NC Bar Contracts 3

Question 1

Which of the following is an example of promissory estoppel that could make an otherwise unenforceable promise binding?

Accepted Answer

A charitable pledge without consideration that the charity detrimentally relied upon by beginning construction

Answer

A promise supported by $1 in nominal consideration

Answer

A promise made under duress that the promisor later ratifies

Answer

A promise that is too indefinite to be enforced

Question 2

A contract is formed between two parties, but one party was intoxicated at the time of signing and did not understand the nature of the transaction. Under North Carolina law, the intoxicated party's contract is best characterized as:

Accepted Answer

Voidable at the election of the intoxicated party

Answer

Void ab initio

Answer

Unenforceable by either party

Answer

Enforceable because intoxication is never a defense

Question 3

Buyer and Seller enter a written contract for the sale of a car for $5,000. A clerical error causes the written contract to state $500. Under which doctrine could a court correct the written contract to reflect the true agreement?

Accepted Answer

Reformation

Answer

Rescission

Answer

Restitution

Answer

Novation

Question 4

Under the UCC, an acceptance that contains additional terms will generally:

Accepted Answer

Accept the offer, and the additional terms become proposals for addition to the contract between merchants

Answer

Reject the offer and constitute a counteroffer

Answer

Accept the offer only if the additional terms are material

Answer

Be treated as a rejection if any term differs from the offer

Question 5

A seller agrees to sell land to a buyer. Before closing, the seller sells and deeds the same property to a third party who pays fair value and has no notice of the prior contract. Under North Carolina's recording act (a notice statute), which party prevails?

Accepted Answer

The third party, because they are a bona fide purchaser without notice who recorded first

Answer

The first buyer, because first in time is first in right

Answer

The seller, who retains the right to choose which buyer gets title

Answer

The first buyer, because land contracts create automatic constructive notice

Question 6

A party claims impossibility of performance as a defense to a breach of contract claim. Which scenario would most likely support this defense?

Accepted Answer

The specific subject matter of the contract was destroyed after contract formation without the promisor's fault.

Answer

The cost of performance became significantly more expensive than anticipated.

Answer

The promisor simply changed its mind about wanting to perform.

Answer

Performance became less profitable due to market fluctuations.

Question 7

In a contract for the sale of goods, Seller gives Buyer an express warranty that the widgets will operate for 5 years. Buyer sues when the widgets fail after 3 years. Under the UCC, Seller argues the warranty was disclaimed by a merger clause in the contract stating 'no warranties other than those stated herein.' Is the express warranty enforceable?

Accepted Answer

Yes, because express warranties created by the seller's own affirmations cannot be disclaimed by general merger language.

Answer

No, because the merger clause effectively disclaims all prior representations.

Answer

No, because a written disclaimer always overrides an oral warranty.

Answer

Yes, but only if the buyer relied on the warranty when signing the contract.