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The transfer of a contract right to a third party is known as a(n): - ✔✔assignment. A(n) __________ is a substitution for an old contract with a new one that either replaces an existing obligation with a new obligation with a new obligation or replaces an original party with a new party. - ✔✔novation When a contract is intended to benefit a third person, such a person is a(n): - ✔✔intended beneficiary. A(n) __________ is an intended beneficiary of a contract who receives the benefits of the contract as a gift. - ✔✔donee beneficiary Which of the following is true about the vesting of an incidental beneficiary's rights? - ✔✔An incidental beneficiary was not meant to benefit from the contract, thus he acquires no rights A(n) __________ stands exactly in the position of the __________. - ✔✔assignee; assignor Not all classes of beneficiaries receive rights in the underlying contract. Which one does not? - ✔✔Incidental beneficiaries. A clear and specific contractual prohibition against the assignment of rights __________ enforceable at common law. - ✔✔Is The party owing a debt under a contract is the: - ✔✔obligor Which of the following is/are true concerning the requirements for the form of an assignment? - ✔✔a. An assignment may be in any form. b. Statutes may require certain assignments be in writing or executed in a particular form.
c. Any words, written or spoken, that show an intention to transfer or assign will be respected. Sometimes the promisee's primary intent is to discharge a duty to a third party. Which of the following describes that type of contract? - ✔✔A contract where the insured names a bank with which he has a loan as the beneficiary of a life insurance policy. Which of the following duties would not be delegable? - ✔✔Andy has a duty to teach an accounting class at a community college during the fall semester. Officer Friendly has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds. Officer Friendly's mother is a(n): - ✔✔donee beneficiary Trent wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $15.00 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n): - ✔✔creditor beneficiary. Randolph enters into a contract with a contractor to build a large office building in Central City. Gas-N-Go will greatly benefit from this contract since his convenience store is adjacent to the building. Gas-N-Go in this instance is: - ✔✔an incidental beneficiary. Drake, a contractor, and Lonnie, a landowner, have a contract whereby Drake is to perform routine construction services according to the blueprints that Lonnie has provided. Drake assigns the contract to Brad, a developer. As a result of this assignment: - ✔✔Drake no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform. In which of the following situations is there a third party incidental beneficiary who would be unable to enforce the agreement? - ✔✔A t-shirt store hoping to sell national championship t-shirts, located across the street from a stadium where the home team loses the national championship due to a bad call by the referee hired by the conference. Brandon promises Debbie to deliver an iPad to Edward if Debbie promises to pay Brandon $200. What is Edward's status in this agreement? - ✔✔Intended Beneficiary
__________ is an offer by one party—who is ready, willing, and able to perform—to the other party to perform his obligation according to the terms of the contract. - ✔✔Tender The fact that no time is specified in the contract means that: - ✔✔a reasonable time for performance will be implied. Which of the following will be seen as commercial impracticability? - ✔✔Performance is rendered unjust by a supervening event not caused by her own fault. Where, after a contract is made, a party's principal purpose is substantially frustrated without his fault by the occurrence of an event whose nonoccurrence was a basic assumption on which the contract was made, his remaining duties can be discharged by: - ✔✔frustration of purpose. By operation of law one might be able to discharge their contractual obligations by: - ✔✔bankruptcy Wilma has an insurance policy on the contents of her apartment, which requires that she notify the insurance company within 60 days of any loss before she is eligible to receive payment for her loss. The notification requirement is: - ✔✔a condition precedent. Which of the following is a contract with a condition subsequent? - ✔✔Adam bought an iPad but he may return the iPad within one month and get all of his money back. On September 15th, Annie and Bertha enter into a contract where both parties are obligated to perform on December 31. On December 1, Annie tells Bertha, "Performing the contract would be impossible for me." This statement is: - ✔✔anticipatory repudiation. Pam and Alexander enter into a contract on January 1 of this year. Pam's friend Callie tells Pam, "There is a statute that restricts the period of time within which an action may be brought." Callie's statement is: - ✔✔true because of statute of limitations. Andrew owes Rachel $200 for a used television which he bought last year at Rachel's yard sale. When Andrew is unable to pay, the two agree that the debt can be paid by Andrew's typing all of Rachel's term papers for the school year. The new contract is a(n): - ✔✔accord
Salvador and Jose make a contract for Salvador to manufacture five custom saddles of a specified design. Prior to their manufacture, the factory is destroyed in an accidental fire that is no one's fault. The saddles are available from other sources. In this case: - ✔✔Salvador's duty to deliver the saddles is discharged by the destruction of the factory. Leo owes Nora $1,000 and they both agree that Leo will mow the grass of Nora's 10-acre field in satisfaction of the debt. Leo's performance of mowing the grass is: - ✔✔satisfaction Daniel owes Amanda $5,000 and they both agree that Daniel will mow the grass of Amanda's 10-acre field to satisfy Daniel's outstanding balance. The agreement to mow the grass represents: - ✔✔accord Jose is a race car driver and contracted with Peter to race Peter's car in an upcoming car race. The night before the race, Peter's car caught fire, was severely charred, and was inoperable. What concept would allow Jose to be excused from performing under the contract? - ✔✔impossibility Raul builds Evelyn a $200,000 home according to Evelyn's specifications. Raul, however, missed two specifications, causing Evelyn to incur $25,000 in damages to fix the missed specifications. If Evelyn files a breach of contract, but the court does not allow her to forgo paying for the house, and only requires her to pay Raul $175,000, what theory will the court use to justify its order? - ✔✔substantial performance. Courts of equity will not grant specific performance of contracts: - ✔✔for a personal services contract. Compensatory damages are designed to place the injured party in a position as good as the one he would have been in had the other party performed, and are known as: - ✔✔consequential damages. A court of equity, at its discretion, may grant a(n) __________ to command the other party to refrain from doing a specific act. - ✔✔injunction A small sum of damages fixed without regard to the amount loss is known as: - ✔✔nominal damages.
