BUL 3310 EXAM 2 QUESTIONS WITH
ALL CORRECT ANSWERS
On Monday, Agnes bought and paid for a sofa from SofaStore. SofaStore offers free
furniture delivery, but the first available delivery date was Thursday. On Wednesday the
sofa was destroyed in a fire at SofaStore. Who bears the risk of loss?
Agnes, because she had title to the sofa when it was destroyed.
Agnes, because the sofa had already been identified to the contract
Agnes, if her check had cleared; SofaStore, if the check had not yet cleared.
SofaStore, because it is a merchant and Agnes had not yet taken possession of the
sofa. - Answer-SofaStore, because it is a merchant and Agnes had not yet taken
possession of the sofa
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.
Yes, he can rescind the contract based on a unilateral mistake of value.
Yes, he van rescind the contract based on innocent misrepresentation
Yes, he can rescind the contract based on economic duress
No, this was a valid bargained for exchange with a good faith purchaser for value -
Answer-No, this was a valid bargained for exchange with a good faith purchaser for
value
If goods are destroyed while in the buyer's possession, and the buyer holds the goods
under a sale on approval contract, the loss will fall on
A. Whichever party has insured the goods
B. The buyer and the seller equally
C. The buyer only
D. The seller only - Answer-the seller only
Article 2A of the Code governs
Leases of goods
Consignments
,Sales of fixtures
Sales of securities - Answer-Leases of goods
Buyer and Seller have a contract that calls for Seller to ship Buyer 10 dozen blue
widgets. Seller ships 10 dozen red widgets instead, and the shipment is destroyed in
transit. Which party has the risk of loss and why?
Seller has the risk of loss if it was a destination contract.
Buyer has the risk of loss if it was a shipment contract.
Seller has the risk of loss because the red widgets are a non-conforming tender.
Buyer has the risk of loss because he had an insurable interest when the widgets were
identified to the contract. - Answer-Seller has the risk of loss because the red widgets
are a non-conforming tender.
A legal waiver and a legal renunciation - Answer-A legal benefit and a legal detriment
Legal detriments always entail economic losses
T/F - Answer-False
Which of the following statements about nominal consideration is correct?
a. Giving your siblings a quitclaim deed for your 1/8 share in your family home for $1 is
an example of nominal consideration.
b. Nominal consideration will support an enforceable contract.
c. Nominal consideration is another term for sham consideration.
d. a and b are true - Answer-Nominal consideration will support an enforceable
contract???
In bilateral contracts, both parties must be bound to the contract or neither party is
bound
T/F - Answer-True
Mutuality of consideration is a requirement for which of the following? - Answer-A
bilateral contract
An illusory promise is not a promise at all
T/F - Answer-True
Famous Chef told Shrimp Boat Captain: "I will buy your catch if I think the shrimp are
large enough". What is the status of this promise?
A. This is a valid promise because the chef must make the decision in good faith.
B. This is a valid promise because size is a quantifiable term.
C. This is an illusory promise because the chef has complete control over whether or
not he will keep the promise.
D. This is an illusory promise for a contract but a valid promise for promissory estoppel.
- Answer-This is a valid promise because the chef must make the decision in good faith
,Courts do not enforce output contracts as a matter of public policy
T/F - Answer-False
Big Oil Company has a contract with Homeowner to deliver however much heating oil
Homeowner needs for the fall and winter seasons. This is an example of contract
, a. requirements
b. output
c. unilateral
d. lease - Answer-A requirements
Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim
catches during the season for $35 per bushel. Which of the following actions would
constitute a breach of the contract between Bay Crab and Jim?
- Jim sells crabs to another buyer
- Jim buys crabs from other crabbers at $25 per bushel so that he can sell them to Bay
Crab at the contract price of $35 per bushel - Answer-Both A and B
Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim
catches during the season for $35 per bushel. This is an example of contract -
Answer-An output
Parties to a contract may not offer as consideration promises to do what they are
already legally required to do
T/F - Answer-True
Under common law, modifications to existing contracts require new consideration from
each party
T/F - Answer-True
Under the Code, parties may agree to modify the terms of an existing contract without
providing new consideration
T/F - Answer-True
In a liquidated debt, the parties agree on the exact amount that is due
T/F - Answer-True
Under which of the following circumstances will cashing a check marked "paid in full"
create an accord and satisfaction?
a. The check is for a lesser sum that the amount due on a liquidated debt.
b. The check is for an unliquidated debt and both parties know of the dispute.
c. The check is for any transaction governed by the Code.
d. The check is in payment of a court judgment. - Answer-The check is for an
unliquidated debt and both parties know of the dispute
Another term for promissory estoppel is - Answer-Detrimental reliance
Promissory estoppel is the contract doctrine which requires that accords be in writing
T/F - Answer-False
ALL CORRECT ANSWERS
On Monday, Agnes bought and paid for a sofa from SofaStore. SofaStore offers free
furniture delivery, but the first available delivery date was Thursday. On Wednesday the
sofa was destroyed in a fire at SofaStore. Who bears the risk of loss?
