Business Law Exam 2 Questions With Complete Solutions
A breach of contract occurs when: Correct Answers a promisor
fails—without legal excuse—to perform the obligations of a
contract.
A buyer has an insurable interest in goods when: Correct
Answers at the time the goods are identified.
A buyer who has accepted nonconforming goods may keep the
goods and recover damages caused by the breach. In addition to
incidental and consequential damages, the buyer is entitled to
damages equal to: Correct Answers the difference between the
value of the goods as accepted and their value if they had been
delivered as warranted.
A condition that must be fulfilled before a party's promise
becomes absolute is called: Correct Answers a condition
precedent.
A contract for a sale of land from Best Properties, Inc., to
Commercial Investments Corporation contains an erroneous
legal description. The most appropriate remedy for these parties
is: Correct Answers reformation
A contract for the sale of goods in which the seller is required or
authorized to ship the goods by carrier and tender the delivery of
the goods at a particular destination is called a: Correct
Answers destination contract.
,A contract may include provisions stating that no damages can
be recovered for certain types of breaches or that damages will
be limited to a maximum amount. Provisions stating that no
damages can be recovered are called: Correct Answers
exculpatory clauses.
A contract provision that affects the availability of certain
remedies is called: Correct Answers a limitation-of-liability
clause.
A critical requirement for enforcement of a contract under the
doctrine of substantial performance is: Correct Answers good
faith.
A lessor retains an insurable interest in leased goods: Correct
Answers until the lessee exercises an option to buy and the risk
of loss has passed to the lessee
A limitation-of-liability clause in a contract for the sale or lease
of goods: Correct Answers is permissible pursuant to the
Uniform Commercial Code.
A professor wrote a highly controversial letter to the editor
which was badly received by his colleagues, the university and
the public. Despite his free speech rights, he was terminated
from his position as a professor. He sued for damages. The jury
decided in his favor and awarded $1.00. This kind of damages is
referred to as: Correct Answers nominal damages.
A provision in a contract stating that no damages may be
recovered is called: Correct Answers an exculpatory clause.
,A qualification in a contract based on a possible future event is
a(n): Correct Answers condition.
A sale involving unborn animals that will be born within 12
months of contracting will have identification take place:
Correct Answers at the conception of the animals.
A seller's or lessor's act of placing conforming goods at the
disposal of the buyer or lessee and giving the buyer or lessee
whatever notification is reasonably necessary to enable the
buyer or lessee to take delivery is called: Correct Answers
tender of delivery.
A specific grade of corn that fills BioFuel Cooperative's silo is
fungible. This means that the corn is: Correct Answers alike
naturally or by agreement or trade usage.
A waiver is a willingness to: Correct Answers accept a
defective performance of a contract.
relinquish a legal right.
set aside the requirement of satisfactory and full performance.
A-One Construction Company enters into a contract with Ben to
remodel Carol's Home Store, using products from Delta
Building Supplies. Eats Cafe is next to Carol's Home Store. The
remodeling is a gift from Ben to Carol. Carol is: Correct
Answers an intended beneficiary.
A-One Construction Company enters into a contract with Ben to
remodel Carol's Home Store, using products from Delta
, Building Supplies. Eats Cafe is next to Carol's Home Store. The
remodeling is a gift from Ben to Carol. The value of Eats'
property will increase after Carol's store is remodeled. Eats is:
Correct Answers an incidental beneficiary.
According to the UCC, the buyer has an insurable interest in
contract goods: Correct Answers from the moment the goods
are identified to the contract.
Alan contracts for the sale of an ancient vase, a Renaissance
painting, and a modern mansion to Beth. Alan breaches the
contract. Beth files a suit against Alan. The court will most
likely award specific performance for: Correct Answers the
mansion, the painting, and the vase.
Alaskan salmon that fill the hold of Bill and Carla's fishing boat
are fungible if the salmon are: Correct Answers alike naturally
or by agreement or trade usage.
Alexandra contracts with Jeremie, a world-renowned guitar
player to give her lessons. Jeremie: Correct Answers cannot
delegate the duty to another teacher since the service is personal
in nature.
Alpha Inc. and Beth enter into a contract that includes a
limitation-of-liability clause. The clause would most likely not
be enforceable if: Correct Answers the clause excludes liability
for fraud or intentional injury.
