ace performs, they sign an accord, in which Bob promises to pay Ace $500 next week in lieu of the $700. Bob does not pay the $500. Ace can bing an action against Bob based on
a. the accord only.
b. the original contract only.
c. either the accord or the original contract.
d. none of the above.
c. either the accord or the original contract.
On July 1, General Contractors (GC) contracts to build a retail store for Sue at a specific location. On August 1, the zoning law are changed to prohibit the construction of commercial buildings at that location. Sue files a suit against GC. In this situation
a. GC is in breach of contract.
b. Sue is in breach of contract.
c. the contract is suspended until a new location is specified.
d. the contract is discharged.
d. the contract is discharged.
Pitts, whose family owns and operates a farm, agrees to sell Armstrong ten bushels of strawberries. Pitts dies before the strawberries are delivered to Armstrong. This
a. discharges the obligations of both parties under the contract.
b. suspends the obligations of both parties until the contract can be performed.
c. has no effect on the obligations of both parties.
d. none of the above.
c. has no effect on the obligations of both parties.
Pitts, whose family owns and operates a farm, agrees to sell Armstrong ten bushels of strawberries. A fire destroys the strawberries, through no fault of either party, before they are delivered to Armstrong. This
a. discharges the obligations of both parties under the contract.
b. suspends the obligations of both parties until the contract can be performed.
c. has no effect on the obligations of both parties.
d. none of the above.
a. discharges the obligations of both parties under the contract.
Pitts, whose family owns and operates a farm, agrees to sell Armstrong ten bushels of strawberries. A strike delays delivery of he strawberries by two weeks. This delay
a. discharges the obligations of both parties under the contract.
b. suspends the obligations of both parties until the contract can be performed.
c. has no effect on the obligations of both parties.
d. none of the above.
b. suspends the obligations of both parties until the contract can be performed.
Carol pays Dick $10,000 for Dick to design an advertising campaign for Carol's health club. The next day, Dick tells Carol that he has accepted a job in New York and cannot design the campaign. Carol files a suit against Dick. As restitution, Carol can recover
a. $100,000
b. $10,000
c. $1,000
d. nothing.
b. $10,000.
Bill contracts to work exclusively for TechCorp during April for $3,000. On March 31, TechCorp cancels the contract. Bill finds another job during APril but earns only $2,000. Bill files a suit against TechCorp. As compensatory damages, Bill can recover
a. $3,000.
b. $2,000.
c. $1,000.
d. nothing.
c. $1,000.
Paul contracts to buy a Quality-brand computer from ROyal Networking Systems for $5,000, but Royal fails to deliver. Paul buys the computer elsewhere for $6,700. Paul's measure of damages is
a. $1,700.
b. $1,700 plus incidental damages.
c. incidental damages only.
d. nothing.
b. $1,700 plus incidental damages.
Development Associates (DA) agrees to buy five acres of land from Eagle Properties for $15,000. Eagle fails to go through with the deal on the agreed date, when the market price of the land is $17,000. DA may recover
a. $17,000.
b. $15,000.
c. $2,000.
d. nothing.
c. $2,000.
Ace Contractors, Inc., agrees to build a motel for Best Motels Corporation. The project proceeds according o plan, but before it is done, Best tells Ace to quit. Ace may recover
a. the contract price less costs of materials and labor.
b. the contract price.
c. the costs needed to complete construction.
d. profits plus the costs incurred up to the time of the breach.
d. profits plus the costs incurred up to the time of the breach.
Alpha Engineers, Inc., needs a drill to continue its operations and orders one for $1,500 from Mining Supplies Company. Alpha tells the supplier that it must receive the drill by Tuesday or it will lose $5,000. The supplier ships the drill late. Alpha can recover
a. $6,500.
b. $5,000.
c. $1,500.
d. nothing.
b. $5,000.
National Expeditions needs a tent for a mountain-climbing trip and orders one for $500 from Outdoor Supplies. National does not tell Outdoor about the trip, or that it must receive the tent by July 1 or it will lose $10,000. Outdoor ships the tent July 15. National can recover
a. $10,500.
b. $10,000.
c. $500.
d. nominal damages.
d. nominal damages.
Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corporation. Fresh Food does not pay for the storage. Earl sells the fruit to Green Grocery Stores, Inc. This sale represents
a. breach of contract.
b. a mitigation of damages.
c. rescission and restitution.
d. specific performance.
b. a mitigation of damages.
Ron breaches his lease with Sunny Properties and vacates the premises six months before the end of the term. In some states, the landlord would have to
a. avoid reletting the premises to recover any damages from Ron.
b. make reasonable efforts to relet the premises to mitigate the damages recoverable from Ron.
c. relet the premises to recover any damages from Ron.
d. sell the premises to recover any damages from Ron.
b. make reasonable efforts to relet the premises to mitigate the damages recoverable from Ron.
Home Delivery Corporation and Interstate Transport, Inc., sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to estimate but approximately $1,000." This is
a. a liquidated damages clause.
b. a mitigation of damages clause.
c. a nominal damages clause.
d. a penalty clause.
a. a liquidated damages clause.
Fine Properties, Inc., negotiates with General Maintenance Corporation to include a liquidated damages clause in their contract. To be enforceable, the clause must
a. be set when the contact is formed due to the difficulty of estimating the damages that would result from a breach.
b. include a reasonable estimate of the amount of damages that would result from a breach of the contract.
c. both a and b.
d. none of the above.
c. both a and b.
Lyle and May want to rescind their contract under which Lyle sold a laser printer to May for $200. To rescind the contract
a. Lyle must return the $200 only.
b. May must return the printer only.
c. Lyle must return the $200 and May must return the printer.
d. none of the above.
c. Lyle must return the $200 and May must return the printer.
Ira orally agrees to buy a unique collection of sports memorabilia for $1,000 from Jane and sends her $250 as a down payment. When Ira sends her the rest of the price, Jane refuses to ship Ira the collection. Ira should seek
a. damages.
b. reformation.
c. rescission.
d. specific performance.
d. specific performance.
Alpha Commodities, Inc., agrees to deliver ten tons of sheet metal to Beta Builders Corporation. The agreement states that delivery to be within "3" days, although the parties intend "30" days. Alpha cannot convince Beta to amend the contract. Alpha should seek
a. damages.
b. reformation.
c. rescission.
d. specific performance.
b. reformation.
A contract for a sale of land from United Properties, Inc., to Commercial Investments Corporation contains an erroneous legal description. The most appropriate remedy for these parties is
a. damages.
b. reformation.
c. rescission.
d. specific performance.
b. reformation.
As part of a sale of her marketing firm, Peggy signs a covenant not to compete that is unreasonable in its essential terms. To prevent undue hardship, a court will most likely
a. convert the unreasonable terms into reasonable ones.
b. declare that the entire contract is illegal.
c. decree that the sale of the business must be undone.
d. do nothing.
a. convert the unreasonable terms into reasonable ones.
Eagle Corporation and Finest Products, Inc., enter into a contract. To be enforceable, the contract must include
a. no particular signatures.
b. the signatures of all parties to the deal.
c. the signature of the party against whom enforcement is sought.
d. the signature of he party who is seeking enforcement.
c. the signature of the party against whom enforcement is sought.
T/F: Overestimating the value of an object is a mistake for which a court will normally provide relief.
False.
T/F: Misrepresentation of an opinion is an element of fraud.
False
T/F: Intent to deceive is an element of fraud.
True
T/F: A contract entered into under duress is voidable.
True
T/F: Under the Statute of Frauds, all written contracts are enforceable.
False
T/F: A contract involving a sale is the only contract relating to an interest in land that must be in writing to be enforceable.
False
T/F: All collateral promises must be in writing to be enforceable.
True
T/F: An oral contract for a sale of land may be enforceable if the contract has been partially performed.
True
T/F: Oral evidence of otherwise clear terms in a contract can be introduced at a trial to contradict those terms.
