blaw test 2

Which of the following are the two basic elements to consideration? a. Bargained-for exchange and legal sufficiency b. Legal detriment and legal benefit c. Legal sufficiency and legal adequacy d. Promise and forbearance

Bargained-for exchange and legal sufficiency

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? a.. Yes, since the acceptance was received before the rejection b. No, because the rejection was effective upon dispatch c. No, because the rejection terminated the offer d. Yes, because the acceptance is always effective upon dispatch

a.. Yes, since the acceptance was received before the rejection

(n) ____ contract is one in which the parties have manifested their agreement by oral or written language, or both. a.. express b. implied c. executory d. formal

a.. express

Ken promises not to foreclose on a mortgage that he holds on an office complex that Christopher owns. In reliance on this promise, Christopher expends $200,000 to remodel the complex. Which of the following is correct with regard to Ken's promise? a. Ken's promise not to foreclose is unsupported by consideration. b. Ken's promise is noncontractual. c. Ken's promise will be enforced against him based upon the doctrine of promissory estoppel. d. All of the above.

all

The UCC Battle of the Forms rule: a. changes the mirror image rule. b. may yield different results depending on whether the parties are merchants. c. may result in formation of a contract different from the terms of the offer. d. All of the above.

all

Which is an irrevocable offer? a. A bid to construct a bridge for the city b. An offer to buy stock in the ABC Corporation once it is formed c. A unilateral offer to pay John $30 to mow your lawn at the point that he has completed half the job and indicates he wishes to finish d. All of the above.

all

Which of the following can meet the scienter requirement to establish fraud in the inducement? a. Actual knowledge b. Lack of belief in the statement's truthfulness c.. Reckless indifference as to a statement's truthfulness d. All of the above meet the requirement.

all

Which of the following is correct with regard to counteroffers? a. A counteroffer operates as a rejection of the original offer. b. A conditional acceptance is a common type of counteroffer. c. The receipt of a counteroffer terminates the original offer. d. All of the above are correct.

all

Which of the following is correct with regard to a contract? a. All contracts must be in writing. b. A person who deposits money in a bank account has entered into a contract with the bank. c. A contract may be for a tortious purpose. d.. To be valid, a contract must be bilateral and cannot be unilateral.

b. A person who deposits money in a bank account has entered into a contract with the bank.

Which of the following would most likely be enforceable? a. An agreement supported by past consideration b. A substitute agreement to settle an undisputed debt c. A debt agreed to seven years ago in a state where the statute of limitations is six years d. A promise following the rendering of emergency services that is not supported by new consideration

b. A substitute agreement to settle an undisputed debt

Which of the following is NOT an element of fraud? a. Material misrepresentation b. Competent parties c.. Knowledge of falsity d. Justifiable reliance

b. Competent parties

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. a. Elmer has made a firm offer to Fred which cannot be revoked. b. Elmer can revoke his offer at any time before acceptance, because there is no consideration to keep the offer open. c. Elmer must keep the offer open, because this is an option contract. d. Elmer is prohibited from revoking his offer to Fred under the doctrine of promissory estoppel.

b. Elmer can revoke his offer at any time before acceptance, because there is no consideration to keep the offer open.

Which of the following results in a void, rather than voidable, agreement? a. Duress by improper threat b. Fraud in the execution c. Fraud in the inducement d. Undue influence

b. Fraud in the execution

A collection agency threatened to sue Martha for the unpaid hospital bills from her heart operation. She signed a promissory note at a high but not illegal rate of interest. What result? a. It is valid because she signed it.. b. It is valid because the threat to bring a civil suit to collect money owed is permissible. c. It is invalid because she signed under duress. d. It is invalid because the agency put her under undue pressure

b. It is valid because the threat to bring a civil suit to collect money owed is permissible.

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. a. This contract is voidable at Kenneth's option. b. James has committed physical duress against Kenneth. c. This is an example of economic duress. d. All of the above.

b. James has committed physical duress against Kenneth.

Janet promises Eli $4,000 for one of his original paintings on the condition that she receive $1 million from her mother's will. a.. Janet has made an illusory promise. b. Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million. c. Janet has made a conditional promise which is not sufficient to form consideration. d. Janet's promise is legally inadequate and the courts will therefore not enforce it.

b. Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million.

