BLAW 3430 Exam 2

Which of the following, if false, would probably be considered a misrepresentation of a material fact?

"This car has new brakes."

Barbara, an antique dealer, intentionally represents the value of an antique chest of drawers, as $6,000 when she has reason to know the value is considerably less. Margaret agrees to buy it for $5,500. It is worth $2,500. In a state that uses the "benefit-of-the-bargain" rule, Margaret's damage award would be:

$3,500

The UCC Article 2 statute of frauds provision applies to the sale of goods for the price of ___________.

$500

Mary agrees to sew Georgia's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay:

$60 Since the modified agreement is supported by additional consideration

Elmer wrote a letter to his friend Fred offering to sell Fred an 80-acre farm for $200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000 and changes his mind about selling.

Elmer can revoke his offer at any time prior to Fred's accepting it, because there is no consideration to keep it open.

In which of the following situations can parol evidence be admitted to vary or contradict the terms of an integrated document?

Evidence could be admitted in both of the above situations: Where a typographical error occurs in the document and obviously does not represent the agreement of the parties. Where one of the parties to the contract lacks contractual capacity.

Samuel Tate enters into a contract with Bill Smith under the terms of which Smith is to pay Tate $7,000 and Tate is to build a garage, repair a boat, and build a doghouse. If the doghouse has not yet been built, which term describes the type of contract in existence?

Executory contract

Which of the following is/are not essential elements of a contract?

Expiration date (****MAY BE WRONG****)

A(n) _____________ contract is one in which the parties manifest assent in words.

Express

In determining the meaning of a contract under the UCC, which of the following will have first priority?

Express terms

Which of the following is NOT generally required in order to have a valid contract?

Fairness of the bargain

To avoid a contract, an intoxicated person must have been so intoxicated as to be unable to understand the consequences of his actions and unable to act in a reasonable manner.

False

Fay, age 17, ordered a pair of skis on the installment plan. She paid $20 every month until she turned 18, the age of majority. The next day, she sold them to Sharon and disaffirmed the contract. What result?

Fay is still liable because selling the skis amounts to a ratification.

An offer, made by a merchant under the UCC, that is irrevocable even though no consideration is given to keep it open is known as a(n):

Firm offer

An intentional misrepresentation of a material fact made with knowledge of the falsity and intention to deceive and which a party justifiably relies upon to his detriment is known as:

Fraud in the inducement

Sam wants to sell his Golden Retriever to Jordan. Sam tells Jordan that the dog is three years old and that he will point, back, and retrieve. Although the dog is three years old and will point at birds, he will not back (honor another dog's point). Jordan relies on these statements and purchases the bird dog. The buyer has most probably been a victim of:

Fraud in the inducement

Unless one of the parties contractually assumes the risk, the ____ discharges a contract if supervening circumstances make fulfillment of the purpose which both parties had in mind impossible.

Frustration of purpose doctrine

Harold purchased 400 pairs of gloves from Isaac at a contract price of $800. Fifty of the gloves were defective and a dispute arose as to the amount due and owing under the contract. Harold refuses to pay the $800 and Isaac is threatening to sue. Which of the following is correct with regard to this transaction?

If Isaac agrees to accept $600 to settle the dispute and Harold agrees to pay that amount, the substitute agreement is enforceable.

An executor personally promises to pay the debts of the decedent's widow. Under what circumstances would the creditor need to have a writing in order to enforce this promise?

If the promise is made to the creditor.

Courts will enforce contracts for the benefit of all but which of the following?

Incidental beneficiaries

A(n) __________ is a third party who obtains possible benefits but no rights under a contract.

Incidental beneficiary

What remedy did the plaintiff seek in the case of Madison Square Garden Corp., Ill. v. Carnera?

Injunctions

Jason's mother would like him to go to college, so in June he enrolls at State University. He also quits his job and tells his mother his plans to continue taking classes. His mother says, "I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485. Which of the following is true regarding his mother's promise?

It is unenforceable, because Jason has already enrolled in school and there is no consideration.

Which of the following is NOT true regarding specific performance?

It will be granted frequently in contracts involving the sale of goods.

James threatens to hit Kenneth on the head with a baseball bat unless Kenneth signs a contract agreeing to pay James $900 for a motor. Because of the threat, Kenneth signs the contract.

James has committed physical duress against Kenneth

Jan promises Eli $4,000 for one of his original paintings on the condition that she receives $1 million from her mother's will.

Jan's promise is legally sufficient

Jill contracts to purchase Kevin's automobile under the belief that she can sell it at a profit to Linda, but after Jill has bought the car, she finds out that Linda isn't interested in buying it.

Jill cannot void the contract

Which of the following promises in consideration of marriage would be outside the statute of frauds?

John and Joan mutually promise to marry each other in a formal ceremony on June 23.

Which one of the following assignments would probably not be prohibited by a court:

John is a landscape designer. He is scheduled to meet with Molly on Monday to look over her house and lot and discuss ideas for landscaping. Johns wakes up Monday morning with the flu. He calls Ed, who is also a landscape designer, to meet and begin working with Molly. (****MAY BE WRONG****)

Lynne agrees to buy Harriette's farm for $100,000 and puts $20,000 down. Then Lynne learns she is allergic to hay and repudiates the contract. If Harriette can sell the farm one month later for $90,000, she may:

Keep $10,000 of Lynne's down payment.

Nell gives Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true?

Legally, Nell can neither get the money back nor force Al to do as he promised.

