Statutes of limitations:
A) define how much money the injured party can sue for under a breach of contract claim.
B) define whether there has been substantial performance of a contract or a material breach.
C) limit the time in which an injured party may sue.
D) only apply to the sale of goods. There is no statute of limitations on a service contract.
Which of the following can be consideration for a promise?
A) refraining from beating one’s spouse.
B) promising to refrain from beating one’s spouse.
C) refraining from smoking cigarettes.
D) refraining from using cocaine.
Hill Computers is a retailer, which buys its inventory from Acme Co. on credit, giving Acme a security interest in the inventory. Hubert buys a computer from Hill in the normal course of business. Hubert’s title in the computer is:
A) a good title.
B) a voidable title.
C) Hubert has no title in the computer. Title does not pass to Hill and therefore to Hubert until Hill pays its debt in full to Acme.
D) Hubert has good title that is subject to Acme’s security interest.
Dodger bought an insurance contract from Liberty Farm Co. The policy contained a clause stating that all claims for losses had to be reported within 45 days after the date of the loss or the claim would be barred. Time is stated to be of the essence. Dodger sustained a covered farm loss, but did not report it to Liberty Farm until 50 days later. Liberty Farm denied coverage for the claim. If Dodger sues, who wins?
A) Dodger wins; the contract was substantially performed.
B) Liberty Farm wins; there was failure of a condition subsequent.
C) Dodger wins; courts will not enforce a time-of-the-essence clause.
D) Liberty Farm wins; the impossibility doctrine applies.
Usually, a promise to perform an existing legal obligation is
A) not consideration.
B) binding if the promisor promises to perform with extra care.
C) binding if the promisor promises to perform to suit the personal satisfaction of the promisee.
D) binding if the promisee would experience substantial loss due to breach of the promise.
One of the factors leading courts away from a laissez-faire approach to contract law was:
A) the movement away from requiring a writing and a seal on contracts.
B) a change in relative bargaining power between parties to contracts.
C) the assumption that promises are not legally significant.
D) the assumption that parties had freedom to contract and would have to live with the consequences.
Assume that Sherrie’s Cherries contracts with Dessert World to sell and ship 600 pounds of cherries in three equal installments of 200 pounds each. If the first installment arrives with 5 pounds of spoilage, then Dessert World may:
A) reject the installment shipment because of the perfect tender rule.
B) not reject the installment if those in the food industry expect a small percentage of spoilage with fresh fruits or vegetables.
C) reject the entire contract.
D) declare a breach and “cover.”
An oral contract can be enforced when it relates to:
A) the purchase of a television set for $200.
B) the sale of an interest in land for $400.
C) managing a factory for five years.
D) a promise to answer for the debt of another.
Ralph is a professional football player. He signs a valid contract with the Jets. Later, he claims that he was also promised free use of the Jets’ private jet, but this was not in the contract. What type of clause in his contract would prevent him from flying away with this claim?
A) A complete agreement clause.
B) A “no additional terms” clause.
C) An integration clause.
D) A severability clause.
A promise to pay a debt must be in writing if:
A) the debt is for more than $500.
B) the debt is now due and payable.
C) the promise is to pay the debt of another.
D) the debt owed is the promisor’s.
A contract between a company in the U.S. and one in China, contained a clause that stated: “If an event happens which is extraordinary and out of the control of the parties such as a strike, act of God, fire, accident, or transportation difficulties, then the affected party shall be relieved of its obligations under the contract.” This type of clause is:
A) an objective impossibility clause.
B) a force majeure clause.
C) a concurrent condition clause.
D) a condition precedent clause.