CONTRACTS_MCQS_51-60 - GOULDS MCQs in the MORNING Multiple Choice Program CONTRACT LAW QUESTIONS 51-60 2012 GOULDS ALL RIGHTS RESERVED 51 Curt decided

CONTRACTS_MCQS_51-60 - GOULDS MCQs in the MORNING Multiple...

This preview shows page 1 - 5 out of 22 pages.

GOULD’S “MCQ’s in the MORNING”Multiple Choice Program:CONTRACT LAW QUESTIONS, 51-60© 2012 GOULD’S, ALL RIGHTS RESERVED.
© 2012 GOULD’S, ALL RIGHTS RESERVED.51. Curt decided to open a new car dealership, even though he had no experience in the car industry. Curt contracted with Herb to have cars delivered to Curt’s dealership. The valid written contract stated that Herb would deliver cars to Curt’s dealership “on a weekly basis.” When they discussed the parameters of the contract, before it was committed to writing, Herb knew that Curt thought that the words “weekly basis” meant once a week, when, in fact, in the automobile industry, “weekly basis” indicates three deliveries per month. Curt was astounded when at the end of the first month, Herb had only made three deliveries, and had not delivered cars each week. Curt contacted Herb through a written correspondence, and told Herb he wanted deliveries every week. Herb appropriately responded in a timely manner, and clearly indicated to Curt that he, Herb, would not deliver cars to Curt’s car dealership more than three times a month. Curt got angry, and cancelled the contract with Herb. The custom of the car industry is that “weekly basis” means three times a week. If Herb sues Curt for breach of contract, will Herb prevail?
© 2012 GOULD’S, ALL RIGHTS RESERVED.51.CORRECT ANSWER: C. The parol evidence rule will not bar evidence of prior or contemporaneousinformation in this situation, partly because there was no integration clause,and partly because this situation regards clarification of ambiguity. When oneparty thought that a term could only mean one thing, while the other partywas aware that the first party thought that the term could only mean one thing,the first party’s understanding will rule.Here, Curt started a car dealership,having had no experience in the car industry.Herb was aware that Curtregarded the words “weekly basis” as meaning once per week, and Herb didnothing to clarify that meaning with Curt, even though Curt could not knowthat the words had a different meaning in the car industry.Therefore, whenHerb stated to Curt that Herb would not deliver cars on a weekly basis afterCurt requested adequate assurances of performance, Herb anticipatorilyrepudiated the contract, allowing Curt to cancel the contract and sue forbreach of contract.
© 2012 GOULD’S, ALL RIGHTS RESERVED.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture