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Contracts Flashcards

7 cards from real IA BAR practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Contracts flashcards as text

  1. Which measure of damages puts the non-breaching party in the position it would have been in had the contract been performed?

    Answer: Expectation (benefit-of-the-bargain) damages

    Expectation damages, the standard contract remedy, award the plaintiff the benefit it expected from full performance, including lost profits.

  2. Under the UCC, the risk of loss in a shipment contract passes to the buyer:

    Answer: When the seller duly delivers the goods to the carrier

    In a shipment contract, UCC § 2-509(1)(a) places risk of loss on the buyer once the seller properly delivers the goods to the carrier.

  3. An offeree's reply that accepts the offer but adds a new term is treated under common law as:

    Answer: A counteroffer that terminates the original offer

    Under the mirror image rule, any deviation from the offer's terms constitutes a counteroffer, terminating the original offer and reversing the roles of offeror and offeree.

  4. A liquidated damages clause is enforceable only if:

    Answer: The amount is a reasonable forecast of actual damages and harm is difficult to estimate

    Liquidated damages clauses must represent a reasonable pre-estimate of probable damages; if they function as a penalty, courts will strike them down.

  5. The doctrine of frustration of purpose applies when:

    Answer: A supervening event destroys the principal purpose of the contract without the party's fault

    Frustration of purpose requires that a supervening event, not reasonably foreseeable at contracting, substantially frustrate the purpose for which a party entered the contract.

  6. Under Iowa law, a valid assignment of a contract right:

    Answer: Generally does not require the obligor's consent unless the assignment would materially change the obligor's duty

    Assignments are generally valid without the obligor's consent, but courts protect the obligor if the assignment would materially alter the burden or risk the obligor accepted.

  7. Which of the following constitutes adequate consideration under contract law?

    Answer: A promise to pay $1 for a house worth $500,000 if freely bargained

    Courts generally do not inquire into the adequacy of consideration; a freely bargained exchange of nominal value for a promise is legally sufficient consideration.