Business Law Practice Questions

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 1.  Able entered into an oral contract with Baker for the sale of Able's car for $5,000. Later Baker breached that contract. Able wants to sue to enforce the contract. Under the Statute of Frauds, who is the "party to be charged" in this case? a. Able.

b. Baker.
c. Both Able and Baker.
d. Neither Able nor Baker, because this is a contract for the sale of goods.   
2.  Chen, a retail seller of fruit, entered into a contract for the purchase of 10 bushels of peaches from Georgina, at a price of $5 per bushel. Delivery was to be in one month. One week after this contract was formed, unexpected cold weather destroyed most of the peach crop and prices doubled. Georgina asked Chen if he would agree to a price increase to $7 per bushel, to help her absorb some of her loss. Chen agreed. However, after the peaches were delivered, Chen refused to pay more than $5 per bushel. a. Chen must pay the higher price because the UCC does not require consideration in this case. b. Chen must pay the higher price because he accepted delivery of the peaches. c. Chen does not have to pay the higher price because the UCC requires consideration in exchange for a promise to pay a higher price than in the original contract. d. Chen does not have to pay the higher price because a valid original contract cannot be modified.  

 3.  Jerry's Hardware Co. (JHC) of Moscow Idaho, a retailer, sent a communication with the heading "Purchase Order" to Chicago Hardware (CH) of Chicago Illinois, a wholesaler.  This purchase order was based on a price list that CH had sent four months earlier.  JHC's purchase order stated the price, quantity and terms of payment for $5,000 of hardware goods.  On the back of JHC's purchase order form there were 16 numbered clauses.  None of these clauses dealt with how to resolve a dispute, should one later arise.  CH received the purchase order and responded with a communication that had the heading "Order Confirmation".  CH's order confirmation stated the same prices, quantities, and terms of payment as those contained in JHC's form.  However, on the back of CH's form there was a clause that stated that if a dispute should arise over this transaction, the dispute would be resolved through arbitration. A dispute later arose. How should it be resolved? a. By litigation, because CH proposed an additional term that was not incorporated into the contract. b. By litigation, because CH proposed a different term that was not incorporated into the contract. c. By arbitration, because CH proposed an additional term, that was incorporated into the contract. d. By arbitration, because CH proposed a different term, that was incorporated into the contract.            

4.  The most important element in determining whether a UCC sales contract has been formed is the: a. presence or absence of a price term.
b. issue of whether the terms of the offer and acceptance are exactly alike. c. issue of whether the contract can be fully performed in six months or less. d. intention of the parties to enter into a contract.

 
5.  You enter into negotiations to buy a car from Ace Cars (AC). After extensive negotiations you and the AC salesman agree on a price of $23,000 for a specific car on the lot. However, you explain to the salesman that you do not have the money now, but expect to get it within a week. The salesman then promises to hold that offer open for 5 days, to buy that car at that price. You ask for and receive that promise in writing, signed by the sales manager. Is AC's promise to hold its offer open for 5 days legally binding? a. No, because it is a "gift promise", made without consideration. b. No, because it fails to satisfy the requirements of an option contract. c. Yes, because that promise is a UCC firm offer that does not require consideration to be binding. d. Yes, because whenever a seller makes such a promise it is binding for a "reasonable" period of time.   

6.  If a seller has delivered nonconforming goods that have...
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