21. Ample Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for $1 per shoe. When the market price decreases to 50 cents per shoe, Ample refuses to go through with the deal. Blacksmith can recover
a. $1,500.
b. $1,000.
c. $500.
d. 0.
22. Farm Equipment, Inc., makes farming machinery. Gail discovers that her Farm Equipment tractor is defective and sues the maker for product liability based on negligence. To win, Gail must show that
a. Farm Equipment sold the tractor to Gail.
b. Gail knew and appreciated the risk caused by the defect.
c. Gail suffered an injury caused by the defect.
d. the “defect” was a commonly known danger.
23. Ida signs a check payable to Jane and gives it to her. Jane indorses the back, and transfers the check to Kyle. To negotiate the check to Leo, Kyle must
a. indorse “Kyle” on the back and deliver the check to Leo.
b. indorse “pay to the order of Leo [signed] Kyle” on the back and deliver the check to Leo.
c. only deliver the check to Leo.
d. transfer the check through the drawee bank.
24. John, the secured party, perfects its security interest by filing a financing statement. What is the effect of perfection of John’s security interest?
a. The secured party has priority in the collateral over most creditors who acquire a security interest in the same collateral after the filing.
b. The security interest becomes enforceable against the debtor.
c. The debtor is protected against all other parties who acquire an interest in the collateral after the filing.
d. The assets subject to the security interest do not become part of the bankruptcy estate in the event the creditor files an involuntary petition against the debtor.
25. Ruth, a minor, charges groceries at Sam’s Mini-Mart. Two days later, Ruth disaffirms the purchase. Ruth owes Sam’s Mini Mart
a.
the reasonable value of the groceries.
b.
the retail value of the groceries.
c.
the wholesale value of the groceries.
d.
nothing.
Fact Pattern A
Pretty Properties, Inc. (PPI) offers in writing to sell to Newer Development Corporation (NDC) a certain half-acre of land for “$112,000.” After NDC signs the offer in acceptance and returns it, PPI discovers that the price should have been stated as “$121,000.”
____ 26. Refer to Fact Pattern A. PPI’s misstatement of the price is
a.
a bilateral mistake.
b.
a fraudulent misrepresentation.
c.
a unilateral mistake.
d.
unconscionable.
____ 27. Beth is convicted of arson for burning down her warehouse.. On an application for insurance from Cover-All Insurance Company on a new building, in answer to a question about prior convictions, Beth does not disclose her conviction. This makes the contract
a.
binding because the omission is immaterial to Cover-All’s decision to issue coverage.
b.
binding due to Cover-All’s failure to discover Beth’s conviction.
c.
voidable by Beth because the omission is immaterial to Cover-All’s decision to issue coverage.
d.
voidable by Cover-All because the omission is material to its decision to issue coverage.
Fact Pattern B
Fred enters into a contract under Gene’s threats. Later, Fred refuses to perform, claiming that he acted under duress.
____ 28. Refer to Fact Pattern B. Gene sues to enforce the contract. In order for Fred to establish duress, Gene must have threatened
a. a civil suit.
b. a lost opportunity.
c. a social snubbing.
d. a wrongful act.
e. none of the above.
____ 29. Century Properties. Inc., and Dandy Capital Corporation enter into a contract for a sale of land. To be enforceable, the contract must be in writing if the land is valued at
a.
$50.
b.
$500.
c.
$5,000.
d.
$50, $500, or $5,000.
____ 30. Timber Trees, Inc., and Land Corporation enter into an oral contract for Timber Trees, Inc. to sell its lumber mill to Land Corporation . Before Land Corporation takes possession, this contract is enforceable by
a.
either party.
b.
neither party.
c.
Timber Trees only.
d.
Land Corporation only because only the buyer can get specific performance.
____ 31. Lola agrees to pay Mira’s debt to New Sales Corporation if Mira does not pay it. Lola does not get any personal benefit for or from the agreement. To be enforceable against Lola, the promise must be in writing if the debt is
a.
paid by Mira.
b.
for $50.
c.
for $500.
d.
$50, $500, or $5,000.
