Question 1

Girard accepts a job with Deep Vault Bank in reliance on assurances that Deep Vault will not soon be sold.In fact,negotiations to sell the bank are under way at the time that Girard is hired.Girard is most likely a victim of

A)fraud.
B)mistake.
C)nothing.
D)puffery.

A

Accepted Answer

Girard has been given false assurances with the intent to deceive him into accepting the job. This is a form of fraud, where Deep Vault Bank has intentionally made false representations to induce Girard into entering into a contract with them. The fact that negotiations were underway to sell the bank at the same time is evidence that the assurances were fraudulent.

Question 2

Topographical Engineers,Inc.,which is new to its business,offers its services at less than half their possible market price to United Road Crew Construction,Inc.,which knows the services' value.United's decision to accept the offer without commenting on the price could be justified by

A)the concept of unconscionability.
B)the doctrine of promissory estoppel.
C)the principle of freedom of contract.
D)the Statute of Frauds.

C

Accepted Answer

The principle of freedom of contract allows parties to freely negotiate and agree on the terms of a contract, including the price. As United Road Crew Construction, Inc. willingly accepted the offer without commenting on the price, it can be concluded that they agreed to the terms voluntarily. The concept of unconscionability and doctrine of promissory estoppel do not apply in this situation, as there is no evidence that Topographical Engineers, Inc. acted unfairly or made any promises that were relied upon by United Road Crew Construction, Inc. The Statute of Frauds is also not applicable, as there is no indication that the contract falls under any of the categories specified in the statute.

Question 3

Bonnie contracts to deliver a crop of soybeans to Farmers Co-op.A tornado destroys the crop on her farm.The buyer insists that she deliver by acquiring soybeans on the open market.She claims that this is prohibitively expensive.Her best argument against enforcing the contract is

A)frustration of purpose.
B)objective impossibility of performance.
C)anticipatory repudiation.
D)commercial impracticability.

D

Accepted Answer

Commercial impracticability applies when unforeseen events make performance unreasonably difficult or expensive, which is Bonnie's situation due to the tornado.

Question 4

Sports Fit Company sponsors the &#34;$100,000 Game&#34; in which contestants compete in ten separate athletic events over a period of weeks.Sports Fit announces that the winner of each event will be awarded $5,000 with the &#34;Ultimate Champion&#34;-the winner of the most events-awarded $50,000.If the &#34;$100,000 Game&#34; is treated as a unilateral contract,Sports Fit can&#10;A)cancel the contest or alter its terms at any time.&#10;B)not modify the terms of the contest after it begins.&#10;C)reduce the amount of the event prizes but not the grand prize.&#10;D)reduce the amount of the grand prize but not the event prizes.

Accepted Answer

Once a unilateral contract is offered and performance begins, the offeror cannot modify the terms of the contract.

Question 5

Merchandise Presentation Company enters into a contract with Newt to perform certain services for a certain price.Newt is later dissatisfied with what he claims is a low level of service for a high price.Whether this deal is unconscionable is subject to

A)the interpretation of a court.
B)the opinion of the buyer.
C)the position of the seller.
D)the precise definition in UCC 2-302.

Accepted Answer

The determination of whether a contract is unconscionable is typically made by a court, which interprets the circumstances and terms of the contract.

Deck 55: Contracts and Agreements