gould’s “mcq’s in the morning” multiple choice program · no obligation to receive any...

GOULD’S “MCQ’s in the MORNING”Multiple Choice Program:

CONTRACT LAW QUESTIONS, 81-90

© 2012 GOULD’S, ALL RIGHTS RESERVED.


81. Homeowner was so overjoyed with the wonderful job Landscaper was performing for Homeowner under their contract, that Homeowner went out one day and pushed a wheelbarrow for four hours, in appreciation of the work that Landscaper was performing. After Homeowner had finished with the wheelbarrow, Landscaper was enamored at the work of Homeowner, and promised Homeowner tickets to an upcoming baseball game, and Homeowner accepted the offer.

If Landscaper fails to give the baseball tickets to Homeowner, and Homeowner sues for breach of contract, what is the likely result?

A. Landscaper wins, because he completed his landscaping duties wonderfully. B. Landscaper loses, because he anticipatorily repudiated. C. Homeowner wins, because this situation presents a bilateral contract of mutual promises to perform. D. Homeowner’s loses, because his work was not sufficient consideration for Landscaper’s promise to give Homeowner the baseball tickets.


81. CORRECT ANSWER: D.

A promise to make a gift is a gratuitous promise, and lacks consideration. Giftsdo not constitute valuable consideration because there is no bargained forexchange, and the promisor gets nothing in return for their promise to act. In thissituation, Homeowner pushed a wheelbarrow out of appreciation for the workLandowner had already performed, and therefore Homeowner’s work was a gift,lacking consideration. Further, a promise to make a gift is a gratuitous promise,and lacks consideration. It appears as though Landscaper promised to make givetickets to Homeowner in consideration of the work that Homeowner hadperformed. However, consideration must relate to future performance, not priorperformance. In effect, Landscaper made a promise to give a gift to Homeowner,and Landscaper later reneged on his promise, by failing to give the tickets toHomeowner. Therefore, Homeowner’s will lose, because his work was notsufficient consideration for Landscaper’s promise to give Homeowner thebaseball tickets.


82. Seller owns some property, and he wanted to sell some of the property to Buyer. The written contract stated, “Seller agrees to sell and Buyer agrees to buy, part of the property owned by Seller, such that Buyer will be able to farm enough produce to meet his needs at some farmer markets in the area.”

If Buyer anticipatorily repudiates, and Seller seeks specific performance, what is the likely result?

A.Specific performance granted, because Buyer anticipatorily repudiated.B.Specific performance granted, due to good faith and fair dealing.C. Specific performance denied, because the agreement is ambiguous.D. Specific performance denied, because specific performance is not allowed except for situations involving unique goods.


82. CORRECT ANSWER: C.

Specific performance is an equitable remedy where the courtcompels a defendant to perform, that is available for real propertyand for unique goods. It is not available for service contracts, due tothe prohibition against involuntary servitude. In order to enforce theterms of an agreement under specific performance, the terms mustbe definite and certain, so that the court can specify the order forspecific performance. Where the terms are ambiguous, the courtcannot specifically fashion a court order. Here, the terms of theagreement do not adequately delineate the property boundaries, andtherefore the court will not be able to fashion an equitable remedy ofspecific performance.


83. Buyer sent in an order form for prompt shipment of 60 red widgets, to Seller. Seller promptly shipped 60 maroon widgets to Buyer, with a note stating that the shipment was made as an accommodation.

If Buyer sues Seller for breach of contract, what is the likely result?

A. Buyer wins, because Seller shipped non-conforming goods. B. Buyer wins, pursuant to the perfect tender rule. C. Seller wins, because he sent a note of accommodation. D. Seller wins, because he shipped conforming goods.


83. CORRECT ANSWER: C.

Whenever a seller ships goods after receiving an order / offer from abuyer, then the seller has accepted the offer, and when the buyerreceives the goods, the buyer may operate pursuant to the perfecttender rule, and either, accept the goods, reject the goods, or acceptsome and reject some. However, here Seller did not accept theoffer, because Seller sent a note of accommodation, along with non-conforming goods. Therefore, when Buyer received the goods, hewas free to accept the goods, but at the time of his receipt nocontract was in place because Seller had sent a note ofaccommodation.


