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Contract Law & Commercial Transactions Flashcards

7 cards from real MPOETC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Contract Law & Commercial Transactions flashcards as text

  1. A police officer is called to a scene where a car dealer refuses to return a customer's trade-in after the financing fell through. Under contract law, this scenario most likely involves:

    Answer: A failed condition precedent making the contract unenforceable

    When financing approval is a condition precedent to a sale, failure to obtain financing prevents the condition from being satisfied, potentially voiding the obligation.

  2. Under common law, which modification of an existing contract requires new consideration to be enforceable?

    Answer: Modifications to contracts for services, not goods

    Under common law (applicable to service contracts), any modification requires new consideration; the UCC relaxes this rule for goods contracts.

  3. When a seller's non-conforming goods cause the buyer to sue for breach of contract, the buyer's duty to mitigate damages means:

    Answer: The buyer must take reasonable steps to reduce their own losses

    The duty to mitigate requires the non-breaching party to take reasonable actions to minimize their losses; failure to mitigate reduces any recovery.

  4. A 'novation' in contract law occurs when:

    Answer: A new party replaces an original party and the original party is fully released

    Novation substitutes a new party for an original one, with all parties' consent, and fully releases the replaced party from their original obligations.

  5. A written contract contains a clause that is unconscionable. A court faced with such a clause may:

    Answer: Refuse to enforce the unconscionable clause while enforcing the rest of the contract

    Courts have discretion to refuse enforcement of unconscionable clauses while keeping the remainder of the contract intact, or void the contract entirely.

  6. An officer responds to a complaint about a pyramid scheme recruitment pitch. Which contract law concept is most relevant to prosecution?

    Answer: Illegality of subject matter

    Contracts with an illegal purpose or subject matter are void and unenforceable; pyramid schemes violate law, making related agreements unenforceable.

  7. Under the UCC, when a buyer and seller dispute whether a contract was formed but both act as if one exists, the court will:

    Answer: Recognize a contract based on the parties' conduct and fill gaps with UCC default rules

    UCC §2-207 and related provisions recognize that contracts can be formed by conduct, with courts filling in missing terms using UCC gap-filler rules.