Kyle wants to buy a six-passenger car. The salesperson tells him that the two-seat sports car Kyle sees on the car lot would be just perfect for six people. Kyle test drives the car and then buys it. a. Kyle has a valid cause of action for fraud. b. Kyle was not justified in relying upon the salesperson's representation that the car would seat six people. c. The element of scienter is missing in this fact situation. d. The salesperson is a fiduciary.

b. Kyle was not justified in relying upon the salesperson's representation that the car would seat six people.

Article 2 of the Uniform Commercial Code deals with what type of property? a. Real b. Personal c. Intangible d. Business

b. Personal

Brian makes a material misrepresentation of fact regarding his horse to Rosalind while out riding one day. Later that day, Rosalind makes an offer to buy the horse. Brain accepts without correcting his earlier misrepresentation of fact. a. Brian may avoid the contract. b. Rosalind may avoid the contract. c. Either or both Brian or Rosalind may avoid the contract. d. Neither Brian nor Rosalind may avoid the contract.

b. Rosalind may avoid the contract.

Shirley 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. a. Shirley cannot collect the money unless the offer was specifically made to her by the station. b. The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Shirley has accepted. c. Because Shirley failed to notify the station of her intention to supply the information before actually doing so, she has not accepted their offer. d. Shirley was just doing her duty as a citizen and has no right to the payment of any money.

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

The State of Florida enters into a contract with Treasure Salvors governing the salvage of a Spanish galleon that sunk in the 1600's. 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 enter into the contract, they both believe that the seabed where the ship lies is state land. Subsequently, the United States 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. a. The contract cannot be rescinded. b. The parties made a mutual mistake for which the contract should be avoided. c. There is a mutual mistake, but because it is not material, the court should enforce the contract. d. The United States government will automatically step into the shoes of the State of Florida to make the contract enforceable.

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

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code? a. The sale of a house b. The sale of a new car c.. An employment agreement d. A sale of automobile insurance

b. The sale of a new car

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." a. There is no contract because there is no mutual assent. b. There is no contract because there is no valid consideration. c. There is no contract because $10 is reasonably inadequate consideration. d. There is a contract with sufficient consideration.

b. There is no contract because there is no valid consideration.

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? a. There is a valid contract for the computer, the monitor, the printer, and the software. b. There is no contract, because Bradley has made a counteroffer. c. There is no contract, because the time for delivery has not been decided. d. There is no contract, because the offer has been revoked by the offeror.

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

Abe is involved in an automobile accident and is injured. While he is unconscious, the police call an ambulance which takes him to a hospital. Abe is treated at the hospital and released a day later. The hospital sends him a bill for $2,400, which Abe refuses to pay, claiming it is too high and he never consented to the treatment because he was unconscious. a. Abe has entered into a unilateral contract with the hospital and therefore will have to pay the bill. b. This is a quasi-contractual agreement. c. Abe has entered into an implied in fact contract with the hospital. d. Abe and the hospital have entered into a bil

b. This is a quasi-contractual agreement.

Tom tries to sell his classic car to Victoria for $12,000. Tom tells Victoria, "I paid $12,000 for the car in 1978 and it's worth twice that today." Tom really paid $8,000 for the car in 1978. If Victoria buys the car, basing her decision on Tom's statement, which of the following correctly states the situation? a. Tom's statements amount to puffing only. b. Tom's statements provide grounds to set the contract aside. c. Tom's statements are actionable only if intentional. d. Tom's statements amount to fraud in the execution.

b. Tom's statements provide grounds to set the contract aside.

Tyler contracts to build a garage for Wilbur for a price of $6,000. Because of an increase in the cost of labor and materials, Tyler refuses to perform. Wilbur wants the garage, so he agrees to pay an additional $500. a. Wilbur must pay the additional $500. b. Tyler has given no additional consideration, and under the common law must perform at the agreed upon original price. c. The substitute agreement is an illusory contract. d. The debt is a disputed one, and therefore Wilbur is obligated to pay the additional money.

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

Gary mails an offer to Brian on June 15. Brian receives the offer on June 16. Gary mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18 and Gary receives the acceptance on June 20. Brian receives the revocation on June 19. Was a contract formed? a. Yes, on June 16 b. Yes, on June 18 c. Yes, on June 20 d. No, the offer was revoked before acceptance

b. Yes, on June 18

Sales of personal property are governed by Article ____ of the Uniform Commercial Code (UCC). a. 2 b. 3 c. 6 d. None of the above.

a. 2

Which of the following is enforceable without consideration? a. A new promise to pay a debt barred by the statute of limitations. b. An illusory promise. c. Under the common law, a promise made to satisfy a preexisting moral obligation. d. A promise by a father to pay someone for rendering emergency services to his injured son before the father had arrived at the accident scene.

a. A new promise to pay a debt barred by the statute of limitations.

