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

UCC 2-608 permits revocation of acceptance for defects that substantially impair value when acceptance was induced by difficulty of discovery, if done within a reasonable time.

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 UCC Statute of Frauds applies only to goods of $500 or more, and even then, goods received and accepted are enforceable to that extent under 2-201(3)(c).

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

A contract that by its terms cannot be performed within one year of its making falls within the Statute of Frauds and requires a signed writing.

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

A promisor may assert against a third-party beneficiary any defense it could assert against the promisee arising out of the contract, including fraudulent inducement.

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

As in Jacob & Youngs v. Kent, where a breach is trivial and replacement would cause economic waste, damages are measured by diminution in value.

(OH Bar) Ohio Bar Exam Practice Test

(OH Bar) Ohio Bar Exam Practice Test

OH Bar Contracts and Sales 4