BUL 3310 Unit 6 Quiz
Having lost his job in the recent recession and facing property taxes that were past due,
Ed was desperate for cash. He sold his prized 1969 Mustang to a good faith purchaser
for value at a price that was well below its market value. Ed now regrets this decision
and asks if he has any legal basis for rescinding the contract. Please advise Ed
a. no, this was a valid bargained for exchange with a good faith purchaser for value
b. yes, he van rescind the contract based on innocent misrepresentation
c. yes, he can rescind the contract based on economic duress
d. yes, he can rescind the contract based on a unilateral mistake of value - ✔️✔️a
British Textile Manufacturer entered into a contract with Cotton Broker for 2,000 bales of
cotton to be shipped from India to England on the ship "Peerless, sailing from Bombay."
The contract was silent about the shipping date. Buyer expected the cotton to be
shipped on the Peerless that sailed from Bombay in October; seller expected to ship the
cotton on the Peerless that sailed from Bombay in December. By the time the second
ship arrived in England, buyer had found another supplier and refused to accept the
cotton. Does manufacturer have any defenses to the breach of contract suit brought by
Broker?
a. yes, there was economic duress
b. yes, there was a bilateral mistake of material fact
c. yes, there was a unilateral mistake of material fact
d. no, the buyer should have double checked the shipping date - ✔️✔️b
Larry Lawyer entered into a contract to buy land from a client at well below market
value. The client was elderly and trusted Larry as his lawyer and son of his best friend
to be fair and give him good advice. Client can rescind the contract based on
a. unilateral mistake of fact
b. unilateral mistake of value
c. undue influence
d. duress - ✔️✔️c
Goods which are required for maintaining life or health are classified as
a. res in chose
b. sustenance
c. necessaries
d. obligatories - ✔️✔️c
,For which of the following purchases would a minor be liable to the seller for the fair
value of the goods?
a. medicine
b. insurance
c. car
d. an iPod - ✔️✔️a
Any person who occupies a position of trust and confidence in relation to another
person or his property is a trustee.
a. true
b. false - ✔️✔️b
Contracts entered into by alcoholics are void
a. true
b. false - ✔️✔️b
A seller who knows that his property has a defect not discoverable by the buyer will be
liable for fraudulent misrepresentation if he does not disclose the defect
a. true
b. false - ✔️✔️a
Fraudulent misrepresentation can be the basis for the injured party to rescind the
contract
a. true
b. false - ✔️✔️a
If a minor ratifies a contract before the age of majority, he gives up the right to avoid the
contract
a. true
b. false - ✔️✔️b
Under the Code, goods are "tendered" when
a. the seller makes the goods available to the buyer and gives him notice that they are
available
b. the buyer takes physical possession of them
c. the buyer pays for the goods
d. both a and b - ✔️✔️a
, If goods are sold under a negotiable warehouse receipt, risk of loss passes to the buyer
when
a. the buyer takes possession of the goods
b. the warehouse receipt is tendered to the buyer
c. the buyer pays for the goods
d. the goods are tendered to the buyer - ✔️✔️b
Mary runs a clothing store at a ski resort. She is approached by Sally who has several
dozen funky hand knit ski caps she would like Mary to buy to sell in her store. Mary
agrees on the condition that Sally take back any unsold hats at the end of the season.
This agreement is an ______________
a. sale on approval
b. sale or return
c. an unenforceable promise
d. an installment sales contract - ✔️✔️b
Sid Salesman sold Bea Buyer a used 2004 Camry for 8,000. The morning after the
contract was signed, Sid called Bea to say that he had forgotten that the dealership
would not let that Camry go for less than 9,000 so she would have to pay an additional
1,000 if she wanted the car. Is Bea liable for the extra 1,000?
a. yes, this was a unilateral mistake of fact by Sid
b. no, this was a unilateral mistake of fact by Sid
c. yes, Sid has the defense of economic duress
d. yes, this was a bilateral mistake of fact - ✔️✔️b
The term F.A.S. in a contract indicates that
a. the seller is a merchant
b. the buyer is a merchant
c. the goods are being shipped by a merchant vessel
d. the buyer paid the cost of insuring the goods - ✔️✔️c
Debbie, who owns an art gallery, lets regular customers take home prints and large
works of art so they can "think about them" before buying. A customer who wants the
print sends Debbie a check for the selling price. A customer who decides not to buy the
work has 15 days to return it to Debbie. This arrangement is classified as an ______
a. sale or return
b. sale on approval
c. consignment
d. installment sales contract - ✔️✔️b
Having lost his job in the recent recession and facing property taxes that were past due,
Ed was desperate for cash. He sold his prized 1969 Mustang to a good faith purchaser
for value at a price that was well below its market value. Ed now regrets this decision
and asks if he has any legal basis for rescinding the contract. Please advise Ed
a. no, this was a valid bargained for exchange with a good faith purchaser for value
b. yes, he van rescind the contract based on innocent misrepresentation
c. yes, he can rescind the contract based on economic duress
d. yes, he can rescind the contract based on a unilateral mistake of value - ✔️✔️a
British Textile Manufacturer entered into a contract with Cotton Broker for 2,000 bales of
cotton to be shipped from India to England on the ship "Peerless, sailing from Bombay."