Carlos ordered an aluminum storm door for $249.99. Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door at $179.99. Carlos calls the store and demands the advertised price. They say okay. a. Carlos must pay $179.99. b. Carlos must pay $249.99. c. There is no contract. d. There is a contract for the reasonable value of the door.

a. Carlos must pay $179.99.

Leonard offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer." a. Diane cannot accept the offer, because it wasn't made to her. b. This is a valid acceptance. c. The offer has not been communicated to the offeree. d. This is an invitation seeking offers and not an offer.

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

Rob repairs a door for Howard. In return, Howard is supposed to pay Rob $75 on November 1 at Howard's house. Which of the following would constitute legally sufficient consideration? a. Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment to Rob's house. b. Rob comes to Howard's house to collect the $75 on November 1, but Howard only has $50. Rob tells Howard to forget the other $25. c. Since this is an unliquidated debt, the only legally sufficient consideration is Howard's payment of $75 to Rob on November 1 at Howard's house. d. Since this is a liquidated debt, the only legally sufficient consideration is Howard's payment of $75 to Rob on November 1 at Howard's house.

a. Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment to Rob's house.

Stan 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. Stan refuses to pay the $800, and Isaac is threatening to sue. Which of the following is correct with regard to this transaction? a. If Isaac agrees to accept $600 to settle the dispute and Stan agrees to pay that amount, the substitute agreement is enforceable. b. If Isaac agrees to accept $600 to settle the dispute and Stan pays that amount, Isaac can still sue for the balance of $200 and will win the lawsuit. c.. Stan is under a pre-existing legal obligation to pay the $800. d. Both (b) and (c).

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

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. a. Jill cannot void the contract. b. Jill can rescind the agreement. c. Jill could rescind the agreement if she was mistaken in her estimate of the value of the auto. d. Jill can sue Linda for detrimental reliance.

a. Jill cannot void the contract.

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. a. Maxine has revoked her offer to Tom. b. Maxine's offer is a firm offer and she must sell Tom a video camera for $200. c. Maxine must get the camera back from Cindy if Tom accepts within two weeks. d. Both (b) and (c) are appropriate alternatives in this case.

a. Maxine has revoked her offer to Tom.

The Rogers family has always wanted to buy the beautiful house at the top 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. a. She may not accept since the offer is terminated. b. She may not accept because she does not have the capacity. c. She may accept since the contract offer is assignable. d. She may accept since the offer cannot be revoked without notice

a. She may not accept since the offer is terminated.

Elvis makes an offer to Miguel, but before Miguel can accept, the state supreme court decides a case that makes the offer illegal. What is the effect of the court decision on the offer? a. The court decision automatically terminates the offer. b. The court decision has no effect on the offer. c. The court decision acts as a condition on the offer. d. The court decision acts as a rejection of the offer by the offeree.

a. The court decision automatically terminates the offer.

Destruction of the subject matter has what effect on the offer? a. The offer is terminated. b. The offer is delayed until additional subject matter can be located. c. This creates an impossibility of fact that does not terminate the offer. d. The offer is merely delayed under the "Hardship Rule."

a. The offer is terminated.

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? a. Yes, there is no way for the dealer to get the extra money anyway b. Yes, there is consideration for the modified amount c. No, there is no consideration and the dealer can sue for the extra $300 d. No, there is an implied contract to pay the dealer whatever he billed Jack

b. Yes, there is consideration for the modified amount

Lynn offers to sell his house to Dennis for $95,000. Dennis responds, "I will pay you $95,000 if you will paint the second floor." This response could best be described as: a. an acceptance. b. a counteroffer. c. a rejection. d. an invitation.

b. a counteroffer.

Actionable fraud would be likely to be based on falsity of: a. a car owner's statement that, "This car is the best buy you will find." b. a realtor's statement that, "The contractor used 25-year warranted shingles on the roof." c. an art dealer's statement that, "This painting will increase in value." d. a stockbroker's statement that, "This stock should double in price within six months.."

b. a realtor's statement that, "The contractor used 25-year warranted shingles on the roof."

An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as: a. an output contract. b. a requirements contract. c. a firm offer. d.. promissory estoppel..

b. a requirements contract.