False
T/F: An integrated contract is the final embodiment of the terms of an agreement.
True
Grover contracts to sell two tracts of land to Hank.Both parties believe that the two tracts are adjacent, but in fact they arenot. Grover is still willing to sell the land, but under these circumstancesthe deal would adversely affect Hank. Because of the parties' belief about the agency of the property, their contract is
a. unavoidable.
b. unconscionable.
c. unenforceable.
d. voidable.
d. voidable.
Ralphoffers to sell Sophie, who is seventeen years of age, a car about which Ralphintentionally misrepresents several material facts. In reliance on themisrepresentations, Sophie buys the car. To prove fraud in this transaction,Sophie would have to show that
a. Ralph intentionally deceived Sophie.
b. Ralph made statements that were obviously exaggerated.
c. Sophie does not know anything about cars.
d. Sophie is under eighteen years of age.
a. Ralph intentionally deceived Sophie.
In selling software to Payroll Services Corporation, Ray tells Payroll's purchasing agent that the software is "almost human." This is
a. fraud.
b. duress.
c. puffery.
d. undue influence.
c. puffery.
Gary threatens physical harm to force Hugh to sell his business, Imported Goods, Inc., to Gary for a below-market price. This is
a. duress.
b. fraud.
c. puffery.
d. undue influence.
a. duress.
Randy and Beach Biz Company enter into an oralcontract under which Randy agrees to clean Beach Biz’s office for two years.This contract is enforceable by
a. Randy only.
b. Beach Biz only.
c. either party.
d. neither party.
c. neither party. * (One year rule?)
Lembuys a used MP3 player for $50 and a new laptop for $1,500, and signs aone-year employment contract for a $4,000 monthly salary to start at thebeginning of the next month. The Statute of Frauds covers
a. the employment contract, and the laptop and MP3 purchases.
b. the employment contract and the laptop purchase only.
c. the employment contract only.
d. the laptop and MP3 purchases only.
b. the employment contract and the laptop purchase only. (Sale of goods over $500)
Nina and Owen enter into an oral contract forNina’s sale to Owen of a laser printer for $400. Before Owen takes possessionof the printer, the contract is enforceable by
a. either party.
b. Nina only.
c. neither party.
d. Owen only.
a. either party. *
Theoand Uma orally agree on the sale of Theo’s Fitness Center to Uma and note theterms on a sheet of the center’s stationery, which includes the Center’sletterhead but which neither party signs. This agreement is most likelyenforceable against
a. neither Theo nor Uma.
b. Theo and Uma.
c. Theo only.
d. Uma only.
a. neither Theo nor Uma. (Not signed by either?) *
T/F: The person to whom rights in a contract are assigned is the assignor.
False
T/F: All rights can be assigned.
False
T/F: A right to receive damages on a breach of a contract for a sale of goods may be assigned.
True.
T/F: A delegation relieves the party making it of the obligation to perform.
False.
T/F: Any third party beneficiary to a contract who is not an intended beneficiary is incidental.
True.
T/F: If a contract condition is not satisfied, the obligations of the contracting parties are discharged.
False.
T/F: Performance that provides a party with most of the benefits of a contract, in spite of a deviation from the trims, is complete performance.
False
T/F: Anything less than substantial performance is a material breach of contract.
True
A novation revokes and discharges a prior contract.
True.
T/F: After a contract is made, a supervening event may make performance impossible and discharge the contract.
True.
Clem attempts to free himself from the duties of hiscontract with Drew by telling Drew to find someone else to perform them. Thisis
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. none of the choices.
d. none of the choices.
Benand Ivy enter into a contract under which Ben agrees to cater Ivy’s wedding inexchange for a cash down payment. The contract expressly prohibits any transferof rights. A contract right may be transferred, however, if the transferinvolves
a. a right to receive payment.
b. a right to Ben's services.
c. rights under Ivy's insurance policy against Ben's failing to perform.
d. a right whose transfer is otherwise expressly prohibited by statute.
a. a right to receive payment.
