Contract Law & Commercial Transactions Flashcards

A contractor begins renovating a house but stops after the owner verbally says 'I'll pay you extra to finish faster.' Later the owner refuses to pay the extra amount. This promise is likely unenforceable because:

Answer: The contractor was already obligated to finish, providing no new consideration

Under the pre-existing duty rule, a promise to pay more for performance of an existing legal obligation lacks consideration and is unenforceable at common law.

Which of the following would constitute a valid 'accord and satisfaction' resolving a contract dispute?

Answer: Both parties agree to accept different performance to discharge the original obligation, and the new performance is completed

Accord and satisfaction requires mutual agreement on substitute performance (accord) followed by completion of that substitute performance (satisfaction).

In Pennsylvania, the 'plain language' requirement for consumer contracts primarily means:

Answer: Consumer contracts must use clear, understandable language that average consumers can comprehend

Pennsylvania's Plain Language Consumer Contract Act requires that consumer contracts be written in clear, simple language so that average consumers can understand their rights and obligations.

A police officer is taking a theft report where a person claims they paid for goods via wire transfer but never received them. The relevant UCC rule for risk of loss in a shipment contract passes risk to the buyer when:

Answer: The seller delivers the goods to a carrier

Under UCC §2-509, in a shipment contract, risk of loss passes to the buyer when the seller duly delivers the goods to the carrier.

A car dealership adds a clause in small print waiving all implied warranties. Under the UCC, to effectively disclaim the implied warranty of merchantability, the disclaimer must:

Answer: Mention 'merchantability' specifically and be conspicuous

UCC §2-316 requires that a disclaimer of the implied warranty of merchantability specifically use the word 'merchantability' and be conspicuous to be effective.

When investigating a consumer fraud complaint, an officer learns the victim signed a contract due to a salesperson's high-pressure tactics exploiting the victim's emotional distress over a recent bereavement. This may constitute:

Answer: Undue influence or duress

Undue influence involves overcoming a person's free will through improper pressure, often by exploiting a position of trust or a vulnerable emotional state.

A contract includes a 'time is of the essence' clause. If one party delivers performance one day late, the legal consequence is:

Answer: A material breach allowing the other party to treat the contract as terminated

A 'time is of the essence' clause makes deadlines conditions of performance; missing the deadline even by one day constitutes a material breach entitling the other party to rescind.