Divided Parcel Service (DPS) includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through the fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to Bulova Co. to be repaired anyway. The watch is destroyed which the DPS driver uses the package for a ball and tosses it to his buddy. Mary is

Likely to collect from DPS BECAUSE it attempted to excuse intentional reckless behavior.

A contract may contain a ____________ damages provision by which the parties agree in advance to the damages to be paid in the event of a breach.

Liquidated (****MAY BE WRONG****)

The majority of states follow the ____________ rule in awarding damages for fraud.

Liquidated (****MAY BE WRONG****)

A contractor and Southampton, Inc. have a contract, which calls for the contractor to build a building with the completion by June 15. If the building is not completed by that date, the contract calls for the contractor to pay $100 per day in damages. The $100 per day is:

Liquidated damages

Mark paid off his brother Steve's debt to their parents. The parents accept the payment. The parents then proceed to sue Steve in small claims court for the payment. Their agreement is that the debt was Steve's and Mark had no obligation to pay the debt. There was thus no consideration between the parents and Mark and therefore no contract. Which statement is correct regarding this situation?

Mark's payment to the parents was a gift to the parents and unenforceable. Steve will still have to pay the debt.

Matt is a master tailor with a renowned reputation for expert work. Ron, a local professional in his own right, agrees to pay Matt $500 for a suit to be custom sewn by Matt. The amount to be paid is contingent on Ron's being satisfied with the completed work. Matt finishes the suit; it fits Ron. Nevertheless, Ron says that he is not satisfied and refuses to accept or pay for it. Ron is honest in his dissatisfaction, but he is unreasonable.

Matt has no recourse against Ron because he agreed to the subjective standard.

Maxine offered to sell her video camera to Tom for $200 and also stated to Tom, "I will give you two weeks to accept my offer." One week later Tom learned that Maxine had sold the video camera to Cindy.

Maxine has revoked her offer to Tom.

Henry hires Ace Roofing to put a new roof on his house. When Ace comes, Henry refuses to let them on the roof, saying that he has a headache and doesn't want to listen to pounding. The next day, Henry still has a headache and he refuses to allow them on the roof. The day after, the baby is sleeping and Henry refuses to allow them to work. After four weeks of this, Ace:

May be discharged, but Henry is not.

Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed, only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement is most accurate?

McHenry is liable to Nancy based on the concept of promissory estoppel.

In which of the following cases would an oral contract be enforceable without a written memorandum?

Michelle calls an employment agency in Paris to arrange for maid service for her three-month Parisian vacation.

Mike tries to sell his car to Martha for $42,000. Mike tells Martha,"I paid $50,000 for the car three years ago and it's worth twice that today." Mike really paid $49,756 for the car. If Martha buys the car, basing her decision on Mike's statement, which of the following correctly states the situation?

Mike's statements are both misrepresentations of fact, the basis of actionable fraud. (****MAY BE WRONG****)

As a result of a breach of contract by Susan, Ellen's personal losses were substantial. Ellen's obligation is to:

Mitigate damages

The usual remedy for breach of contract is:

Money damages

Wanda at age 17 purchased an expensive stereo system from Stereo Sales. If Wanda wishes to ratify this contract, Wanda:

Must reach the age of majority and ratify the contract as a whole.

In general, the law will grant relief in a situation involving a mistake only where there is a ________ mistake involving a(n):

Mutual ; Material Fact

When both parties misunderstand their manifestations of mutual assent, it is termed:

Mutual mistake

Before granting an injunction enjoining a former employee from competing in a described territory, the courts insist that the employer demonstrate that the restriction is:

Necessary

Barry's Sport Shop calls Champs Tee Shirt Company to order 200 designer tee shirts at $2 per shirt. The next day, Barry decides he can easily sell 100 more. Before the order is filled, he calls to change the order to 300 tee shirts. Champs sends 200. Can Barry force Champs to send the additional 100?

No, because Barry does not have a writing signed by Champion Tee Shirts.

Mary, age 17, sold Mark, age 22, the briefcase she got for graduation. Mark's father liked it and bought it from him. If Mary decides to disaffirm the contract, will Mark's father have to return the briefcase to her?

No, if Mark's father bought it without knowing that Mary was a minor.

In a majority of states, a minor who purchases a vehicle and then wrecks the vehicle, may:

None of the above (****MAY BE WRONG****)

Joanne, a minor, sold her laptop computer to Bruce, an adult. Bruce then sold the laptop to Anna, also an adult, who had no knowledge of the fact that the original owner was a minor. Under the Uniform Commercial Code, Joanne may:

Not avoid her contract to Bruce and may not recover her laptop.

A(n) ____________ is a method of discharging a performance in which a third party becomes bound upon a promise to the obligee.

Novation

The party to whom a contractual duty of performance is owed is known as the:

Obligee

Which of the following is generally NOT grounds for discharge of a contract by operation of law?

Order of discharge by the bankruptcy court.

Howard needs a truck to pull a 2,000-pound trailer. Gordon tells Howard, "My truck will pull a 2,000-pound trailer with ease." Relying on Gordon's statement, Howard buys the truck, but it will not pull a 2,000-pound trailer. If Gordon did not intend to deceive and Howard sues for non-fraudulent misrepresentation, he can recover:

Out-of-pocket (consequential) damages, but not punitive damages.

Percy, age 17, purchased a used mobile home from a mobile home dealer for $20,000. This price, however, was twice the reasonable value of the mobile home. One month later, Percy wishes to disaffirm the contract. If the mobile home is considered a necessary, then:

Percy must keep the mobile home but is only liable for the reasonable value of the mobile home.