Ample Country Stables contracts to buy 1,000 horseshoes from
Blacksmith, Inc., for $1 per shoe. When the market price
A breach of contract occurs when: Correct Answers a promisor
fails—without legal excuse—to perform the obligations of a
contract.
A buyer has an insurable interest in goods when: Correct
Answers at the time the goods are identified.
A buyer who has accepted nonconforming goods may keep the
goods and recover damages caused by the breach. In addition to
incidental and consequential damages, the buyer is entitled to
damages equal to: Correct Answers the difference between the
value of the goods as accepted and their value if they had been
delivered as warranted.
A condition that must be fulfilled before a party's promise
becomes absolute is called: Correct Answers a condition
precedent.
A contract for a sale of land from Best Properties, Inc., to
Commercial Investments Corporation contains an erroneous
legal description. The most appropriate remedy for these parties
is: Correct Answers reformation
A contract for the sale of goods in which the seller is required or
authorized to ship the goods by carrier and tender the delivery of
the goods at a particular destination is called a: Correct
Answers destination contract.
,A contract may include provisions stating that no damages can
be recovered for certain types of breaches or that damages will
be limited to a maximum amount. Provisions stating that no
damages can be recovered are called: Correct Answers
exculpatory clauses.
A contract provision that affects the availability of certain
remedies is called: Correct Answers a limitation-of-liability
clause.
A critical requirement for enforcement of a contract under the
doctrine of substantial performance is: Correct Answers good
faith.
A lessor retains an insurable interest in leased goods: Correct
Answers until the lessee exercises an option to buy and the risk
of loss has passed to the lessee
A limitation-of-liability clause in a contract for the sale or lease
of goods: Correct Answers is permissible pursuant to the
Uniform Commercial Code.
A professor wrote a highly controversial letter to the editor
which was badly received by his colleagues, the university and
the public. Despite his free speech rights, he was terminated
from his position as a professor. He sued for damages. The jury
decided in his favor and awarded $1.00. This kind of damages is
referred to as: Correct Answers nominal damages.
A provision in a contract stating that no damages may be
recovered is called: Correct Answers an exculpatory clause.
,A qualification in a contract based on a possible future event is
a(n): Correct Answers condition.
A sale involving unborn animals that will be born within 12
months of contracting will have identification take place:
Correct Answers at the conception of the animals.
A seller's or lessor's act of placing conforming goods at the
disposal of the buyer or lessee and giving the buyer or lessee
whatever notification is reasonably necessary to enable the
buyer or lessee to take delivery is called: Correct Answers
tender of delivery.
A specific grade of corn that fills BioFuel Cooperative's silo is
fungible. This means that the corn is: Correct Answers alike
naturally or by agreement or trade usage.
A waiver is a willingness to: Correct Answers accept a
defective performance of a contract.
relinquish a legal right.
set aside the requirement of satisfactory and full performance.
A-One Construction Company enters into a contract with Ben to
remodel Carol's Home Store, using products from Delta
Building Supplies. Eats Cafe is next to Carol's Home Store. The
remodeling is a gift from Ben to Carol. Carol is: Correct
Answers an intended beneficiary.
A-One Construction Company enters into a contract with Ben to
remodel Carol's Home Store, using products from Delta
, Building Supplies. Eats Cafe is next to Carol's Home Store. The
remodeling is a gift from Ben to Carol. The value of Eats'
property will increase after Carol's store is remodeled. Eats is:
Correct Answers an incidental beneficiary.
According to the UCC, the buyer has an insurable interest in
contract goods: Correct Answers from the moment the goods
are identified to the contract.
Alan contracts for the sale of an ancient vase, a Renaissance
painting, and a modern mansion to Beth. Alan breaches the
contract. Beth files a suit against Alan. The court will most
likely award specific performance for: Correct Answers the
mansion, the painting, and the vase.
Alaskan salmon that fill the hold of Bill and Carla's fishing boat
are fungible if the salmon are: Correct Answers alike naturally
or by agreement or trade usage.
Alexandra contracts with Jeremie, a world-renowned guitar
player to give her lessons. Jeremie: Correct Answers cannot
delegate the duty to another teacher since the service is personal
in nature.
Alpha Inc. and Beth enter into a contract that includes a
limitation-of-liability clause. The clause would most likely not
be enforceable if: Correct Answers the clause excludes liability
for fraud or intentional injury.
Ample Country Stables contracts to buy 1,000 horseshoes from
Blacksmith, Inc., for $1 per shoe. When the market price