A contract in which both parties exchange promises is a: a. voidable contract. b. bilateral contract. c. unilateral contract. d. quasi contract.

b. bilateral contract.

Contracts induced by threats of ____ are voidable, regardless of whether the coerced party has committed an unlawful act. a. civil prosecution b. criminal prosecution c. tortious conduct d. physical force

b. criminal prosecution

An offer under Article 2 of the UCC that is irrevocable even though no consideration is given to keep it open is known as a(n): a. option. b. firm offer. c. requirements contract. d.. output contract.

b. firm offer.

To be effective, notice of revocation of an offer: a. must be communicated directly to the offeree before the offeree has accepted. b. may be communicated indirectly to the offeree through a third person. c. must be dispatched before the offeree accepts; when notice actually reaches the offeree is not important. d. is not addressed in the Restatement.

b. may be communicated indirectly to the offeree through a third person.

A fiduciary is a: a. person in a subservient position. b. person who owes a duty of trust, confidence, and loyalty to another. c. form of formal conduct. d. person of equal power and control.

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

ny property other than an interest in real property is: a. goods. b. personal property. c.. tangible property. d. intangible property.

b. personal property.

A purchaser's agreement to buy from a particular seller all the materials of a particular kind he needs is a(n) ____ contract. a. illusory b. requirements c. output d. exclusive dealing

b. requirements

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by: a. Article 2 of the UCC. b. state common law. c. federal statute. d. the law of quasi contract.

b. state common law.

Steven intentionally makes a material misrepresentation of fact regarding his motorcycle to Thelma who agrees to buy the motorcycle based upon the misrepresentation. This contract is: a. void. b. voidable. c. executed. d. unenforceable.

b. voidable.

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: a. $50, since that is the original agreement. b. $50, since a modification must be in writing. c. $60, since the modified agreement is supported by additional consideration. d. $60, since any subsequent agreement is enforceable.

c. $60, since the modified agreement is supported by additional consideration.

In general, which of the following will not terminate an offer? a. The death of the offeree b. The death of the offeror c. An inquiry by the offeree as to size or materials d. An acceptance that adds a material term

c. An inquiry by the offeree as to size or materials

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 them is eligible? a. The employees of the bank b. An on-duty sheriff's deputy in the county where the arrest occurred c. An off-duty deputy sheriff from a county other than the one where the arrest occurred d. None of the above are eligible.

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

Andrew agrees to paint Betty'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 Betty agrees to pay him $100 more. What law applies to this fact situation? a. The acceptance of additional money to settle a disputed claim is supported by consideration. b. A past obligation is sufficient consideration for a new promise. c. Andrew gives no additional consideration in return for modification of a preexisting contract. d. Betty has made a promise in exchange for a forbearance.

c. Andrew gives no additional consideration in return for modification of a preexisting contract.

30. Anna by mistake delivers to Bob a plain, unaddressed envelope containing $50 intended for Cora. a. Bob can keep the money. b. Bob is under a contractual obligation to return the money. c. Bob's obligation to return the money is quasi contractual. d. Bob's obligation to return the money is implied in fact.

c. Bob's obligation to return the money is quasi contractual.

A valid contract may be unenforceable for which reason(s)? a. Failure to satisfy the Statute of Frauds b. Running of the Statute of Limitations c. Both (a) and (b) d. A valid contract is always enforceable

c. Both (a) and (b)

Which of the following does not exemplify a relationship that typically leads to scrutiny of a contract for undue influence? a. Wife and husband b. Clergy and parishioner c. Brother and sister d. Parent and child

c. Brother and sister

Which of the following is not generally required in order to have a valid contract? a. Mutual assent b. A lawful purpose c. Fairness of the bargain d. Parties who have contractual capacity

c. Fairness of the bargain

Which of the following will support a contract? a. An illusory promise b. Past consideration c. Forbearance to do an act d. A pre-existing public obligation

c. Forbearance to do an act

In which of the following situations will a smaller sum be unable to discharge a larger debt? a. If the smaller sum is paid before the due date of the larger debt. b. If an additional article or service is given together with the payment of the smaller sum. c. If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency. d. A smaller sum is never able to discharge a larger debt.

c. If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency.