The Code greatly alters the common law doctrine of material breach by adopting what is known as the:

Perfect tender rule.

Damages for reliance include expenses for:

Preparing to perform

The privilege to play tennis and socialize at the Capital Country Club (CCC) is obtained through application, references, resumes, and fees. Steven and Chanel want to assign the remaining 4 years of their 5-year membership to Charles and Prissy so that Steven and Chanel may join the Silver Hawk Tennis and Polo Club. CCC sues to enjoin Steven and Chanel from assigning their membership. CCC will most probably:

Prevail because the parties intended the contract for membership to be personal and thus non-assignable.

An obligation imposed by law where there has been no agreement or expression of assent by word or act on the part of either party involved is a(n):

Quasi contract

Randy, a minor, buys a new four-wheel drive truck from the Jones Dealership. Randy sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to Arthur Smith. Arthur does not personally know Steve or Randy. Which of the following expresses the status of this situation?

Randy may not recover the vehicle from Mr. Smith.

Justifiable reliance is:

Reasonably influenced by the misrepresentation.

The process whereby a court "rewrites" or "corrects" a written contract to make it conform to the true intentions of the parties is:

Reformation

If restrictions in an employment contract is found to be too harsh, a court may do any of the following EXCEPT:

Refuses to enforce that part of the contract

A(n) _______ is a measure designed to protect the public from unqualified practitioners.

Regulatory license

The refusal to accept an offer is a:

Rejection

Garrett ordered 100 pieces of 2 × 6 lumber from his supplier and paid upon delivery. Later, when he unpacked the lumber, he discovered that the supplier had delivered 2 × 4 lumber. After being notified, the supplier picked up the lumber, apologized, and gave Garrett his money back. The response the supplier made to rectify the breach is:

Restitution

The return to the aggrieved party of the consideration, or its value, which he gave to the other party is:

Restitution

To accomplish the basic purposes of contract remedies, which of the following limitations have not been imposed upon monetary damages?

Restitution

Robert Briscoe is 17 years old. He lies to Bouyers Auto in order to induce them to sell him a new pickup truck. Bouyers falls for this lie and sells him the pickup. Under the prevailing view, which of the following is correct?

Robert may disaffirm and get his money back.

Which of the following is a contract with a condition subsequent?

Roger bought a VCR but he may return the VCR within ten days and get all of his money back.

Andrew agrees to paint Rosalene's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job, unless Rosalene agrees to pay him $100 more. What principle applies to this fact situation?

Rosalind has made a promise in exchange for a forbearance (****MAY BE WRONG****)

According to the UCC, an enforceable agreement involving the transfer of title of goods from a seller to a buyer for a price is called a(n):

Sale

Shane contracts to build a garage for Bob for a price of $6,000. Because of an increase in the cost of labor and materials, Shane refuses to perform. Bob wants the garage, so he agrees to pay an additional $500. In this case:

Shane has given no additional consideration, and under the common law must perform at the agreed upon original price.

The Rogers family has always wanted to buy the beautiful house at the tope of the hill. The owners of the house, the Thompsons, decided to sell and called Mr.Rogers. Before he could get back in touch with Mr.Thompson, Mr.Rogers suffered a heart attack and died. Mr.Rogers' adult daughter, to whom the Thompsons had not spoken, still wants the house.

She may not accept since the offer is terminated.

Which of the following is untrue regarding the contracts of intoxicated persons?

Slight intoxication will destroy one's contractual capacity.

Miller made a contract to sell his condominium to Jefferson for $80,000. Two days later Miller changed his mind after discovering that he could have sold the property to another buyer for an additional $20,000. Jefferson sues and asks the court to have the property conveyed to him at the price of $80,000. Jefferson is seeking:

Specific Performance

Carolyn agrees to sell Marianne an antique handmade lace tablecloth for $1,500. When Carolyn discovers that her cousin wants it too, she breaks the contract with Marianne. Marianne can ask the court to order:

Specific performance

Bartow signed a contract to coach baseball for Washington High for a period of three years. After two years he is offered and accepts an assistant coach position at State University. Contract law will not allow Washington High to ask for:

Specific performance of his contract.

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by:

State common law

Contracts are governed primarily by:

State common law

Steve purchases a four-wheel drive truck from Belk Auto Sales. Steve is only 17 years of age. He wrecks the vehicle and attempts to disaffirm the contract and have Belk repay him all that he has paid. In the majority of jurisdictions, what would happen?

Steve may simply return the vehicle and get his money.

Under the parol evidence rule, which of the following types of evidence may be used to vary or contradict the written agreement?

Subsequent oral or written agreements modifying the original agreement.

John operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of:

Substantive unconscionability

Which of the following is not true with regard to the interpretation of contracts?

Technical terms will always be given technical meaning even where one party to the contract is ignorant of the technical meaning.

The definition of commercial reasonableness as used in contract law includes:

That the practices customary in the type of transaction involved be used as a standard.

"Scienter" is a legal term which means:

That the seller had knowledge that his statements are false and had the intention to deceive.

In the Pacific Custom Pools, Inc. v. Turner Construction Company case, the court found:

That the trial court erred in granting motion for summary judgement on the basis that PCP had not been licensed in California and thus could not bring suit.

Michelle's Boutique places an ad in the Sunday paper for beautiful, top-of-the-line designer suits for $3.00. Irene sees the ad in the paper and goes to the store to stock up on business suits for her new job. Michelle apologizes for the misprint. Irene has just finished a class in contract law and insists that the store sell her 5 suits for $15.00. Irene threatens to sue Michelle for breach of contract.

