Sample Multiple Choice Questions for Contracts II Exam

Prof. Thomas A. Lambert

Sample Question One: Consider the following cases involving what might be termed
“misrepresentation” in the inducement of a contract between plaintiff and defendant:

1. Defendant sells plaintiff a table she (defendant) has advertised in the newspaper as
“made from the finest hardwood.” In fact, the hardwood of which the table is
constructed, while very high quality, is not technically “the best” available.

2. Defendant buys a plot of land from plaintiff farmer. She pays the going rate for
farmland. Unbeknownst to plaintiff farmer, defendant has used heat imaging to
discover that there are large oil deposits beneath the property at issue. Defendant
does not tell plaintiff about the oil deposits or the research she’s done.

3. Defendant sells farmland to plaintiff buyer. Defendant knows there is a leaking

underground storage tank on the property but fails to inform plaintiff of that fact.
Plaintiff, however, could easily have learned of the underground storage tank had he
consulted county records, which reasonable buyers normally consult as a matter of
their due diligence.

4. Defendant is a professional voice coach. Plaintiff, an elderly widower, signs up for

six voice lessons from defendant. At the end of the six lessons, plaintiff asks
defendant whether she (defendant) thinks he (plaintiff) has a “lovely voice.” “Oh yes,
it’s wonderfully unique, and you are really progressing in your studies,” defendant
replies. (Defendant’s actual opinion was that plaintiff’s voice was terrible.) Based on
defendant’s statement of her opinion, plaintiff purchases $1,000 worth of voice
lessons.

5. Defendant, a lawyer, uses heat imaging to discover that his client’s (plaintiff’s)
property sits atop an oilfield. Defendant then contracts to buy the property from
plaintiff without disclosing this hidden value to plaintiff.

In which of the cases would a court likely permit the plaintiff to void the contract?

a) all the cases (1, 2, 3, 4, and 5).

b) 2, 3, and 4 only.

c) 3 and 4 only.

d) 3 only.

e) 3, 4, and 5 only.
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Sample Question Two: Sally put her 50 year-old Victorian home up for sale. Mike, who had
been renting a house in the neighborhood, entered a contract to purchase Sally’s house. Two
days after the sale closed and Mike moved into the house, Mike became ill. He soon discovered
that the source of his illness was a rare invisible mold, which a house inspector determined was
growing all over Mike’s new home. Mike therefore confronted Sally and demanded that the
purchase contract be rescinded. Sally refused, for she is among the 90 per cent of individuals
who show no adverse reactions to the mold at issue, and she therefore was not aware of the
mold’s presence when she sold the house. If Mike sues Sally to rescind the contract –

a) Sally will likely win because of the well-established principle, caveat emptor.

b) Mike will likely win because Sally had a duty to correct his mistake regarding a
basic assumption of the contract.

c) Mike will likely win on the basis of mistake if Mike did not bear the risk that
there would be mold in the house.

d) Mike will likely win on the basis of impracticability if Mike did not bear the risk
that there would be mold in the house.

e) Mike will likely win on the basis of frustration of purpose if Mike did not bear the
risk that there would be mold in the house.

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For Sample Questions Three and Four, assume the following facts:

J. Peterman, Inc. (“Peterman”) is a retailer of fashions from indigenous cultures around the
world. It purchases its merchandise from several different wholesalers. One of its suppliers is
Van de Lay Industries (“Van de Lay”), an importer-exporter. Peterman purchases Moroccan
sandals from Van de Lay pursuant to a written agreement that states terms regarding price,
quantities to be purchased, shipment dates, etc. The writing, which was executed on December
1, 2017, also specifies that the sandals are to be “made in Morocco through the use of only
Moroccan labor,” and it includes a provision stating, “This writing constitutes the entire
agreement between the parties and supersedes any prior negotiations, agreements, and/or
understandings.”

