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PCCE Paralegal practice questions

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Question 1Civil Litigation

Under the Federal Rules of Civil Procedure, a complaint must contain which of the following?

  1. A short and plain statement of the claim Correct answer.
  2. A verified statement of all supporting evidence
  3. A memorandum of law citing controlling authority
  4. An affidavit from every anticipated witness

Explanation

Rule 8(a) requires only a short and plain statement of the grounds for jurisdiction, the claim for relief, and the demand for judgment. The federal system uses notice pleading, so a plaintiff need not attach evidence, affidavits, or a legal brief at the pleading stage.

Question 2Civil Litigation

Under Rule 4(m), how long does a plaintiff generally have to serve the summons and complaint after the complaint is filed?

  1. 6 months
  2. 120 days
  3. 30 days
  4. 90 days Correct answer.

Explanation

Rule 4(m) gives the plaintiff 90 days after the complaint is filed to serve the defendant with the summons and complaint. If service is not made in that period, the court must dismiss the action without prejudice or order service within a specified time, and may extend the period for good cause.

Question 3Civil Litigation

A defendant who is served with a complaint in federal court must generally serve a responsive pleading within:

  1. 7 days
  2. 14 days
  3. 21 days Correct answer.
  4. 60 days

Explanation

Rule 12(a)(1)(A) requires a defendant to serve an answer within 21 days after being served with the summons and complaint. A defendant who timely files a motion under Rule 12 gets an extended period running from the court's ruling on that motion.

Question 4Civil Litigation

A claim asserted by one defendant against a co-defendant in the same action is called:

  1. A third-party claim
  2. A counterclaim
  3. A crossclaim Correct answer.
  4. An affirmative defense

Explanation

Rule 13(g) defines a crossclaim as a claim by one party against a co-party arising out of the same transaction or occurrence that is the subject of the original action. A claim against an opposing party is a counterclaim, and a claim against a nonparty brought in by the defendant is a third-party claim.

Question 5Civil Litigation

Summary judgment is appropriate when the record shows:

  1. That the movant's evidence is more convincing
  2. That no genuine dispute of material fact exists Correct answer.
  3. That the parties have waived a jury trial
  4. That the pleadings are technically deficient

Explanation

Rule 56(a) permits summary judgment only where there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. The court does not weigh evidence or decide credibility at this stage.

Question 6Civil Litigation

Under Rule 26(b)(1), a party may obtain discovery of any nonprivileged matter that is:

  1. Relevant and proportional to the case's needs Correct answer.
  2. Endorsed by the judge in a scheduling or case management order
  3. Likely to be admissible at trial
  4. Within the personal knowledge of a party

Explanation

Rule 26(b)(1) allows discovery of any nonprivileged matter relevant to a party's claim or defense and proportional to the needs of the case. Admissibility at trial is not required, so long as the information appears reasonably calculated to lead to the discovery of admissible evidence.

Question 7Civil Litigation

Absent a stipulation or court order, how many interrogatories may a party serve on another party under Rule 33?

  1. 20
  2. 25 Correct answer.
  3. 15
  4. Unlimited

Explanation

Rule 33(a)(1) caps interrogatories, including discrete subparts, at 25 per party without leave of court or a written stipulation. Parties frequently stipulate to a different number in a discovery plan.

Question 8Civil Litigation

Under Rule 38, a party demanding a jury trial must serve the demand:

  1. Within 14 days of the last pleading Correct answer.
  2. At any point before the trial begins
  3. Within 30 days after the answer is filed
  4. With the final pretrial order

Explanation

Rule 38(b) requires a jury demand to be served no later than 14 days after service of the last pleading directed to the issue. A party who misses that deadline waives the jury right as to that issue under Rule 38(d).

Question 9Civil Litigation

A motion brought under Rule 12(b)(6) tests:

  1. The accuracy of the factual allegations
  2. The scope of permissible discovery
  3. The propriety of the venue selected
  4. The legal sufficiency of the complaint Correct answer.

