Business Law: Multiple Choice Questions, True/False Questions and Essay Question

This document contains solved multiple choice questions, true/false questions and an essay question related to Business Law. The essay question discusses the breach of contract between RepairCo and GreenCar and the potential compensation for damages incurred.

BUSINESS LAW
STUDENT ID:
[Pick the date]

Multiple Choice Questions
Q1 – A
Q2 – D
Q3 – E
Q4 – B
Q5- C
Q6 – E
Q7- A
Q8- A
Q9- E
Q10- D
Q11- B
Q12-D
Q13- D
Q14- B
Q15 –B
Q16- B
Q17- D
Q18- C
Q19- C
Q20 – A
True/False Questions
Q1- False as Vern can revoke the offer anytime provided Lee has not accepted the same.

Q2 – False as Doug is intoxicated and hence lacks capacity to enter into legally enforceable
contracts.
Q3- False as usury tends to happen when the loans are lent at excessively high rate.
Q4- False as the statement by Adam is an opinion and not factual. This cannot be considered
as misrepresentation.
Q5- True
Q6 – True
Q7 – False as such a contract need not be in writing for it to be enforceable.
Q8 – False as it is not imperative to give a notice but merely is considered a good practice.
Q9- True
Q10 – True
Q11- True
Q12- True
Q13- True
Q14- False as liquidated damages are amounts which are certain before the event even
happens and are pre-defined.
Q15- True
Q16- True
Q17 – False as the contracts with minor children are voidable owing to lack of capacity and
hence parents are not responsible.
Q18 – True
Q19 – False since the chances of increase in share price provides a valid consideration for
purchase considering that the share movement is uncertain at the time of contract enactment.
Q20 – False as the contract can be rescinded only by the party that is adversely impacted by
the mistake.

Essay Question
The key issue is to highlight if the refusal on part of GreenCar to pay anything would
lead to contractual breach or not. Further, the basis for payment for RepairCo needs to be
highlighted along with potential defence for GreenCar.
The contract law is the applicable law here. A key aspect with regards to contract law
is that failure on the part of any party to comply with the terms of the contract would lead to
breach of contract and thereby relive the innocent party from fulfilment of contractual
obligations. Also, the innocent party in this case could also demand compensation with
regards to the damages incurred. However, with regards to determining the quantum of these,
the court tends to rely on the principle of equity whereby the decision needs to be fair to both
the parties which is especially the case when part performance of contract is carried out.
Based on the given facts it is apparent that there was an enforceable contract between
RepairCo and GreenCar. As per the contract, RepairCo had to repair the 10 Greencars by
April 21 with a consideration of $ 1000 per car. However, there was breach of contract by
RepairCo considering that they could only repair 6 cars out of 10 by the agreed date. The date
was of high significance for GreenCar and hence amounts to breach of contractual term. This
implies that the innocent party Greencar has no obligation to make the payment.
However, the Court would decide on the matter taking into consideration the principle
of equity whereby the part payment of $ 6,000 for the 6 cars that were repaired in a timely
manner would be adjusted against the damages that are claimed by the innocent
party(Greencar) with regards to breach of contract. Also, it is noteworthy that the labor
problem at RepairCo is not a valid reason for delay as the company could have hired outside
labor to finish the job on time.