NALA Contracts and Commercial Law Questions and Answers

Question 1

A contractor orally agrees to build a custom-designed home for a client for a price of $600,000.
The construction is expected to take 18 months to complete.
After six months of work, the client disputes the payment terms and attempts to cancel the project.
Which legal principle is most likely to make this oral agreement unenforceable?

Accepted Answer

The Statute of Frauds

Answer

The parol evidence rule

Answer

The doctrine of promissory estoppel

Answer

The rule of mutual assent

Question 2

A buyer orders 500 blue widgets from a seller for delivery on June 1st. On the delivery date, the seller delivers 500 red widgets. Under the Uniform Commercial Code (UCC), which rule gives the buyer the right to reject the entire shipment?

Accepted Answer

Perfect Tender Rule

Answer

Substantial Performance Rule

Answer

Statute of Frauds

Answer

Parol Evidence Rule

Question 3

Which of the following is NOT an essential element required for the formation of a legally binding contract?

Accepted Answer

A notarized signature

Answer

Offer and Acceptance

Answer

Consideration

Answer

Legal Capacity

Question 4

A buyer sends a purchase order to a seller for 1,000 units of a product. The seller responds with an order confirmation that accepts the key terms but includes a new clause disclaiming liability for consequential damages. Both parties are merchants. Under UCC § 2-207, this scenario is commonly referred to as:

Accepted Answer

The 'battle of the forms'

Answer

A firm offer

Answer

An illusory promise

Answer

A requirements contract

Question 5

After signing a fully integrated written contract for the sale of a commercial property, the buyer claims the seller orally promised to include an adjacent parking lot in the sale during negotiations. The written contract makes no mention of the parking lot. Which rule would likely prevent the buyer from introducing evidence of this oral promise in court?

Accepted Answer

The Parol Evidence Rule

Answer

The Best Evidence Rule

Answer

The Statute of Frauds

Answer

The Rule Against Perpetuities

Question 6

Article 2 of the Uniform Commercial Code (UCC) applies to which of the following transactions?

Accepted Answer

The sale of a fleet of delivery vehicles

Answer

The sale of corporate stocks

Answer

A contract for employment services

Answer

The lease of an apartment