Unit 4 Test Flashcards
(20 cards)
A landlord offers a 12-month lease to a tenant for the third floor of the landlord’s three-story home. The landlord provides the tenant only with the final page of the lease to sign, stating that the rest of the contract is all legalese and boilerplate. The lease provided that the tenant would have to submit to arbitration.
Which claim could this tenant bring to set aside the lease?
Accord and satisfaction Procedural unconscionability Rescission Substantive unconscionability
Procedural unconscionability
The tenant’s lack of opportunity to read and review parts of the contract will likely qualify as procedural unconscionability, likely allowing the tenant remedies for any harm.
An LLC promises to buy all the units that it requires from another business, which agrees to produce and sell these units to the LLC.
Which type of contract have these two businesses executed?
Output contract Nonsales contract Requirements contract Firm offer contract
Requirements contract
The LLC and business agreed to sell all that the LLC requires as the buyer.
A 14-year-old signs a lease for a one-bedroom apartment with a landlord. The 14-year-old promises to pay $1,000 in rent on the first of each month for 12 months.
During the terms of this lease, which type of contract did the 14-year-old sign?
A voidable contract A void contract A valid contract An executed contract
A voidable contract
Because the 14-year-old is a minor at the time of execution, the contract is likely to be deemed voidable in their favor, so they may avoid any duty to perform or ratify the contract.
What is considered a basic obligation of the buyer?
Repairing defective goods Delivering the conforming goods Paying for the goods tendered Transferring the conforming goods
Paying for the goods tendered
The basic obligation of the buyer is to pay for the goods tendered.
When is acceptance demonstrated?
When the lessee indicates by words to the lessor that the goods are nonconforming When the buyer is inspecting the goods When the buyer rejects the goods within a reasonable time When the buyer starts reselling the goods
When the buyer starts reselling the goods
A buyer will be deemed to have accepted the goods if they perform any act inconsistent with the seller’s ownership, such as the use or resale of the goods.
To which party does a warranty impose a duty?
Seller Lessee Buyer Carrier
Seller
A warranty is an assurance or guarantee by the seller or lessor about the quality and features of the goods being sold or leased.
What must a seller or lessor (merchant or nonmerchant) know for the implied warranty of fitness for a particular purpose to arise in the sale or lease of goods?
The ordinary purpose for which a buyer or lessee will use the goods and the price agreed upon with the seller or lessor The certainty of the place and time of delivery, by choosing a fit carrier party and the particular purpose for which a buyer or lessee will use the goods The reliance the buyer or lessee placed on the seller or lessor's skill and judgment and the price agreed upon The particular purpose for which a buyer or lessee will use the goods and the reliance the buyer or lessee placed on the seller or lessor's skill and judgment
The particular purpose for which a buyer or lessee will use the goods and the reliance the buyer or lessee placed on the seller or lessor’s skill and judgment
What is the measure of damages when a buyer refuses to accept the nonperishable goods as sold?
Difference between resale price and market price Difference between contract price and market price Special damages Cost of delivery
Difference between contract price and market price
The seller would be entitled to damages for nonperishable goods for the difference between the price agreed to by the parties and the market price for the goods.
A customer enters into a contract with a vendor for the purchase of 10 widgets for $60. If the vendor refuses to sell, and the customer buys substitute widgets for $90 from other sellers, not including incidental damages, how much can this customer claim in damages?
$90 $60 $6 $30
$30
The customer may claim the difference between the cost of cover, $90, less the contract price, $60, for $30 in damages.
In which situation may a buyer obtain specific performance?
Sale of a publicly traded security Only a seller being able to claim specific performance Purchase of an original portrait Purchase of 50 drill bits
Purchase of an original portrait
The original portrait is unique, and monetary damages are inadequate as a remedy, so specific performance for the portrait may be obtained.
An individual tells another person that he will trade his 2016 car for her 2006 car.
Which term is likely missing for an effective offer?
Identification of the cars Timing for the trade Age of the parties Amount of money to be paid
Timing for the trade
Erik did not state when the trade would commence, and this term may be supplied by the court, if the parties otherwise clearly manifested an intent to form the contract.
Beth offered to sell her house to Dennis. Before Dennis could respond, a tornado completely destroyed Beth’s house.
What is the destruction’s effect on Beth’s offer?
The offer is terminated. The offer is unilateral. The offer is voidable in favor of Dennis. The offer is valid.
The offer is terminated
The offer is likely automatically terminated because the house is destroyed before Dennis could accept.
If two parties agreed on mail for their communication in their offer, under the majority rule, and without any other terms stipulated, when is the acceptance deemed to be valid?
During delivery to the post office When it is emailed to the offeror, if received first During receipt by the offeror When it is written by the offeree
During delivery to the post office
Under the mailbox rule, the offeree validly accepts when delivered to the post office.
In January, a national company issued a memo informing employees that employees who successfully complete the accounting certification by the end of the year will receive a $500 bonus. One employee who enrolled in the certification review course in the summer passed the exams in November.
When is the national company liable to this employee?
In the summer, when the employee enrolled in the certification review course By the end of the year, the stated time for performance in the contract In January, when the offer was made In November, when the employee passed the exams
In November, when the employee passed the exams
A condition precedent is an event that must exist before the promisor incurs any liability. The completion of the accounting certification was the condition precedent.
What is a warranty in sales and lease law?
Money advances or cash deposits made as stated in a contract The possession of the collateral object of the contract The good faith of the parties as stated in the Uniform Commercial Code (UCC) An assurance by the seller about the quality and features of the goods being sold
An assurance by the seller about the quality and features of the goods being sold
In sales and lease law, a warranty is an assurance or guarantee by the seller or lessor about the quality and features of the goods being sold or leased.
Express warranties arise when a seller or lessor indicates which, under UCC 2-313 and 2A-210?
The goods do not conform to any sample or model of the goods shown to the buyer or lessee. The goods conform partially to any description of them. The seller has a good and valid title to the goods sold. The goods conform to an affirmation of fact.
The goods conform to an affirmation of fact
Express warranties arise when a seller or lessor indicates that the goods conform to any declaration that something is true about the goods.
Which requirement of a contract is a “meeting of the minds” part of the legal standard?
Rescission Scienter Voluntary consent Compensatory damages
Voluntary consent
The parties to a contract must agree on the same terms, at approximately the same time (a “meeting of the minds”), and this consent is part of a contract formation.
Which element does fraudulent misrepresentation require?
Scienter Nominal damages Bilateral mistake of fact Misrepresentation of any fact
Scienter
The intent to deceive, or scienter, is an essential element for a valid fraudulent misrepresentation claim.
How do liquidated damages differ from penalties?
Penalties are for reasonable damages anticipated by the parties. Penalties are meant to make the nonbreaching party whole. Penalties are more common in contracts with entertainers. Liquidated damages are for damages difficult to estimate.
Liquidated damages are for damages difficult to estimate
Liquidated damage clauses are for damages difficult to estimate at the time of contracting, unlike penalties that seek to penalize.
