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
A store displays a jacket with a $50 price tag. Under contract law, this display is best characterized as:
Answer: An invitation to make an offer
Price tags and advertisements are generally invitations to make an offer, not binding offers, so the store is not legally obligated to sell at that price.
When police investigate a complaint about a contractor abandoning a job, the legal doctrine of 'substantial performance' means:
Answer: Near-complete performance may entitle the contractor to payment minus damages for deviations
Substantial performance allows a party who has mostly completed contractual duties to recover the contract price minus any damages caused by minor deviations.
A contract is entered into under economic duress when one party:
Answer: Wrongfully threatens to cause economic harm unless the other party agrees
Economic duress requires a wrongful threat that leaves the victim no reasonable alternative but to agree, making the contract voidable.
Under the UCC, which of the following is NOT required for a valid contract for the sale of goods over $500?
Answer: That the agreement involves a merchant
UCC §2-201 (Statute of Frauds) requires a writing, a signature, and quantity, but does not require that either party be a merchant.
A teenager (age 16) signs a contract to buy a car. Later, they want to cancel it. This is an example of:
Answer: Voidable contract due to lack of capacity
Contracts with minors are generally voidable at the minor's option because minors lack the legal capacity to enter binding contracts.
In a contract dispute, 'anticipatory repudiation' occurs when:
Answer: A party clearly indicates before the due date that it will not perform
Anticipatory repudiation is a clear statement or action by a party before the performance date indicating they will not fulfill their contractual obligations.
Which of the following best describes 'liquidated damages' in a contract?
Answer: A pre-agreed sum payable upon breach, representing a reasonable estimate of actual harm
Liquidated damages clauses specify in advance an agreed amount of damages if a breach occurs, enforceable when actual damages are difficult to calculate and the amount is reasonable.