MD Bar Contracts and Sales 4

Question 1

A father contracts with a landscaper to maintain his adult daughter's lawn for one year, telling the landscaper the work is a gift to her.
After six months, the landscaper stops performing.
May the daughter sue the landscaper?

Accepted Answer

Yes, as an intended donee beneficiary whose rights vested when she learned of and relied on the contract

Answer

No, because she gave no consideration

Answer

No, because only incidental beneficiaries may sue after part performance

Answer

Yes, but only if the father assigns her his rights in writing

Question 2

A dealer sells a used car "as is" to a consumer buyer. The engine fails a week later. Which warranty claim, if any, survives?

Accepted Answer

None of the implied warranties, because "as is" language effectively disclaims the implied warranties of merchantability and fitness

Answer

The implied warranty of merchantability, which can never be disclaimed

Answer

The implied warranty of fitness, because the buyer relied on the dealer

Answer

An express warranty arising automatically from the sale itself

Question 3

An employer and employee sign a two-year employment contract. After one year, the employer says, "I will not pay you next month or ever again." What may the employee do immediately?

Accepted Answer

Treat the statement as an anticipatory repudiation, terminate the contract, and sue for damages at once

Answer

Nothing until the next paycheck is actually missed

Answer

Only demand adequate assurance and wait 30 days

Answer

Rescind the contract but forfeit all accrued wages

Question 4

A contract for the sale of a business includes a clause that all disputes "arising under" it are subject to conditions precedent of written notice within 30 days. The buyer sues without giving notice. What result?

Accepted Answer

The claim fails because an express condition precedent was not satisfied, and courts enforce express conditions strictly

Answer

The claim proceeds because conditions are always excused in litigation

Answer

The claim proceeds because substantial compliance satisfies express conditions

Answer

The claim fails only if the seller shows prejudice from the lack of notice

Question 5

A minor, age 17, buys a motorcycle on credit. At 18, she continues making payments for six months before defaulting and asserting infancy. Can she disaffirm?

Accepted Answer

No, because continuing payments after reaching majority ratified the contract

Answer

Yes, because contracts made as a minor are void from inception

Answer

Yes, because disaffirmance is available any time before full payment

Answer

No, because motorcycles are necessaries as a matter of law

Question 6

Seller agrees to deliver goods "F.O.B. Seller's warehouse." The goods are destroyed in transit through no fault of either party. Who bears the loss?

Accepted Answer

The buyer, because risk of loss passed to the buyer when the goods were duly delivered to the carrier

Answer

The seller, because risk of loss always remains with the seller until receipt

Answer

The carrier, as an absolute insurer of all shipments

Answer

The parties share the loss equally under the UCC

Question 7

A wealthy collector agrees to pay $1 million for a painting both parties believe is an original Vermeer. It is later discovered to be a worthless copy. What is the collector's best argument to avoid the contract?

Accepted Answer

Mutual mistake as to a basic assumption of fact that materially affects the exchange

Answer

Unilateral mistake, because only the collector was mistaken

Answer

Frustration of purpose, because the painting cannot be displayed

Answer

Impossibility, because an original Vermeer cannot be delivered