Commercial Shipping, Inc., and Dock ServicesCorporation enter into a contract for Dock to load Commercial’s trucks for whichCommercial agrees to pay Dock. Dock transfers its duty to load the trucks toEast Harbor Transport Company. Dock is
a. a delegator.
b. an assignor.
c. a payor.
d. an assignee.
a. a delegator.
Joy and kris enter into a contract for Kris to lay sod in Joys yard for which she agrees to pay Kris. When Kris schedule conflicts, she contracts Leza, to whom Kris "assigns all rights under the contract." Kris is
a. absolved of any liability under the contract.
b. in breach of the contract with Joy.
c. liable to Joy if Leza does not perform.
d. liable to Leza for inducing a prohibited contract.
c. liable to Joy if Leza does not perform. *
Jen is a third party beneficiary under a contractbetween Kyla and Leo. Kyla and Leo can modify or rescind their contract withoutJen’s consent
a. at any time.
b. at no time.
c. only after Jen's rights have vested.
d. only before Jen's rights have vested.
d. only before Jen's rights have vested.
Lon enters into a contract to mine limestone inMica’s quarry, sell it, and share the profits on its sale with Mica. If theduties under this contract are discharged like those under most contracts, theduties will be
a. assigned.
b. breached.
c. performed.
d. rescinded.
c. performed.
Building Restoration, Inc. (BRI), enters into acontract to refurbish an old train depot for Casual Dining, Inc., to open asEat Up Restaurant. If BRI completes most of the work promised in the contract,its performance will be
a. absolute.
b. complete.
c. material.
d. substantial.
d. substantial.
Super Toolmakers, Inc., contracts to sell itsbusiness to True Hardware Corporation. Before either party has performed,rescission of this contract requires
a. a mutual agreement to rescind.
b. consideration.
c. performance by all of the parries.
d. an accord and satisfaction.
b. consideration.
On April 1, OK Contractors, Inc., contracts tobuild a store for Lo-Cost Jewelers at a specific location in Metro City. On May1, Metro changes its zoning laws to prohibit the construction of a commercialbuilding at that location. When the store is not built, Lo-Cost files a suitagainst OK. In this situation
a. OK is in breach of contract.
b. Metro is in breach of contract.
c. the contract is discharged.
d. the contract is suspended.
c. the contract is discharged.
Haruko, who owns and operates Garden Orchard, agrees tosell Fresh Produce Cooperative ten bushels of apples. When the market price for apples exceeds the pricein the contract with Fresh Produce, Haruko decides not to deliver the apples. This
a. breaches the contract.
b. discharges the contract.
c. has no effect on the contract.
d. suspends the contract.
a. breaches the contract.
T/F: Expenses that are caused directly by a breach of contract such as those incurred to obtain performance from another source - are incidental damages.
True.
T/F: The injury suffered by a nonbreaching party due to thebreach of a contract may be remedied by payment of compensatory damages.
True*
T/F: Themeasure of damages for breach of a construction contract depends on which partybreaches and when.
True
T/F: Consequential damages are foreseeable damages thatarise from a party’s breach of a contract.
True
T/F: Punitive damages are never awarded in breach of contract actions.
False.
T/F: Normally, when a non breaching party has been damaged by a breach of contract, he or she has a duty to mitigate those damages.
True.
T/F: A breach of contract may entitle the innocent party to rescind the contract.
True.
T/F: Specific performance is the remedy customarily used when one party has breached a contract for personal services.
False.
T/F: A party seeking to recover in quasi contract must show that he or she has been unjustly enriched.
True* depending on how this is phrased.
T/F: A contract may include a clause stating that no damages can be recovered for a certain type of breach.
