ND Bar Contracts and Commercial Law 3

Question 1

Which of the following contracts is within the Statute of Frauds and must be in writing to be enforceable?

Accepted Answer

A contract that cannot be performed within one year from the date of its making

Answer

A contract to purchase a car for $400

Answer

An oral agreement to provide professional consulting services for two months

Answer

A contract for the sale of goods worth $499

Question 2

When a contract is rescinded by mutual agreement, the legal effect is:

Accepted Answer

Both parties are excused from future performance and the contract is treated as if it never existed

Answer

One party may still sue for expectation damages

Answer

The contract terms remain enforceable for 30 days

Answer

Only the offeror may enforce remaining obligations

Question 3

Under the doctrine of substantial performance, a party who substantially but not perfectly performs a contract is entitled to:

Accepted Answer

The contract price minus the cost to remedy the deficiencies

Answer

No compensation because only perfect performance triggers payment

Answer

Restitution only for work already done

Answer

Double the contract price as a penalty for imperfect performance

Question 4

A third-party beneficiary who has vested rights under a contract may:

Accepted Answer

Enforce the contract against the promisor

Answer

Only sue the promisee for breach

Answer

Sue only if they have given independent consideration

Answer

Never enforce the contract because they were not a party to it

Question 5

Which of the following best describes a liquidated damages clause?

Accepted Answer

A pre-agreed sum payable upon breach when actual damages would be difficult to calculate

Answer

A clause allowing punitive damages for intentional breach

Answer

A clause that limits liability to restitution only

Answer

A court-ordered payment after litigation

Question 6

Under North Dakota law (following the Restatement approach), which of the following constitutes adequate consideration?

Accepted Answer

A promise to forbear from filing a lawsuit the party genuinely believes to have merit

Answer

A moral obligation to repay a past gift

Answer

A promise to perform a pre-existing legal duty

Answer

A nominal payment of $1 to formalize a gift promise

Question 7

An assignment of contract rights is generally valid unless:

Accepted Answer

The contract is for professional services that depend on the personal skill of the assignor

Answer

The assignee provides separate consideration for the assignment

Answer

The other contracting party is notified of the assignment

Answer

The assignment is made in writing