BUS 250 CH 18 QUESTIONS WITH VERIFIED NSWERS
Alice signs a contract with Bob to buy Bob's house for $150,000, with the clause, "if I
am able to obtain a mortgage loan for $125,000, at no more than 7% interest, payable
over 15 years." Assume that Alice tries but is unable to obtain the described loan, and
therefore refuses to proceed with the purchase. Alice is in breach of the contract. -
Answers - False
The statement, "You will have a job with Snelling & Snelling as long as you complete
your degree in business administration this May" does not create a condition because it
does not include the phrase "provided that." - Answers - False
most contracts are discharged by mutual agreement of the parties - Answers - False
Irving is shopping at the local Computers R Us store and agrees to buy a computer for
his home "on the condition of personal satisfaction." If Irving takes the computer back to
the store stating that he doesn't like the computer, then the seller must accept the return
of the computer and terminate the contract. - Answers - False
Assume that Jessie and Lester have formed a contract whereby Jessie agrees to
deliver 10,000 dozen "Grade A Large Eggs" to be shipped in recycled paper cartons. A
shortage of paper makes paper cartons much more expensive, so Jessie uses
styrofoam cartons and ships the eggs. Lester is entitled to cancel the contract based on
this deviation of terms in the contract. - Answers - False
A wholesaler of coffee notifies a retailer that it cannot fulfill its contractual obligation to
deliver 1,000 pounds of coffee at the agreed upon price of $2.00 per pound next month
because of recent price increases in coffee. The retailer may treat the wholesaler as
having breached the contract and sue for damages even though the wholesaler's
performance is not due until next month. - Answers - True
The legal right to sue for a breach of contract is subject to a statute of limitations -
Answers - True
A court may, at times, discharge a party who has not performed. - Answers - True
Concurrent conditions arise when there is both a condition precedent and a condition
subsequent - Answers - False
Generally, neither a "time is of the essence" clause nor a "force majeure" clause will be
recognized by the courts because these types of clauses are seen as a violation of
public policy. - Answers - False
, Monumental, Inc. contracts with Champion Builders to erect a three-story office building
on a parcel of land it has purchased. Before construction begins, the local zoning board
changes the zoning of the parcel and those adjoining it to residential use only.
Monumental's contract with Champion is discharged. - Answers - True
In negotiating the purchase of a vehicle, the sales representative told Karla, "I
guarantee that you will be personally satisfied with this car." The guarantee was written
on the contract when Karla purchased the car. If a controversy arises over Karla's
satisfaction, the court will apply a subjective standard, which means Karla's judgment
must be reasonable. - Answers - False
Ramon purchased 5,000 pounds of coffee from Quick Jump Coffee. The coffee was to
be delivered on September 1. Since the contract included a date for performance, time
is of the essence and the delivery date is strictly enforceable. - Answers - False
Abdulla hired Granite Construction to build an addition onto his home. Granite
Construction dug the foundation but then abandoned the project. Granite Construction
is entitled to receive the full contract price minus the value of the defects. - Answers -
False
The UCC recognizes commercial impracticability as a ground for discharge of a
contract. - Answers - True
M & E contracted to sell 500 music stands to Coda, Inc. M & E shipped the stands in
accordance with the agreement. Coda paid for the stands as promised. The contract
between M & E and Coda is discharged by:
a.
full performance.
b.
agreement.
c.
rescission.
d.
accord and satisfaction. - Answers - A
Al contracted to sell his house to Bev. Subsequently, they both changed their minds and
agreed to cancel the contract. The contract between Al and Bev is discharged by:
a.
full performance.
b.
rescission.
c.
accord and satisfaction.
d.
novation. - Answers - B
Alice signs a contract with Bob to buy Bob's house for $150,000, with the clause, "if I
am able to obtain a mortgage loan for $125,000, at no more than 7% interest, payable
over 15 years." Assume that Alice tries but is unable to obtain the described loan, and
therefore refuses to proceed with the purchase. Alice is in breach of the contract. -
Answers - False
The statement, "You will have a job with Snelling & Snelling as long as you complete
your degree in business administration this May" does not create a condition because it
does not include the phrase "provided that." - Answers - False
most contracts are discharged by mutual agreement of the parties - Answers - False
Irving is shopping at the local Computers R Us store and agrees to buy a computer for
his home "on the condition of personal satisfaction." If Irving takes the computer back to
the store stating that he doesn't like the computer, then the seller must accept the return
of the computer and terminate the contract. - Answers - False
Assume that Jessie and Lester have formed a contract whereby Jessie agrees to
deliver 10,000 dozen "Grade A Large Eggs" to be shipped in recycled paper cartons. A
shortage of paper makes paper cartons much more expensive, so Jessie uses
styrofoam cartons and ships the eggs. Lester is entitled to cancel the contract based on
this deviation of terms in the contract. - Answers - False
A wholesaler of coffee notifies a retailer that it cannot fulfill its contractual obligation to
deliver 1,000 pounds of coffee at the agreed upon price of $2.00 per pound next month
because of recent price increases in coffee. The retailer may treat the wholesaler as
having breached the contract and sue for damages even though the wholesaler's
performance is not due until next month. - Answers - True
The legal right to sue for a breach of contract is subject to a statute of limitations -
Answers - True
A court may, at times, discharge a party who has not performed. - Answers - True
Concurrent conditions arise when there is both a condition precedent and a condition
subsequent - Answers - False
Generally, neither a "time is of the essence" clause nor a "force majeure" clause will be
recognized by the courts because these types of clauses are seen as a violation of
public policy. - Answers - False
, Monumental, Inc. contracts with Champion Builders to erect a three-story office building
on a parcel of land it has purchased. Before construction begins, the local zoning board
changes the zoning of the parcel and those adjoining it to residential use only.
Monumental's contract with Champion is discharged. - Answers - True
In negotiating the purchase of a vehicle, the sales representative told Karla, "I
guarantee that you will be personally satisfied with this car." The guarantee was written
on the contract when Karla purchased the car. If a controversy arises over Karla's
satisfaction, the court will apply a subjective standard, which means Karla's judgment
must be reasonable. - Answers - False
Ramon purchased 5,000 pounds of coffee from Quick Jump Coffee. The coffee was to
be delivered on September 1. Since the contract included a date for performance, time
is of the essence and the delivery date is strictly enforceable. - Answers - False
Abdulla hired Granite Construction to build an addition onto his home. Granite
Construction dug the foundation but then abandoned the project. Granite Construction
is entitled to receive the full contract price minus the value of the defects. - Answers -
False
The UCC recognizes commercial impracticability as a ground for discharge of a
contract. - Answers - True
M & E contracted to sell 500 music stands to Coda, Inc. M & E shipped the stands in
accordance with the agreement. Coda paid for the stands as promised. The contract
between M & E and Coda is discharged by:
a.
full performance.
b.
agreement.
c.
rescission.
d.
accord and satisfaction. - Answers - A
Al contracted to sell his house to Bev. Subsequently, they both changed their minds and
agreed to cancel the contract. The contract between Al and Bev is discharged by:
a.
full performance.
b.
rescission.
c.
accord and satisfaction.
d.
novation. - Answers - B
