BLAW: Quiz 2 Questions

B

An offeror has specified the method of communication to be used by the offeree when accepting the offer. What principle would a court apply to determine whether acceptance had been perfected? a) The offer must have been made using the same method of communication. b) The offer cannot be accepted by another method of communication. Incorrect Response c) Acceptance by a specified method of communication must be reasonable. d) Acceptance by other means is effective when received by the offeror.

B

A cancer hospital asked its privately owned medical isotope source to arrange an earlier shipment of an urgent order. The private supplier confirmed an earlier shipment was possible for a 30 percent surcharge on the contractual price. Because the hospital's cancer patients needed the isotopes desperately, the hospital faxed a written acceptance of the varied terms. The hospital subsequently refused to pay the price increase. What would a New Brunswick court hearing the ensuing dispute be most likely to determine? a) Extra payment for a delivery the supplier was going to make is a gratuitous variation, and not enforceable. b) Contractual variation was supported by consideration, and therefore the variation is enforceable.

C

A consumer conducting business with a bank must accept the standard set of terms expressed in the loan agreement, even though those terms are non-negotiable and typically favour the bank. Why would a modern-day court most likely continue to uphold these contractual "take it or leave it" arrangements? a) the law expects a bank to show goodwill toward its customers b) the agreement does not require further elaboration or clarification c) the law expects people to take care of themselves d) consumers accept the bank's unconditional offer

A

Avatar Productions Ltd. has had a long and successful relationship with Facades Inc., a set designing company. Recently, Facades failed to complete one of its contractual obligations within the time limit set out in the contract. What overriding factor should Avatar consider when deciding whether to sue Facades? a) whether it makes business sense to sue Facades b) that failure to immediately sue Facades will result in giving up its right to sue c) the impact of the litigation on the industry d) whether it can prove that the breach was due to negligence on the part of Facades

A

Canada's new anti-spamming legislation makes it illegal to send an electronic commercial message (A. without / B. even with) the prior consent of the recipient.

B

Most Canadian jurisdictions require contracts regarding interests in land to be in written form. a) True b) False

B

The fact that one party has less bargaining power than the other (A. does / B. does not) generally affect the enforceability of their concluded contract.

A

The question of validity of browse-wrap agreements can be avoided entirely by requiring customers to take affirmative action to signify assent. a) True b) False

B

Thomas gave Jerron his final sales pitch, offering 10 percent off the list price, 60 days for payment, a delivery date, and delivery terms. What has happened so far at this point in the negotiation process? a) A consensus on the terms of the offer between parties was reached. b) A complete offer has been extended that is now open to acceptance. c) There has been a mutual expression of willingness to do business.

B

What is the primary benefit of contract law to business? a) Contract law allows businesses to transfer risk. b) Once a contract is created, it permits both parties to rely on the terms they have negotiated and plan their business affairs accordingly. c) Contract law guarantees that others will follow through with their promises. d) It ensures that businesses treat each other as equals and do not take advantage of one another in business relationships.

C

What types of employees should a company's head of risk management choose when putting together a negotiating team? a) executives with highly developed abilities to deceive when necessary in order to secure a favourable agreement b) experienced individuals who want to win and are willing to bluff and bluff hard to have a successful career c) individuals with adequate legal knowledge for the negotiation of an enforceable contract that meets needs and protects interests d) individuals who know the game and are not shy in demonstrating a complete lack of ethical standards

A

When will an offer without a stated deadline expire? a) Automatically, after a "reasonable period of time" b) Only if revoked

A

When will an offer without a stated deadline expire? a) Automatically, after a "reasonable period of time" b) Only if revoked

B

Which if the following is a distinguishing characteristic of a "condition precedent"? a) It prevents a contract from coming into existence if a particular condition is not met. b) It relieves a party from performing a contract if a particular condition is not met. c) It permits a party to limit liability for damages.

C

Which of the following best explains the requirement that "contracts must be supported by mutual consideration"? a) There must always be at least two parties to a contract. b) Contracts require that the parties treat each other fairly. c) A contract involves a bargain or exchange between the parties. d) Contracts must be in writing to be enforceable.

D

Which of the following would automatically end a contract with a supplier if the buyer's sales fall below a stated level? a) an exemption clause b) a condition precedent Incorrect Response c) a liquidated damages clause d) a condition subsequent

B

Why would a businessperson use contractual terms as a planning feature of the law? a) to limit liability and block the use of the parole evidence rule b) to limit liability and shield against possible future events c) to limit liability and prevent collateral oral agreements

A

What is the meant by the statement that an offer "has lapsed"? a) that the time limit for acceptance given by the offeror has passed b) that the offeror has lost the capacity to fulfill the contract c) that the rejection of the offer has occurred

D

After completing her due diligence assessment of Arjan's proposal, Benta has agreed to meet with Arjan to discuss a possible venture capital arrangement to be used to commercialize Arjan's promising battery technology. If the negotiations are successful, Benta's lawyer will draft the agreement setting out the terms of the arrangement. What is the most important factor both parties will have to consider throughout their discussions? a) Communication is just about discussing possibilities with the other side. b) Arjan will likely communicate with other sources to determine who can provide the most favourable terms. c) To know when simple business communications crystallize into legal obligations. d) Until the lawyer drafts the agreement, contractual negotiations have no legal meaning.