True
HandyHardware Store agrees to hire Ilsa for one year at a salary of $500 per week.When Handy cancels the contract, Ilsa spends $100 to obtain a similar job thatpays $450 per week for a year. Ilsa is entitled to recover
a. the amount of the wages that Handy promised only.
b. the difference between the wages at the two jobs only.
c. the difference between the wages a the two jobs plus $100.
d. $100 only.
c. the difference between the wages at the two jobs plus $100. *
HybridCorporation enters into a contract with Insure Service, Inc. (ISI), to obtainhealth insurance for Hybrid employees. If ISI breaches the contract and Hybridis awarded compensatory damages, the purpose would be to
a. establish, as a matter of principle, that ISI acted wrongfully.
b. provide Hybrid with funds for a foreseeable loss beyond the contract.
c. provide Hybrid with funds for its loss of the bargain.
d. punish ISI and set an example to deter others from similar acts.
c. provide Hybrid with funds for its loss of the bargain.
Monacontracts to repair a computer for NuData, Inc. (NDI). Mona knows that withoutthe computer, NDI will lose a sale. Mona does not perform as promised. NDIfiles a suit against Mona. As consequential damages, NDI can recover
a. the cost of a new computer.
b. the difference between Mona's price and the actual cost of repair.
c. the loss of profit from the lost sale.
d. nothing.
c. the loss of profit from the lost sale.
MedicalCentre enters into a contract with Local Motion Fitness Club for discountedmemberships for the Centre’s employees. If the Club breaches the contract andthe Centre enters into a contract with KO Sports for the same service at alower price, the Centre might be awarded nominal damages to
a. establish, as a matter of principle, that the Club acted wrongfully.
b. provide the Centre with funds for a foreseeable loss beyond the contract.
c. provide the Centre with funds for its loss o the bargain.
d. punish the Club and set an example to deter others from similar acts.
a. establish, as a matter of principle, that the Club acted wrongfully.
Fashion Retail Center enters into a contract with Great Promotions, Inc.,to provide Fashion with a plan to retool its merchandising strategy. If GreatPromotions breaches the contract, Fashion has a duty to
a. reduce the damages that Fashion might otherwise suffer.
b. reduce the loss that Great Promotions might otherwise suffer.
c. punish Great Promotions and deter others from similar acts.
d. take no action.
a. reduce the damages that Fashion might otherwise suffer.
RigHeli-Pads, Inc., enters into a contract to employ Scott as an on-site projectmanager for two years. If Rig breaches the contract, Scott has a duty to
a. do nothing.
b. reduce the damages that Scott might otherwise suffer.
c. rescind the contract with Rig.
d. punish Rig and set an example to deter others from similar acts.
b. reduce the damages that Scott might otherwise suffer.
HomeDelivery Corporation and Interstate Transport, Inc., sign an agreement thatprovides for the payment of “$1,000 by whichever party commits a materialbreach of the contract that creates damages difficult to estimate butapproximately $1,000.” This is
a. a liquidated damages clause.
b. a mitigation of damages clause.
c. a nominal damages clause.
d. a penalty clause.
a. a liquidated damages clause.*
Iraorally agrees to buy a unique collection of sports memorabilia for $1,000 fromJane and sends her $250 as a down payment. When Ira sends her the rest of theprice, Jane refuses to ship Ira the collection. Ira should seek
a. damages.
b. reformation.
c. rescission.
d. specific performance.
d. specific performance.
Dinohires Eve to perform at Dino’s Club, but Eve later breaches the agreement toaccept a higher-paying job at First Star Arena. Dino files a suit against Eve.The court will most likely
a. award damages to Dino.
b. cancel Dino and Eve's contract.
c. order Eve to perform the contract.
d. reform Dino and Eve's contract.
b. cancel Dino and Eve's contract.
Creekside Property Corporation enters into a contract with DownstreamManagement Associates to manage and maintain Creekside’s apartment complex.Their contract provides that neither party can recover damages for anon-fraudulent or unintentional breach. This is
a. a limitation-of-liability clause.
b. an exculpatory clause.
c. an illegal clause.
d. a quasi contract.
a. a limitation-of-liability clause.
About this deck
By: Nicole Mecham
Created: 2012-11-10
Size: 113 flashcards
Views: 426
Created: 2012-11-10
Size: 113 flashcards
Views: 426
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