CP Contracts and Commercial Law Questions and Answers

Question 1

A construction company signs a contract with a supplier for a specific grade of steel to be delivered on June 1st.
On May 15th, the supplier calls the construction company and states unequivocally that they will not be able to deliver the steel due to a factory shutdown.
This action by the supplier is best described as:

Accepted Answer

An anticipatory repudiation

Answer

A material breach

Answer

A minor breach

Answer

A partial breach

Question 2

Which of the following contracts is required to be in writing to be enforceable under the Statute of Frauds?

Accepted Answer

A contract to purchase a parcel of land.

Answer

A contract for the sale of a custom-made boat for $1,200.

Answer

An agreement to lease a car for a term of six months.

Answer

An employment contract for an indefinite term.

Question 3

A software company and a client have a fully integrated, written contract for the development of a new application. The contract specifies a delivery date of December 1st. The client later claims that during a phone call before the contract was signed, the lead developer promised a November 15th delivery. The software company objects to the introduction of this evidence. Which rule of law supports the software company's objection?

Accepted Answer

The Parol Evidence Rule

Answer

The Statute of Frauds

Answer

The Doctrine of Promissory Estoppel

Answer

The Perfect Tender Rule

Question 4

Article 2 of the Uniform Commercial Code (UCC) would govern which of the following transactions?

Accepted Answer

A contract for the purchase of 1,000 computers for a business.

Answer

The sale of a residential home.

Answer

A contract for accounting services.

Answer

The sale of corporate stocks.

Question 5

A contract includes a provision stating that if the contractor fails to complete the project by the agreed-upon deadline, the contractor will pay the owner $500 for each day the project is late. This type of damages clause is known as:

Accepted Answer

Liquidated damages

Answer

Punitive damages

Answer

Compensatory damages

Answer

Nominal damages

Question 6

For a contract to be legally enforceable, it must contain several essential elements. Which of the following is NOT a required element for the formation of a valid contract?

Accepted Answer

A notarized signature

Answer

Offer and Acceptance

Answer

Consideration

Answer

Legal Capacity