Sample Question Three: On September 1, 2017, Van de Lay moved its headquarters into a
building owned by Peterman, and the parties executed a three-year written lease, which
required Van de Lay to pay Peterman $5,000/month as rent and provided for eviction only
for cause. In April 2018, another business offered to pay Peterman $6,000/month rent for
Van de Lay’s space, and Peterman attempted to evict Van de Lay. If Van de Lay attempts to
enforce the September 2017 lease and shows that there were no grounds for eviction:
 a) Van de Lay will lose, because the parol evidence rule discharges all agreements
executed prior to the December 1, 2017 contract.

b) Van de Lay will win, because the lease was written – not oral – and thus could not
be discharged by the parol evidence rule.

c) Van de Lay will win only if the December 1, 2017 agreement is found to be only
partially integrated and the September 1, 2017 agreement is found to be consistent
with the integrated terms of the December agreement.

d) Van de Lay will lose even if the December 1, 2017 agreement was only partially
integrated because the September 1, 2017 lease was contradictory to the
December writing’s “Entire Agreement” provision.

e) Van de Lay will win even if the December 1, 2017 agreement was fully
integrated, because the September 1, 2017 agreement was not within the scope of
the integrated agreement.

Sample Question Four: After having supplied Peterman with several shipments of
handmade Moroccan sandals, Van de Lay, in February 2018, delivered Peterman a shipment
of sandals made by machines in a factory that was located in Morocco and was owned and
operated by Moroccans. When Peterman objected, Van De Lay argued that the December 1,
2017 contract did not specify that the Moroccan sandals had to be made entirely by hand, as
long as the sandals were made in Morocco and only Moroccan (i.e., no foreign) laborers
were involved in their production. If Peterman attempts to introduce evidence that the parties
orally stipulated during negotiations that the sandals were to be made entirely by hand, what
result?

a) The evidence will be excluded, even if the court finds the December 1, 2017
agreement to have been ambiguous, because that agreement was fully integrated
and the prior oral agreement is within the scope of the integrated agreement.

b) The evidence will be admitted if the court finds that the December 1, 2017
agreement was ambiguous on the issue of whether machines could be used.

c) The evidence will be admitted, despite the fact that the December 1, 2017
agreement was fully integrated, because the oral agreement regarding handmade
sandals was not within the scope of the integrated agreement.

d) The evidence will be admitted to prove fraud by Van De Lay, who is clearly
trying to “cheat” Peterman.

e) The evidence will be excluded, because the integration clause in the December 1,
2017 agreement clearly states that the written agreement “supersedes any prior
negotiations, agreements, and/or understandings.”
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Sample Question Five: In which of the following cases would Plaintiff be least likely to obtain
an order of specific performance?
a) Defendant, a well-known fashion designer, entered a contract to design Plaintiff’s
wedding gown. Defendant then canceled because of competing obligations.
b) Defendant, a cosmetic surgeon, entered a covenant not to compete with Plaintiff
Columbia Cosmetic Surgery Group, which employed Defendant. Defendant later
resigned from the group medical practice and opened her own office in the same
hospital complex.
c) Defendant, owner of a condominium with a balcony overlooking the route of the
Presidential inaugural parade, entered a contract to lease the condominium to
Plaintiff for the day of the inauguration. Plaintiff was to pay $3,000 for the one-
day lease. After executing the contract, a television network offered the
Defendant $5,000 for the same one-day lease. Defendant then terminated his
contract with Plaintiff.
d) Defendant executed a contract to purchase from Plaintiff Egyptian cotton sheets
monogrammed “TAL” (Defendant’s initials). After Plaintiff had monogrammed
the sheets, but before they were delivered to Defendant, Defendant canceled the
order.
e) Defendant executed a contract to sell to Plaintiff the quill pen with which
Alexander Hamilton wrote 51 of the Federalist Papers. Prior to delivery of the
pen, the musical Hamilton became a giant hit, and Defendant refused to deliver
the pen.