LLM Contract Law & Commercial Transactions 1 — Questions and Answers
Question 1: Which element is NOT required for a valid contract under common law?
- Written form (Correct answer)
- Offer
- Acceptance
- Consideration
Correct answer: Written form
Common law does not require most contracts to be in writing; oral contracts are generally enforceable unless the Statute of Frauds applies.
Question 2: Under the UCC Article 2, when does title to goods pass from seller to buyer in the absence of agreement?
- At the time and place of physical delivery (Correct answer)
- When the contract is signed
- Upon payment of the purchase price
- When the goods are identified to the contract
Correct answer: At the time and place of physical delivery
UCC § 2-401 provides that title passes to the buyer at the time and place at which the seller completes performance with respect to physical delivery.
Question 3: The doctrine of promissory estoppel allows enforcement of a promise even without consideration when which elements are met?
- A clear promise, reasonable reliance, and injustice without enforcement (Correct answer)
- Written form, witnesses, and notarization
- Mutual assent, capacity, and legality
- An offer, acceptance, and payment
Correct answer: A clear promise, reasonable reliance, and injustice without enforcement
Promissory estoppel requires a clear promise, foreseeable and actual detrimental reliance by the promisee, and injustice that can only be avoided by enforcement.
Question 4: What is the legal effect of a 'material breach' of contract?
- The non-breaching party may treat the contract as terminated and sue for total breach damages (Correct answer)
- Both parties must continue performance
- Only nominal damages are available
- The court must first order specific performance
Correct answer: The non-breaching party may treat the contract as terminated and sue for total breach damages
A material breach allows the non-breaching party to suspend or terminate performance and seek expectation damages for total breach of contract.
Question 5: Under common law, the 'mirror image rule' provides that an acceptance must:
- Match the terms of the offer exactly without alteration (Correct answer)
- Be in writing to be valid
- Be communicated within a reasonable time
- Be made by the offeree personally
Correct answer: Match the terms of the offer exactly without alteration
The mirror image rule requires that an acceptance must conform exactly to the terms of the offer; any deviation constitutes a counteroffer rather than an acceptance.
Question 6: Which remedy places the non-breaching party in the position they would have been in had the contract been fully performed?
- Expectation Damages (Correct answer)
- Reliance Damages
- Restitution
- Nominal Damages
Correct answer: Expectation Damages
Expectation damages, the standard contract remedy, aim to give the non-breaching party the benefit of the bargain by putting them in the position performance would have created.
LLM Contract Law & Commercial Transactions 1
Which element is NOT required for a valid contract under common law?