Graded Homework

This is a test, each question is worth 2 points. There is only one attempt for this exam. If I receive a full mark you will receive a $50 tip.

Question 1

1. If a buyer accepts defective goods and wants to hold the seller liable, the buyer must give the seller notice of the defect:
   

   only in writing.

   within a reasonable time after detecting the defect.

   within the same financial year of the purchase.

   when the contract is made.

2 points

Question 2

1. A building that deviates slightly from the contract’s specifications does not qualify as substantial performance.

   True

   False

2 points

Question 3

1. A promisor who delegates duties is _____ if the party to whom the duties were delegated fails to satisfactorily perform them.
   

   liable to the promisee

   not liable to the promisee

   liable for novation

   liable to the creditor beneficiary

2 points

Question 4

1. A buyer is _____ if he cannot pay his bills when they become due.
   

   unconscionable

   liquidated

   unaccountable

   insolvent

2 points

Question 5

1. By accepting goods, the buyer forfeits remedies against the seller for any nonconformities in the goods.

   True

   False

2 points

Question 6

1. Emma had contracted with Queen Arts Inc. to perform a ballet. A day before the program, there was a fire and the dance floor was burnt. Hence, Emma could not perform. Since Emma cannot perform her contractual duties, she is liable for material breach.

   True

   False

2 points

Question 7

1. A person’s promise made on an original contract is identical to the promise a third party makes on a guaranty contract.

   True

   False

2 points

Question 8

1. Consequential damages:
   

   occur when the special circumstances of the plaintiff cause him or her to suffer losses that would not ordinarily be foreseeable as a result of the breach.

   are recoverable unless the defendant had reason to foresee them at the time the contract was created.

   are measured by the loss in value of the promised performance.

   are very small damages that the court may award the plaintiff when a technical breach of contract has occurred without causing any actual loss.

2 points

Question 9

1. Adam contracts to sell Ben 100 widgets for $100, for use in Ben’s factory. Adam does not know that Ben’s factory is closed as it is waiting for the supply of widgets from Adam. Which of the following statements is true of the damages caused due to late delivery?
   

   Adam will be liable for compensatory damages.

   Adam will be liable for consequential damages.

   Adam will not be liable for consequential damages.

   Adam will be liable for nominal damages.

2 points

Question 10

1. Anyone who entrusts goods to a merchant who regularly deals in such goods gives that merchant the power to give good title to a buyer in the ordinary course of business.

   True

   False

2 points

Question 11

1. If a contract does not require a seller to deliver the goods to a buyer’s place of business but merely to ship the goods to the buyer, the seller:
   

   is required to put the goods into the possession of a carrier such as a trucking company or a railroad.

   is not required to notify the buyer of the shipment as it is the duty of the carrier to bear for any material delay or loss in the process.

   is required to deliver the goods personally to the buyer’s place of business.

   is not required to make a contract with the carrier as the seller’s duty ends after he delivers the goods safely to the carrier.

2 points

Question 12

1. If the goods delivered by the seller do not conform to the contract, _____.
   

   the buyer can pay for the units accepted at a price lower than the price per unit provided in the contract

   the buyer can accept only part of a commercial unit and reject the rest

   the buyer cannot reject an installment delivery even if the nonconformity substantially affects the value of that delivery

   the buyer can accept any commercial units and reject the rest

2 points

Question 13

1. If an oral contract has been declared unenforceable under the statute of frauds, yet one of the parties has rendered some performance under the contract that conferred benefits on the other party, he or she can recover the reasonable value of the performance in _____.
   

   collateral enforcement

   quasi contract

   guaranty contract

   promissory estoppel

2 points

Question 14

1. If a contract is silent about the place for delivery, the goods are to be delivered at the seller’s place of business.

   True

   False

2 points

Question 15

1. Buyers are entitled to specific performance of a contract if the goods covered by the contract are unique.

   True

   False

2 points

Question 16

1. An incidental beneficiary can:
   

   enforce a contract.

   acquire rights under a contract.

   be a member of the general public.

   sue for nonperformance.

2 points

Question 17

1. According to the Uniform Commercial Code, title to goods passes to the buyer:
   

   before the buyer pays for the goods.

   upon selection of the goods by the buyer.

   when the document of title is delivered by the seller.

   only if the seller delivers the goods to the buyer’s residence.