The ad in the newspaper is a solicitation seeking offers, but is not an offer to sell; therefore, Irene will not be able to successfully sue for breach of contract.

Darrell owns a parcel of land that is encumbered by a mortgage held by the First National Bank. Darrell agrees to sell the land to Paul for $50,000. Darrell and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Darrell, Paul, and the banker sign an agreement stating that Paul will assume the mortgage and that Darrell will be discharged from all further liability on the mortgage.

The agreement among the three is a novation.

Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere in River City for a period of five years.

The agreement is unreasonable in its geographic restraint

Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so.

The consideration from Darla to Edward is the promise of $6,000 subject to a condition.

Don, a minor, contracts to sell 100 acres of land to Jerry who is also a minor. Don reaches the age of 18 as does Jerry. Don takes no action to avoid the contract for several months. Which of the following most accurately describes the status?

The contract remains executory. (****MAY BE WRONG****)

Elvis makes an offer to Fred, but before Fred can accept, the state supreme court decides a case that makes Elvis's offer illegal. What is the effect of the court's decision on the offer?

The court decision automatically terminates the offer.

All but which of the following is true about a delegation of duties?

The courts will examine an assignment more closely than a delegation.

Anita owes Brad $75,000. Brad signs a written statement granting Glen a gratuitous assignment of his rights from Anita. Brad delivers the signed statement to Glen before Brad dies.

The delivery of the statement makes the assignment irrevocable.

The Uniform Commercial Code (UCC) has changed the traditional common law view regarding goods the minor has sold and that the buyer resold to a good purchaser for value. Under the UCC:

The good faith purchaser for value receives a voidable title.

What is another name for the main purpose doctrine?

The leading object rule

When a minor falsely advises the other party that he is of the age of majority and based upon that misrepresentation, the other party in good faith enters into a contract with the minor:

The minor is required to restore the other party to the position occupied before the making of the contract.

Charlene hears about a reward being offered by the local television station for information leading to the arrest and conviction of a local rapist. She supplies the requested information and the suspect is then arrested and convicted.

The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Charlene has accepted.

Destruction of the subject matter has what effect on the offer?

The offer is terminated.

In addition to the four basic requirements of a contract, which of the following must occur in order to have a valid contract?

There must be an absence of invalidating conduct and duress.

Assume an offeree mails a rejection to the offeror on November 1. This rejection arrives at the offeror's place of business on November 5. In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November 6. Which of the following statements correctly describes the situation?

There was no contract because the rejection was mailed first. (****MAY BE WRONG****)

Rose is working hard on Arlin's mayoral campaign. She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 if she will register and vote for Arlin. Violet does so, but Arlin loses the election, and Rose now refuses to pay. Rose's agreement to pay Violet:

This agreement is unenforceable and opposed to public policy

Anna is 88 years old and under the legal guardianship of her daughter. One day Anna receives a telephone call from a health insurance salesman and purchases a $400-a-month Medigap insurance policy.

This contract is void.

James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer pays James $100. Which statement describes the payment of $100?

This created an option contract

Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct?

This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders.

Able found a stone in his yard and took it to Bob, a jeweler, for evaluation. Bob wasn't sure as to the nature of the stone, but told Albert he thought it was a topaz. Bob then offered t buy the stone for $25 and Albert agreed. Later Albert found out the stone was an uncut diamond worth about $700.

This is a valid contract that should be enforced by the law, because neither party knew the exact nature of the stone at the time of the sale.

Which of the following is true with respect to substantial performance?

Two of the above, (A) and (B), are correct. It has particular importance in the construction industry. Substantial performance does not defeat the purpose of the contract.

Which of the following is correct with regard to consideration?

Two of the above, (A) and (B): In a unilateral contract, a promise is exchanged for an act or forbearance to act. In a bilateral contract, there is an exchange of promises.

Roberto obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years.

Two of the above, (A) and (B): The manufacturer is obligated to use his best efforts to supply the goods even if no such clause appears in the written franchise agreement. Roberto has an implied obligation to use his best efforts to promote the sale of the widgets.

In which of the following situations will a court grant specific performance?

Two of the above, (A) and (C): In a case involving breach of contract for the sale of real property. Where goods are unique or rare.

The Uniform Commercial Code (UCC) provides that a court may scrutinize every contract for the sale of goods to determine whether, in its commercial setting, purpose, and effect, the contract is:

Unconscionable

Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia agrees never to open a hair salon in the state. Which of the following best describes this contract clause?

Unenforceable as a violation of public policy

Which of the following is untrue regarding the contracts of incompetent persons?

Unlike a minor, an incompetent person can never ratify a contract.

When does acceptance of an offer to enter into a unilateral contract generally occur?

Upon notice of intent to accept by the office. (****MAY BE WRONG****)

Tim, who is a minor, enters into a contract with Violet, who is an adult. Which of the following is correct?

Violet may not disaffirm the contract.

George threatens Allie, his soon to be ex-wife that he will claim she committed domestic violence in the marriage and will file criminal charges unless she agrees to give him the marital home and the children. George presents the agreement for Allie to sign. At first she refuses. Then George runs his head into a wall and picks up the phone to call the police to report that Allie hit him. If Allie signs the contract under these conditions and evidence can be admitted in court to prove what happened, the agreement will be held by the court to be:

Voidable at George's option

James offers to sell his fishing boat to Brenda for $3,000. Brenda says she will apply for a loan and will buy the boat within a week. A contract is formed:

When Brenda tells James she will buy the boat

Which of the following would NOT require a writing under the statute of frauds?

