MN Bar Contracts and Commercial Law 2 — Questions and Answers
Question 1: Under Minnesota law, when does a contract for the sale of real property satisfy the Statute of Frauds?
- When oral agreement is witnessed by two parties
- When it is signed by the party to be charged (Correct answer)
- When earnest money is exchanged
- When both parties perform within 90 days
Correct answer: When it is signed by the party to be charged
Minnesota's Statute of Frauds (Minn. Stat. § 513.05) requires a written contract signed by the party against whom enforcement is sought for real property sales.
Question 2: A seller in Minnesota breaches a contract for goods. The buyer covers by purchasing substitute goods at a higher price. The buyer's damages are:
- Contract price minus market price
- Cover price minus contract price (Correct answer)
- Lost profits only
- Consequential damages only
Correct answer: Cover price minus contract price
Under Minn. Stat. § 336.2-712, a buyer who covers may recover the difference between the cover price and the contract price, plus incidental and consequential damages.
Question 3: Which Minnesota doctrine prevents a party from asserting a contractual right when their own conduct would make doing so inequitable?
- Waiver
- Estoppel (Correct answer)
- Laches
- Unclean hands
Correct answer: Estoppel
Equitable estoppel in Minnesota bars a party from asserting a right when their prior conduct induced reasonable reliance by the other party.
Question 4: Under Minnesota contract law, an anticipatory repudiation occurs when:
- A party is late on a payment
- A party clearly states before performance is due that they will not perform (Correct answer)
- A party requests a modification
- A party seeks an extension of time
Correct answer: A party clearly states before performance is due that they will not perform
Anticipatory repudiation is an unequivocal statement or conduct before the performance date indicating an intent not to perform.
Question 5: Under Minnesota UCC Article 2, risk of loss for identified goods passes to the buyer when the seller is NOT a merchant:
- Upon identification of the goods
- When the seller tenders delivery (Correct answer)
- When the buyer receives the goods
- Upon contract formation
Correct answer: When the seller tenders delivery
Under Minn. Stat. § 336.2-509(3), when the seller is not a merchant, risk of loss passes upon tender of delivery rather than actual receipt.
Question 6: In a Minnesota contracts dispute, which parol evidence is admissible to interpret a fully integrated written agreement?
- Prior oral agreements that contradict the writing
- Prior written agreements that add new terms
- Course of dealing evidence to explain ambiguous terms (Correct answer)
- Subsequent oral modifications that decrease obligations
Correct answer: Course of dealing evidence to explain ambiguous terms
The parol evidence rule bars contradicting a fully integrated agreement, but course of dealing, course of performance, and trade usage are admissible to explain or supplement ambiguous terms.
MN Bar Contracts and Commercial Law 2
Under Minnesota law, when does a contract for the sale of real property satisfy the Statute of Frauds?