Business Law MCQs, True/False, and Essay Questions

This document contains multiple choice questions, true/false questions, and essay questions on Business Law. It covers topics such as the applicability of UCC and common law, consideration in contracts, and more. Use this study material to prepare for your Business Law exams.

BUSINESS LAW
STUDENT ID:
[Pick the date]

Multiple Choice Questions (MCQ)
Q1 – A
Q2 – B
Q3 – B
Q4- A
Q5 – D
Q6 – A
Q7 – D
Q8 – A
Q9 – C
Q10- A
Q11- A
Q12- A
Q13- B
Q14- B
Q15 – C
Q16- E
Q17- D
Q18 – C
Q 19 – E
Q 20 – B
True/False
Q1- True

Q2 – False since terming as merchant is dependent on repeated nature of transaction and
underlying expertise.
Q3- True
Q4- False since the written contract supercedes the oral contracts and prior agreements.
Q5- True
Q6- False since it is possible that both have an insurable interest for a given good.
Q7- False since Nora can recover the car from OK only since Pete did not show about the car
actually being owned by Nora.
Q8- True
Q9- True
Q10- False since there has to be a reason which was absent in the earlier instalments but
present in the rejected instalment.
Q11- False since it is possible that the given good is found non-merchantable for the purpose
stated by the customer.
Q12- True
Q13- True
Q14- True
Q15 – False as Titlis can recover damages from McGraw as Rio was a buyer in good faith.
Q16- True
Q17- False as this can possibly arise from the description of any sample also
Q18- False as offer may be revoked before acceptance without any contract formation or
legal implications.
Q19- False as this test is used to determine if the contract is covered or not.
Q20- True

Essay Question
Question 1
It is imperative to note that the purview of UCC (Universal Commercial Code) and common
law tend to differ. The UCC is only applicable for contracts where there are goods involves
and not services. Also, it is imperative that the sale of the goods should be by a merchant. A
merchant is defined as any entity that has expertise or knowledge with regards to the
underlying good that is being sold. Also, it is imperative that the transactions ought to be
repetitive in nature and not one time. The purview of common law is rather wide as it extends
to a host of transactions where contractual obligations tend to arise.
The organ repair contract would be covered under the common law and not under the UCC.
This is because it is a service and these tend to lie outside the purview of UCC where only
goods are to be included. However, the sale of the new organ would be covered under UCC
since the seller is a merchant which has expertise with regards to organs. Also, the seller is
engaged in a business (involving repeat transactions) related to sale of musical organs. As a
result, it would be appropriate to conclude that both common law and UCC are applicable in
the given transaction. Thus, the conduct of the organ instrument sale would be governed by
the applicable UCC sections unlike service contract which is based judicial precedents.
Question 2
Issue
The issue relates to whether the additional payment of $ 60,000 needs to be paid by
conservatory.
Rule
For any promise to be enforceable, it is imperative that consideration ought to be present. As
per restatement of contracts s. 73, a pre-existing duty which is owed under a contract does not
form a valid consideration to enact another contract. This has been highlighted in Alaska
Packers’Ass’n v Domenico 117 F. 99. A noticeable exception to the above clause is presence
of unanticipated changed circumstance. In such cases, the courts tend to ensure that the
modification made in the contract ought to be fair and equitable.
Application and Conclusion

In the given scenario, it is apparent that the existing contract between the observatory and the
supplier was enacted with the consideration amount of $225,000. The supplier faced financial
difficulties and thereby demanded $60,000 incrementally without adding any additional
service or product in the existing contract. Clearly, there is no consideration present for the
conservatory to pay the additional sum and modifying the pre-existing contract. Even if the
underlying circumstance of the supplier is considered, then also it is evident that the resultant
change in the contract is not fair and equitable as the conservatory has ended losing
additional money without any gains. Hence, only the original contract would stand which
implies that no implication arises for conservatory to pay additional $ 60,000.