84. Buyer and Seller formulated an agreement, whereby Buyer would “have no obligation to receive any specified quantity of blueberries, but only his daily requirements,” and Seller agreed to “supply such requirements at a fixed price per quart of blueberries.” The agreement was to last for ten months, and for six months, Seller delivered twenty quarts of blueberries daily to Buyer. Seller then experienced an increase in his operating costs, and decided to stop delivering blueberries to Buyer, and notified Buyer of his decision.

If Buyer sues Seller for breach of contract, what is the likely result?

A.Buyer wins, because Seller anticipatorily repudiated.B.Seller wins, because the contract lacked consideration as an illusory promise.C.Seller wins, because requirements contracts lack mutuality of obligation.D.Buyer wins, because requirements contracts do not need consideration in order to be valid.


84. CORRECT ANSWER: A.

Requirements and outputs contracts sometimes appear to haveillusory promises. However, the duty of good faith and fairdealing imputed in these UCC contracts will often cure anyotherwise illusory promises. In this situation, Seller and Buyerhad a valid requirements contract, and valid consideration existed.Therefore, when Seller refused to continue his deliveries, heanticipatorily repudiated.


85. Buyer and Seller formulated an agreement, whereby Buyer would “have no obligation to receive any specified quantity of blueberries, but only his daily requirements,” and Seller agreed to “supply such requirements at a fixed price per quart of blueberries.” The agreement was to last for ten months, and for six months Seller delivered twenty quarts of blueberries daily to Buyer. Buyer then opened another shop, and needed thirty-five quarts of blueberries a day for month seven for both shops.

Can Seller continue to deliver only twenty quarts of blueberries per day?

A. Yes, because it might have been financially impracticable to deliver thirty-five quarts. B. Yes, because the normal requirements of the original agreement were twenty quarts. C. No, because the agreement provided that Seller would supply Buyer’s daily needs of blueberries. D. No, because Seller must operate pursuant to good faith and fair dealing.


85. CORRECT ANSWER: B.

An outputs contract is where a buyer agrees to purchase all that aseller produces, and a requirements contract is where a seller agreesto supply all of the materials that a buyer requires. Outputs andrequirements contracts have an implied covenant of good faith, thatproduction / output or demand / requirements be proportionate toprevious amounts or estimates, and which promise serves asconsideration. Bad faith is shown where orders cease, or amountsare disproportionate. Here, Buyer increased his normal daily orderof blueberries from 20 quarts to 35 quarts, which is a drasticincrease, indicating bad faith. Therefore, while Seller still has todeliver 20 quarts per day, he will not be required to deliver 35quarts per day.


86. Buyer ordered and pre-paid for twenty Standard Blackboards, and Seller promptly delivered twenty Exceptional Blackboards.

May Buyer properly inspect the blackboards upon delivery?

A.Yes.B.No, because he forfeited his right to inspect through pre-payment of goods, as dictated under the Uniform Commercial Code.C.No, because he waived his right to inspect under the perfect tender rule.D.No, unless the contract has a stipulation that he may inspect the goods.



Under the Uniform Commercial Code, a pre-paying buyerdoes not waive, or otherwise forfeit their right to inspect,and reject, goods. Therefore, Buyer in this instance willbe able to seasonably inspect the goods, and if non-conforming, reject the goods, and advance payment infull for the goods will not impair his right to inspect andreject the goods, or any of his other remedies.


87. Buyer ordered and pre-paid for twenty Standard Blackboards, and Seller promptly delivered twenty Exceptional Blackboards. After Buyer inspected the shipment, Buyer returned the shipment to Shipper, and demanded his money be returned to him. Seller refused, stating that the goods were conforming in number shipped, and in quality.

If Buyer attempts to re-sell the Exceptional Blackboards, may he do so?

A.Yes, in a private sale, after notifying Seller of his intention to re-sell the Exceptional Blackboards.B.No, because there was no breach of contract.C.Yes, but only in a public sale.D.No, because Seller promptly delivered twenty blackboards.



