Author: Joyce Buda


1.  Johann and Barton contract for the sale of goods. Later Johann, who is 15 years old, decided to cancel the contract on grounds of incapacity. Which of the following is true, assuming that neither Johann nor Barton is a merchant?a.        The common law capacity rules apply, because Article 2 of the UCC has no rules on the subject in such a case.b.        The common law capacity rules supersede the UCC rules in all contracts for sale of goods, even if neither Johann nor Barton is a merchant.c.         UCC, Article 2, capacity rules apply, because this is a contract for the sale of goods and UCC rules applies to all contracts for sale of goods.d.        The Restatement (Second) of Contract rules apply; the UCC does not apply because neither Johann nor Barton are merchants, and because the Restatement (Second) supersedes any common law precedent.
2.  Contractor and Owner contracted for Contractor to build a house for Owner for $150,000 to be completed by December 24.  Later, without terminating the first contract, Contractor and Owner agreed to change their agreement by writing and signing an addendum to the original contract so that Owner will now pay $175,000 for the house to be built.  In return, Contractor promised to build exactly the same house, but to complete it 2 weeks earlier - by December 10.
Assuming that all other elements of the contract are lawful and present in this situation, this second addendum contract:
a.        Is not binding because it does not have a liquidated damages clause.b.        Is not binding because Contractor is merely promising to perform a pre-existing       legal duty to build the house.c.         Is not binding because Contractor is not giving adequate consideration by merely promising to complete the house 2 weeks earlier compared to Owner’s paying an additional $25,000.d.        Is a validly modified addendum that is a binding contract.
3.  Which of the following is most likely to be considered unconscionable, thus making the contract invalid on the ground of unconscionability?a.        All terms that are stated in fine print.b.        Some moderate disparity in bargaining power between the parties.c.         High pressure sales tactics.d.        A penalty clause obligating the buyer to pay 5 times the product's price for failing to accept the goods when delivered.
4.   Office Depot orally agreed with Supplier to buy 475 memo pads at a total price of $475.  Later, Office Depot and Supplier agreed to modify the contract so that the price of the memo pads would increase to a total of $575. This modification:a.        Must be in writing and signed by one or both parties.b.        May be oral because the original contract agreement was oral.c.         Can be written or oral because the original contract was oral.d.        Is unenforceable because the terms of the original contract were fully agreed upon and cannot be modified.
5.  Patient went to Clinic to have a chest x-ray.   Patient did not sign any written agreement for the x-ray.  Patient and Clinic also did not make an oral agreement regarding the x-ray.  When Clinic billed Patient $325 for the x-ray, Patient refused to pay.  Clinic sued Patient to recover the $325.
Which of the following is true about Clinic’s lawsuit?
a.        Clinic can recover under the quasi-contract theory of promissory estoppel.
b.        Clinic can recover under an implied contract theory.
c.         Clinic cannot recover because there was no express contract.
d.        Clinic cannot recover because Patient did not give consideration for the bargain.

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