Explanation

A Rule 12(b)(6) motion asserts that the complaint fails to state a claim upon which relief can be granted, testing whether the pleaded facts state a plausible entitlement to relief. The court accepts the well-pleaded factual allegations as true for purposes of the motion.

Question 10Civil Litigation

Which defense may be raised at any time during the litigation?

  1. Insufficient service of the summons and complaint
  2. Failure to state a claim
  3. Improper venue
  4. Lack of subject matter jurisdiction Correct answer.

Explanation

Rule 12(b)(1) defenses are never waived because subject matter jurisdiction is a limit on the court's power to act. By contrast, defenses such as improper venue, insufficient service, and failure to state a claim must be raised in the first Rule 12 motion or the answer.

Question 11Civil Litigation

Claim preclusion bars a later lawsuit only when the earlier action resulted in:

  1. A stay of the proceedings
  2. A dismissal without prejudice
  3. A final judgment on the merits Correct answer.
  4. A voluntary dismissal by the plaintiff

Explanation

Claim preclusion requires a final judgment on the merits by a court of competent jurisdiction, identity of parties or privies, and identity of the claim. A judgment on the merits gives the same claim preclusive effect even if the first suit was resolved by default or summary judgment.

Question 12Civil Litigation

Issue preclusion requires, among other elements, that the issue in the prior action was:

  1. Litigated and necessarily decided Correct answer.
  2. Decided by a jury rather than by a judge
  3. Addressed in a published written opinion
  4. Raised in a state court

Explanation

Issue preclusion, or collateral estoppel, applies when an issue was actually litigated, determined by a final judgment, and necessary to that judgment, and when the party against whom it is asserted had a full and fair opportunity to litigate. It does not require a jury, a state forum, or a published opinion.

Question 13Civil Litigation

The work-product doctrine protects from disclosure:

  1. Materials prepared in anticipation of litigation Correct answer.
  2. All communications with a client's accountant
  3. Records of a party's business transactions
  4. Documents held by a testifying expert

Explanation

Under Rule 26(b)(3), documents and tangible things prepared by or for a party or its representative in anticipation of litigation are protected from discovery absent a showing of substantial need and undue hardship. The protection belongs to the attorney's preparation of the case and is distinct from the attorney-client privilege.

Question 14Civil Litigation

A matter admitted in response to a request for admission under Rule 36 is:

  1. Admissible only against the responding party
  2. Binding only if signed by the party
  3. Conclusively established in the action Correct answer.
  4. Subject to withdrawal at any time before trial

Explanation

Rule 36(b) provides that an admitted matter is conclusively established against the party who made the admission unless the court permits withdrawal or amendment. The admission narrows the issues for trial and relieves the requesting party of proving that matter.

Question 15Civil Litigation

Absent a stipulation or leave of court, a deposition of a party is limited to:

  1. Five hours
  2. Two days of six hours
  3. One day of seven hours Correct answer.
  4. Four hours

Explanation

Rule 30(d)(1) limits a deposition to one day of seven hours unless otherwise stipulated or ordered by the court. A party may move for additional time, and the court may impose further limits to prevent annoyance or oppression.

Question 16Civil Litigation

A defendant seeking to remove a case from state to federal court generally must file the notice of removal within:

  1. 30 days after receiving the initial pleading Correct answer.
  2. 60 days after the answer is served
  3. 10 days after the complaint is filed with the court
  4. 90 days after service of process

Explanation

Under 28 U.S.C. section 1446(b), a notice of removal must be filed within 30 days after the defendant receives the initial pleading or summons showing that the case is removable. A case may not be removed on diversity grounds more than one year after commencement.

Question 17Civil Litigation

In federal court, venue is proper in a judicial district where:

  1. The claim arose anywhere within the United States
  2. The state court clerk so designates
  3. The plaintiff's attorney maintains an office
  4. Any defendant resides, if all reside in that state Correct answer.

Explanation

Under 28 U.S.C. section 1391(b), venue lies in a district where any defendant resides if all defendants reside in the same state, where a substantial part of the events occurred, or, if neither applies, where any defendant is subject to personal jurisdiction.

