ACC 460

Sarah is 16 years old. She left home at age 15; her parents no longer support her. Sarah entered into a contract with Best Groceries for the purchase of $100 of groceries on credit. The groceries consisted of basic, necessary items. However, their reasonable value is only $80. If Sarah discovers that she has been overcharged and refuses to pay, Best is entitled to collect:

$80

Which of the following is most likely to constitute undue influence?

A clergyman using a parishioner's emotional susceptibility to get the parishioner to contract with the clergyman.

which of the following contracts is void?

A contract made by a person who has been adjudicated insane and institutionalized.

Alana, who runs a flower shop, sells Jose a shotgun. Jose is unemployed, and Alana has never before sold a firearm in her life. Which of the following is true?

Article 2 of the UCC applies because a shotgun is a movable thing.

A party who has the right to rescind a contract may do so at any time.

False

A promise not to sue another party is not consideration, because the promise does not convey any legal value to the other party.

False

A promissory estoppel cannot be applied in the case of the absence of a binding consideration.

False

A revocation is effective at the time it is dispatched by the offeror.

False

Generally speaking, advertisements are considered to be offers.

False

Generally, if there is a good faith dispute over a matter, a person's threat to file a lawsuit to resolve that dispute is considered to be improper.

False

In order to have any chance of being enforced, an illegal agreement must be indivisible.

False

The legal term for innocent misrepresentation is 'scienter.'

False

To accept an offer for a bilateral contract, the offeree must perform the requested act.

False

To accept an offer for a unilateral contract , the offeree must make the promise requested by the offer.

False

When an offer is unclear about the form of acceptance it requires, ideally it must not be accepted.

False

State X has a "Sunday Closing Law" making it a crime to operate a retail business on Sundays. The law's legislative history reveals that it was enacted to promote respect for the Sabbath by all the people of the state, and thus to promote public decency and morality. One Sunday, Judy Smith slips on a puddle of spilled soft drink at Joe's Hamburger joint (which is operating in violation of the statute), and suffers an injury to her spine. The soft drink would not have been spilled if the store had not been open on Sunday. Judy sues Joe in negligence. One part of her complaint relies on the doctrine of negligence per se. Under the doctrine of negligence per se: A. Judy will recover because the spilled drink posed a reasonably foreseeable risk of harm, and Joe failed to eliminate that risk.

Judy will not recover because she did not suffer harm of a kind that the statute was intended to protect against.

Mike Minor buys some real estate as investment. The contract obligates Mike to make monthly installment payments for 10 years. Mike reaches the age of majority one month after making the contract. After this, Mike makes 25 monthly payments under the contract, but then decides that he wants to rescind the deal. Which of the following is most true?

Mike cannot disaffirm because he has already ratified the contract.

Which of the following is a remedy in the case of an erroneous expression of an agreement due to an error in drafting?

Reformation

You are walking down a street and you pass by a beer brewery. A barrel rolls out of a third story window and injures you. You have no idea how this accident occurred, and you will have difficulty proving that the brewery was at fault. What legal theory will serve you best if you sue the brewery?

Res ipsa loquitur

Which of the following is NOT a requirement in the enforceability of a noncompetition clause?

The noncompetition clause must be regarding the sale of goods.

In a contract for the sale of land, how close must the terms of the acceptance be to the terms of the offer, in order to form a contract?

They must be identical or almost identical

A contract may be voidable even if the person making the misrepresentation believes in good faith that what he/she says is true.

True

An advertisement offering a reward for the return of lost property is usually treated as an offer for a unilateral contract.

True

Generally speaking, the UCC's rules for the definiteness of an offer make it easier to form a contract than traditional common law rules.

True

If a term is left open in a sale of goods contract, that open term or 'gap' can be filled by instering a presumption found in the UCC's 'gap filling' rules.

True

In determining whether consideration exists, the law is not concerned with any disproportion in value between the things exchanged in a contract.

True

In return for services Charles performed for Richard in the past, Richard promises to pay Charles $1,000.

True

Michael and William contracted for Michael to mow William's lawn once a week for 20 weeks, at a price of $20 per week. Later, without terminating the first contract, the parties modify the contract as follows: Michael will mow William's lawn in exactly the same way for exactly the same time period, in exchange for William's promise to pay Michael $22 per week. There is no consideration for William's promise.

True

Mutual mistake is more likely to make a contract voidable than is unilateral mistake.

True

Offers that fail to provide a specific time for acceptance are invalid because they are deemed to be indefinite.

True

Ratification ends the right to rescind a contract.

True

The UCC often creates contractual liability in situations where no contract would have resulted at common law.

True

The offeror is said to be the "master of the offer". This means that offerors have the power to determine the terms and conditions under which they are bound to a contract.

