Blaw Exam 4
15. An effective offer requires a clear manifestation of intent, definite terms and conditions, and communication of the offer.
(A) True
16. An offer is made to the offeree.
(A) True
17. An offer is made by an offeror.
(A) True
2. Contract law is primarily state common law.
(A) True
24. You return a lost dog to its owner. You did not know a reward was being offered for the dog. You do not have a legal right to the reward.
(A) True
26. An offer may be revoked before the offeree has a chance to respond to it
(A) True
28. "I will pay you $100 to not sell your $500,000 house to anyone else for the next month so I can see if I can get the money together to buy it," you say. "Ok," says the home owner. The $100 payment is an option contract.
(A) True
29. "I will pay you $100 to not sell your $500,000 house to anyone else for the next month so I can see if I can get the money together to buy it," you say. "Ok," says the home owner. The $100 payment is a valid contract.
(A) True
30. Option contracts are binding promises to keep a specific offer open to a specific party for, say, one month.
(A) True
32. A counteroffer terminates the original offer.
(A) True
33. Offers may be terminated by the destruction of the subject matter of the contract.
(A) True
34. "I will sell you my car for $5,000," says A. "How about $4,000 instead?" says B. The offer to sell for $5,000 has been terminated.
(A) True
35. If the offeree accepts an offer through performance requested, unilateral contract is formed.
(A) True
37. Two promises or an exchange of promises are involved in bilateral contracts
(A) True
39. Most contracts are bilateral.
(A) True
4. A contract may be based on a promise not to do something.
(A) True
40. In unilateral contracts, performance is acceptance of an offer.
(A) True
41. Acceptance of an offer must be unconditional, unequivocal, and legally communicated to be effective.
(A) True
43. The general rule in contract law is that an acceptance of an offer must be its "mirror image."
(A) True
45. The acceptance of an offer to form a contract may be communicated in any "reasonable" way and be effective, in most instances.
(A) True
46. Usually, the acceptance of an offer is legally effective when the acceptance is sent
(A) True
49. If an acceptance is mailed before a revocation of an offer is received, the acceptance is effective.
(A) True
5. The Uniform Commercial Code has significantly influenced the operation of commercial contract law.
(A) True
50. Consideration is something of value in exchange for a promise.
(A) True
51. A legal detriment may be good consideration for a contract.
(A) True
56. In Caley v. Gulfstream Aerospace the court held that when employees were told a new dispute resolution policy would be imposed on them if they kept working that getting to keep working was adequate consideration, so there was a contract.
(A) True
6. Not all promises are enforceable contracts.
(A) True
60. Promissory estoppel is also known as detrimental reliance.
(A) True
61. When the courts use the doctrine of promissory estoppel (detrimental reliance), it means that despite the lack of the elements of a contract, the court may require payment to be made as if a contract had existed.
(A) True
62. In Hinson v. N&W Construction Co., where N&W relied on a plumbing bid by Hinson in making a bid on a construction contract that was later awarded, the court held that N&W could rely on the bid based on promissory estoppel.
(A) True
65. If you promise to give $1 million to a church, which begins new construction based on your promise, you may be held legally obligated to make the gift even though there is no contract.
(A) True
67. An intoxicated person often has partial capacity to contract.
(A) True
68. A void contract never was or will be a valid contract.
(A) True
70. A voidable contract is a contract that one party has the right to avoid.
(A) True
71. A contract formed under conditions of fraud is voidable.
(A) True
72. Contracts created by an intoxicated person may be voidable by that person because he only had partial capacity to contract.
(A) True
75. A minor may ratify a contract, upon reaching the age of majority, that she had the right to disaffirm if she so desired.
(A) True
76. Generally, minors and intoxicated persons have only partial capacity to contract.
(A) True
78. If a 16-year-old buys a car, uses it for six months, then decides to disaffirm the contract to buy the car on a three-year payment plan, the contract is voidable.
(A) True
80. If a minor contracts for student loans for college, the contract is not voidable.
(A) True
81. Contracts in many low income countries are more difficult and costly to enforce than they are in more developed countries.
(A) True
82. If the subject matter of a contract is unlawful, such as a deal to sell heroin, then there is no contract.
(A) True
83. A valid contract can become unenforceable because of a statute passed after the contract was formed.
(A) True
84. If state law limits the interest rate that may be charged on a loan, then a loan charging a higher interest rate may be an illegal, unenforceable agreement.
(A) True
85. When the U.S. government announced that no Americans could do business with Iraq, all existing contracts became unenforceable.
(A) True
87. Joe contracts with Phil to set fire to Joe's warehouse so he can collect the insurance money, but then Joe refuses to pay Phil for his work. This contract is unenforceable.
(A) True
89. If you win a lot of money at a poker game, and the other players refuse to pay you, in many states you could not sue to collect your winnings.
(A) True
91. Contracts that unreasonably restrict competition are unenforceable.
(A) True
92. If parties enter into a contract by mistake, the contract may be disaffirmed.
(A) True
93. If a contract is made under duress or undue influence, it may be disaffirmed because there was no real consent.
(A) True
95. The Federal Trade Commission cooling-off rule allows purchasers of door-to-door sales of more than $25 to rescind the contract within three days, even if there was no undue influence used in the sale.
