Contracts (Foundational) Question Pack - Questions

1. A customer hired a contractor to renovate a kitchen, promising to pay $10,000 upon completion. The contractor began work but later discovered that prices for building materials had unexpectedly doubled, making the job unprofitable. The contractor demanded more money to finish, and the customer agreed in writing to pay an additional $3,000.

Is the promise to pay more enforceable?

  1. No, because there was no consideration for the modification.
  2. Yes, because parties may renegotiate contracts at any time.
  3. No, because the original contract was voidable due to impracticability.
  4. Yes, because the modification was made in good faith and fair dealing.

2. A seller offered to sell a car to a buyer for $12,000, stating, "Let me know by Friday." On Thursday, the seller sold the car to someone else and called the buyer to revoke the offer. The buyer sued.

How should the court rule?

  1. For the buyer, because the offer was irrevocable.
  2. For the seller, because the offer had not been accepted.
  3. For the buyer, because the seller breached a unilateral contract.
  4. For the seller, because selling to a third party is an implied revocation.

3. A teenager entered into a written contract to buy a motorcycle from a dealership. After riding it for two months, he crashed and sought to rescind the contract.

What is the dealership's best defense?

  1. The contract is enforceable because it was in writing.
  2. The teenager is liable for damages due to partial performance.
  3. The teenager ratified the contract by using the motorcycle.
  4. The dealership offered a fair market price.

4. Two businesses negotiated the sale of industrial equipment. The buyer sent a purchase order with terms on warranty and delivery. The seller replied with an invoice containing differing warranty provisions.

Under UCC Article 2, what is the legal effect?

  1. The invoice creates a counteroffer.
  2. The differing terms are automatically rejected.
  3. The contract is formed, and the differing terms may be incorporated if not objected to.
  4. No contract is formed without express agreement on all terms.

5. A homeowner contracted with a painter to paint the exterior by June 15. The painter began work but stopped halfway due to illness. The homeowner hired another painter and sued for breach.

What is the painter’s strongest defense?

  1. The homeowner failed to mitigate damages.
  2. The painter substantially performed.
  3. The contract was discharged by impossibility.
  4. The second painter caused the breach.

6. A manufacturer agreed to supply parts to a retailer every month for a year. After two months, the manufacturer stopped deliveries, claiming market instability. The retailer sued.

What is the likely result?

  1. The manufacturer is excused due to frustration of purpose.
  2. The manufacturer materially breached the contract.
  3. The retailer failed to protect against risk by contract terms.
  4. The contract was void due to market unpredictability.

7. A buyer refused delivery of goods, claiming nonconformity. The seller immediately notified intent to cure and offered replacement goods within contract time.

Under the UCC, must the buyer accept?

  1. No, because breach already occurred.
  2. Yes, because cure was offered within contract time.
  3. No, unless the replacement goods are perfect.
  4. Yes, if the buyer waived objection by failing to inspect.

8. A homeowner agreed to sell her house to a buyer. After signing, she received a higher offer and tried to cancel. The buyer sued for specific performance.

What is the best basis for granting relief?

  1. Damages are insufficient because each home is unique.
  2. Buyer is entitled to expectation damages only.
  3. Seller acted in bad faith, triggering punitive damages.
  4. Specific performance is not available for real property contracts.

9. An injured cyclist hired a lawyer on contingency. After settlement was reached, the cyclist refused to pay fees, claiming no written contract existed. The lawyer sued.

What is the most likely legal theory?

  1. Parol evidence supports the contract terms.
  2. Restitution allows recovery for benefit conferred.
  3. The Statute of Frauds bars enforcement.
  4. The agreement failed for lack of consideration.

10. A furniture dealer mistakenly priced a $5,000 sofa online for $500. A customer ordered two. The dealer claimed pricing error and refused delivery.

What is the customer’s strongest argument?

  1. A valid contract was formed through offer and acceptance.
  2. The dealer is estopped from denying the offer.
  3. The error constitutes fraud.
  4. The price is enforceable under UCC gap-filling provisions.

11. A buyer entered into a written contract to purchase farm equipment from a dealer. Before delivery, the buyer learned the dealer had misrepresented the equipment’s age. The buyer refused delivery and was sued.

What is the buyer’s best defense?

  1. Lack of consideration.
  2. Fraud in the inducement.
  3. Illegality of the contract.
  4. Unilateral mistake.

12. Two business owners orally agreed to sell one’s commercial building for $1 million. After verbal agreement, one refused to perform. The other sued.

What is the likely result?

  1. Judgment for the plaintiff because of detrimental reliance.
  2. Judgment for the plaintiff due to partial performance.
  3. Judgment for the defendant because of the Statute of Frauds.
  4. Judgment for the plaintiff because real property contracts don’t require writing.

