Business Law

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True/False
Indicate whether the statement is true or false.

1. Sweet Plantation, Inc. made a written contract with Candy, Inc. whereby Sweet Plantation agreed to supply all of Candy’s sugar requirements for the next year at $.25 per pound. A dispute arose as to how much sugar Sweet is to supply. The parol evidence rule will bar Sweet’s introduction of evidence concerning the intent of the requirements of Candy. a.FALSE

2.Patrick owned an acre of land which was being divided into building lots. Nancy was interested in purchasing the corner lot. In a signed writing, Patrick stated “I will sell Nancy Grimes a lot on Route 70 for $5,500 cash, payable on April 30, 2009.” This writing is sufficient under the statute of frauds to make the contract enforceable. a.FALSE

3.The Uniform Commercial Code provides that, under certain circumstances, a merchant may be liable on a written contract, even though that merchant has NOT signed it. a.TRUE

4.Amanda, a recent university graduate, needed a car to get to her new job, to help Amanda secure a loan for the car, Ted, a friend, agreed to pay the loan should Amanda default. Ted’s promise to pay the loan is a collateral promise. His promise must be in writing to be enforceable. a.TRUE

5.Under the statue of frauds, the writing must: be signed by the defendant; and must state with reasonable certainty the name of each party, the subject matter of the agreement, and all of the essential terms and promises. a.TRUE

6.Rest Well Hotel orally ordered 1,000 blankets monogrammed with its initials, RWH, from TriColor Textiles. TriColor had just finished monogramming the blankets when Rest Well called and cancelled the order. TriColor will be able to enforce the agreement even though there was no writing. a.TRUE

7.An assignment is effective from the moment it is made, regardless of whether the assignor notifies the obligor. a.TRUE

8.Generally, the assignment of the obligation to perform personal services is invalid. a.TRUE

9.Contract prohibitions against assignments are invalid as a matter of public policy a.FALSE

10. If Velma, as a birthday present, assigns to Jim her contractual right to collect $50 from Wood Co., this would be a gratuitous assignment. a.TRUE

11.Alice signs a contract with Bob to buy Bob’s house for $150,000 “if I am able to obtain a mortgage loan for $125,000, at no more than 7% interest, payable over 15 years.” Assume that Alice tries but is unable to obtain the described loan, and therefore refuses to proceed with the purchase. Alice is in breach of the contract. a.FALSE

12.Most contracts are discharged by mutual agreement.
a.FALSE

13.Generally, neither a “time is of the essence” clause nor a “force majeure” clause will be recognized by the courts because these types of clauses are seen as a violation of public policy. a.FALSE

14.In negotiating the purchase of a vehicle, the sales representative told Karla, “I guarantee that you will be personally satisfied with this car.” The guarantee was written on the contract when Karla purchased the car. If a controversy arises over Karla’s satisfaction, the court will apply a subjective standard, which means Karla’s judgment must be reasonable. a.FALSE

15.The UCC recognizes commercial impracticability as a ground for discharge of a contract. a.TRUE
16.Injunctions are commonly used by courts to force employees to complete their contractual obligations with their employers. a.FALSE

17.Damages must be established with reasonable certainty.
a.TRUE

18.Dr. Gonzalez ordered specialized surgical equipment from Physician’s Supply Co., but his order was not delivered by the agreed date. Gonzalez is under no obligation to minimize damages since the contract was breached by Physician’s Supply, not Gonzalez. a.FALSE.

19.Under the UCC, the buyer is entitled to consequential damages if the seller could have reasonably foreseen them. a.TRUE

20.Oliver contracts...
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