NALA Contracts and Commercial Law 3

Question 1

What is the effect of a 'condition precedent' in a contract?

Accepted Answer

It must occur before a party's duty to perform arises

Answer

A condition precedent is an event that must occur before a contractual duty to perform is triggered; if the condition does not occur, no duty arises.

Question 2

Under the UCC, which warranty is implied in every contract for the sale of goods by a merchant who deals in goods of that kind?

Accepted Answer

Warranty of merchantability

Answer

UCC 2-314 implies a warranty of merchantability in every sale of goods by a merchant, meaning the goods must be fit for the ordinary purposes for which they are used.

Question 3

A legal assistant discovers that a contract was induced by fraudulent misrepresentation. The remedy available to the innocent party is typically:

Accepted Answer

Rescission and restitution

Answer

Fraudulent misrepresentation renders a contract voidable, entitling the innocent party to rescind the contract and seek restitution to be restored to their pre-contract position.

Question 4

What is 'anticipatory repudiation' in contract law?

Accepted Answer

A clear statement or conduct before the performance date showing a party will not perform

Answer

Anticipatory repudiation occurs when a party clearly communicates before performance is due that they will not fulfill their contractual obligations, allowing the non-breaching party to treat the contract as immediately breached.

Question 5

Under the parol evidence rule, extrinsic evidence of prior or contemporaneous agreements is generally inadmissible to:

Accepted Answer

Contradict or vary the terms of a fully integrated written contract

Answer

The parol evidence rule bars admission of extrinsic evidence to contradict, vary, or add to the terms of a fully integrated written agreement, though exceptions exist for ambiguity, fraud, and conditions precedent.

(NALA) National Association of Legal Assistants Certification Practice Test

(NALA) National Association of Legal Assistants Certification Practice Test

NALA Contracts and Commercial Law 3