MN Bar Contracts and Commercial Law 3

Question 1

Under Minnesota law, a liquidated damages clause is enforceable if:

Accepted Answer

Damages are difficult to estimate and the amount is a reasonable forecast

Answer

The amount is a penalty designed to punish breach

Answer

The breaching party agrees at the time of breach

Answer

The contract involves real property exclusively

Question 2

Under Minnesota contract law, the duty to mitigate damages requires the non-breaching party to:

Accepted Answer

Take reasonable steps to minimize damages after breach

Answer

Accept any reasonable settlement offered

Answer

Sue immediately upon learning of the breach

Answer

Obtain a court order before covering

Question 3

In Minnesota, which type of contract is voidable at the option of one party due to lack of capacity?

Accepted Answer

Contracts with a minor

Answer

Contracts between corporations

Answer

Contracts involving licensed professionals

Answer

Contracts for necessaries

Question 4

A Minnesota court would likely find a contract unconscionable and refuse to enforce it if:

Accepted Answer

The contract had grossly unfair terms imposed on a party with no meaningful choice

Answer

One party received a bad deal due to market fluctuations

Answer

The contract lacked a price term

Answer

Both parties were represented by counsel

Question 5

Under Minnesota law, which of the following modifications to an existing contract requires new consideration?

Accepted Answer

Modification of a common law services contract

Answer

Modification of a UCC goods contract

Answer

Modification that relieves both parties of duties

Answer

Modification made by a written instrument

Question 6

Under Minnesota law, a valid assignment of contract rights:

Accepted Answer

Requires the obligor's consent unless the contract forbids assignment

Answer

Automatically releases the assignor from duties

Answer

Can always be made even if the contract prohibits it

Answer

Is only effective if made in writing