Contract Law and Remedies – LAW 421

Topics about the Contract Law and Remedies

The following business law study guide covers topics related to the contract law and remedies.

Assumption of risk is a defense to

​​ negligence

Explanation: The assumption of risk defense is commonly used in professional malpractice suits. For example, a heart surgeon that is being sued for malpractice after a patient dies could use this as a defense because he or she is preforming a highly risky medical operation.

Upon her return home from work Maria discovered that her lawn has been mowed and trimmed

 

Upon her return home from work Maria discovered that her lawn has been mowed and trimmed. An hour later, a male stranger comes to her door for payment for the lawn work. Maria refuses any payment because she had not hired him to do the work. In these circumstances

​​ Maria would not have to pay anything.

Explanation: In this scenario, there was never an implied contract between the two parties. A party cannot perform work for another party on a whim and expect payment. There must be an implied agreement, even if only a quick discussion, before a contract becomes legally binding.

When a buyer rejects nonconforming goods and purchases the appropriate goods from a different seller, this is an example of which of the following:

​​ Revoking Acceptance

Explanation: Revocation occurs when a buyer rejects goods that did not meet the standards of a contract. It varies by state common law, but most cases allow the buyer to obtain goods for a different seller and compel a refund on the original contract.

Which of the following is classified as an equitable remedy?

​​ Reformation

Explanation: Reformation is a subset of equitable remedies that occurs when a contract is rewritten in a way that is mutually acceptable for both parties. This can occur when the parties want to change similar areas of an existing contract.

The following is required for disclaiming a warranty:

​​ The word “merchantability” need not be included, if a warranty of merchantability is to be disclaimed

Explanation: Merchantability refers the the implied warranty that a certain product is fit for its normal everyday purposes. For example, you would expect an implied warranty that a new can of soup is suitable to be cooked and consumed. Therefore, this type of language is not required when disclaiming a warranty.

Which of the following is a defense to a claim of breach of contract?

​​ Insufficient operating capital

Explanation: Depending on the circumstances, it could be argued that insufficient working capital would make the contract impractical to perform. The defenses for this situation could include impracticability or frustration of purpose.

 
  • Student: Hanzel Wolff
  • Textbook: Law 421 Final Exam
  • Course: Business Law
 

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