PSI Contracts and Business Law 4

Question 1

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

Accepted Answer

A contract for the sale of real property

Answer

Contracts for the sale of real property are within the Statute of Frauds and must be evidenced by a writing signed by the party to be charged.

Question 2

What is 'anticipatory repudiation' in contract law?

Accepted Answer

Clearly communicating an intent not to perform before performance is due

Answer

Anticipatory repudiation occurs when a party clearly and unequivocally indicates before the due date that it will not perform its contractual obligations.

Question 3

Under agency law, which of the following best describes 'apparent authority'?

Accepted Answer

Authority a third party reasonably believes the agent has based on the principal's conduct

Answer

Apparent authority arises when the principal's words or conduct lead a third party to reasonably believe the agent has authority to act on the principal's behalf.

Question 4

A homeowner hires a plumber who negligently floods the house. Which doctrine would make the hiring company liable if the plumber is its employee, but not if the plumber is an independent contractor?

Accepted Answer

Respondeat superior

Answer

Respondeat superior makes employers vicariously liable for torts committed by employees within the scope of their employment, but generally does not apply to independent contractors.

Question 5

What is the primary remedy for breach of contract?

Accepted Answer

Compensatory damages to put the non-breaching party in the position they would have been in had the contract been performed

Answer

The primary remedy for breach of contract is compensatory damages, designed to give the non-breaching party the benefit of the bargain they expected.

PSI - Exams Practice Test

PSI - Exams Practice Test

PSI Contracts and Business Law 4