Mega Co. contracts with Service Co. to manufacture 100 custom service trucks, to be delivered in ten months. One month after making the contract, Mega Co. learns that its supplies will cost double what it expected. Thus, Mega Co. will lose $800,000 if it performs the contract with Service Co. Mega ...
OMGT Final Exam || WITH SCORED A+ SOLUTIONS.
Mega Co. contracts with Service Co. to manufacture 100 custom service trucks, to be
delivered in ten months. One month after making the contract, Mega Co. learns that its
supplies will cost double what it expected. Thus, Mega Co. will lose $800,000 if it performs
the contract with Service Co. Mega Co. advises Service Co. that it will not perform under the
contract. This is called ______. correct answers Anticipatory repundiation
The ___________ establishes a deadline by which a party must sue to enforce a contract.
correct answers Statute of limitations
If Party A breaches the contract, Party B can sue for damages. Party B still must perform any
outstanding duties under the contract, unless Party A's breach was _______, in which case
Party B is discharged from performance. correct answers material
A party's duties under a contract may be discharged (terminated) by the party's performance
of the duties or by ____________. correct answers Agreement of the parties
Which of the following are defenses to negligence claims? I. superseding event; II.
assumption of risk; III. res ipsa loquitor correct answers I and II only
Which negligence doctrine states the following "violation of a statute that proximately causes
an injury" creates liability? correct answers negligence per se
Which of the following are required elements to prove a lawsuit for negligence? I. defendant
owed duty of care; II. defendant breached duty; III. injury to plantiff; IV. defendant's break of
duty caused by injury; V. defendant's breach of duty was proximate cause of plantiff's injury
correct answers I, II, III, IV, and V
What is an unconscionable contract? correct answers a contract that a court will not enforce
because the contract is too unfair and one-sided
How does the UCC differ from common law of contracts with regard to the terms of the
contract? correct answers the UCC allows contracts to be formed with indefinite terms,
whereas the common law requires definite terms
A contract is not enforceable when a party did not voluntarily consent to the contract. Which
of the following circumstances may create lack of voluntary consent? I. fraud; II. duress; III.
insanity correct answers I and II
If there is a dispute as to whether a contract was formed, courts look to the ______. correct
answers the objective facts as interpreted by a reasonable person
Lara was joking with a friend about selling her new car for $2000 and only riding her bike to
and from work. The friend said, "I accept your offer." Is there an enforceable contract
between Lara and her friend? (i.e. if Lara refuses to deliver the car to her friend, will the
friend succeed in a lawsuit to compel Lara to deliver the car?) correct answers No, because
Lara did not objectively intend to be bound by her offer to sell her car for $2000
, Marc bought a boat. Which law governs that type of contract (a sale of goods)? correct
answers The UCC as passed by the state where the contract occurs
What is the purpose of consequential damages in contract? correct answers to cover indirect,
but foreseeable losses
Often a breach of contract lawsuit results in an award of money damages. However, sale of
land contracts are usually treated differently. How do most states resolve lawsuits where the
seller of land has breached and not delivered the parcel of land? correct answers courts order
the seller to specifically perform the contract, awarding ownership of the land to the non-
breaching buyer
Taxi Co. contracts to purchase two limos from Custom Cars with delivery to occur on May 1.
Taxi Co. explained to Custom Cars that on-time delivery was very important because the
limos were booked for 4 proms and 8 weddings in May. Custom Cars breached the contract
and never delivered the two limos. Taxi Co. had to cancel the prom and wedding contracts. In
a lawsuit, will Taxi Co. be able to recover the profits it lost when it cancelled the prom and
wedding contracts? correct answers Yes, because these were consequential damages: indirect
losses related to Custom Cars' breach, which were foreseeable as Custom Cars knew of the
prom and wedding contracts
What is the standard measure of compensatory damages in a contract lawsuit? correct
answers the difference between the value of the breaching party's contractually promised
performance and the value of the breaching party's actual performance
May a 14-year-old entrepreneur be a principal, contracting with another person to be his
agent? correct answers No, a person must have contractual capacity to be a principal
An express agency may be based on an oral or written agreement, unless _________. correct
answers the agent is to enter into contracts which must be in writing under the Statute of
Frauds, then the agency agreement must be in writing
Generally, employees of a company who deal with third parties are _______ of the company.
correct answers agents
Ms. Talbot hires Lela to sell her condominium. Ms. Talbot dies before Lela finds a buyer for
the condominium. On the day after Ms. Talbot dies, Lela finds a buyer offering double the
asking price. May Lela complete the sale of the condominium? correct answers No, the death
of the principal terminated the agency relationship
The concept of fiduciary is key to principal-agent law. What is the fiduciary relationship?
correct answers a relationship involving trust and confidence
Construction contracts have a unique measure of damages. What is the usual outcome if the
owner of the construction project breaches before the construction company has begun work?
correct answers lost profits (total contract price minus cost of materials and labor)
If a court decides a contract must be rescinded, what follows? correct answers restitution
(each side must return goods, property, or funds previously conveyed under the rescinded
contract)
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