Agnes, because she had title to the sofa when it was destroyed.
Agnes, because the sofa had already been identified to the contract
Agnes, if her check had cleared; SofaStore, if the check had not yet cleared.
SofaStore, because it is a merchant and Agnes had not yet taken possession of the
sofa. - Answer-SofaStore, because it is a merchant and Agnes had not yet taken
possession of the sofa
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.
Yes, he can rescind the contract based on a unilateral mistake of value.
Yes, he van rescind the contract based on innocent misrepresentation
Yes, he can rescind the contract based on economic duress
No, this was a valid bargained for exchange with a good faith purchaser for value -
Answer-No, this was a valid bargained for exchange with a good faith purchaser for
value
If goods are destroyed while in the buyer's possession, and the buyer holds the goods
under a sale on approval contract, the loss will fall on
A. Whichever party has insured the goods
B. The buyer and the seller equally
C. The buyer only
D. The seller only - Answer-the seller only
Article 2A of the Code governs
Leases of goods
Consignments
,Sales of fixtures
Sales of securities - Answer-Leases of goods
Buyer and Seller have a contract that calls for Seller to ship Buyer 10 dozen blue
widgets. Seller ships 10 dozen red widgets instead, and the shipment is destroyed in
transit. Which party has the risk of loss and why?
Seller has the risk of loss if it was a destination contract.
Buyer has the risk of loss if it was a shipment contract.
Seller has the risk of loss because the red widgets are a non-conforming tender.
Buyer has the risk of loss because he had an insurable interest when the widgets were
identified to the contract. - Answer-Seller has the risk of loss because the red widgets
are a non-conforming tender.
A legal waiver and a legal renunciation - Answer-A legal benefit and a legal detriment
Legal detriments always entail economic losses
T/F - Answer-False
Which of the following statements about nominal consideration is correct?
a. Giving your siblings a quitclaim deed for your 1/8 share in your family home for $1 is
an example of nominal consideration.
b. Nominal consideration will support an enforceable contract.
c. Nominal consideration is another term for sham consideration.
d. a and b are true - Answer-Nominal consideration will support an enforceable
contract???
In bilateral contracts, both parties must be bound to the contract or neither party is
bound
T/F - Answer-True
Mutuality of consideration is a requirement for which of the following? - Answer-A
bilateral contract
An illusory promise is not a promise at all
T/F - Answer-True
Famous Chef told Shrimp Boat Captain: "I will buy your catch if I think the shrimp are
large enough". What is the status of this promise?
A. This is a valid promise because the chef must make the decision in good faith.
B. This is a valid promise because size is a quantifiable term.
C. This is an illusory promise because the chef has complete control over whether or
not he will keep the promise.
D. This is an illusory promise for a contract but a valid promise for promissory estoppel.
- Answer-This is a valid promise because the chef must make the decision in good faith
,Courts do not enforce output contracts as a matter of public policy
T/F - Answer-False
Big Oil Company has a contract with Homeowner to deliver however much heating oil
Homeowner needs for the fall and winter seasons. This is an example of contract
, a. requirements
b. output
c. unilateral
d. lease - Answer-A requirements
Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim
catches during the season for $35 per bushel. Which of the following actions would
constitute a breach of the contract between Bay Crab and Jim?
- Jim sells crabs to another buyer
- Jim buys crabs from other crabbers at $25 per bushel so that he can sell them to Bay
Crab at the contract price of $35 per bushel - Answer-Both A and B
Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim
catches during the season for $35 per bushel. This is an example of contract -
Answer-An output
Parties to a contract may not offer as consideration promises to do what they are
already legally required to do
T/F - Answer-True
Under common law, modifications to existing contracts require new consideration from
each party
T/F - Answer-True
Under the Code, parties may agree to modify the terms of an existing contract without
providing new consideration
T/F - Answer-True
In a liquidated debt, the parties agree on the exact amount that is due
T/F - Answer-True
Under which of the following circumstances will cashing a check marked "paid in full"
create an accord and satisfaction?
a. The check is for a lesser sum that the amount due on a liquidated debt.
b. The check is for an unliquidated debt and both parties know of the dispute.
c. The check is for any transaction governed by the Code.
d. The check is in payment of a court judgment. - Answer-The check is for an
unliquidated debt and both parties know of the dispute
Another term for promissory estoppel is - Answer-Detrimental reliance
Promissory estoppel is the contract doctrine which requires that accords be in writing
T/F - Answer-False