Which of the following requires consideration in order to be binding upon the parties? a. A written promise by a merchant to keep an offer to buy goods open for 14 days b. Material modification of a sale of goods contract under Article 2 of the UCC c. Material alteration of a personal service contract d. Settlement of a disputed debt

c. Material alteration of a personal service contract

Lee has been declared incompetent by the court and is under the care of his sister. Without his sister's knowledge, Lee rents the 30,000-seat civic center for his birthday party. Lee's contract to rent the civic center is best described as a: a. valid contract. b. voidable contract. c. void contract. d. quasi contract.

c. void contract.

Promissory estoppel is found in Section ____ of the Restatement (Second) of Contracts. a. 71 b. 81 c. 90 d.. None of the above

90

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. a. The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000. b. Under the UCC, the substitute contract is binding, because there is the payment of additional money. c. William is in breach of contract. John need not pay any additional money. d.. William is under a pre-existing moral duty to perform at the originally agreed-upon price.

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

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? a. There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one. b. There was a contract since the acceptance was mailed prior to the time the rejection was received. c. There was no contract because the rejection was mailed first. d. There was no contract because the acceptance was mailed more than three days subsequent to the rejection.

a. There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one.

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: a. an illusory promise. b.. past consideration. c. the pre-existing duty rule. d. good consideration.

a. an illusory promise.

The way parties usually show mutual assent is by: a. an offer by words or conduct and an acceptance by words or conduct. b. a proposal in words and an acceptance in words. c. an act exchanged for an act.. d. an offer and a counteroffer.

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

The requirement of legally sufficient consideration: a. is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor. b. has nothing to do with the value of what is exchanged. c. means the subject matter that the parties agree to exchange has to have the same value. d. is the same as the requirement of adequacy of consideration.

a. is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor.

Tommy's parents died in a plane crash and he went to live with his guardian, Aunt Rose. Rose had a very small house and did not have a separate bedroom and bath for 12-year-old Tommy. She and Tommy decided to use some of his inheritance to pay for an addition to the house. He had some shares of stock transferred into Rose's name so that she could sell them when the money was due to be paid. The stock transfers are: a. presumed voidable unless Rose can show no unfair advantage was taken. b. presumed valid unless it can be proven that Tommy was taken advantage of. c. null and void because of undue influence. d. presumed void because of duress.

a. presumed voidable unless Rose can show no unfair advantage was taken

A person who makes a promise is a(n): a. promisor. b. promisee. c. offeror. d. executor.

a. promisor.

Contracts are governed primarily by: a. state common law. b. federal common law. c. statutory law. d. federal case law.

a. state common law.

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. b. quasi contract. c. implied in fact contract. d. bilateral contract.

a. unilateral contract.

Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement? a. A statement of judgment of value, such as "This is the best car in town for the money." b. "This style of jacket is going to be the most popular style next year." c. "This car has a new radiator." d. "In my opinion, this is the best buy for the money."

c. "This car has a new radiator."

Stewart entered into a contract with Will to have Will build a 10-unit apartment complex on Elm Street in Randolph County. Unknown to both parties, this land had recently been rezoned and only single-unit dwellings can be constructed. a.. This is a mistake of law. b. This is a mutual mistake of fact. c.. Stewart is obligated to buy land elsewhere and have the complex constructed on property zoned for apartments. d. Will is liable to Stewart since Will is a contractor.

a.. This is a mistake of law.

If untrue, which of the following would probably be considered a misrepresentation of a material fact? a. "This is the one that I think is the best buy." b. "This is the best computer on the market." c. "This car has new brakes." d. "These tires will wear like iron."

c. "This car has new brakes."

A contract was made for 125 bales of cotton to arrive on a ship named "Peerless" from Bombay. Unbeknownst to either party to the contract, there were two ships named "Peerless," both of which were sailing from Bombay. One sailed in October and the other in December. The buyer had in mind the ship sailing in October, but the seller had in mind the ship sailing in December. Each party held his belief in good faith. When the goods failed to arrive on time, the buyer sued for breach of contract. a. The seller is in breach and must pay damages. b. The seller is guilty of fraud in the inducement for failing to disclose to the buyer which ship would contain the goods. c. No contract exists due to mutual mistake of fact as to the existence or identity of the subject matter of the contract. d. Two of the above, (a) and (b).

c. No contract exists due to mutual mistake of fact as to the existence or identity of the subject matter of the contract.

Fred is a concert violinist who is scheduled to perform at Carnegie Hall for the first time. He buys what he is told is a Stradivarius violin from a well-known, reputable dealer in quality violins, and he pays the going rate for a Stradivarius. He later learns the violin is an imitation, although it is such a good imitation that even the dealer thought it was authentic. a. Fred has made a unilateral mistake and cannot avoid the contract. b. The dealer has committed fraud in the inducement. c. The sale is voidable by the purchaser for mutual mistake. d. The sale is voidable, because the dealer has made a fraudulent misrepresentation.

c. The sale is voidable by the purchaser for mutual mistake.

Which of the following statements is most accurate concerning charitable subscription promises? a. They are generally not enforceable. b. The courts equate them with gifts. c. They are generally enforceable if there is reliance by the charity. d. The Restatement uses a strict reliance requirement in relation to charitable subscriptions.

c. They are generally enforceable if there is reliance by the charity.

Albert found a stone in his yard and took it to Bob, a jeweler, for evaluation. Although Bob knew what the stone was, he told Albert that he wasn't sure as to the nature of the stone, but that he thought it was a topaz. Bob then offered to buy the stone for $25 and Albert agreed. Later Albert found out the stone was an uncut diamond worth about $700. a. The sale was a valid contract that should be enforced by the law. b. This contract can be voided based upon fraud in the execution. c. This contract can be voided based upon fraud in the inducement. d. This contract can be voided based upon mistake as to the identity of the subject matter.

c. This contract can be voided based upon fraud in the inducement.

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? a.. Marilyn will have to pay $20,000. b. This is a contract under seal which is enforceable. c. This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders. d.. This is the settlement of a disputed debt that requires no additional consideration on the part of Bravo Builders.

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

Sue owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. She has been offered a two-year graduate fellowship, but she will not be able to pay the loan back if she accepts the fellowship. The bank manager tells Sue that if she pays $3,000 now, they will forgive the loan. Should Sue accept the offer? a. No, because the bank can still sue for the remaining $2,000 b. No, because the manager's promise is not binding on the bank c. Yes, because the early payment of the loan is consideration that makes the bank's promise binding d. Yes, because the bank must do whatever the manager says

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

According to the Restatement, manifesting an intention to act or an intention to refrain from acting in a specified manner is considered to be: a. an implied in fact contract. b. an express contract. c. a promise. d. a quasi contract.

c. a promise.

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: a.. duress. b. fraud in the execution. c. fraud in the inducement. d. non-fraudulent misrepresentation.

c. 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: a. duress. b. undue influence. c. fraud in the inducement. d. fraud in the execution.

c. fraud in the inducement.

A promise against public policy: a. can be contractual. b. is enforceable if the parties have capacity and mutual assent and they exchange consideration. c. has no legal remedy available for breach. d. Both (a) and (b).

c. has no legal remedy available for breach.

A ____ is an offeree's refusal to accept an offer. a. revocation. b. counteroffer c. rejection d. statutory irrevocability

c. rejection

A party to a contract may be able to avoid the contract if: a. there is a mutual mistake, and the party undertook to bear the risk by conscious allocation. b. there is a unilateral mistake, and the party undertook to bear the risk by conscious ignorance. c. there was a mistake and the mistaken party was at fault in not discovering the problem before making the contract. d. None of the above. e. Only (a) and (b).

c. there was a mistake and the mistaken party was at fault in not discovering the problem before making the contract.

The UCC provides that a merchant is bound to keep a written offer open for a stated period but no longer than: a. ten days. b. two months. c. three months. d. a reasonable time.

c. three months.

ontract law: a. has seen little change during the nineteenth and twentieth centuries. b.. has experienced an expansion of the absolute freedom of contract during the twentieth century. c. today usually recognizes contractual obligations whenever the parties manifest an intent to be bound. d. requires privity between parties seeking to enforce contractual rights.

c. today usually recognizes contractual obligations whenever the parties manifest an intent to be bound.

Which of the following is NOT always necessary in order for a valid contract to be formed? a. Mutual assent b. Legality of purpose c.. A writing d. Competent parties

c.. A writing

An ad in a newspaper or a circular describing goods and stating prices would generally be considered a(n): a. firm offer if made by a merchant. b. offer if made by a merchant, but not a firm offer. c. offer irrespective of who made the offer. d. invitation to buyers to make an offer to buy goods.

d. invitation to buyers to make an offer to buy goods.

