Question 1

U.S. Oil Company and Vehicle Fuel Corporation enter into a contract for the sale of refined oil. Either party's nonperformance may be excused, be?cause of unforeseen circumstances, under the doctrine of commercial

A) good faith.
B) impracticability.
C) square dealing.
D) unconscionability.

B

Accepted Answer

The doctrine of impracticability excuses nonperformance of a contract when unforeseen circumstances arise that make performance impractical or impossible. This is also known as the impossibility doctrine.

Question 2

Sports Line, Inc., and Trudy, a consumer, enter into a contract for a sale of a snowmobile. If the contract includes a clause that is perceived as grossly unfair to Trudy, its enforcement may be challenged under the doctrine of

A) good faith.
B) impracticability.
C) square dealing.
D) unconscionability.

D

Accepted Answer

The doctrine of unconscionability allows a court to refuse to enforce a contract or a clause in a contract that is perceived as grossly unfair or oppressive to one party. This is particularly applicable in consumer contracts where one party may have greater bargaining power and the other party may not have had the opportunity to negotiate the terms of the contract.

Question 3

Paltry Tools, Inc., makes and sells a QuikMade-brand power drill to Rolf, who is allegedly injured by the drill. Rolf and others allegedly injured by QuikMade -brand drills pool resources to file a suit as a group against Paltry. Under the Class Action Fairness Act, if more than two-thirds of the plaintiffs are from different states and the damages sought are $5 million or more, jurisdiction over the suit is in

A) a federal court.
B) a federal court and a state court.
C) a federal court or a state court.
D) a state court.

A

Accepted Answer

Under the Class Action Fairness Act, if the damages sought are $5 million or more and more than two-thirds of the plaintiffs are from different states than the defendant, jurisdiction over the suit is in a federal court. Therefore, in this case, if the requirements are met, the jurisdiction over the suit would be in a federal court.

Question 4

Fast Food Corporation and Giant Potatoes, Inc., enter into a contract for Giant's sale to Fast of all of the potatoes that Fast needs. The amount of potatoes that Giant must supply is&#10;A) all of Fast's requirements that may occur in good faith.&#10;B) all of Giant's output that is not commercially impracticable.&#10;C) the greatest quantity that is not unconscionable.&#10;D) the greatest quantity that makes the contract a &#34;square deal.&#34;

Accepted Answer

The UCC recognizes that parties may enter into "requirements contracts" or "output contracts." In a requirements contract like this scenario, the seller agrees to supply all of the buyer's needs for a particular product. The UCC provides that the quantity of goods to be ordered under a requirements contract must be stated in good faith, so Giant is required to supply all of Fast's requirements that may occur in good faith.

Question 5

Flimsy Watercraft, Inc., makes and sells a boat to Glen, who is injured in an accident allegedly due to the boat. Glen and others similarly situated pool resources to file a suit as a group against Flimsy, seeking $10 million in damages. Under the Class Action Fairness Act, the suit must be filed in a federal court

A) if Flimsy is a national corporation.
B) if more two-thirds of the plaintiffs are from multiple states.
C) under any circumstances.
D) under no circumstances.

Accepted Answer

The Class Action Fairness Act requires that for a class action lawsuit to be filed in federal court, the plaintiffs must be from multiple states and the amount in controversy must exceed $5 million. In this scenario, the plaintiffs are seeking $10 million in damages, but there is no indication that Flimsy is a national corporation. Therefore, the suit must be filed in federal court only if more than two-thirds of the plaintiffs are from multiple states.

Question 6

Precision Parts Company and Quality Manufacturing, Inc., enter into a contract for the sale of a certain quantity of machine parts. Although not expressly stated, a concept that is read into this contract is the concept of

A) good faith.
B) impracticability.
C) square dealing.
D) unconscionability.

Accepted Answer

The concept of good faith is read into contracts by default under the Uniform Commercial Code (UCC). It requires parties to act honestly and fairly towards each other in the performance of their contractual obligations.

Deck 56: Contracts and Liability