13. A contractor promised to build a deck for a homeowner but failed to complete the work. The homeowner hired someone else and sued for damages. The contract contained no clause on remedies.

What damages may the homeowner recover?

  1. Punitive damages for breach of trust.
  2. Nominal damages only.
  3. Cost of substitute performance.
  4. Damages limited to profits lost.

14. An inventor offered a $5,000 prize to anyone who could deliver a drone prototype within two weeks. An engineer learned of the offer and immediately began designing a model. Before delivery, the inventor withdrew the offer.

Can the engineer enforce the promise?

  1. Yes, because the offer was accepted upon beginning performance.
  2. No, because the inventor never signed a contract.
  3. Yes, because it was a bilateral contract.
  4. No, because unilateral contracts may be revoked at any time.

15. A seller delivered goods to a buyer, but the contract required payment on delivery. The buyer refused to pay and claimed the goods were defective. The seller sued for breach.

What principle most favors the seller?

  1. Perfect tender rule.
  2. Substantial performance.
  3. Concurrent conditions.
  4. Parol evidence rule.

16. A landscaper and homeowner agreed orally to monthly maintenance. After one year, the homeowner refused further payments, saying there was no written agreement.

Which legal theory best supports the landscaper?

  1. Breach of contract under UCC Article 2.
  2. Quasi-contract recovery under restitution.
  3. Specific performance.
  4. Promissory estoppel.

17. A buyer contracted to buy 500 units of a product, with delivery and payment split over five months. The seller delivered 100 units the first month; the buyer paid. Before the next shipment, the buyer demanded a full warranty not included in the original deal.

What should the seller do?

  1. Ignore the demand and continue delivery.
  2. Treat the demand as anticipatory repudiation.
  3. Seek modification and suspend delivery.
  4. Cancel the contract due to material breach.

18. A homeowner hired a plumber to fix a pipe for $300. After completion, the homeowner promised to pay $500 instead, praising the quality. Later, he paid only $300. The plumber sued for the rest.

What is the likely result?

  1. Judgment for the plumber, because the second promise modified the agreement.
  2. Judgment for the homeowner, because the additional promise lacked consideration.
  3. Judgment for the plumber, because the work was exceptionally valuable.
  4. Judgment for the homeowner, because services are presumed gifts.

19. A woman entered into a life insurance contract, naming her nephew as beneficiary. Years later, she attempted to change the beneficiary, but the policy restricted changes without the nephew’s consent.

Is the change valid?

  1. Yes, because the contract was revocable.
  2. No, because the nephew is a vested third-party beneficiary.
  3. Yes, because the nephew did not pay consideration.
  4. No, because the woman breached a condition.

20. A contractor agreed to install windows by July 1. On June 15, he called the homeowner and said he couldn’t finish until August. The homeowner immediately hired someone else. The contractor sued.

What is the best legal defense for the homeowner?

  1. Failure of consideration.
  2. Breach by non-performance.
  3. Anticipatory repudiation.
  4. Impossibility.

21. A supplier contracted to deliver 10,000 widgets to a manufacturer for $1 each. After delivering 5,000 widgets, the supplier claimed the market had changed and refused to deliver the remainder. The manufacturer purchased replacements at $1.40 per unit and sued.

What damages can the manufacturer recover?

  1. $1.40 per unit for all 10,000 widgets.
  2. $0.40 per unit for the 5,000 widgets not delivered.
  3. $0.40 per unit for the full contract amount.
  4. $1 per unit, because that was the contract price.

22. A bakery agreed to purchase flour from a mill every week for six months. After two deliveries, the bakery refused further shipments, citing a new supplier offering lower prices. The mill sued.

What legal principle best supports the mill?

  1. Duty of good faith in ongoing contracts.
  2. Statute of Frauds.
  3. Specific performance.
  4. Parol evidence rule.

23. An aunt promised her niece $10,000 as a graduation gift. The niece used the promise to book a vacation, relying on the funds. The aunt refused to pay.

What legal theory most supports the niece?

  1. Misrepresentation.
  2. Promissory estoppel.
  3. Breach of warranty.
  4. Restitution.

24. A buyer contracted to purchase a vintage car after inspecting it and agreeing to a price. Two days later, the seller claimed he had changed his mind and refused to go through with the sale. The buyer sued.

What remedy is most appropriate?

  1. Expectation damages based on market value.
  2. Liquidated damages if specified.
  3. Specific performance due to uniqueness of the item.
  4. Restitution for any deposits paid.