Eliza was an antique expert. She went to a tea party at Grandma Jones' house and saw a magnificent Queen Anne table out on the back porch. She asked Grandma about it and was told it was in the way so they were going to store it in the barn. Eliza offered to buy it from her for $200. The next week, Grandma saw it in Eliza's store on sale for $3,000. Which of the following is true? a. She can get it back because of fraudulent concealment of the value. b. She can get the true value, because it would not be fair otherwise. c.. She cannot rescind the contract because Eliza did not have a duty to tell her the value of the table. d. She cannot rescind the contract because she did not rely on Eliza to give her a fair price.

c.. She cannot rescind the contract because Eliza did not have a duty to tell her the value of the table.

Which of the following need NOT be proved in order to establish the defense of economic duress? a. That one side involuntarily accepted the terms of another. b. That circumstances permitted no other alternative. c.. That one party explicitly made an economic threat. d. That the circumstances leading up to the contract were the result of coercive threats or acts of the opposite party.

c.. That one party explicitly made an economic threat.

1. The Uniform Commercial Code would be applied in which of the following situations? a. A contract for landscape services b. A contract for sale of patent rights c. A contract for the purchase of farmland d. A contract to buy living room furniture

d. A contract to buy living room furniture

If there is no time specified for the acceptance of an offer, when does the offer terminate? a. After 24 hours b.. After 48 hours c. After two weeks d. After a reasonable period of time

d. After a reasonable period of time

Albert read Gem City's ad in the local newspaper advertising a one-quarter carat diamond ring for $89. Albert rushed to the store to buy the ring only to be told by the salesperson that the ad was a misprint and the price should have been $289. Albert gave the salesperson $89 plus sales tax and demanded the ring. a. The ad is a firm offer by the merchant, and the ring must be sold for $89. b. The ad is a contract and the store must abide by terms stated in the contract. c.. The store must accept the price stated in the ad, but only if Albert has a copy of the ad with him. d. Albert is merely making an offer to Gem City to buy the ring for $89 plus sales tax.

d. Albert is merely making an offer to Gem City to buy the ring for $89 plus sales tax.

Which of the following gratuitous promises are enforceable by statute? a. A good-faith contract modification in a contract for the sale of goods b. A written offer signed by a merchant to buy or sell goods that assures it will be kept open for one month c. A renunciation of a claim in a written waiver that is signed and delivered by the aggrieved party when the contract involves a sale of goods d. All of the above are enforceable by statute.

d. All of the above are enforceable by statute.

Contract law is significant in that it is basic to other fields of law such as: a. sales of personal property. b. commercial paper. c. secured transactions. d. All of the above.

d. All of the above.

Contracts that are implied in law: a. are obligations imposed by law on grounds of justice and equity. b. are intended to prevent unjust enrichment. c. do not rest upon the assent of the contracting parties. d. All of the above.

d. All of the above.

The remedies of damages and rescission are available for: a. fraudulent misrepresentation. b. negligent misrepresentation. c. innocent misrepresentation. d. All of the above.

d. All of the above.

A misrepresentation is material if: a. it would likely induce a reasonable person to enter into a transaction. b. the maker knows it would likely induce the other party to enter into the transaction. c.. it is made knowingly. d. Both (a) and (b).

d. Both (a) and (b).

Doug 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. a. Acme is obligated to use its best efforts to supply the goods even if no such clause appears in the written franchise agreement. b. According to the UCC, unless otherwise agreed, Doug must use his best efforts to promote the sale of the widgets in his territory. c. Under the UCC, such an agreement lacks consideration. d. Both (a) and (b).

d. Both (a) and (b).

Express contracts and implied contracts are: a.. both genuine contracts. b. equally enforceable. c. not really contracts. d. Both (a) and (b).

d. Both (a) and (b).

Promissory estoppel is a contractual doctrine that includes the following considerations: a. The courts use the doctrine of promissory estoppel to enforce noncontractual promises. b. 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. c. The courts will not, under any circumstance, enforce promises that do not include all four of the elements of contract. d. Both (a) and (b).

d. Both (a) and (b).

Barbara, a wealthy widow, promises the pastor of her church that she will donate $20,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $80,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around-the-world cruise instead. a. The doctrine of promissory estoppel can be applied to this case. b. The promise to pay $20,000 is a promise to give a gift and is therefore not enforceable. c. Under the Restatement, Barbara's promise is enforceable. d. Both (a) and (c).

d. Both (a) and (c).

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. a. Ralph has committed fraudulent misrepresentation. b. Steve is bound by the contract, because he failed to verify the statements which were made to him. c. The contract is voidable at Steve's option. d. Both (a) and (c).

d. Both (a) and (c).