Where a landscaper agrees to landscape the lot surrounding an office building.

Under which of the following circumstances might you implement BGP on your company network and share routes with Internet routers?

Where the agreement is with an unlicensed attorney.

In which of the following situations would a minor be unable to disaffirm a contract which he had made?

Where the minor wishes to perform part of a contract and disaffirm another part of the same contract.

A discharge by breach is:

Wrongful failure to perform the terms of a contract that gives rise to a right to damages by the injured party. (****MAY BE WRONG****)

Rebecca sees a pair of beautiful silver shoes in a store window. She goes in and tells the shopkeeper, "If I am asked to the prom, I will buy those shoes. Please hold them for me." If the shopkeeper signs a note that says, "Will hold for Rebecca silver shoes, style 1028, size 8," will he have to honor that promise?

Yes, Rebecca and the shopkeeper entered a contract with a condition precedent.

Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract?

Yes, because Robbie gave up a legal right.

Which of the following is correct with regard to conditions subsequent?

A "sale or return" contract is an example of a contract with a condition subsequent.

Which of the following involves a creditor beneficiary relationship?

A contract where the insured names a bank with which he has a loan as the beneficiary of a life insurance policy.

Lyle offers to sell his house to Dennis for $75,000. Dennis responds, "I will pay you $75,000 for the house if you first paint the second floor." This response could best be described as:

A counteroffer

In which of the following situations is there a third party incidental beneficiary who would be unable to enforce the agreement?

A doctor, when an automobile accident policy states that the insurance company will reimburse the insured for the medical expenses incurred as a result of an automobile accident.

Which of the following is a collateral promise?

A mother tells a merchant to extend $1,000 worth of credit to her son and says, "If he doesn't pay, I will."

Al owes Tory $500, due June 1. Al, Tory, and Ted mutually agree that Ted will pay Tory instead of paying Al the money Ted owes Al. Such an agreement is an example of:

A novation

A fiduciary is:

A person who owes a duty of trust, confidence, and loyalty to another.

According to common law, informing someone of an intention to do an act or an intention to refrain from acting in a specified manner is considered to be:

A promise

Which of the following is an exception to the suretyship provision requirement under the statute of frauds?

A promise, the leading object of which is to obtain an economic benefit for oneself.

An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as:

A requirements contract

The parol evidence rule is:

A rule of substantive law

Matthew recently borrowed $50 from Ricardo for a couple of weeks. Matthew, still short of cash, tells Ricardo, "I will wash and wax your car in exchange for the $50 I owe you." Ricardo tells Matthew, "OK, that's great!" Matthew's performance of his new duty will be:

A satisfaction

Which of the following would generally be considered to be a revenue- raising licensing law?

A statute requiring salespeople to be licensed, but not establishing educational or training requirements.

Which of the following would most likely be enforceable?

A substitute agreement to settle a disputed debt.

Sarah offers to pay Allison $150 if Allison will paint her apartment while she is out of town on vacation for two weeks. Allison makes no promise but tells Sarah that she will think about it. While Sarah is out of town, Allison paints the apartment. This is best described as a(n):

A unilateral contract

George has been declared incompetent by the court and is under the care of his sister. Unknown to his sister, George rents the 30,000-seat civic center for his birthday party. George's contract to rent the civic center is best described as:

A void contract

Which of the following is NOT always necessary in order for a valid contract to be formed?

A writing

ABC, Inc. calls the Widget Corporation of America to order 400 widgets at $2 a widget. Widget accepts the oral order and then sends out an order confirmation form, with the pre-printed name Widget Corporation of America on the top of the form. The form states that an order has been received for "300" widgets and that it will be filled promptly.

ABC can enforce the contract for 300 widgets, but not for 400 widgets.

Able is involved in an automobile accident and is injured. While he is unconscious, the police call an ambulance which takes him to a hospital. Able is treated at the hospital and released a day later. The hospital sends him a bill for $6,500, which Able refuses to pay, claiming it is too high and he never consented to the treatment because he was unconscious. Able:

Able and the hospital have entered into a bilateral contract, the terms of which require that he pay the bill.

A(n) __________ is a contract by which the obligee agrees to accept and the obligor agrees to render a substituted performance in satisfaction of an existing contractual duty.

Accord

Adam wants to buy a six-passenger car. The salesman tells him that the two-seat sports car Adam sees on the car lot would be just perfect for six people. Adam test drives the car and then buys it. In this case:

Adam was not justified in relying upon the salesman's representation that the car would seat six people.

On March 1, Tammy, a student, received a telephone call from Watterson, Inc., offering her a job for one year beginning on June 15, after completion of the school year. According to the personnel manager, she will have to move to California and be ready to start work at 8am on June 15. Should Sara ask for a letter confirming the telephone conversation if she accepts the offer immediately.

Yes, because the contract would be for longer than one year from March 1.

Sam owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. He has been offered a two-year graduate fellowship, but he will not be able to pay the loan back if he accepts the fellowship. The bank manager tells Sam that if he pays $3,000 now, they will forgive the loan. Should Sam accept the offer?

Yes, because the early payment of the loan is consideration that makes the bank's promise binding.

The strict rule of unenforceability of illegal contracts includes which of the following exception(s)?

All of the above

Which of the following is correct with respect to election of remedies?