Question 18Civil Litigation

Specific personal jurisdiction over a nonresident defendant requires that the defendant have:

  1. Consent to service of process by mail
  2. A physical office in the forum state
  3. Purposeful contacts with the forum state Correct answer.
  4. Presence in the forum when served

Explanation

Specific jurisdiction exists when the defendant purposefully avails itself of the forum, the claim arises out of or relates to those contacts, and the exercise of jurisdiction is reasonable. Physical presence in the state is not required.

Question 19Civil Litigation

Under Rule 37(e), a court may presume that lost electronically stored information was unfavorable to the party that lost it only if that party:

  1. Acted negligently in preserving the information
  2. Sought the information by subpoena
  3. Caused any degree of prejudice to the requesting party
  4. Acted with intent to deprive another party of its use Correct answer.

Explanation

Rule 37(e)(2) permits the severe measures of an adverse-inference instruction, dismissal, or default only on a finding that the party acted with intent to deprive another party of the information's use. Lesser curative measures under Rule 37(e)(1) require prejudice and are available without a finding of intent.

Question 20Civil Litigation

An amendment adding a new claim relates back to the date of the original pleading when:

  1. The proposed new claim is identical in every respect to the original
  2. All parties stipulate in writing
  3. The claim arises from the same transaction or occurrence Correct answer.
  4. The court grants leave to amend

Explanation

Rule 15(c)(1)(B) provides that an amendment relates back when the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set out in the original pleading. Relation back protects the amendment from a statute of limitations defense.

Question 21Civil Litigation

Under Rule 11(c)(2), a party moving for sanctions must:

  1. File the motion and simultaneously send a warning letter
  2. Obtain leave of court before serving any motion
  3. Submit the motion to a magistrate judge for a hearing
  4. Serve the motion and wait 21 days before filing Correct answer.

Explanation

Rule 11(c)(2) creates a safe harbor: the motion is served but not filed, and the allegedly offending party has 21 days after service to withdraw or correct the challenged paper before the motion may be filed. This gives the party an opportunity to cure without judicial involvement.

Question 22Civil Litigation

When a party fails to plead or otherwise defend, the clerk may enter a default judgment without court involvement only if:

  1. The defendant has appeared through counsel
  2. The court has held an evidentiary hearing
  3. The claim seeks a sum certain from a competent adult Correct answer.
  4. The plaintiff has served a written motion on the defendant

Explanation

Rule 55(b)(1) allows the clerk to enter default judgment when the plaintiff's claim is for a sum certain, the amount is established by affidavit, and the defendant is not a minor or an incompetent person. Otherwise the plaintiff must apply to the court under Rule 55(b)(2).

Question 23Civil Litigation

Under Rule 26(a)(2)(B), a retained expert's written report must include:

  1. The facts or data considered and the expert's qualifications Correct answer.
  2. A statement of the expert's opinion about the opposing expert
  3. The fee agreement between the expert and counsel
  4. Drafts of the report reviewed only by counsel

Explanation

Rule 26(a)(2)(B) requires a signed report containing a complete statement of all opinions and the basis for them, the facts or data considered, exhibits to be used, the witness's qualifications and publications, compensation, and a list of other cases in which the witness testified in the past four years.

Question 24Civil Litigation

If a party rejects a Rule 68 offer of judgment and later obtains a judgment that is less favorable than the offer, that party:

  1. Is entitled to recover no costs at all
  2. Must pay the costs incurred after the offer was made Correct answer.
  3. Must pay the costs incurred before the offer was made
  4. May retry the case before a different judge

Explanation

Under Rule 68(d), a party who rejects an offer and then obtains a judgment not more favorable than the offer must pay the costs incurred after the offer was made. The provision is designed to encourage settlement and applies to costs, not to the opposing party's attorney fees unless a statute provides otherwise.

