IA Bar Contracts 4

Question 1

Which measure of damages puts the non-breaching party in the position it would have been in had the contract been performed?

Accepted Answer

Expectation (benefit-of-the-bargain) damages

Answer

Reliance damages

Answer

Restitutionary damages

Answer

Nominal damages

Question 2

Under the UCC, the risk of loss in a shipment contract passes to the buyer:

Accepted Answer

When the seller duly delivers the goods to the carrier

Answer

When the seller tenders the goods at its place of business

Answer

When the carrier delivers the goods to the buyer's address

Answer

When the buyer pays for the goods

Question 3

An offeree's reply that accepts the offer but adds a new term is treated under common law as:

Accepted Answer

A counteroffer that terminates the original offer

Answer

A valid acceptance that binds both parties to the new term

Answer

A request for information that keeps the original offer open

Answer

An acceptance with a minor deviation that courts will ignore

Question 4

A liquidated damages clause is enforceable only if:

Accepted Answer

The amount is a reasonable forecast of actual damages and harm is difficult to estimate

Answer

The parties are both sophisticated commercial entities

Answer

The clause explicitly waives all other remedies

Answer

The clause is separately initialed by both parties

Question 5

The doctrine of frustration of purpose applies when:

Accepted Answer

A supervening event destroys the principal purpose of the contract without the party's fault

Answer

Performance becomes more expensive than anticipated

Answer

One party cannot perform due to personal financial hardship

Answer

The subject matter is destroyed before contract formation

Question 6

Under Iowa law, a valid assignment of a contract right:

Accepted Answer

Generally does not require the obligor's consent unless the assignment would materially change the obligor's duty

Answer

Requires the obligor's consent unless the contract prohibits assignment

Answer

Must always be in writing to be enforceable

Answer

Automatically delegates the assignor's duties to the assignee

Question 7

Which of the following constitutes adequate consideration under contract law?

Accepted Answer

A promise to pay $1 for a house worth $500,000 if freely bargained

Answer

A promise to perform a pre-existing legal duty

Answer

A moral obligation to repay a past benefit

Answer

A gift conditioned solely on the promisor's generosity