Fact Pattern C
Macro Marketing, Inc. (Macro), and National Food Corporation (NFC) discuss the terms of a contract under which NFC is to provide personal services to Macro. The next day, Macro faxes NFC a memo on Macro’s letterhead that summarizes the items on which they agreed, including a two-year term. NFC immediately begins to perform, but Macro refuses to pay. NFC promptly institutes a law suit seeking damages.
____ 32. Refer to Fact Pattern C. The contract between Macro and NFC is
a.
subject to the Statute of Frauds’ collateral-promise provision, and is probably unenforceable.
b.
subject to the Statute of Frauds’ services rule, and is probably enforceable.
c.
barred by the statute of limitations, and is therefore probably unenforceable.
d.
subject to the Statute of Frauds’ one-year rule, and is probably unenforceable.
Fact Pattern D
Jeff and Kris sign a written contract for the sale of Jeff’s Koffee Kiosk to Kris. The parties intend their written contract to be a final statement of the terms of their agreement.
____ 33. Refer to Fact Pattern D. Kris later disputes some of the provisions of the deal with Jeff. The dispute results in litigation, and the court finds the terms of the agreement are ambiguous. The court will most likely
a.
exclude evidence that buttresses the written terms.
b.
exclude evidence that contradicts the written terms.
c.
allow evidence that explains the terms.
d.
dismiss the action because there was a lack of mutual asset and no contract was formed.
34. A party who filed a financing statement covering inventory on April 1, 2011 would have a superior interest to which of the following parties?
a. A holder of a mechanic’s lien whose lien was filed on March 15, 2011.
b. A judgment lien creditor who filed its judgment on April 15, 2011.
c. A holder of a purchase money security interest in after-acquired inventory
filed on March 20, 2011.
d. A purchaser in the ordinary course of business who purchased on April 10, 2011.
35. Manny, as buyer, wants to transfer his rights under a written real estate contract with Nila, as seller, to Opie. To ensure that the transfer of rights is valid, Manny must
a.
have this right expressly stated in the contract.
b.
file a notice of assignment in the public records.
c.
have the contract recorded in the public records.
d.
none of the choices.
36. Rural Development Corporation (RDC) and Sid enter into a contract for the clear-cutting of RDC’s fifty-acre tract for which RDC agrees to pay Sid. Sid is the owner of Timber Logging Company. Sid transfers his duty to log the tract under the contract to Timber Logging Company. Timber Logging Company is
a.
a delegatee and is subject to the terms of the agreement between RDC and Sid.
b.
a delagetee and is not entitled to collect under the contract from RDC for services provided by Timber.
c.
an obligee and is not required to perform under the contract.
d.
a prohibitee.
37. Mke, a physician, renders aid to Nancy, who is injured and unconscious after an avalanche. Mike can recover the cost of the aid from Nancy
a.
even if Nancy was not aware of the aid when it was given.
b.
only if Nancy recovers because of the aid.
c.
only if Noel was aware of the aid at the time it was given.
d.
under no circumstances.
38. Pat, a world famous musician, agrees to give ten piano lessons to Quinn in exchange for $1,000. Pat’s attempt to transfer his contract duties to Ruth, an inexperienced pianist, will probably be
a.
permitted because contracts may be freely delegated.
b.
prohibited in this case unless the contract expressly permits delegation.
c.
permitted if the contract is silent on the issue.
d.
prohibited in any case.
39. Chaz and Dolly enter into a five year contract under which Chaz agrees to provide maintenance services for Dolly’s Ski Resort. Chaz transfers his rights and obligations under the contract to Mark. Mark
performs
under the contract, and Dolly is aware of the Mark’s performance of the contract. However, Dolly refuses to pay Mark. Assuming Mark’s services are properly performed and Mark sues Dolly, Mark
a. will be successful in enforcing the contract if performance depends on the personal skills or talents of the obligor.
b. will probably not be able to recover under the express terms of the contract.
.
c. may be able to recover the value of his services.
d. may not recover.
40. On August 1, 2010 Delia and Edwin entered into an agreement for Edwin to lease Delia’s country home for two months during the following summer for $1000 per month. Delia promised to vacate the property for Edwin by July 1, 2011 with the lease to begin on July 1, 2011. If these promises are not in writing, they are most likely
a.
enforceable.
b.
unenforceable.
c.
voidable.
d.
none of the above.
Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.
[order_calculator]