Question 25Civil Litigation

To obtain a preliminary injunction, the movant must generally show, among other things:

  1. Likelihood of success and irreparable harm Correct answer.
  2. That money damages would be an adequate remedy
  3. Unanimous agreement of all parties
  4. A final judgment on the merits

Explanation

A preliminary injunction ordinarily requires the movant to show a likelihood of success on the merits, irreparable harm absent relief, that the balance of equities favors relief, and that the injunction serves the public interest. The remedy is extraordinary and preserves the status quo while the case proceeds.

Question 26Civil Litigation

A plaintiff sues a defendant in federal court for breach of a construction contract. The defendant believes that the plaintiff's delays on that same contract caused the defendant $50,000 in damages. The defendant has not yet filed an answer. Under the Federal Rules of Civil Procedure, how should the defendant's delay claim be handled?

  1. It is waived unless asserted within 14 days after service of the complaint.
  2. It is a compulsory counterclaim that must be pleaded in this action. Correct answer.
  3. It may be pursued only in a separate action, because it seeks affirmative money relief.
  4. It may be asserted in this action only if the plaintiff consents in writing.

Explanation

Rule 13(a) requires a party to plead as a counterclaim any claim it has against an opposing party if the claim arises out of the same transaction or occurrence and does not require joining a party the court cannot bring before it. The defendant's delay damages stem from the same contract, so the claim is compulsory and belongs in the answer. A compulsory counterclaim is barred in a later action if omitted, subject to limited exceptions.

Question 27Contracts

Which statement best describes what is required for a communication to operate as an offer?

  1. It must be communicated to a third party who relays it
  2. It must be in writing and signed by the offeror
  3. It must state a fixed price and a deadline for acceptance
  4. Present intent to contract and reasonably certain terms Correct answer.

Explanation

An offer is a manifestation of present contractual intent that gives the offeree power to accept. The terms must be sufficiently definite that a court can identify the parties, subject matter, and essential obligations. Writing, a stated price, or a deadline may clarify an offer but are not required for one to exist.

Question 28Contracts

An offer authorizes acceptance by mail and says nothing about when acceptance takes effect. When is the acceptance generally effective?

  1. When the offeror receives it at its business address
  2. When the offeror actually reads the acceptance
  3. When dispatched, unless the offer provides otherwise Correct answer.
  4. When the offeree mails it and the offeror acknowledges

Explanation

Under the mailbox rule, an authorized acceptance by mail is effective on dispatch, the moment it leaves the offeree's control. The offeror's actual receipt or acknowledgment is irrelevant unless the offer specifies receipt as the trigger. Modern statutes and the UCC may vary the rule in limited settings, but dispatch remains the default.

Question 29Contracts

A contractor promises to finish work already required by an existing contract in exchange for the owner's promise of extra payment. It performs and then sues for the extra amount. What is the likely result at common law?

  1. The contractor loses; an existing duty is not consideration Correct answer.
  2. The contractor wins, because the modification is in writing
  3. The contractor wins, because the extra payment was bargained for
  4. The contractor loses, because the original contract was not signed

Explanation

A promise to do what the promisor is already legally bound to do is not consideration for a new promise. The pre-existing duty rule therefore leaves the owner's promise of extra pay unenforceable at common law. A writing does not supply consideration, though good-faith UCC modifications of goods contracts are treated differently.

Question 30Contracts

Under the UCC, which is true of a merchant's signed written offer to buy or sell goods that states it will be held open?

  1. It is irrevocable for the stated period, up to three months Correct answer.
  2. It is irrevocable for as long as the offer states, even beyond one year
  3. It is revocable at will unless the offeree paid consideration
  4. It becomes a firm offer only if the offeree accepts within thirty days

Explanation

UCC 2-205 makes a merchant's signed written offer to buy or sell goods irrevocable without consideration for the time stated, but no longer than three months. If the offer states a longer period, it is enforceable only up to that three-month limit. Past that point, consideration or a separate option contract is needed for irrevocability.

Question 31Contracts

Which agreement falls within the classic statute of frauds requirement of a writing?

