SMC Business Law Sec 1059 Week 2 Ch 4 Quiz (2015)

Week 2 Chap. 4 QuizGrading SummaryGrade Details – All QuestionsQuestion 1. Question : In the problem case of Pass v. Shelby Aviation, the appellate court decided that the language of the invoice, the nature of the defendant’s business, and the purpose for which Pass took his airplane to the defendant all indicate that: Student Answer: The sale of goods (airplane parts) was the predominant factor in the transaction The contract was not hybrid in nature Service was the predominant factor in the transaction None of the above Question 2. Question : In the case of Aceves v. U.S. Bank, which of the underlying elements (that are needed to prove promissory estoppel) did the appellate court rule to be present in the complaint filed by Aceves? Student Answer: A clear and unambiguous promise was made to Aceves by the bank Aceves indeed relied upon the bank’s promise The reliance by Aceves was foreseeable to the bank and was reasonable Aceves demonstrated injury as a result of the broken promise All of the aboveQuestion 3. Question : The Uniform Commercial Code promotes business ethics that are both fair and honest. Under the code, the parties must deal fairly with one another by observing “reasonable commercial standards of fair dealing.” A grossly unfair contract (one-sided contract) violates the fair dealing requirement and can result in a court intervening to protect the disadvantaged party. Student Answer: True False Question 4. Question : A void contract is one that either party can cancel at their option. Student Answer: True False (If a contract is void then it never had any legal effect. A contract that could be canceled would have had some legal effect at some point. Voidable contracts differ from void contracts and if a contract is voidable, then one party has the choice of canceling it.) Question 5. Question : A promises to pay B $50.00 if B will mow A’s front lawn. B completely and satisfactorily mows A’s lawn. This is aunilateral contract. Student Answer: True False Question 6. Question : The Restatement of Contracts Second reflects the changes in contract law that occurred since the adoption of the original Restatement of Contracts and places emphasis on standards that produce fair and just results. Student Answer: True False Question 7. Question : A voidable contract is one that provides the injured (the party incurring damages) with the choice of canceling the contract if she so chooses. Of course, the injured party can choose to enforce the agreement instead. Student Answer: True False Question 8. Question : Why does it matter whether or not a contracting party is an Article 2 merchant? Student Answer: It never matters Because contracts between merchants are covered by the Restatement (Second) of Contracts rather than by Article 2 of the UCC Because Article 2 sometimes creates different rules for merchants in sale-of-goods cases Actually, the term merchant has little or no practical significanceQuestion 9. Question : Speaking generally, quasi-contract applies where there has been foreseeable reliance on an express promise that is broken with resulting hardship to the promisee. Student Answer: True False (The above description is that of promissory estoppel, not quasi contract.) Question 10. Question : Assume that Clive Johnson, who owned Santa Monica Toyota, sold his Harley Davidson motorcycle to Buyer. Clive used the motorcyle on weekends for pleasure. Santa Monica Toyota did not sell anything other than automobiles. Clive Johnson would be treated as a merchant – under the UCC – in his contract to sell the motorcycle. Student Answer: True False Question 11. Question : Sometimes, Article 2 of the UCC holds merchants to different standards than the standards it applies to non-merchants. Student Answer: True False Question 12. Question : The original Restatement of Contracts attempted to resolve the many conflicting judicial contract court decisions by embodying the most sound contract principles and including said principles in an orderly fashion by codifying and systemizing them. Student Answer: True False Question 13. Question : Article 2 of the UCC applies to, among other things, contracts for the sale of real estate. Student Answer: True False Question 14. Question : Mary saw Dr. Smith (her regular internist) for her annual physical exam. There was no discussion of the costs for lab tests or how much Dr. Smith would charge Mary for the examination. A statement was sent to Mary at the end of the month. This is an example of: Student Answer: An express in fact (express contract) contract A quasi contract An implied in fact (implied contract) None of the above Question 15. Question : A bilateral contracts differs in its structure from a unilateral contract. In a bilateral contract: Student Answer: Both parties exchange promises The contract is formed once the promises are exchanged The contract often remains fully executory for a period of time after it is formed All of the aboveQuestion 16. Question : Standardized online contracts – presented in a manner that require the viewer to click on an icon indicating agreement before he/she can access the program – are often called ‘clickwrap contracts’. Student Answer: True False Question 17. Question : The Uniform Commercial Code in fact distinguishes between persons who are acting as merchants and persons who are acting as nonmerchants. Merchants are: Student Answer: Those who regularly deal in the type of goods being sold Those pretending to have some special knowledge about the goods being sold Those who use agents (go betweens) if the agents fit either of the above descriptions Generally held to a higher standard than nonmerchants All of the aboveQuestion 18. Question : Oral contracts are difficult to prove and when litigated consume much court time. It is for this reason, the law specifically requires that all contracts be written to be enforceable. Student Answer: True False Question 19. Question : In the problem case of Shelby Aviation, Identify which factors (below) favored Shelby in its lawsuit with Pass: Student Answer: The language in the invoice indicated that the plane was brought in for repair The language in the invoice indicated that the plane was brought in for the “100 hour inspection” and the box adjacent to this language was checked The nature of Shelby Aviation’s business is primarily one of provding services As a whole, the invoice emphasized the repair and inspection aspect of the transaction between the parties All of the above favor the position taken by Shelby Aviation in this parlticular lawsuitQuestion 20. Question : A contract that is hybrid in nature will require that the Restatement 2d be applied to the entire contract if the emphasis is on goods. Student Answer: True False