Where a buyer has pre-paid for goods, the buyer may re-sell rejected goods ata public sale or at a private sale. If the goods are re-sold at a private sale, thepurchaser must give notice to the seller of buyer’s intent to re-sell the goods.Here, Buyer could rightfully reject the goods as non-conforming, because heordered Standard Blackboards, and Seller shipped Exceptional Blackboards,which were not exactly what Buyer ordered. Since Buyer could rightfullyreject the goods, he could also re-sell the goods in a private sale, if he firstgave notice of the re-sale to Seller.


88. Buyer ordered and pre-paid for twenty Standard Blackboards, and Seller promptly delivered twenty Exceptional Blackboards. After Buyer inspected the shipment, Buyer returned the shipment to Shipper, and demanded his money be returned to him. Seller refused, stating that the goods were conforming in number shipped, and in quality.

If Buyer brings an action in breach of contract against Seller, and prevails, what is his likely remedy?

A.He will receive no remedy, because he pre-paid for the goods.B.He will receive the price paid for the goods plus the difference between the value of conforming blackboards and the value of the blackboards delivered.C.He will receive specific performance.D.He will receive the difference in value between the conforming blackboards and the non-conforming blackboards.



Pursuant to the doctrine of cover damages, a buyer, upon breachof contract by a seller, may recover ‘cover’ damages, whichencompass the difference between the contract price for thegoods and the amount that the buyer must spend to purchaseconforming goods from another seller. Therefore, Buyer willreceive will receive the price paid for the goods plus thedifference between the value of conforming blackboards andthe value of the blackboards delivered.


89. Rescuer unilaterally acted without prompting and risked his life to save Maurice from falling over a cliff. If Rescuer had not acted quickly, and grabbed Maurice’s hand and pulled him back from a precipice, Maurice would have fallen and died. Thereafter, to give due credit for the work performed by Rescuer, Maurice promised Rescuer that Maurice would give Rescuer a new sports car.

If Maurice later refuses to give Rescuer a new sports car, and Rescuer sues for breach of contract, what is the likely result?

A.Rescuer wins, because Maurice anticipatorily repudiated.B.Rescuer loses, because Maurice did not ask Rescuer for assistance.C.Rescuer loses, because there is no duty to aid or rescue another in peril.D.Rescuer loses, because even though Rescuer acted with good faith and fair dealing, Maurice’s duty to perform was excused through impossibility of performance due to imminent death of a party to a contract.



This situation lacks proper consideration, because Rescueracted on his own, without first engaging in a bargained forexchange of legal detriment with Maurice. Therefore,Maurice’s promise of a new sports car, is only a gratuitouspromise, and does not formulate the requisite legaldetriment needed for consideration.


90. Buyer and Seller formulated an agreement, whereby Buyer would “have no obligation to receive any specified quantity of blueberries, but only his daily requirements,” and Seller agreed to “supply such requirements at a fixed price per quart of blueberries.” The agreement was to last for ten months, and for six months, Seller delivered twenty quarts of blueberries daily to Buyer. Buyer sold his business, and New Buyer was assigned rights and delegated duties under all contracts with Buyer, with appropriate notice and novation.

If New Buyer refuses all deliveries from Seller, and Seller sues for breach of contracts, what is the likely result?

A. Seller will prevail, because there was proper assignment, delegation and novation.B. Seller will prevail, because his right to receive return performance had matured.C. New Buyer will prevail, because he was only an incidental beneficiary under the original Buyer-Seller contract.D. New Buyer will prevail, because a buyer under a requirements contract may properly eliminate their daily requirements as needed.



In this situation, Buyer properly assigned his rights and delegatedhis duties to New Buyer, attended by a proper novation and noticeto Seller. Therefore, New Buyer was obligated to meet the sameperformance standards under the original Seller-Buyer contract, aswould Buyer. Inasmuch as New Buyer refused future shipmentsfrom Seller, New Buyer anticipatorily repudiated.


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