  1. A lease of an apartment for six months
  2. A promise to answer for another person's debt Correct answer.
  3. An employment contract terminable at will
  4. A contract for the sale of a used bicycle delivered that day

Explanation

The traditional statute of frauds categories include promises to answer for the debt of another, contracts for an interest in land, agreements that cannot be performed within one year, marriage-related promises, and sale-of-goods contracts of $500 or more. A surety promise is squarely within the surety category. The other examples either fall under exceptions or are outside the listed categories.

Question 32Contracts

A written contract states that it is the complete agreement of the parties. A party offers testimony about an earlier oral promise that contradicts a term in the writing. How should the court rule?

  1. Admit it, because it was made before the writing was signed
  2. Exclude it only if the judge and jury both find ambiguity
  3. Exclude it; an integrated writing bars contradictory terms Correct answer.
  4. Admit it, because oral statements are always admissible

Explanation

The parol evidence rule bars prior or contemporaneous statements that contradict, or would add terms to, a fully integrated writing. A clear integration clause supports a finding of completeness. Evidence of ambiguity may permit explanation of terms but does not open the door to flat contradiction.

Question 33Contracts

A charity relies on a donor's signed promise of a $50,000 gift and spends $20,000 building a wing. The donor dies and the estate refuses to pay. What is the charity's best theory?

  1. Unjust enrichment, measured by the donor's gain
  2. Breach of an implied-in-fact contract
  3. Quantum meruit for the value of the charity's services
  4. Promissory estoppel, based on the charity's reliance Correct answer.

Explanation

Promissory estoppel enforces a promise without consideration when the promisor should reasonably expect reliance and injustice can be avoided only by enforcement. Charitable subscriptions are a classic setting because the charity relies to its detriment. The recovery is typically limited to the extent of the reliance rather than the full promise.

Question 34Contracts

An offeree responds to an offer with a proposal on different terms. What is the usual effect at common law?

  1. It is a request for information that keeps the offer alive
  2. It is an acceptance if the changes are minor
  3. It has no effect on the original offer, which stays open
  4. It operates as a rejection and a counteroffer Correct answer.

Explanation

At common law, acceptance must mirror the offer exactly. A response that varies the terms is not an acceptance but a counteroffer, which simultaneously rejects the original offer. The original offer is thereby terminated, though the offeror may revive it.

Question 35Contracts

Two merchants exchange forms and a contract for goods is formed, but the buyer's form limits remedies while the seller's form has no such term, and the terms conflict. Under UCC 2-207, how is the conflict usually resolved?

  1. The contract fails for lack of assent on all material terms
  2. The conflicting terms drop out; gap fillers apply Correct answer.
  3. The seller's terms prevail because the seller made the offer
  4. The buyer's terms prevail because the buyer sent the first form

Explanation

Under the common judicial approach to UCC 2-207, a definite expression of acceptance forms a contract even with additional or different terms. When the parties' forms conflict, the conflicting terms cancel each other and the UCC's gap-filling provisions supply the missing terms. The contract does not fail merely because the forms disagree.

Question 36Contracts

An offeror mails a revocation that the offeree receives Monday morning. On Tuesday, before learning of the revocation, the offeree mails an acceptance. Which statement is correct?

  1. The acceptance is effective, because it was dispatched in good faith
  2. Neither is effective until both parties have received the other
  3. The revocation is effective, because it was received first Correct answer.
  4. The acceptance is effective, because the revocation was not in writing

Explanation

A revocation is effective when it is received by the offeree, and it terminates the power of acceptance at that moment. Once the offer is gone, a later dispatch cannot revive it by acceptance. The mailbox rule protects dispatched acceptances only while the offer remains open.

Question 37Contracts

What makes an offer irrevocable as an option contract?

  1. A promise to keep the offer open, without more
  2. The offeree's statement that it intends to accept
  3. Payment of consideration for holding the offer open Correct answer.
  4. Filing the offer with a notary public

Explanation

An option is a promise not to revoke an offer, supported by consideration, that limits the offeror's power of revocation. Without consideration, a bare promise to keep the offer open is generally revocable. Merchant firm offers under the UCC are a statutory exception to the consideration requirement.