(A) True
96. Contracts signed with a door-to-door seller may be voided within three days of signing under a Federal Trade Commission Rule.
(A) True
98. If a person signs a contract because of "undue influence" by the other party to the contract, the person can later disaffirm the contract.
(A) True
10. In an express contract, promises are inferred from the behavior of the parties in relation to one another.
(B) False
12. The basic elements of a contract are: offer, acceptance, fair value, lawful subject matter, and genuine consent.
(B) False
14. The basic elements of a contract are: offer, acceptance, consideration, genuine consent and court approval.
(B) False
19. Preliminary negotiations are generally considered to create as binding offers.
(B) False
21. "I want $10,000 for my car," says Sam. "I would love to have it," says Jan. We have an offer that has been accepted to form a contract.
(B) False
22. An offer that is missing only one key element will be accepted as the basis of a contract; the court will clarify the offer.
(B) False
23. If a printed advertisement states the price of a good offered for sale, the seller must sell to any customer who wants the good at that price.
(B) False
25. Termination of an offer can only occur through the operation of law.
(B) False
27. If no time is specified in an offer, the law presumes the offer exists for one year before it is terminated by lapse of time.
(B) False
3. Freedom of contract means businesses may enter into any contracts they wish to.
(B) False
31. Option contracts are binding promises to keep an offer to sell a good open to the public for a certain length of time.
(B) False
36. Most contracts are unilateral.
(B) False
38. If an offeree accepts an offer through an exchange of mutual promises, a unilateral contract is formed.
(B) False
42. Acceptance of an offer must be conditional, unequivocal, and legally communicated to be effective.
(B) False
44. "Unless you say no, then you must buy my car for $5,000," says A. B says nothing. B must buy the car.
(B) False
47. Usually, acceptance of an offer is legally effective when the acceptance is received
(B) False
52. A promise not to do something may not be consideration for a valid contract.
(B) False
53. Consideration involves the right of individuals to be considered to be able to enter into contracts legally.
(B) False
54. Courts will not enforce contracts if the consideration is not "reasonably consistent" with what is received in exchange.
(B) False
55. In Caley v. Gulfstream Aerospace the court held that when employees were told a new dispute resolution policy would be imposed on them if they kept working that there was no consideration, so no contract.
(B) False
57. In Caley v. Gulfstream Aerospace the court held that when employees were told a new dispute resolution policy would be imposed on them if they kept working that there was no acceptance of an offer, so no contract.
(B) False
58. A signs a contract to buy B's ranch for $900,000 then learns that the true market value is $500,000. There is not adequate consideration, so the contract will not be enforced.
(B) False
59. Promissory estoppel applies when, to avoid injustice, a court refuses to enforce a grossly unfair promise.
(B) False
63. In Hinson v. N&W Construction Co., where N&W relied on a plumbing bid by Hinson in making a bid on a construction contract that was later awarded, the court held that since Hinson received no consideration for his bid, he could not be bound to it later.
(B) False
64. The promise of a gift is generally considered to be an enforceable promise.
(B) False
66. An intoxicated person has no capacity to contract.
(B) False
69. A voidable contract never was or will be a valid contract.
(B) False
7. Contract law enforces duties imposed on citizens by the government.
(B) False
73. Contracts created by intoxicated persons, or persons under the influence of drugs, are always voidable at their option.
(B) False
74. A minor always has the ability to disaffirm a contract.
(B) False
77. If a minor buys a car and later wants his money back after the car burns in a fire, courts will typically hold the contract to be voidable and a full refund is required.
(B) False
79. If a minor agrees to join the Army, the minor's agreement to join is voidable.
(B) False
8. If a party fails to perform a nonbinding promise the law will provide a remedy.
(B) False
86. An employer can avoid liability for on-the-job injuries so long as fully informed workers sign exculpatory agreements.
(B) False
88. If an agreement is held by the courts to be illegal or in violation of public policy, it will allow the parties to recover their costs.
(B) False
9. Express contracts must be in writing to be valid.
(B) False
90. Unconscionable contracts are upheld by the courts unless force was used to obtain them.
(B) False
94. If a party accidentally puts in a contract that a house is to sell for $20,000, when it should have said $200,000, the contract is enforceable if both parties signed it.
(B) False
1. The Restatement of Contracts is an authoritative source that presents and summarizes the common law of contracts.
(A) True
100. Fraud occurs when there is false material information passed to the party being induced to enter into a contract.
(A) True
11. An implied contract is based on promises inferred from the behavior or circumstances of the parties involved.
(A) True
13. The basic elements of a contract are: offer, acceptance, consideration, lawful subject matter, and genuine consent.
(A) True
20. Advertisements that state prices are usually not considered binding offers.
(A) True
48. The party who makes an offer can require the acceptance to be communicated in a very specific way or the acceptance is not good.
(A) True
18. An offer is made by an offeree.
(B) False
97. If a contract is agreed to in the presence of any incorrect information, the contract may be voided.
(B) False
99. Fraud occurs whenever there is any false information passed to the party being induced to enter into a contract.
(B) False