by that date, the contract calls for the construction company to pay $150 per day in damages. The $ per day is: - ✔✔liquidated damages Alfie enters into a contract to give Ezra the right of first refusal on a tract of land owned by Alfie. Alfie subsequently offers the land to Frank without first offering it to Ezra. An appropriate remedy for Ezra to seek would be: - ✔✔injunction Because of his winning record at another school Albert signed a contract to coach wrestling for Sigma High for a period of five years. After three years he is offered and accepts an assistant coaching position at Crosstown University. If they sue Albert, Sigma High cannot ask for which remedy? - ✔✔Specific performance of his contract. Bernie promises to build an office complex for Donald for $1 million by February 1. Bernie breaches the agreement by finishing construction by March 1. As a result of the breach, Donald lost $100,000 for the month lost, but saved expenses of $25,000. How much is Bernie liable for? - ✔✔$75, Shirley leases Tom a defective piece of machinery that causes $50,000 in property damage and $100, in personal injuries. In addition to damages for loss of value and incidental damages, how much can Tom recover as consequential damages? - ✔✔$150,000. Wendy is a worldwide recording artist and agrees to play on New Year's Eve at Roscoe's mansion on the beach. Wendy later discovers that Roscoe is a notorious gangster, and refuses to appear at the party as agreed. If Roscoe sues Wendy, what remedy is absolutely not available to Roscoe? - ✔✔Specific Performance. Seller agrees to sell land to Buyer for $50,000. After Buyer makes a payment of $25,000 to Seller, Seller wrongfully refuses to transfer title. If Buyer sues Seller for breach of contract and the court awards buyer $25,000, what does this figure represent? - ✔✔Restitution Seller orally agrees to sell land to Buyer for $50,000. Buyer pays three monthly installments of $10, to Seller before Seller repudiates the oral contract, and argues that the contract is unenforceable under the statute of frauds. What remedy, if any, is buyer entitled to against Seller? - ✔✔Restitution Carl agrees to build a hotel for Jerry by December 1. Both parties agree that if Carl fails to meet his December 1 deadline, he would be obligated to pay $10,000 per day in damages beginning December 2
for each day it takes to finish the hotel past the December 1 deadline. The $10,000 per day damages represent: - ✔✔Liquidated Damages. A "sale" of goods happens when: - ✔✔title to the goods is passed. Which of the following transactions is governed by Article 2 of the UCC? a. The sale of an apartment complex. b. The sale of oranges to be picked from a 10-acre grove. c. The sale of common stock of a soft drink company. d. A contract to receive medical services in a hospital. - ✔✔The sale of oranges to be picked from a 10- acre grove. The CISG applies to: - ✔✔the international sale of goods. The Code defines __________ as "honesty in fact in the conduct or transaction concerned." - ✔✔good faith A merchant is defined as a person who: - ✔✔a. is a dealer in a particular type of goods. b. by his occupation holds himself out as having knowledge or skills peculiar to certain goods or practices. c. employs an agent or broker whom he holds out as having such knowledge or skill. The definition of "usage of trade" includes: - ✔✔b. a practice regularly observed and followed in a place, vocation, or trade.