25. A contractor was hired to build a patio for $8,000. He completed the work but used slightly different tiles than specified, which looked nearly identical. The homeowner refused to pay.

What is the appropriate result?

  1. The contractor materially breached.
  2. The contractor substantially performed.
  3. The contract was void for indefiniteness.
  4. The contractor waived the tile requirement.

26. A business assigned its rights under a service contract to a related company. The original service provider refused to work with the assignee, claiming lack of consent.

Is the assignment valid?

  1. Yes, because service contracts are freely assignable.
  2. No, if the assignment materially changes the duty of the obligor.
  3. Yes, because consideration wasn’t required for assignment.
  4. No, because delegation requires written notice.

27. A retailer received a shipment of 500 shirts from a manufacturer. Upon inspection, 200 were the wrong size. The retailer immediately notified the manufacturer and returned the shirts.

Under the UCC, what is the retailer’s most justified action?

  1. Cancel the entire contract.
  2. Keep the nonconforming shirts and withhold payment.
  3. Accept conforming goods and reject the rest.
  4. Demand replacement and sue for damages.

28. A purchaser of a used boat signed a contract containing the clause: “Seller makes no warranties of any kind, express or implied.” After purchase, the engine failed.

What is the purchaser’s strongest argument?

  1. The disclaimer is unenforceable for used goods.
  2. The warranty of merchantability applies.
  3. The disclaimer was not conspicuous.
  4. The seller acted in bad faith.

29. A singer agreed to perform at an event on July 1. On June 25, the organizer learned the singer had double-booked and was planning to attend another engagement. The organizer sued.

What is the best argument?

  1. Breach by anticipatory repudiation.
  2. Breach by failure of consideration.
  3. Frustration of purpose.
  4. Substantial performance.

30. A contractor entered a settlement agreement after a dispute with a client. The agreement stated the contractor would perform minor repairs “in full satisfaction of all claims.”

What legal doctrine applies?

  1. Novation.
  2. Accord and satisfaction.
  3. Anticipatory repudiation.
  4. Parol evidence.

31. A retail store signed a contract to receive 200 units of seasonal merchandise. The seller delivered only 150 units and explained that supply issues prevented full delivery. The store had time to resell the inventory but refused the shipment.

What remedy is the store most likely entitled to?

  1. Specific performance for the remaining 50 units.
  2. Expectation damages for profits lost on the missing units.
  3. Rejection of all goods for partial breach.
  4. Restitution for advance payments on the contract.

32. A painter subcontracted the trim work to another professional, but the original homeowner objected. The contract between the homeowner and painter was silent about delegation.

Can the painter delegate the work?

  1. Yes, because contracts are freely delegable unless they involve special skill.
  2. No, because delegation is never allowed without consent.
  3. Yes, because the contract was silent and trim painting is routine.
  4. No, because homeowners may refuse all third-party performance.

33. A commercial tenant terminated a five-year lease after two years, citing declining revenues. The landlord left the unit vacant for nine months and then sued for full remaining rent.

What is the tenant’s strongest defense?

  1. Anticipatory repudiation.
  2. Mitigation of damages.
  3. Frustration of purpose.
  4. Unilateral mistake.

34. A seller entered into a written agreement to sell coffee beans, stating, “No express or implied warranties are made.” After delivery, the buyer discovered mold.

What is the buyer’s best claim?

  1. Breach of express warranty.
  2. Breach of the implied warranty of merchantability.
  3. Unconscionability of contract terms.
  4. Invalid disclaimer due to lack of conspicuousness.

35. A bakery entered a contract to purchase 1,000 pounds of flour from a supplier. The contract stated “delivery to occur on June 1.” The supplier shipped on June 5 due to mechanical delays.

What are the bakery’s options?

  1. Reject the entire shipment for untimeliness.
  2. Accept delivery and sue for incidental damages.
  3. Reject only if time was expressly stated as “of the essence.”
  4. Accept and seek restitution.

36. A tech consultant signed a fixed-fee contract with a client. Halfway through, the client requested additional training services at no extra charge. The consultant completed the extra work but later demanded compensation.

What is the consultant’s best argument?

  1. Unjust enrichment.
  2. Modification of the original agreement.
  3. Promissory estoppel.
  4. Recission and reformation.

37. A manufacturer contracted with a distributor to deliver custom equipment. The contract specified that any disputes would be resolved via arbitration. The distributor later sued in court over delayed delivery.

What is the manufacturer’s strongest defense?

  1. Statute of Frauds.
  2. Parol evidence rule.
  3. Accord and satisfaction.
  4. Enforceability of arbitration clause.

38. An engineer promised to consult on a project “as long as needed.” After six months, she quit without notice. The client sued for breach.

