OH Bar Contracts and Sales 4

Question 1

A buyer accepts delivery of machinery and later discovers a latent defect substantially impairing its value that was difficult to detect. Under the UCC, may the buyer revoke acceptance?

Accepted Answer

Yes, if revocation occurs within a reasonable time after discovery and before any substantial change in the goods

Answer

No, because acceptance is always final

Answer

Yes, but only if the seller consents

Answer

No, because revocation requires a written court order

Question 2

A written contract for the sale of goods for $400 was never signed by either party, but the seller has fully delivered and the buyer accepted the goods. The buyer refuses to pay, citing the Statute of Frauds. Who prevails?

Accepted Answer

The seller, because goods received and accepted are enforceable despite the Statute of Frauds; also $400 is below the $500 threshold

Answer

The buyer, because all sales contracts must be signed

Answer

The buyer, because acceptance of goods is irrelevant to the writing requirement

Answer

The seller, but only for half the price

Question 3

An employer terminates an at-will employee who then sues on an alleged oral promise of five years' employment made at hiring. What is the employer's strongest defense?

Accepted Answer

The Statute of Frauds, because a five-year employment contract cannot be performed within one year

Answer

The parol evidence rule

Answer

Lack of mutual assent

Answer

Failure of a condition precedent

Question 4

A creditor beneficiary sues the promisor on a contract made between promisor and promisee for the beneficiary's benefit. The promisor asserts the promisee committed fraud in inducing the contract. Can the promisor raise this against the beneficiary?

Accepted Answer

Yes, because the promisor may assert against the beneficiary any defense arising from the contract itself

Answer

No, because third-party beneficiaries take free of all defenses

Answer

No, because fraud may only be raised against the party who committed it

Answer

Yes, but only after the beneficiary's rights have vested

Question 5

A contractor deviates slightly from house plans by using an equivalent brand of pipe, discovered only after the walls are sealed. The owner refuses final payment. Under substantial performance doctrine, what is the likely measure of the owner's remedy?

Accepted Answer

Diminution in value rather than cost of replacement, since the breach was minor and replacement would cause economic waste

Answer

Full cost of tearing out the walls and replacing the pipe

Answer

Rescission of the entire contract

Answer

Nothing, because substantial performance eliminates all remedies

Question 6

A buyer breaches a contract to buy a boat from a dealer with an unlimited supply of identical boats. The dealer resells the boat at the same price. What damages may the dealer recover?

Accepted Answer

Lost profits as a lost-volume seller, because resale did not make it whole

Answer

Nothing, because resale at the same price eliminated any loss

Answer

The full contract price

Answer

Nominal damages only, capped at $100

Question 7

A party assigns its right to receive payment under a contract to a bank. The contract contains a clause prohibiting assignment of the contract. The obligor refuses to pay the bank. What result under the majority/UCC approach?

Accepted Answer

The assignment of the payment right is effective; a bar on assigning "the contract" is construed as barring only delegation of duties

Answer

The assignment is void and the bank has no rights

Answer

The assignment is effective only with the obligor's written consent

Answer

The assignor is liable for breach and the assignment is automatically rescinded