D

It is a basic contract rule that if one party makes what looks like an offer, the other side is entitled to accept that offer whether it was intended as one or not. What is the term for this rule of contract law? a) the reasonable person test b) the subjective standard test c) the reasonable intention test d) the objective standard test

B

Goto Supplies Ltd. has determined that, because of increased production costs, it will actually lose money if it fulfills its contract to supply parts to Nova Manufacturing Inc. and is considering breaching the contract. What term used to describe the type of contract breach Goto is contemplating? a) reputation management b) economic breach c) specific performance

B

How should a manufacturer try to salvage its reputation after it has been discovered to have knowingly produced and sold a defective product to the public? a) Deny any wrongdoing and obtain top lawyers to defend against litigation. b) Take ownership for the problem and voluntarily compensate affected customers. c) Hire bloggers to create confusion about the facts on social networking websites. d) Have a top executive issue an official apology presented on national television.

A

In most instances, the rules governing contractual disputes are based on (A. the common law / B. statutes).

A

In reality, negotiating parties rarely have equal bargaining power. Which statement best reflects the significance the law attaches to this reality? a) Despite this reality, the courts are not normally entitled to assess the fairness or reasonableness of the contractual terms that business parties have chosen. b) Because of this reality, the courts will often intervene to assist the weaker party. c) Because of this reality, it is prohibited in contract law to persuade a weaker party to agree to unreasonable terms. d) Because of this reality, the law always allows weaker parties to cancel contracts that contain unreasonable terms.

C

What best describes the objective standard test that the court will apply in determining the formation of a contract? a) whether the contract is sufficiently complete to provide certainty to all parties b) whether the terms of the contract provide sufficient mutual consideration c) whether a reasonable person could conclude that an offer and acceptance occurred Incorrect Response d) whether the parties to the agreement have legal capacity to enter into contracts

B

What is the difference between the communication of an invitation to treat and the communication of an offer to enter into a contract? a) An offer to enter into a contract is an expression of a willingness to do business. b) An invitation to treat invites an offer, and cannot be accepted. c) An invitation to treat is a promise to perform specified acts on certain terms.

A

On Tuesday, Jatelle offered to sell one of her racing motorcycles to Rofan for $8000. Rofan said he needed time to consider her offer. On Friday morning, Rofan received an e-mail from Jatelle advising the offer was no longer open. Which of the following actions would allow Rofan to try to complete the purchase of her motorcycle? a) present Jatelle with an offer to buy the motorcycle b) ask Jatelle for more time c) communicate the acceptance of Jatelle's offer

A

It is important for a business person to know when simple communications crystalize into legal obligations. a) True b) False

A

ABC Electrical Inc. has a contract with a building contractor that provides that in the event of breach, ABC will be entitled to damages of $10 000. Which of the following best describes this type of contract term? a) a liquidated damages clause b) a condition precedent c) an exemption clause d) a limitation of liability clause

C

Albert's mother signed a three-month listing agreement with a real estate agent. Prior to considering or accepting either of two below-listing-price offers the agent brought to Albert's mother, she suffered a fatal stroke. What would a judge likely decide if the agent and/or the offerees attempt to legally force the mother's estate to accept one of the offers? a) that someone who makes an offer and then dies would not be bound b) that the death increased the chance of one of the offers being accepted c) that the deceased party cannot personally perform, hence her offer also died d) that the estate is obligated to complete the sale by accepting one of the offers

A

In what way are a click-wrap agreement and a browse-wrap agreement different from one another? a) Notification prior to assent is required to enforce terms of a click-wrap agreement. b) Notification prior to assent is required to enforce browse-wrap agreements. c) Notification and consent are required to enforce browse-wrap agreements. d) Notification and consent are required to enforce terms of a click-wrap agreement.

B

Matt purchases a car for his son from an auto dealership. A week later, his son discovers a defect that renders the car unsafe. The defect is one that a court would consider to be a breach of contract. What legal recourse is available to remedy this problem? a) The court's resistance to imposing ethical business standards leaves no recourse. b) Matt may commence a lawsuit against the dealer for breach of contract. c) Matt's son may file a lawsuit against the auto dealer for breach of contract. d) Mat's son can sue the manufacturer of the car for breach of contract.