Question 38Contracts

A contract between A and B requires B to pay C, who is named and intended to benefit. How are C's rights best described?

  1. C is an intended beneficiary who may enforce the promise Correct answer.
  2. C has no rights, because C gave no consideration
  3. C may enforce only if C signs the contract as a party
  4. C may enforce only after A assigns the right to C

Explanation

An intended third-party beneficiary may enforce a contract made for its benefit even though it is not a party and gave no consideration. The key inquiry is whether the contracting parties intended to benefit that person rather than incidentally doing so. No assignment is required for the beneficiary to sue.

Question 39Contracts

Unless the contract provides otherwise or the duty is personal in nature, what is the effect when a party assigns a right to receive money?

  1. The assignee may enforce the right against the obligor Correct answer.
  2. The obligor's duty is discharged by the assignment
  3. The assignor keeps the sole right to sue on the contract
  4. The assignment is void without the obligor's written consent

Explanation

Contract rights are generally freely assignable unless assignment is barred by contract, by statute, or because it would materially change the obligor's duty. The assignee steps into the assignor's shoes and may enforce the assigned right. The obligor's duty is not discharged; performance is simply owed to a new party.

Question 40Contracts

When a party delegates a contractual duty to a third party, what is the delegator's position?

  1. The delegator is released once the delegate begins performance
  2. The delegator becomes a beneficiary of the delegate's work
  3. The delegator stays liable unless a novation is agreed Correct answer.
  4. The delegator is liable only if the delegation was in writing

Explanation

Delegation shifts performance but does not discharge the delegator's obligation to the other contracting party. The delegator remains liable for the delegate's nonperformance unless the obligee agrees to a novation substituting the delegate. A writing is not what determines continuing liability.

Question 41Contracts

On June 1 a seller clearly tells a buyer it will not deliver goods due August 1. The buyer waits until August 2 and then sues. The seller argues the buyer waited too long. What is the best analysis?

  1. The claim fails; only a total failure at the deadline is actionable
  2. The claim fails; no breach can occur before the due date
  3. The buyer could sue at once and waiting did not waive the claim Correct answer.
  4. The claim fails, because no written demand for assurances was made

Explanation

An unequivocal anticipatory repudiation gives the aggrieved party an immediate claim for breach. The aggrieved party may sue at once or wait for performance, and mere delay ordinarily does not waive the claim absent a material change of position or reliance. Waiting until the performance date therefore does not forfeit the right.

Question 42Contracts

A builder completes a house but installs a different brand of water heater than specified, a minor deviation that is easily fixed. The owner refuses to pay the balance. What is the likely result?

  1. The owner owes nothing, because the deviation is material
  2. The builder may recover the price less the cost to cure Correct answer.
  3. The owner owes the full price with no deduction at all
  4. The builder recovers nothing but keeps progress payments

Explanation

Substantial performance by a builder triggers the owner's duty to pay, even if minor defects remain. The owner may deduct the cost of curing the defects or the diminished value caused by them. Only a material breach would excuse the owner from paying entirely.

Question 43Contracts

Which breach by one party excuses the other party from further performance?

  1. A breach that goes to the heart of the contract Correct answer.
  2. Any delay in performance, however brief
  3. A minor breach cured within a reasonable time
  4. A breach of a promise made after the contract was signed

Explanation

A material breach is one that substantially defeats the purpose of the contract and excuses the other party's remaining duties. Minor breaches give rise to damages but do not suspend performance. Whether a breach is material turns on the extent of the failure and the likelihood of cure.

Question 44Contracts

A contract sets late-delivery damages at $500 per day, a reasonable forecast of likely loss when made. Delivery is 40 days late and actual loss turns out lower. Is the clause enforceable?

  1. No, because liquidated damages clauses are disfavored and void
  2. No, because the amount exceeds the actual loss
  3. Yes, but only to the extent of proven actual damages
  4. Yes; it was a reasonable forecast when made, not a penalty Correct answer.

