QUESTION 31

Generally, a minor must place the adult in status quo in order to disaffirm a contract.

1. True
2. False

QUESTION 32

Contracts that have an illegal object are voidable.

1. True
2. False

QUESTION 33

A statement of opinion may form the basis for fraud.

1. True
2. False

QUESTION 34

Which of the following statements is true?

1. Restitution is placing the other party back in the position it was in prior to the contract.
2. Restoration is what a minor is entitled to receive upon disaffirming a contract.
3. Revocation refers to a party returning the consideration received in a contract.
4. Rejection can occur only as part of a counteroffer.

QUESTION 35

Where a contract calls for action that violates a statute, in a breach of contract case the court will:

1. Impose the appropriate criminal penalty.
2. Ignore the contract and leave the parties where they are.
3. Order both parties to return any consideration received.
4. Order payment so that the parties to the illegal contract share any losses equally.

QUESTION 36

The primary significance of requiring only the signature of the party "against whom enforcement is sought" under the Statute of Frauds is that:

1. The court will check to see that the signatures of both parties are present.
2. The contract need not be signed by the party seeking to enforce the contract.
3. Parties can be penalized for failing to sign a written contract.
4. A party's signature must be present in order to introduce evidence from outside the four corners of the contract.

QUESTION 37

In a contract, a party can be both an obligor and an obligee.

1. True
2. False

QUESTION 38

When there is substantial performance of a contract with a minor breach, the other nonbreaching party may sue to recover the cost to repair the defect.

1. True
2. False

QUESTION 39

Intentional interference with contractual relations requires a showing of bad faith before liability can be imposed.

1. True
2. False

QUESTION 40

The transfer of rights under a contract to a third party is called:

1. An assignment.
2. An adjudication.
3. A resolution.
4. A delegation to an obligee.

QUESTION 41

An employment contract contains a clause stipulating that the employer can terminate the contract if the employer fails a drug test.This clause is an example of a:

1. Covenant.
2. Condition precedent.
3. Condition subsequent.
4. Concurrent condition.

QUESTION 42

When a client breaches a contract with a construction contractor before construction begins, what is the contractor generally able to recover?

1. The amount of the contract price
2. Only the out-of-pocket costs incurred by the contractor up to the time of the breach
3. The amount necessary to provide the same profit to the contractor that the contractor would have earned if the contract were fully performed
4. Three times the contract price as punitive damages

QUESTION 43

A sale is the passage of title from the seller to the buyer for a price.

1. True
2. False

QUESTION 44

In a lease transaction, title to the leased goods remains with either the lessor or a third party.

1. True
2. False

QUESTION 45

With letters of credit in international transactions, a bill of lading is issued by the common carrier.

1. True
2. False

QUESTION 46

A general purpose of the UCC is to:

1. Protect the merchant who deals in goods.
2. Protect the consumer.
3. Standardize commercial law and facilitate commercial transactions.
4. Protect parties from entering into unconscionable contracts.

QUESTION 47

Identification of goods is significant because:

1. It allows the contract to be a destination contract.
2. It is the earliest that risk of loss can pass.
3. It determines when a document of title is needed.
4. It determines when the implied warranties become effective.

QUESTION 48

In a noncarrier case for the sale of goods, which of the following is most important in determining when risk of loss passes?

1. Whether the seller is a merchant
2. Whether any warranties have been disclaimed
3. Whether the buyer is a merchant
4. When title passes