How should the court interpret the agreement?

  1. As an enforceable perpetual contract.
  2. As an agreement terminable at will.
  3. As requiring notice before withdrawal.
  4. As a fixed-term agreement.

39. An artist agreed to create a mural for a company, with payment due “upon satisfactory completion.” After finishing, the company refused payment, saying it wasn't satisfied.

What is the artist's best legal claim?

  1. Lack of consideration.
  2. Breach due to unreasonable refusal to accept.
  3. Failure of condition precedent.
  4. Accord and satisfaction.

40. A catering company contracted to serve 100 guests at a wedding. The client canceled the event a week before due to cold feet and refused to pay.

Which legal principle best protects the caterer?

  1. Mitigation of damages.
  2. Specific performance.
  3. Reliance interest.
  4. Unconscionability.

41. A general contractor hired a plumbing subcontractor and promised that payment would be made upon completion of all work. The plumbing subcontractor completed its portion, but the general contractor refused to pay, stating the overall project was still unfinished.

What is the subcontractor’s strongest argument?

  1. The payment term was unconscionable.
  2. The contract created an independent obligation to pay.
  3. The subcontractor is a third-party beneficiary.
  4. The subcontractor substantially performed.

42. A seller offered to sell 50 custom units to a buyer and included the term “price subject to market fluctuation.” The buyer accepted and requested immediate delivery. The seller then demanded a 20% price increase.

What is the buyer’s best response?

  1. Demand specific performance under the original contract.
  2. Argue that the price term made the offer invalid.
  3. Accept the new price to preserve the deal.
  4. Reject the goods as nonconforming due to late delivery.

43. A chef signed a contract to consult for a hotel chain. The contract stated that the chef “may not delegate services without written approval.” The chef assigned his duties to a colleague and departed.

What is the hotel’s most likely remedy?

  1. Sue for anticipatory repudiation.
  2. Accept performance and reduce payment.
  3. Treat the delegation as breach and sue for damages.
  4. Rescind the contract entirely.

44. A buyer contracted to purchase 10 computers from a seller. Upon delivery, eight met specifications and two had outdated software. The buyer refused to pay for any units.

What is the seller’s best legal claim?

  1. The buyer breached under the perfect tender rule.
  2. The buyer breached by failing to accept conforming goods.
  3. The buyer waived the defect by inspecting the goods.
  4. The buyer must accept all goods or none.

45. A construction company promised to complete a building by September 1. The owner agreed to pay more midway through after discovering delays unrelated to the builder’s conduct.

Is the promise to increase payment enforceable?

  1. No, because the original contract is controlling.
  2. Yes, because unforeseen circumstances justified the modification.
  3. No, because consideration was lacking.
  4. Yes, because delay excuses performance entirely.

46. A professional athlete entered a contract with a sports agency. The contract stated that disputes “shall be resolved only in California courts.” A breach suit was filed in New York.

How should the New York court respond?

  1. Dismiss the case for improper venue.
  2. Transfer the case to California automatically.
  3. Ignore the clause if the claim is under federal law.
  4. Retain the case if the athlete lives in New York.

47. A fashion designer signed a licensing contract with a brand that included a clause limiting damages for breach to $5,000. The brand breached, causing $25,000 in losses.

What is the designer's strongest argument?

  1. The limitation is unconscionable because damages were foreseeable.
  2. The clause is valid because parties agreed in advance.
  3. The clause is unenforceable under the Statute of Frauds.
  4. The designer accepted the risk by entering the contract.

48. A company promised to donate $50,000 to a nonprofit. Based on the promise, the nonprofit signed a lease for new space. The company later withdrew the pledge.

Can the nonprofit recover?

  1. Yes, under promissory estoppel due to reasonable reliance.
  2. No, because charitable pledges are not contracts.
  3. Yes, because leases automatically create enforceable rights.
  4. No, because the nonprofit gave no consideration.

49. A dealership ordered 100 tires from a supplier. The supplier delivered 90 but included a note promising the rest “as soon as possible.” The dealership rejected the shipment entirely.

Was the rejection proper?

  1. Yes, because the UCC allows rejection of any imperfect tender.
  2. No, because partial delivery does not justify rejection of all goods.
  3. Yes, because the seller failed to offer cure.
  4. No, because the note made it a complete delivery.

50. A retired architect sold software to a small firm and promised to provide technical updates for a year. After three months, he stopped responding. The firm sued.

What is the best theory of recovery?

  1. Breach of an implied warranty of merchantability.
  2. Material breach of a divisible contract.
  3. Failure of condition precedent.
  4. Anticipatory repudiation.