Gabe has agreed to buy Sarits's car, but the two have not agreed on the price. When there is no agreement as to price in a contract for a sale of goods, what effect does it have on the contract? - ✔✔The price is a reasonable price at the time of delivery. Brown & Co enters into a contract with ATM Industries for the sale of 1,000 shirts at $6 per shirt. In order for Brown & Co to successfully sue ATM industries in the event of a breach of the agreement, all of the following are required except: - ✔✔b. the price of the goods. Bob telephoned the office supply store and agreed to buy 90 reams of paper at $5 each. He then realized what a good buy this was and called the store with a request to modify the contract to read 200 reams of paper. What is the consequence? - ✔✔a. The modified contract is unenforceable. Laura orally agrees to buy 50 smartphones from Smartphones, Inc. for $25,000. Smartphones delivers 25 smartphones to Laura, who receives and accepts them. Which of the following is correct with regard to this transaction? - ✔✔The contract is enforceable to the extent of the 25 machines that have been received and accepted. Mary's Cupcake Shop bakes and sells various types of cupcakes. In remodeling the office areas of its business, Mary's Cupcake Shop purchased tile from the Tile Shop, Inc. Under the Uniform Commercial Code, Mary's Cupcake Shop is a merchant of: - ✔✔cupcakes, but not carpet. Mary's Cupcake Shop bakes and sells various types of cupcakes. On July 5, Billy's Grocery Company orally agreed to buy 2,000 cupcakes from Mary's for $1,000. On July 10, Mary's sent Billy's a written confirmation of the cupcake sale. Billy's received the letter on July 12, filed it, but did not respond. On July 28, Mary's shipped the cupcakes to Billy's Grocery Company and the cupcakes arrived on July 29. Billy's refused to accept delivery and Mary sued. Under the Uniform Commercial Code: - ✔✔. the contract is enforceable because Billy did not object to the confirmation within ten days. Solomon pays Henry's Bike Shop $150 for a bicycle. This is an example of a: - ✔✔sale A warranty may rise out of all of the following except: - ✔✔from a disclaimer. An express warranty within the meaning of the Code is created by which of the following?
a. A sample. b. A description. c. A promise. d. All of these are correct. - ✔✔d. All of these are correct. Which of the following is true with regard to implied warranties under the Code? - ✔✔a. They depend on the type of contract or sale entered into. An obligation of the merchant-seller that the goods are reasonably fit for the ordinary purposes for which they are manufactured and sold, and the goods are of fair average quality is known as: - ✔✔a. a warranty of merchantability. Whether an implied warranty arises out of the circumstances under which the parties enter into a contract may depend on: a. the type of contract entered into. b. the seller's merchant or non-merchant status. c. applicability of other statutes. d. All of these are correct. - ✔✔d. All of these are correct. Which of the following is NOT included within the Code definition of merchantability? - ✔✔In the case of fungible goods that they be of a quality that exceeds the description and be above average. Leslie purchased 100 flower pots from a local merchant. Warranties which are not included in her sales contract, but exist by "operation of law," are the: - ✔✔implied warranties. Strict liability in tort imposes liability on: - ✔✔a manufacturer of a defective component used in a larger product if the manufacturer of the finished product made no essential change in the component.
upon that representation, Alice buys the work for $5,000. At the sale, Arthur has Alice sign a receipt that includes the following language: This sale caries no warranties, including no EXPRESS or IMPLIED WARRANTIES. Alice later discovers that the painting is only a cheap copy of the original that is worth no more than $50. Arthur has: - ✔✔b. breached an express warranty. Rainbow Toy Corporation places a rocket ship toy into the market, but the rocket is missing certain plastic screws that are part of the specifications of the project. Such a defect is a: - ✔✔c. Manufacturing Defect. Rainbow Toy Corporation places a rocket ship toy into the market. The rocket is manufactured according to specifications, but the rocket suddenly explodes after its first use. Such a defect is a: - ✔✔Design Defect. Rainbow Toy Corporation places a rocket ship toy into the market. The rocket is manufactured according to specifications and is a safe product, but the rocket has a tendency to char whatever surface it launches from due to intense heat coming from the rocket during launch causing property damage. If Rainbow Toy Corporation does not tell buyers about the potential to char the launching pad surface, such a defect is: - ✔✔Failure to Warn Defect. In the field of employment discrimination what federal law preempts others in the United States? - ✔✔Title VII of the Civil Rights Act of 1964. Title VII of the Civil Rights Act of 1964 applies to all of the following except: - ✔✔sexual preference. Liability for __________ is based on proving that the employer's decision was motivated by a protected characteristic or trait used in making an employment decision - ✔✔disparate treatment The first action generally taken by the Equal Employment Opportunity Commission is: - ✔✔investigation The Pregnancy Discrimination Act is an amendment to Title VII of the Civil Rights Act to: a. require employers to treat pregnancy as other disabilities are treated.
