CLA/CP Exam Contract Formation and Enforcement 2

Question 1

Which doctrine allows a court to enforce a promise even without consideration when one party has reasonably relied on the promise to their detriment?

Accepted Answer

Promissory estoppel

Answer

Promissory estoppel (detrimental reliance) allows enforcement of a promise when the promisor should have expected reliance and injustice can only be avoided by enforcement.

Question 2

A contractor submits a bid for a construction project. Before the owner accepts, the contractor realizes there was a clerical error that understated costs by 40%. Which defense is most likely to allow rescission?

Accepted Answer

Unilateral mistake known to the other party

Answer

A unilateral mistake may permit rescission when the non-mistaken party knew or should have known of the error, making enforcement unconscionable.

Question 3

What is the legal effect of a counteroffer under common law?

Accepted Answer

It terminates the original offer and creates a new offer

Answer

Under the mirror image rule, a counteroffer simultaneously rejects the original offer and creates a new offer that the original offeror may accept or reject.

Question 4

Seller and Buyer sign a written contract for the sale of equipment. Buyer later claims the parties had an oral agreement to include maintenance services. The parol evidence rule would most likely:

Accepted Answer

Exclude the oral agreement if the written contract is fully integrated

Answer

The parol evidence rule bars extrinsic evidence of prior or contemporaneous agreements that would contradict or vary the terms of a fully integrated written contract.

Question 5

Under the UCC, a contract for the sale of goods worth $500 or more is unenforceable unless:

Accepted Answer

There is a sufficient writing signed by the party to be charged

Answer

UCC § 2-201 requires a writing signed by the party against whom enforcement is sought for contracts involving goods priced at $500 or more.

CLA/CP Exam Practice Test

CLA/CP Exam Practice Test

CLA/CP Exam Contract Formation and Enforcement 2