Explanation

A liquidated damages clause is enforceable if the amount is a reasonable forecast of anticipated harm at the time of contracting and actual damages are difficult to estimate. Later proof that actual loss was smaller does not convert a valid forecast into a penalty. Courts ask whether the clause is punitive, not whether it matched the ultimate loss.

Question 45Contracts

An employee is discharged in breach of a one-year employment contract and finds comparable work three months later. What may the employee recover?

  1. Remaining salary minus earnings or avoidable losses Correct answer.
  2. Nothing, because the employee was an at-will worker
  3. Only the wages earned before termination
  4. The full salary for the rest of the contract term

Explanation

An employee wrongfully discharged must mitigate by seeking comparable employment. Damages equal the contract balance reduced by what the employee actually earned or reasonably could have earned elsewhere. Failing to mitigate reduces but does not eliminate recovery.

Question 46Contracts

A supplier's key raw material doubles in price but remains available, and the supplier seeks to be excused from performance. What is the likely result?

  1. Excused only if the buyer can find a substitute
  2. Excused if the supplier gives prompt written notice
  3. No excuse; increased cost alone is not impracticability Correct answer.
  4. Excused, because the contract became unprofitable

Explanation

Impracticability requires an unforeseen event that makes performance objectively impossible or extraordinarily burdensome, not merely less profitable. A sharp cost increase, without more, generally leaves the duty intact. Notice requirements matter only once a qualifying excuse exists.

Question 47Contracts

A 16-year-old signs a contract to buy a car and, while still a minor, disaffirms it and returns the car. What is the general result?

  1. The contract is voidable by the minor Correct answer.
  2. The contract is fully enforceable because the minor got the benefit
  3. The contract is enforceable once the minor turns 18 without further act
  4. The contract is void and the minor's conduct is irrelevant

Explanation

Contracts made by minors are generally voidable at the minor's election, allowing disaffirmance during minority or within a reasonable time after reaching majority. Upon disaffirmance, the minor typically must return what remains of the consideration. Ratification after majority requires an affirmative act or continued retention of benefits.

Question 48Contracts

A consumer with limited English signs a form contract containing an extremely one-sided term buried in fine print, and the court finds the term shocking. What remedy is available?

  1. The court may rewrite the entire contract to be fair
  2. The court must reduce the price to the market rate
  3. The court may refuse to enforce the unconscionable term Correct answer.
  4. The court must enforce the term as written

Explanation

A court may refuse to enforce a contract or a clause found unconscionable at the time it was made. Under the UCC the court may also limit application of the offending clause to avoid an unconscionable result. Courts do not sit to redraft the parties' bargain into a fairer one.

Question 49Contracts

A debtor sends a check marked 'full payment' for an amount the creditor disputes in good faith, and the creditor cashes it. What is the usual effect?

  1. Cashing the check matters only if a new contract is signed
  2. The creditor may still sue, because cashing a check never settles a debt
  3. The debt is discharged if the claim was disputed in good faith Correct answer.
  4. The debt revives if the creditor later returns the check

Explanation

An accord and satisfaction discharges a disputed claim when the debtor tenders a lesser amount as full payment and the creditor accepts it. Acceptance of the tendered instrument, such as cashing the check, supplies the satisfaction. The doctrine requires a genuine, good-faith dispute about the amount owed.

Question 50Contracts

A buyer receives goods that match the ordered quantity but have a minor cosmetic flaw that does not affect function. What best describes the buyer's position under the UCC?

  1. The buyer may not reject because the flaw is minor
  2. The buyer must accept and sue for breach of warranty
  3. The buyer may reject, subject to the seller's right to cure Correct answer.
  4. The buyer may accept only if the seller cuts the price in half

Explanation

The perfect tender rule lets a buyer reject goods that fail in any respect to conform to the contract, including minor defects. That right is qualified by the seller's right to cure when the time for performance has not expired or the seller reasonably believed the goods would be acceptable. The buyer is not forced to accept with a price discount.