Contracts and Sales Flashcards
7 cards from real IN BAR practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Contracts and Sales flashcards as text
A buyer of a custom machine notifies the seller before delivery that it will not accept the machine. Under the doctrine of anticipatory repudiation, the seller may:
Answer: Sue immediately, await performance for a commercially reasonable time, or suspend its own performance
An unequivocal repudiation lets the aggrieved party sue at once, await performance for a commercially reasonable time, and suspend performance.
A car dealer sells a used car 'as is.' The sale most likely disclaims which warranty?
Answer: The implied warranty of merchantability
Expressions like 'as is' effectively disclaim implied warranties such as merchantability, though express warranties and title are treated differently.
A painter assigns her right to payment under a completed contract to a bank. The homeowner, unaware, pays the painter. The homeowner's payment:
Answer: Discharges the obligation because the obligor had no notice of the assignment
An obligor who pays the assignor before receiving notice of the assignment is discharged; the assignee's remedy is against the assignor.
A buyer sues for breach of the implied warranty of fitness for a particular purpose. The buyer must prove the seller:
Answer: Knew the buyer's particular purpose and knew the buyer was relying on the seller's skill to select the goods
Fitness for a particular purpose requires the seller's reason to know of the buyer's specific purpose and the buyer's reliance on the seller's judgment.
A seller cannot deliver contracted goods because its sole anticipated supplier failed, though other suppliers exist at higher cost. The seller's impracticability defense will most likely:
Answer: Fail, because increased cost alone rarely excuses performance
Mere increased expense or a failed source, when alternatives exist, generally does not make performance commercially impracticable.
A landowner contracts to sell a unique lakefront parcel and then refuses to convey. The buyer's best remedy is:
Answer: Specific performance, because land is presumed unique
Because every parcel of land is deemed unique, money damages are inadequate and specific performance is routinely granted to land buyers.
A manufacturer breaches, and the buyer claims lost profits from a resale contract the manufacturer never knew about. Under Hadley v. Baxendale, the lost profits are recoverable only if:
Answer: They were foreseeable to the breaching party at the time of contracting
Consequential damages are limited to losses arising naturally or that were within the parties' contemplation when the contract was made.