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

Expectation damages, the standard contract remedy, award the plaintiff the benefit it expected from full performance, including lost profits.

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

In a shipment contract, UCC § 2-509(1)(a) places risk of loss on the buyer once the seller properly delivers the goods to the carrier.

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

Under the mirror image rule, any deviation from the offer's terms constitutes a counteroffer, terminating the original offer and reversing the roles of offeror and offeree.

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

Liquidated damages clauses must represent a reasonable pre-estimate of probable damages; if they function as a penalty, courts will strike them down.

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

Frustration of purpose requires that a supervening event, not reasonably foreseeable at contracting, substantially frustrate the purpose for which a party entered the contract.

(IA Bar) Iowa Bar Exam Practice Test

(IA Bar) Iowa Bar Exam Practice Test

IA Bar Contracts 4