All of the above are correct: The Code rejects any doctrine of election of remedies; its remedies are cumulative. The remedy of specific performance is inconsistent with that of restitution. A person who seeks an injunction may also seek incidental damages for the breach.

Theresa has a contract to teach eighth grade at Washington Middle School. She decided she could make more money writing a book, so she assigns her teaching contract to her friend, Stephanie, who is also a licensed teacher.

All of the above are correct: The duties under the teaching contract are non-delegable. The duties which Theresa has attempted to delegate are personal in nature. If the school district agrees to accept Stephanie's services, a novation would occur, which would relieve Theresa of her obligation to the school district.

Which of the following duties would be delegable?

All of the above are delegable: John has a contractual duty to pay Isaac $50. Karl has a contractual duty to deliver 50 bushels of corn to Michael by October 1 . Jeffrey has a duty to mow Georgia's lawn at least once a week.

Which is NOT a revocable offer?

All of the above are irrevocable offers.

In which of the following situations is restitution available as a remedy?

All of the above are situations where restitution is available: As an alternative remedy for a party injured by breach. For a party in default. For a party who may not enforce the contract because of the statute of frauds.

Which of the following would NOT meet the signature requirement for a writing to satisfy the Article 2 statute of frauds provision?

All of the above meet the signature requirement: A typewritten name Handwritten name A printed name

Which of the following would be considered a material breach of a contract?

All of the above would be material breaches: Partial performance that omits some essential part of the contract. Delivery of 50 chairs in a contract that calls for 100 chairs. An intentional breach of the contract.

Examples of unenforceable contracts are:

All of the above: An oral promise to guarantee the additional duties of another. An oral agreement to substitute different land for the described in the original mortgage contract. An oral agreement to extend an employee's contract for six months to a total of two years.

Contracts that are implied in law:

All of the above: Are obligations imposed by law on grounds of justice and equity. Are intended to prevent unjust enrichment. Do not rest upon the assent of the contracting parties

To be effective, an offer must:

All of the above: Be sufficiently definite and certain. Be communicated to the offeree. Manifest an intent to enter into a contract.

Which of the following are requisites for fraud in the inducement?

All of the above: False Representation of a fact that is material Representation is made with knowledge of its falsity and the intention to deceive The representation is justifiably relied on

The age of majority:

All of the above: Is 21 years under common law Is fixed by statute at 18 in most states May be different from one state to another

Contract law is significant in that it is basic to other fields of law such as:

All of the above: Sales of personal property Commercial paper Secured transactions

A power of avoidance held by a party may be lost if:

All of the above: The contract is affirmed. There are unreasonable delays in exercising the power. The rights of third parties intervene.

In which of the following cases will an oral contract for the sale of goods of $750 be enforceable without a writing?

All of the above: The goods are to be specifically manufactured for the buyer and the seller has made a substancial beginning of their manufacturer. A party admits in an answer to a complaint in a lawsuit that the contract was made. Delivery and acceptance of the goods has been made.

Remedies in equity will not be granted where:

All of the above: The seller has already transferred the subject matter of the contract to an innocent victim. The terms of the contract are unfair. The relief would cause the defendant undue hardship.

Ratification can occur in which of the following ways?

All of the above: Through express language As implied from conduct Through failure to make a timely disaffirmance

A condition is probably an express condition if expressed by which of the following terms?

All of the above: While After Provided that

The mirror image rule applies to:

An acceptance

Which of the following would be considered a valid and legally enforceable agreement?

An agreement by a car salesman not to sell automobiles or automobile parts in Marin County for a period of one year after terminating his employment.

Which of the following would always be considered to be contrary to public policy?

An agreement to pay someone to make someone to make false statements about a competitor's product.

Which of the following involves an invalid assignment that a court would not enforce?

An assignment of an automobile liability insurance policy accompanied by the delivery of the policy.

James, a contractor, has a contract to build a new office building for Juan. The contract contains a provision requiring James to furnish a certificate of occupancy from the building inspector before Juan is required to pay. This provision is:

An express condition

Alice says to Brian, "If I decide to buy a word processor next year, I will buy it from you." This is an example of:

An illusionary promise

Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will benefit from this contract since his restaurant is adjacent to the planned mall. Donner in this instance is a(n):

An incidental beneficiary

The concept of consideration in contract law includes:

An inducement to each party to make a return exchange

David enters into a contract to give Edward the right of first refusal to purchase a tract of land owned by David. David subsequently offers the land to Fred without first offering it to Edward. An appropriate remedy for Edward to seek would be:

An injunction

A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of the following is eligible?

An off-duty sheriff from a county other than the one where the arrest occurred.

The way parties usually show mutual assent is by:

An offer by words or conduct and an acceptance by words or conduct.

Sam, a shopkeeper, dies unexpectedly at the age of 46. His lifelong business associate, Paul, is appointed the administrator of the estate. Sam had a personal debt of $8,000 which he owed to Art's Appliance Store. Paul says to Art, "If there isn't enough money in the estate, I'll personally see that the bill is paid." Which of the following is correct?

An oral statement such as this is not enforceable because it is WITHIN the statute of frauds.

On November 1, Paula and Roberta enters into a contract where both parties are obligated to perform on December 31. On December 1, Paula tells Roberta, "I can, in no way, perform my duties in our contract." This statement is:

Anticipatory repudiation

Non-compete agreements drafted for employees of Internet companies:

Are no different in enforceability than non-compete agreements for the other types of companies.

