Question Details

BUSN 420 Week 4 Quiz

1.	Question :	(TCO 4) Jonas enters into an oral contract with Chelsea to lease his house to her for $100,000. Chelsea pays him $100,000 and moves in. A month later, Jonas learns that his state requires contracts for the lease of goods with payments of $1,000 or more to be writing. Which of the following options does either party have?

 	Student Answer:		  Jonas can evict Chelsea as the contract does not comply with the Statute of Frauds and is hence void.
 		 	  The contract cannot be rescinded by either party as it has already been executed.
 			  Chelsea can rescind the contract on the grounds of noncompliance with the Statute of Frauds.
 			  Jonas can rescind the contract on the grounds of noncompliance with the Statute of Frauds.
 	



Question 2.	Question :	(TCO 4) Cody and Debora enter into an oral contract under which Cody agrees to work on Debora's ranch for not less than ten days. This contract is enforceable by _____.

 	Student Answer:		  Cody only

 			  Debora only

 		 	  either party

 			  neither party

 		



Question 3.	Question :	(TCO 4) Sid induces Ty to enter into a contract for the sale of a warehouse about which Sid fraudulently misrepresents a number of material facts. Sid also tells Ty that his commission is 6 percent, but their signed, written contract states 12 percent. The parol evidence rule governs _____

 	Student Answer:		  contracts that are induced by fraud.

 			  contracts that must be in writing to be enforceable.

 		 	  the admissibility in court of oral evidence.

 			  the reformation of oral and written statements into one contract.

 		



Question 4.	Question :	(TCO 4) In selling paving stones to Yard & Garden Supply, Trey tells Yard & Garden's buying representative that the stones are soft as carpet. This is _____.

 	Student Answer:		  unconscionable

 			  fraud

 			  mistake

 		 	  puffery

 	



Question 5.	Question :	(TCO 4) Pete, the owner of Quality Orchards, contracts to sell fruit to Ripe Produce, Inc. When Pete refuses to perform, Ripe Produce files a suit to enforce the contract. To defend successfully on the ground of unconscionability, Pete must show that enforcement of the contract would be _____

 	Student Answer:		  economically meaningless.

 			  legally worthless.

 		 	  manifestly unfair or oppressive.

 			  undeniably valuable.

 		



Question 6.	Question :	(TCO 4) Blue Rorschach Inc. has an immediate requirement for 80 laptops and contracts with Zenzo Electronics 80 Dell laptops at $550 each. But Zenzo Electronics breaches the contract and fails to deliver the laptops. Blue Rorschach then immediately contracts Dell Computers, buys 100 laptops at $600 per laptop, and then sues Zenzo Electronics for the breach of contract.
What is the amount of legal damages that Blue Rorschach can recover from Zenzo because of the breach of contract?

 	Student Answer:		  $4,400

 			  $5,000

 		 	  $4,000

 			  $44,000

 		



Question 7.	Question :	(TCO 4) Which of the following is true of an assignment of a right?

 	Student Answer:		  Unconditional assignment of a contract right retains all the assignor- rights.
 			  The obligor is entitled to performance from the assignor.

 		 	  The assignor loses the right to sue the obligor directly for nonperformance in an unconditional assignment.
 			  The obligor cannot raise personal defenses against the assignee.

 		



Question 8.	Question :	(TCO 4) Mikayla enters into a contract with Logan to provide surface material for Mikayla's tennis courts by April 1 for a tournament to begin May 1. The contract specifies an amount to be paid if the contract is breached. This is a liquidated damages clause if the amount is _____

 	Student Answer:		  an excessive estimate of the loss on a breach.

 		 	  a reasonable estimate of the loss on a breach.

 			  designed to penalize the breaching party.

 			  intended to quickly provide cash to the non-breaching party.

 	


Question 9.	Question :	(TCO 4) Klint Microsystems, a microprocessor manufacturer, was contracted by Zeitar Studios to manufacture specially designed microchips to be used in an audio engineering process. Zeitar was to pay Klint $300,000 as per the contract. Klint decided to redesign their existing microchips and make them suitable for Zeitar. While the finished microchips were being shipped via a carrier, Klint was informed of Zeitar- insolvency. Klint cancelled the shipment before it was delivered. Klint then resold the chips to another Studio where they had to settle for $150,000, as the chips were now only suitable for specific audio engineering processes.
What right to remedy did Klint exercise when they stopped shipment to Zeitar?

 	Student Answer:		  Right to dispose of goods

 		 	  Right to stop goods in transit

 		 	  Right to obtain specific performance

 			  Right to recover purchase rent

 		



Question 10.	Question :	(TCO 4) Jill contracts to sell Ken her MP3 player for $50. This contract will be fully discharged when Jill and Ken _____

 	Student Answer:		  agree to sign a bill of sale.

 		 	  exchange the player for the $50.

 			  sign a receipt.

 			  shake hands and go their separate ways.