2 points

Question 18

1. Ellie took her diamond ring to Portman Jewelers Corp. for routine cleaning. An employee at the store sold the ring to Daniel who was unaware that the ring belonged to Ellie. Which of the following statements is true in this case?
   

   Ellie can recover the ring from Daniel.

   Ellie can sue the store for conversion, but cannot recover the ring from Daniel because he was a buyer in the ordinary course of business.

   Ellie can recover the ring from the store under the Uniform Commercial Code’s ownership principles because the service element is predominant in this case.

   Ellie cannot sue the store because the store employee acted in good faith.

2 points

Question 19

1. Campus Bus Service entered into a contract with Smith Bus Company to purchase 10 buses. One week before Campus Bus was scheduled to receive the buses, a fire destroyed Smith’s warehouse and the buses inside. As a result, Campus Bus had to purchase its buses at a slightly higher cost from another manufacturer. Campus Bus sues Smith Bus for damages for breach of contract under these circumstances. Assume Campus Bus did not bear the risk of loss of the goods under the contract. In this scenario, _____.
   

   Smith Bus should be excused from performance under the clause for the rights on improper delivery

   Smith Bus should not be excused from performance because it did not act in good faith

   Smith Bus should be excused from performance under the test of commercial impracticability

   Smith Bus can exercise its right of anticipatory repudiation

2 points

Question 20

1. Injunctions are:
   

   mandatory if the court orders a party to refrain from doing certain acts.

   not a form of equitable remedy, which is granted depending on the equities of a case.

   used to compel personal service.

   available when a breach of contract threatens to produce an irreparable injury.

2 points

Question 21

1. Acceptance of goods occurs when:
   

   a buyer indicates that he or she will take the goods.

   a buyer inspects the goods.

   a seller ships the goods to a buyer.

   a buyer makes a payment by cash or check for the goods.

2 points

Question 22

1. If the seller fails or refuses to deliver the goods called for in the contract, the buyer has the right to cover.

   True

   False

2 points

Question 23

1. An employee with special skills who has agreed not to work for a competitor may be enjoined from breaching his or her contract and working for that competitor by:
   

   a mandatory injunction.

   liquidated damage provisions.

   a prohibitory injunction.

   nominal damage provisions.

2 points

Question 24

1. If a contract is for the sale of goods, the principles of common law are applicable.

   True

   False

2 points

Question 25

1. A liquidated damage provision will be enforced when:
   

   a technical breach of contract has occurred without causing any actual loss.

   the amount specified is reasonable and actual damages are difficult to determine.

   the nature of the contract is such that damages are easy to determine.

   the amount agreed on is not the injured party’s exclusive remedy.

2 points

Question 26

1. If a buyer accepts any part of a commercial unit of goods, he is considered to have accepted the whole unit.

   True

   False

2 points

Question 27

1. Adam offered to buy automobile batteries from Ben. Adam’s purchase order was complete with respect to all material terms except price, which was omitted. If Ben accepts Adam’s offer, and the price of automobile batteries is well established in the industry, which of the following statements is true?
   

   A contract cannot be formed between Adam and Ben if the price is not included.

   A contract can be formed between Adam and Ben only if it can be proved that the parties intended to enter a contract to discuss the price.

   A contract can be formed between Adam and Ben, but the price will be treated as a proposed addition to the contract which must be accepted by both parties.

   A contract can be formed between Adam and Ben even though the price term was omitted.

2 points

Question 28

1. If a promisor’s performance will satisfy a legal duty that the promisee owes a third party, the third party is a(n) _____.
   

   donee beneficiary.

   incidental beneficiary.

   creditor beneficiary.

   implied beneficiary.

2 points

Question 29

1. After a breach of contract by a buyer, if a seller auctions the goods and makes a profit, he is not liable to give the profit to the buyer.

   True

   False

2 points

Question 30

1. A creditor beneficiary has rights against the promisee, but not the promisor.

   True

   False

2 points

Question 31

1. A buyer has a retail store in Florida and the seller is a manufacturer in California. If the buyer orders goods from the seller and the goods are shipped “FOB Florida,” which of the following statements is true?
   

   The seller bears the expense and risk of delivering the goods to Florida.

   Neither the seller nor the buyer bears the risk of delivering the goods as the goods are insured.

   The seller is allowed to charge a nominal fee for delivering the goods.

   The buyer bears the risk of loss as he is responsible for taking possession of the goods.