b. require women disabled by pregnancy to be provided with the same benefits as other disabled workers. c. protect job reinstatement rights of women returning from maternity leave. d. All of these are correct - ✔✔d. All of these are correct Sexual harassment can be defined as: - ✔✔unwelcome sexual advances and other verbal or physical conduct of a sexual nature when submission is made a term of employment. The term seniority system is generally understood to mean: - ✔✔a set of rules that ensures that workers with longer years of continuous service for an employer will have a priority claim to a job over these with fewer years. The Age Discrimination in Employment Act forbids discrimination by employers, unions, and employment agencies against persons over 40 years of age, and prohibits discrimination in: a. hiring. b. firing. c. compensating. d. All of these are correct. - ✔✔All of these are correct. The __________ extends employment protection for disabled persons beyond the federal level to state and local government agencies: - ✔✔ADA Employers are required to provide a work environment that is "free from recognized hazards that are causing or likely to cause death or serious physical harm to his employees" by": - ✔✔OSHA Once an employee has been employed by a covered employer for at least 12 months and have worked at least 1250 hours during the 12-month period preceding the leave, they are eligible for how many weeks of unpaid leave during any 12 month period? - ✔✔12 weeks. Jerry and his wife, Andrea, are planning to adopt a baby in one month. Jerry has worked full-time for eight months in a six-person office of the county planning commission, and Andrea has worked full-time
investigation was performed and the charge was substantiated. The supervisor was warned not to continue this conduct, but it happened again. The supervisor was again issued a warning. Finally, Maxine brought a court action against the supervisor and Ace. Will Maxine win? - ✔✔Yes, the company failed to appropriately discipline the supervisor. Which of the following scenarios would qualify as a bona fide occupational qualification exception to Title VII? - ✔✔A men's store that sells men's clothing hiring only men to measure and fit customers. Laura believes that her employer has fired her because she was pregnant. She wants to immediately file suit against her employer, but she learns that she must file a complaint with the Equal Opportunity Commission. What is the EEOC's role at this stage of Laura's potential claim? - ✔✔investigation Mimi applies for a job as an administrative assistant at an engineering firm. If she is denied a job because she is of Asian origin, she is a victim of - ✔✔disparate-treatment discrimination. Sergio lives in an area with a high percentage of Hispanic workers. Many of the workers are legal immigrants, but have none to minimal college education. If, Sergio applies for a job with a company,he is given an examination designed for a college graduate, and if he and most Hispanic applicants fail to pass the test and do not receive offers of employment, the employer most likely: - ✔✔might be engaged in disparate-impact discrimination. The sovereign immunity doctrine states that a foreign sovereign cannot be sued unless an exception to the Foreign Sovereign Immunities Act of 1976 applies. A sovereign is: - ✔✔not immune from suits in the United States involving commercial acts. In 1977, Congress enacted the Foreign Corrupt Practices Act (FCPA), which: - ✔✔makes it unlawful for an American company or its agents to offer or give anything of value to a foreign official for the purpose of influencing the official's acts or decisions. Many countries in Europe have jointed the European Union. Which of the following has NOT been an objective of such cooperation? - ✔✔Creation of "regional" legislatures with actual powers. The __________ was the predecessor to the European Union: - ✔✔European Community
In 1994 NAFTA took effect with objectives to: - ✔✔Increase investment opportunities. Probably the most important multilateral trade treaty is the General Agreement on Tariffs and Trade (GATT), which: - ✔✔facilitates the flow of trade by establishing agreements on potential trade barriers. In 1995, the __________ took over responsibility for policing the objectives of the GATT organization. - ✔✔WTO There are a number of forms of doing business abroad. One form is a distributorship. In a distributorship:
- ✔✔both the producer and the distributor must take special care to ensure that the arrangement does not violate the antitrust laws of their respective governments. Every sovereign is bound to respect the independence of every other sovereign state. Which of the following describes the act of state doctrine? - ✔✔a. It provides that the judicial branch of a nation should not question the validity of actions taken by a foreign government within that foreign sovereign's own borders. The U.S. Customs and Border Protection Service imposes tariffs on imported goods at the port of entry. What is the purpose of a tariff? a. To attempt to improve their balance of trade. b. To raise revenues. c. To protect domestic industries from foreign competition. d. All of these are correct. - ✔✔All of these are correct. The Foreign Corrupt Practices Act of 1977 put in place which of the following? - ✔✔The Act makes it illegal to bribe foreign officials to obtain business. Assume the U.S. and Holland are GATT signatories. Under the "most-favored nation" provision, does the U.S. tariff on Dutch imported tobacco have to be at least as low as that charged on tobacco from any other nation? - ✔✔Yes, any privilege granted to a third country is extended to the other party to the treaty.
If the United States and Canada have a dispute about a particular trade agreement, which organization will settle this dispute? - ✔✔WTO Albert, a U.S. citizen and vice president of economic development for Triangle Corporation, offers $10,000 to the controlling party of a Latin American country in order for the local government to relax regulations in the country in order for Triangle to set up a new factory in that country. Is Albert liable for this act? - ✔✔Yes, Albert is liable under the Foreign Corrupt Trade Practices Act.