The contract was silent about the shipping date. Buyer expected the cotton to be
shipped on the Peerless that sailed from Bombay in October; seller expected to ship the
cotton on the Peerless that sailed from Bombay in December. By the time the second
ship arrived in England, buyer had found another supplier and refused to accept the
cotton. Does manufacturer have any defenses to the breach of contract suit brought by
Broker?
a. yes, there was economic duress
b. yes, there was a bilateral mistake of material fact
c. yes, there was a unilateral mistake of material fact
d. no, the buyer should have double checked the shipping date - ✔️✔️b
Larry Lawyer entered into a contract to buy land from a client at well below market
value. The client was elderly and trusted Larry as his lawyer and son of his best friend
to be fair and give him good advice. Client can rescind the contract based on
a. unilateral mistake of fact
b. unilateral mistake of value
c. undue influence
d. duress - ✔️✔️c
Goods which are required for maintaining life or health are classified as
a. res in chose
b. sustenance
c. necessaries
d. obligatories - ✔️✔️c
,For which of the following purchases would a minor be liable to the seller for the fair
value of the goods?
a. medicine
b. insurance
c. car
d. an iPod - ✔️✔️a
Any person who occupies a position of trust and confidence in relation to another
person or his property is a trustee.
a. true
b. false - ✔️✔️b
Contracts entered into by alcoholics are void
a. true
b. false - ✔️✔️b
A seller who knows that his property has a defect not discoverable by the buyer will be
liable for fraudulent misrepresentation if he does not disclose the defect
a. true
b. false - ✔️✔️a
Fraudulent misrepresentation can be the basis for the injured party to rescind the
contract
a. true
b. false - ✔️✔️a
If a minor ratifies a contract before the age of majority, he gives up the right to avoid the
contract
a. true
b. false - ✔️✔️b
Under the Code, goods are "tendered" when
a. the seller makes the goods available to the buyer and gives him notice that they are
available
b. the buyer takes physical possession of them
c. the buyer pays for the goods
d. both a and b - ✔️✔️a
, If goods are sold under a negotiable warehouse receipt, risk of loss passes to the buyer
when
a. the buyer takes possession of the goods
b. the warehouse receipt is tendered to the buyer
c. the buyer pays for the goods
d. the goods are tendered to the buyer - ✔️✔️b
Mary runs a clothing store at a ski resort. She is approached by Sally who has several
dozen funky hand knit ski caps she would like Mary to buy to sell in her store. Mary
agrees on the condition that Sally take back any unsold hats at the end of the season.
This agreement is an ______________
a. sale on approval
b. sale or return
c. an unenforceable promise
d. an installment sales contract - ✔️✔️b
Sid Salesman sold Bea Buyer a used 2004 Camry for 8,000. The morning after the
contract was signed, Sid called Bea to say that he had forgotten that the dealership
would not let that Camry go for less than 9,000 so she would have to pay an additional
1,000 if she wanted the car. Is Bea liable for the extra 1,000?
a. yes, this was a unilateral mistake of fact by Sid
b. no, this was a unilateral mistake of fact by Sid
c. yes, Sid has the defense of economic duress
d. yes, this was a bilateral mistake of fact - ✔️✔️b
The term F.A.S. in a contract indicates that
a. the seller is a merchant
b. the buyer is a merchant
c. the goods are being shipped by a merchant vessel
d. the buyer paid the cost of insuring the goods - ✔️✔️c
Debbie, who owns an art gallery, lets regular customers take home prints and large
works of art so they can "think about them" before buying. A customer who wants the
print sends Debbie a check for the selling price. A customer who decides not to buy the
work has 15 days to return it to Debbie. This arrangement is classified as an ______
a. sale or return
b. sale on approval
c. consignment
d. installment sales contract - ✔️✔️b