Trent says to Ashley, "I have a ring once owned by Marilyn Monroe. Would you like to buy it for $500?" Ashley pays for the ring, but the next day a friend tells her that Trent had recently purchased the ring at a local store. Ashley enjoys wearing the ring and wears it constantly for 12 months. Finally, she goes to Trent and says, "Here is the ring you lied about. Give me my $500." Most likely:

Ashley will not get her money back since she has affirmed the contract by taking an unduly long time to disaffirm.

Ben and Kate had been negotiating Ben's employment contract in conversations over the phone for a couple of weeks. Finally, they agreed on some contract terms. Kate offered to create a draft of the contract for Ben to read over. On the same day Ben was fired from his job. Afraid he would be unemployed, Ben signed Kate's draft without reading it. In this example Ben:

Cannot avoid the contract because of economic duress of failure to read.

Which of the following is least classifiable as a necessity for which a minor will be held liable on a contract?

Cassette tapes

Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress is too expensive and now wishes to cancel the order.

Cheryl may disaffirm this executory contract because, while clothing in general is classified as a necessary, a new prom formal would probably not be classified as a necessary.

Chris receives a printed form in the mail from Wyandott Heating indicating that he has placed a telephone order for a $600 heater. He doesn't recall placing the order. Which of the following is correct?

Chris can hold Wyandott to the order.

The requirement that each party to a contract must intentionally exchange something of value as an inducement to the other party to make a return exchange is known as:

Consideration

Which of the following is NOT true concerning the requirements for an effective assignment?

Consideration is required.

Under the UCC, a(n) ____ is a sequence of previous conduct between the parties to an agreement which may be fairly regarded as establishing a common basis of understanding for interpreting their conduct under the contract.

Course of dealing

Under the UCC, ____ refers to the manner and extent to which the respective parties to a contract have accepted successive tenders of performance by the other party without objection.

Course of performance

Will wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10.00 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n):

Creditor beneficiary

Contracts induced by threats of ____ are voidable, regardless of whether the coerced party has committed an unlawful act.

Criminal Prosecution

Don has an employment contract with Dunkirk Ice Cream. He sells ice cream and novelty ice cream products. He has nine children and doesn't make enough money, so he decides to see if another dairy will hire him, too. "After all," he reasons, "most stores carry four or five different brands." His employment contract prohibits him from competing. If Don sells for another dairy in addition to Dunkirk, will he be in trouble under his contract?

Yes, it is likely to be enforceable during employment.

Arthur mails an offer to Brian on June 15. Brian receives the offer on June 16. Arthur mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18. Brian receives the revocation on June 19. Was a contract formed?

Yes, on June 18

Wes, who is an art collector, offered to buy a print from Le Monde Gallery. Le Monde balked at the price, sending Wes a letter of rejection. That day it discovered that the print was not as highly valued as originally thought. Le Monde immediately telephoned Wes to accept his offer. Is there a contract?

Yes, since the acceptance was received before the rejection.

Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable?

Yes, there is consideration for the modified amount.

If Dan owes Sue $1,000 and the parties agree that Dan will paint Sue's house in satisfaction of the debt, when Dan paints Sue's house:

Dan will still owe Sue $500, half of the amount originally owed, since this is the true value of the painting job. (****MAY BE WRONG****)

The transfer of a contract duty to a third party is known as a(n):

Delegation

A transfer to a third party of a contractual obligation is known as a(n):

Delegation of duties

William recently sold his successful business to Janice. The contract for the sale contained an unreasonable restriction that did not allow William to open a similar business for fifteen years. The courts would, in this instance,

Delete the unreasonable portions of the contract.

Don offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer."

Diane cannot accept the offer, because it wasn't made to her.

The exercise of the power to avoid a contract is known as:

Disaffirmance

Donald, a minor, makes a contract with Albert, an adult, to buy a computer. One week later, Donald has his eighteenth birthday and shortly thereafter tells Albert he will pick up the computer next week.

Donald has expressly ratified the contract.

A(n) _________ is an intended beneficiary of a contract who receives the benefits of the contract as a gift.

Donee beneficiary

Professor Doright has a life insurance policy on his own life which provides that in the event of his death, his mother will receive the proceeds. Professor Doright's mother is a(n):

Donee beneficiary

Dori, an accountant, has a tax service and accounting business in Elmira City...however on weekends she returns to her house in Elmira City and meets with clients in her home.

Dori is in violation of the sales agreement, which would probably be found to be reasonable in time and geographic limits.

Which of the following is correct with regard to duress?

Duress by improper threats is the most common form of duress

Alice offers to sell her computer, monitor, and printer to Bradley for $300. Bradley says he will accept provided that Alice includes her word processing software. What is the status of their discussions?

There is no contract, because Bradley has made a counteroffer.

Which of the following are the two basic elements of consideration?

Bargained-for-exchange Legal sufficiency

A contract in which both parties exchange promises is a:

Bilateral contract

Express contracts and implied contracts are:

Both (A) and (B): Are both genuine contracts Are equally enforceable

A misrepresentation is material if:

Both (A) and (B): It would likely induce a reasonable person to enter into a transaction. The maker knows it would likely induce the other party to enter into a transaction.

Promissory estoppel is a contractual doctrine that includes which of the following considerations?

Both (A) and (B): The courts use the doctrine of promissory estoppel to enforce non-contractual promises. Under this doctrine the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the nature of the promise to take action or refrain from taking action, and the promisee does so.

Which of the following is a(n) obligation imposed by law to avoid injustice?