When both parties misunderstand the same set of facts relating to a basic assumption on which a contract is made, it is termed: a. rescissionary mistake. b. unilateral mistake. c. mistake of law. d. mutual mistake.

d. mutual mistake.

Alex 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 Alex'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. a. Alex must perform for the agreed upon price because he has made a unilateral mistake. b. The city was aware of or should have been aware of Alex's mistake. When it accepted the bid with knowledge of Alex's mistake, the city sought to take an unconscionable advantage of Alex's error. c. This case is an example of a palpable unilateral mistake. d. Both (b) and (c).

d. Both (b) and (c).

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. a. This is an illusory contract, because Darla doesn't know whether she will receive the money for sure. b.. The consideration moving from Darla to Edward is the promise of $6,000 subject to a condition. c. Darla's conditional promise is sufficient consideration unless Darla knows she cannot receive at least $6,000 from her uncle's estate. d. Both (b) and (c).

d. Both (b) and (c).

Tate enters into a contract with 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? a. Quasi contract b. Executed contract c.. Illusory contract d. Executory contract

d. Executory contract

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? a. It is enforceable, because Jason returned to college. b. It is enforceable, because Jason is giving up the right to do something else. c. It is unenforceable, because it is a unilateral contract. d. It is unenforceable, because Jason had already enrolled in school and there is no consideration.

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

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? a. McHenry is not liable to Nancy since there is no consideration. b. McHenry is not liable to Nancy since there is past consideration. c. McHenry is liable to Nancy since adequate consideration is given by both parties. d. McHenry is liable to Nancy based on the concept of promissory estoppel.

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

Jesse makes an offer to Ike, and Ike accepts; then the state legislature passes a law that makes performance of the contract illegal. What is the effect of the new statute on the contract? a. The contract is severed; any portions that are legal must still be performed and any portions that have been made illegal must not be performed. b. The statute has no effect on the contract. c. The statute acts as a condition on the contract. d. The statute discharges the obligations of both parties under the contract.

d. The statute discharges the obligations of both parties under the contract.

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? a. An implied in fact contract has been formed. b. A unilateral contract has been formed. c. This is a formal contract. d. This is an option contract.

d. This is an option contract.

When does acceptance of an offer to enter into a unilateral contract generally occur? a. Upon notice of intent to accept by the offeree. b. Upon full performance by the offeror with the intention of accepting. c. Upon commencement of performance by the offeree. d. Upon full performance by the offeree with the intention of accepting.

d. Upon full performance by the offeree with the intention of accepting.

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? a. No, because Robbie gave no benefit to Aunt Ellie b. No, because Robbie did not suffer any detriment c. Yes, because stopping smoking will benefit Robbie's health d. Yes, because Robbie gave up a legal right

d. Yes, because Robbie gave up a legal right

Steven has a typed copy of a contract, which he would like to have Thomas sign. Thomas, who needs glasses to read typing, doesn't want to sign until he has read the document, but Steven convinces Thomas to sign it anyway, because it is a "standard" contract for this type of situation. Is the contract which Thomas signed binding upon him? a. No, because he did not read it b. No, because he entered into it based upon fraud in the execution c. Yes, because he has made a unilateral mistake of law d. Yes, because he was negligent in not ascertaining its contents

d. Yes, because he was negligent in not ascertaining its contents

Under the common law, the ____ must be the mirror image of the ____. a. contract, consideration b.. contract, offer c. offer, acceptance d. acceptance, offer

d. acceptance, offer

Gail sent a letter of acceptance to an offer that has expired. Gail has made: a. a contract. b. a rejection. c. a revocation. d. an offer.

d. an offer.

One of the changes in contract law between the nineteenth century and the twentieth century is that in more recent times: a. contractual liability, once assumed, can rarely be escaped. b. contract damages are viewed more narrowly and equitable remedies are no longer available. c. privity of contract is required. d. intended third-party beneficiaries may sue in their own right.

d. intended third-party beneficiaries may sue in their own right.

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): a. implied in fact contract. b. express contract. c. void contract. d. quasi contract.

d. quasi contract.

If an offer requires acceptance by mail and the offeree faxes acceptance: a. there is no contract. b. there is a contract if the acceptance is actually received within the time the authorized means would have arrived. c. under the Restatement, if the acceptance is received within the time the authorized means would have arrived, the acceptance is effective when sent. d.. Both (b) and (c) are correct.

d.. Both (b) and (c) are correct

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): a. commercial contract. b. express contract. c. formal contract. d.. sale.

d.. sale.