B

Panda Industries agreed to supply 500 tons of steel rebar to ABC Builders for a price of $250 per ton. Shortly after the contract came into effect, the market price of rebar rose to $275 per ton. Fortunately, ABC Builders was agreeable to paying the hew higher price. Why might ABC Builder's promise to pay an additional $25 per ton be unenforceable? a) the lack of sufficient consideration b) the absence of fresh consideration c) the lack of adequate consideration d) the absence of formalization

B

Raphael saw Fabco Electronics Inc.'s ad in a newspaper advertising that the store had new laser printers for sale for the price of $75. Unfortunately, the store was sold out by the time Raphael arrived at the store with $75, and he now wants to sue Fabco for breach of contract, claiming he accepted their offer by arriving at the store and tendering his payment of $75. Why will Raphael's breach of contract claim be unsuccessful? a) because the store was not able to actually supply him with a printer b) because the store's ad did not constitute an offer to Raphael c) because the offer expired when the store ran out of printers

D

What is the effect of a contract on the relationship between two parties? a) A contract ensures that any breaches by one party will be answered with litigation from the other party. b) A contract ensures that the relationship of the parties will always be equal. c) A contract will prevent all disputes that might otherwise arise between the parties. d) A contract permits both parties to rely on the terms they have negotiated and plan their business affairs accordingly.

D

What is the legal term given to a clause that makes a contract enforceable against a buyer only if the buyer is able to secure a satisfactory building inspection? a) a liquidated damages clause b) a limitation of liability clause c) a condition subsequent d) a condition precedent

C

What is the main disadvantage of building flexibility into contractual agreements? a) the risk of having no contract at all if the resulting document is too unfixed b) the risk that the parties will be allowed to terminate the contract altogether c) the risk that voluntarily altering the contract will make it unenforceable

A

Which of the following is a distinguishing characteristic of a limited liability clause? a) It relieves or limits liability of a party for damages in particular circumstances. b) It may be used to punish parties for non-compliance with contractual promises. c) It requires the parties to purchase insurance. d) It relieves parties in a variety of circumstances from contractual obligations.

B

Which of the following statements regarding written contracts is TRUE? a) Written contracts must be filed at the appropriate registry in order to be enforceable. b) Only certain types of contracts must be in writing in order to be enforceable in court. c) All contracts must be in writing in order to be enforceable in court. d) Written contracts are usually less cost-effective than verbal contracts.

C

Which of the following would most likely have the greatest influence in orchestrating the occurrence of an economic breach in a contractual business relationship? a) seeking methods of maintaining profits when entering into new business relationships b) taking an intractable position and forcing an ultimate favourable settlement c) deciding to secure greater profits through non-performance of an existing contract

C

Which of the following would provide that a supplier will NOT be liable to a retailer if it is fails to deliver products to it on time? a) a liquidated damages clause b) a condition precedent c) an exemption clause d) a limitation of liability clause

C

Which statement best describes a fundamental feature common to all contracts? a) Contracts are agreements that contain long-term promises that can be enforced in court. b) Contracts are primarily governed by rules contained in laws created by elected governments. c) Contracts allow participants to create their own rights and duties within a framework of rules that a judge will later enforce, if called upon to do so. d) Contracts provide legal and ethical guidelines for business relationships.

A

Which statement does NOT accurately describe standard form contracts? a) Standard form contracts are very fair because everyone receives the same standard terms. b) Standard form contracts tend to be "take it or leave it" contracts. c) Standard form contracts help reduce transaction costs. d) Standard form contract terms often favour the party who drafted the contract.

A

Why are promises to keep offers open for particular periods of time normally unenforceable? a) because offers are always revocable b) because offerors are entitled to make multiple offers c) because such promises are contrary to public policy

D

Why is it important for the parties involved in contractual negotiations to know that an offer has been rejected? a) The risk in rejecting an offer is that it may not be renewed. b) A counteroffer is legally recognized as a form of rejection. c) The distinction between rejection and counteroffer can be unclear. d) The offer is automatically terminated upon rejection by the offeree.

C

Why should one NOT rely on the common law doctrine of frustration in contractual negotiations? a) The doctrine of frustration holds that the terms of a contract are settled at the time of acceptance. b) The doctrine of frustration holds a party to the performance of its contractual obligations. c) The doctrine of frustration is an unreliable avenue of escape that operates in narrow circumstances.

C

With respect to the relationship that exists between contractual parties, what is meant by the phrase "meeting of the minds"? a) The legal cornerstone of the commercial operation has been formed. b) There is an informing idea behind the contractual relationship. c) There is agreement upon the parties' responsibilities owed to each other.