2 points

Question 32

1. A statute of frauds essentially says that in some cases, the law will require more evidence that the parties had an agreement than the oral testimony of the party claiming that a contract existed.

   True

   False

2 points

Question 33

1. Contracts transferring ownership rights in real estate need not be evidenced by writing to be enforceable.

   True

   False

2 points

Question 34

1. If a seller discovers a buyer is insolvent, the seller:
   

   must wait 10 days before taking action.

   has the right to stop delivery of any goods that are being shipped to the buyer.

   has to go ahead with the shipment anyway because doing otherwise would disrupt the purchase contract.

   must wait seven days before taking any action.

2 points

Question 35

1. A party who has waived rights to a portion of the contract not yet performed may retract the waiver by giving reasonable notice to the other party that strict performance will be required.

   True

   False

2 points

Question 36

1. Edward owes Frank $100, payable in six months. Frank, who is leaving the country, gives his rights to the payment to Marge for $80. Which of the following is true about the scenario?
   

   Frank is the obligor.

   Edward owes Marge $80.

   Edward owes Marge $100.

   Frank will get $100 from Edward.

2 points

Question 37

1. A(n) _____ is a new, separate agreement by the promisee to release the original promisor from liability in exchange for a third party’s agreement to assume the promisor’s duties.
   

   assignment

   delegation

   novation

   obligor

2 points

Question 38

1. A buyer has the right to retain goods, even if the bank refuses to pay the buyer’s check.

   True

   False

2 points

Question 39

1. A clothing store has opened a credit account in which Judy, a college student, gets Alice, her older sister, to agree to pay the amount owed on the account if Judy fails to do so. Which of the following statements is true of this scenario?
   

   Judy is the obligor, and she is secondarily liable to the clothing store.

   Alice is the guarantor, and she is primarily liable to make the payments.

   Judy is the obligor, and she is contractually liable to the guarantor.

   Alice is the guarantor, and Alice’s contract must be in writing to be enforceable.

2 points

Question 40

1. An oral contract may be enforceable if promissory estoppel applies.

   True

   False

2 points

Question 41

1. Anticipatory repudiation can never be implied from actions by the promisor.

   True

   False

2 points

Question 42

1. If a buyer becomes concerned that the seller may not be able to perform required contract obligations, the buyer:
   

   can legally make the contract without telling the other party.

   can demand assurance from the seller that the contract will be performed.

   will be excused from fair trade under the test of commercial impracticability.

   will be excused from performance under the test of impossibility.

2 points

Question 43

1. If a contract requires a seller to ship the goods, title passes to the buyer only when the seller delivers the goods to him.

   True

   False

2 points

Question 44

1. If a liquidated damages clause is not enforceable because it is unconscionable, the injured party is barred from recovering actual damages.

   True

   False

2 points

Question 45

1. Beck Inc., a food processing company in Chicago, placed a phone order with Gary, a vineyard owner in California, for a certain quantity of perishable products. The shipping term was “CIF” with payment to be made on delivery. Gary contracted with a carrier to deliver the goods to Beck Inc. However, he neglected to ship the goods under refrigeration. The goods were loaded on a non-refrigerated boxcar and as a result the product was spoiled when it reached Chicago. Under these circumstances, _____.
   

   neither Gary nor Beck Inc. bears the risk of loss as the goods are insured

   Beck Inc. bears the risk of loss because, under a CIF shipment, the buyer has to bear all risks

   Beck Inc. bears the risk of loss as the contract did not mention that Gary will guarantee their delivery

   Gary bears the risk of loss because, under a CIF shipment, the seller bears the expense and the risk of loading the goods

2 points

Question 46

1. Any attempt to limit consequential damages for injury caused to a person by consumer goods is considered prima facie unconscionable.

   True

   False

2 points

Question 47

1. If the legal remedies for breach of contract are not adequate to fully remedy a party’s injuries, a court has the discretionary right to grant an equitable remedy.

   True

   False

2 points

Question 48

1. If an event must occur before a party’s duty to perform arises, it is called a condition precedent.

   True

   False

2 points

Question 49

1. A seller can recover the contract price from the buyer when she manufactured goods especially for the buyer, and those goods are not usable by anyone else.

   True

   False

2 points

Question 50

1. If the buyer and seller do not have an agreement for where the goods are to be delivered, the goods should be delivered at the _____.
   

   seller’s place of business

   seller’s house, even if the seller has a place of business

   buyer’s house

   buyer’s place of work