Contracts Keyed to Kuneyback
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On March 1, a widget manufacturer and a retailer entered into a written contract whereby the manufacturer agreed to sell and the retailer agreed to buy 10,000 widgets at a price of $10,000. Due to slow sales, the manufacturer was operating its factory at only 50% capacity and had ample inventory on hand. Delivery and payment was set for May 1. On April 1, the retailer told the manufacturer that he had no need for the widgets after all and would not accept delivery of them on May 1. After notice to the retailer, the manufacturer sold the widgets to another buyer a week later for $11,000, the market price at the time. On May 1, the market price of the widgets dropped to $8,000. The manufacturer’s cost to produce and deliver the widgets was $7,000.
The manufacturer sued for breach of contract. At the time of the trial, the market price of widgets was $9,000. The court ruled in the manufacturer’s favor, and found that its sale of the widgets to the subsequent buyer was done in good faith and in a commercially reason able manner, and that there were no incidental damages or expenses saved as a result of the breach.
What amount of damages should the court award to the manufacturer?CorrectIncorrect
A contractor gave the low bid for some electrical repairs to a homeowner’s house. Based on this bid, the contractor and the homeowner entered into a contract stating that the contractor would perform the electrical repairs for $6,000. Before beginning work on the project, the contractor notified the homeowner that he would lose money on the job at that price, and would not proceed with the work unless the homeowner would agree to increase the price to $9,000.
The homeowner thereupon, without notifying the contractor, entered into a contract with an electrician to make the repairs for $7,500, which was the fair market cost of the work to be done. The electrician finished the house on schedule and then showed the homeowner that he (the electrician) had spent $8,500 on the job. The homeowner thereupon paid the electrician the full balance of their contract price plus an additional $1,000, so that the electrician would not lose money on the job.
In a contract action by the homeowner against the contractor, the homeowner will recover:CorrectIncorrect
A recent college graduate landed her dream job teaching kindergarten at the same elementary school she had attended as a child. The woman’s contract provided that she would be paid $40,000 for the school year, and that she could only be fired for just cause. Days before the woman was to begin teaching, the school’s principal fired the woman, without cause, so that she could hire her cousin for the job instead. The woman submitted her resume to an employment agency, but was so depressed over the loss of her dream job that she turned down a nearby school’s offer for a similar job paying a $30,000 salary, and instead spent the rest of the school year miserably unemployed.
If the woman successfully sues the school for breach of contract, how much can she recover?CorrectIncorrect
A woman entered into a written contract with her local wigmaker to pay $2,000 for a long silver wig, which was in fashion at the time. The wigmaker completed the wig by the date he had promised, but by that time silver wigs were out of style, and the woman refused to accept the wig or pay for it. The wigmaker spent $200 in making the wig, but because the wig was so out of fashion, the best he could do in good faith was to sell the wig to a Halloween store for $20.
If the wigmaker sues the woman, what is the most he can recover?CorrectIncorrect
An East Coast seller of knockoff French handbags and a discount department store chain buyer in the Midwest entered into a contract whereby the seller would sell to the department store 1,000 of a specific brand of its handbags for a price of $20 apiece, with the seller delivering the handbags “F.O.B. Chicago CSX Terminal.” The handbags were sent by rail to Chicago; midway through the trip, the freight car that was carrying the handbags was struck by lightning and caught fire, destroying the handbags.
If the seller brings suit against the buyer, which has refused to pay the contract price for the handbags, the seller will:CorrectIncorrect