Reference no: EM13324568

Q: Dell, in the process of selling his dairy to Alice, tells her it has been operating profitably for the last year and presents her with appropriate records to review. Alice reviews the records, but makes an arithmetic mistake leading her to believe Dell told the truth when, in fact, Dell knew the dairy was unprofitable and the records, if properly interpreted, would indicate this fact.

A.) Dell's statement is false, and therefore, Alice's claim of fraud will be successful.
B.) Because Alice made an independent investigation, she is not held to have relied on Dell's statement.
C.) Because Dell did not specifically state the amount of profit, his comments are statement of value.
D.) This is an example of duress.

Q: S believes that a certain vase has little collector's value and B thinks it to be rare and valuable. The vase is sold to B for $100. The market value is about $5,000.

A.) This is the sort of mistake the law considers as bilateral.
B.) This mistake is the sort that relates to the value of an item rather than to the facts. Hence, no relief is likely.
C.) This mistake is so great that a court will act to keep things "fair."
D.) This mistake creates a unilateral obligation.

Q: Alan and Daphne entered into a contract for the sale of "Alan's motorcycle" for $750. At the time of the sale, Alan owned two motorcycles, worth $1,000 and $500, respectively. Alan thought he was selling the $500 motorcycle while Daphne believed that she was buying the $1,000 motorcycle. Both parties acted in good faith but simply failed to specify in their conversations with each other the motorcycle that was for sale. As a result,

A.) Alan is entitled to receive $750 for the motorcycle worth $500.
B.) Daphne is entitled to purchase the $1,000 motorcycle for $750 .
C.) There is no contract due to the mutual mistake offact by the parties.
D.) Daphne is entitled to select either motorcycle for $750.

Q: Acme Department store issued their annual catalog listing widgets at a price of $50. Able ordered one widget but was informed that a mistake had been made in printing the catalog and that widgets were $150. Able demanded the $50 price and filed a lawsuit.

A.) Able will not prevail because the catalog price would not be considered an offer.
B.) Able will prevail because Acme had not stated that prices were subject to change.
C.) Able will prevail because an offer was properly accepted.
D.) Both b and c.

Q: For the past 9 years the Quick Coal Co. has supplied American Steel WIth all of the supplies it needed to operate. In January 1983, with market price being highly volatile, American writes to Quick Coal, "We expect to need the same amount this year, and will, as usual, pay the January market price during the year," Quick Coal receives this and waits and does nothing.

A.) Silence is not an assent, therefore, American Steel has no rights.
B.) Silence is assent if the other party indicates it will treat it as acceptance.
C.) SIlence can create an acceptance where prior dealings impose an obligation to speak out. Thus, there is a contract here and Quick Co. is obligated.
D.) A contract could not be formed because the price was not stated.

Q: Bill Cratchett leased an apartment from Grendel. Cratchett was a person of limited means in a locality where low-income housing was scarce. Shortly after signing the agreement, he fell in an unlit stairwell when a step unexpectedly gave way. In a suit for damages, Grendel relied on a clause in the lease stating, "Tenant agrees to hold Owner harmless from any claims for damages no matter how caused." Cratchett should

A.) Win because the exculpatory clause was unenforceable as a violation of public policy.
B.) Win because the lease was a contract to adhesion.
C.) Lose because nothing indicates that the lease was unconscious able as a whole.
D.) Lose because exculpatory clauses are usually upheld in the interest of freedom of contract.

Q: When a client accepts the services of an accountant without an agreement concerning payment, the result is

A.) An implied-in-fact contract.
B.) An implied-in-law contract.
C.) An express contract.
D.) No contract.

Q: The following conversation took place between Mary and Ed: "Ed, if you wanted to sell your table, what would you ask for it?" Ed: "I suppose $400 would be a fair price." Mary: "I'll take it, if you have it refurbished." Ed: "Sold." Thus,

A.) Ed's statement, "I suppose $400 would be a fair price" constitutes an offer.
B.) Mary's reply: "I'll take it, if you have it refurbished" was a conditional acceptance, terminating Ed's offer.
C.) No contract resulted because Ed never stated he would actually sell the table for $400.
D.) A contract was formed when Ed said: "Sold."

Q: On April 1, Fine Corp. faxed Moss an offer to purchase Moss' warehouse for $500,000. The offer stated that it would remain open until April 4 and that acceptance must be received to be effective. Moss sent an acceptance on April 4 by overnight mail and Fine received it on April 5. Which of the following statements is correct?

A.) No contract was formed because Moss sent the acceptance by an unauthorized method.
B.) No contract was formed because Fine received Moss' acceptance after April 4.
C.) A contract was formed when Moss sent the acceptance.
D.) A contract was formed when Fine received Moss' acceptance.

Q: Kent, a 16-year-old, purchased a used car from Mint Motors, Inc. Ten months later, the car was stolen and never recovered. Which of the following statements is correct?

A.) The car's theft his a de facto ratification of the purchase because it is impossible to return the car.
B.) Kent may disaffirm the purchase because Kent is a minor.
C.) Kent effectively ratified the purchase because Kent used the car of an unreasonable period of time.
D.) Kent may disaffirm the purchase because Mint, a merchant, is subject to the UCC.