True

The three requirements for a valid offer are: present intent to contract, definiteness and communication to the offeree.

True

Undue influence cases often involve a relationship of trust and confidence between the contracting parties.

True

On Thursday, Trista Dylan receives a letter from Charlie Holmes offering to sell her a diamond ring and stating that: "if you choose to accept, you must do so prior to 2:00 p.m. tomorrow." Trista had a telegram of acceptance dispatched well before 2:00 p.m. on Friday but it is delivered to Charlie's home only at 2:15 p.m. Do Trista and Charlie have a binding contract?

Yes, because Trista dispatched the telegram prior to 2:00 p.m.

non-complete clauses in contracts:

are enforced if found to be reasonable

_____ is the ability to incur legal obligations and acquire legal rights.

capacity

Cathy Young, age 16, buys a 1973 Chevy Camaro from Mark Watson, age 23, for $400. Cathy's indulgent parents, who give her everything she wants, loaned her the money for the car. The reason for Cathy's purchase is that all her friends have cars and she feels left out without one. One week after buying the car, however, Cathy changes her mind and tells Mark that she wants to disaffirm the contract. When Mark comes to pick up the car and give Cathy her money, though, Cathy changes her mind again, telling Mark, "I'll stick by the deal." However, when Cathy's parents gave her a new car for her 17th birthday, she finally decides to disaffirm once again. Which of the following is correct?

cathy can still disaffirm.

Which source of law requires the acceptance to be a "mirror image" of the offer in order to form a contract?

common law

Article 2 of the UCC does NOT apply to a sale of:

corporate stock

The right of minors to avoid a contract as a means of protecting themselves against their own improvidence and against overreaching adults is called:

disaffirmance

An important difference between duress and undue influence is that:

duress is wrongful coercion, while undue influence is unfair persuasion.

In order for the consideration requirement in contracts to be met:

each party must give consideration.

What does 'present intent to contract' mean?

intent to enter the contract upon acceptance

A fact is considered to be material in a misrepresentation case when:

it plays an important role in inducing a person to enter into a contract.

Which of the following would indicate a rejection under the mirror image rule?

material changes to offer

According to contract law, a(n) _____ is a belief about a fact that is not in accordance with the truth.

mistake

A minor entered into a contract with GAM & Co. On attaining majority, he wishes to enforce the contract. The adult party must:

ratify the contract

Jean agrees to lease Steven the fourth floor of his house. Jean himself resides on the second floor. The person typing the contract strikes the wrong key, and the contract reads the leased portion as the "second floor." Neither Jean nor Steven notices this error when they read and sign the contract. What will the courts do in the case of a dispute?

reform the contract

Joe sells his business to Shirley. During the negotiations, Joe negligently tells Shirley that the business has earned a profit for the last five years. In reality, the business operated at a loss for each of those years. However, Shirley did not hear Joe's misstatement. Shirley cannot rescind the contract because:

shirley did not actually rely on Joe's misstatement.

Judith George makes an offer to sell a plot of land using a normal letter and states no authorized means by which the offeree, Helga Holmes must respond if she accepts. If Helga accepts the offer using a normal letter, which of the following is true?

the acceptance is effective upon dispatch

Which of the following elements establishes a case of duress?

the contract was induced by improper threat

Hally took advantage of a confidential, trusting relationship with Gwyn when they entered into a contract. Now, Gwyn can seek remedy based on:

undue influence

Jerry owns a parcel of land. Nate, one of Jerry's closest friends and an attorney, has persuaded Jerry to sell the land to Nate at a price substantially below fair market value. At the time Jerry sold the land, he was resting in a nursing home recovering from a serious illness. If Jerry desires to set aside the sale, which of the following causes of action is most likely to be successful?

undue influence

Martin Nowak, an accountant, entered into a written contract with Jane Gibson to perform certain tax services for Jane. Shortly thereafter, Jane was assessed additional taxes and she wanted to appeal the assessment. Jane was required to appeal immediately and the workpapers held by Martin were necessary to appeal. Martin refused to furnish Jane with the workpapers unless he was paid a substantially higher fee than was set forth in the contract. Jane reluctantly agreed in order to meet the filing deadline. The contract as revised is:

voidable at Jane's option based on duress.

Bill is 25 years old. His uncle had promised in writing to pay him $2,000 if Bill would refrain from drinking alcohol for one year. Bill refrained from drinking alcohol for one year. However, his uncle now refuses to pay Bill as agreed-upon. The uncle claims that because Bill suffered no detriment by refraining from alcohol, his non-drinking does not constitute legal consideration and therefore no contract was formed. If Bill sues his uncle, Bill will:

win because bill had a legal right to drink alcohol.