Both (A) and (C): A contract implied in law A quasi contract

Article 2 of the Code provides:

Both (A) and (C): A right to damages for breach of the whole contract can be assigned despite a contractual provision to the contrary. A right arising out of the assignor's due performance of the entire obligation can be assigned.

An agreement to refrain from a particular trade, profession, or business is enforceable if two requirements are met: that it protects a property interest of the promisee and that the restraint is no more extensive than is reasonably necessary to protect that interest.

Both (A) and (C): If the purpose of the restraint is to protect a property interest of the promisee If the restraint is no more extensive than is reasonably necessary to protect the promisee's interest

Ralph sold a motel to Steve by stating that he had paid $250,000 for it and that his net average annual profit from the business has been $40,000. In reality he paid $100,000 for the motel and has earned a net average annual profit of only $30,000. Steve made no attempt to verify the statements until after the transaction was completed.

Both (A) and (C): Ralph has committed fraudulent misrepresentation The contract is voidable at Steve's option

Russell and Joe make a contract for Russell to manufacture five leather chairs of a specified design. Prior to their manufacture, the factory is destroyed in an accidental fire that is no one's fault. The chairs are available from other sources.

Both (A) and (C): Russell must supply the chairs, even if he must buy them elsewhere. Russell has materially breached the contract if he fails to deliver the chairs.

Jim contracted with Kevin to serve as a guide for Kevin on his three-week fishing trip to Canada. The contract was made on April 1 with the trip to begin on June 1. On May 1, Kevin notified Jim that he had changed his mind and would be unable to make the trip. He also refused to pay Jim any compensation.

Both (B) and (C) above are correct: Because the contract is executory, Jim has suffered no damages, and Kevin has no obligation to pay any compensation. Jim is discharged from his duty to serve as guide, and he may bring suit immediately against Kevin.

Carlos owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Virginia and as part of the transaction agrees not to engage in the same business anywhere within the state for a period of four years.

Both (B) and (C): The agreement is unreasonable The agreement unduly interferes with the interest of the public

Bill, a builder, wants to submit a bid on a city sewer project. He computes the cost, but mistakenly omits the cost of one item. Accordingly, he submits a bid of $430,000 to the city. The next highest bid is $675,000, and the rest of the bids are even higher. The city is happy to have such a low bid, so it accepts Bill's bid and awards him the contract for the job, even though the city engineer is of the opinion the job cannot be done for less than $650,000. In this case:

Both (B) and (C): The city was aware of Bill's mistake. When it accepted the bid, with knowledge of Bill's mistake, the city sought to take an unconscionable advantage of Bill's error. This case is an example of a palpable unilateral mistake.

In addition to the four basic requirements of a contract, which of the following must also occur in order to have a valid contract?

There must be an absence of invalidating conduct and duress

William agrees to drill a well up to 200 feet deep for John's rural cabin. The contract price is $3,000. After drilling 100 feet, William strikes solid granite rock. He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract. He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price. Because John is anxious to have the well, he agrees to pay William an additional $1,000 to complete the job. However, once the well is finished, he changes his mind and now says he will pay only the originally agreed-upon amount.

The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000.

The State of Florida enters into a contract with Treasure Salvors governing the salvage of a Spanish galleon that sank in the 1600s. Under the terms of the contract, the salvagers agree to relinquish 25% of the items recovered to the State of Florida in return for the right to salvage on state lands. At the time the parties entered into the contract, they both believe that the seabed where the ship lies is state land. Subsequently, the United State Supreme Court holds that the continental shelf on which the ship rests has never been owned by Florida. The salvagers sue to rescind the contract.

The parties made a mutual mistake for which the contract should be avoided.

Fred contracts to sell a certain tract of land to Maria for $20,000, but the contract is silent as to the time of delivery of the deed and payment of the price.

The payment of the $20,000 and the delivery of the deed are mutually dependent and, in the absence of an agreement to the contrary, are concurrent conditions.

Barbara owes Arthur $2,000. On July 1, Arthur assigns the right to the $2,000 to Carl. Thereafter, on July 15, Arthur assigns the same right to David, who in good faith gives value to it and knows nothing about the first assignee.

The rule differs in different states. Depending on which rule a state follows, the answer will vary. (****MAY BE WRONG****)

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code (UCC)?

The sale of a new car

A written, integrated contract contains a provision that states it will be effective for a "year." The plaintiff in a lawsuit claims that a "year" is obviously 12 months. The defendant claims that the contract meant a 10-month school year. Parol evidence:

The term "year" in the contract is ambiguous, and the parties can bring in evidence to clarify their intern.

Requirements for a memorandum that satisfies the statute of frauds provisions for a writing include that:

The writing must be in a specified statutory form. (****MAY BE WRONG***)

Wayne helped Hank study all night for an important exam. After Hank got an A on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it."

There is no contract because there is no valid consideration.

Stan sends for a law school catalog from Ivory Towers University. According to the catalog, the law school applications are evaluated on the basis of undergraduate grades, standardized test scores, and references. Stan, who is a straight-A student, has high test scores and excellent references, applies and pays the $100 application fee. His application is rejected. Later he finds out that others with low grades and test scores were accepted based on their family connections and donations made to the University. If Stan followed all of the guidelines in the college catalog and paid the required application fee, then according to the court in Steinberg v. Chicago Medical School:

This is a valid contract, the terms of which are set forth in the college catalog

Elmer promises to pay Fred $100 if Fred will register and vote in the next election as a Democrat. This is:

This is an illegal contract

The UCC provides that a merchant is bound to keep a written offer to open for a stated period but no longer than:

Three months