BLaw Test 3 T/F
A contract in which one party to the agreement agrees to buy all of the produced goods of the other party is called a requirements contract.
FALSE
A famous journalist predicted the result of an NBA match between the LA Groves and LA Phantoms in favor of the Phantoms, based on the present form of Groves. Accordingly, Mark placed a huge bet on the Phantoms and lost heavily. This is an example of misrepresentation of a material fact of a contract.
FALSE
A firm's offer for the sale of goods requires consideration to be given in exchange for the offeror's promise to keep the offer open.
FALSE
A party who has the right to rescind a contract may do so at any time.
FALSE
A promise not to sue another party is not consideration, because the promise does not convey any legal value to the other party.
FALSE
A promissory estoppel cannot be applied in the case of the absence of a binding consideration.
FALSE
A revocation is effective at the time it is dispatched by the offeror.
FALSE
A voidable contract creates no obligation and is not enforceable by any party.
FALSE
According to the provisions of UCC, an exclusive dealing contract imposes a duty only on the distributor to use his/her best efforts to sell the goods.
FALSE
All terms of contracts, even "fine-print" terms of standard form contracts, are always part of the parties' deal and binding on them, because parties have an obligation to read their contracts and are assumed to have done so.
FALSE
Article 2 of the UCC never applies to mixed goods-services contracts; instead, it treats them as pure service contracts.
FALSE
Contracts must always be in writing to be enforceable
FALSE
Courts look at parties' outward manifestations of intent as a requirement to enforce a contract. This is called the subjective standard of intent.
FALSE
Generally speaking, advertisements are considered to be offers.
FALSE
Generally, if there is a good faith dispute over a matter, a person's threat to file a lawsuit to resolve that dispute is considered to be improper.
FALSE
Generally, the terms of a standardized contract are negotiable.
FALSE
Gross inadequacy of consideration is by itself a sufficient reason to set aside a contract.
FALSE
In order to meet the requirements to form a contract the parties must have a future intent to agree and form a contract.
FALSE
Mr. Green is a general contractor and is accepting bids from subcontractors for the building of a new hotel. Mr. Blue submits a bid for his work associated with the project. Mr. Green placed an offer which Mr. Blue accepted with his bid.
FALSE
Offers that fail to provide a specific time for acceptance are invalid because they are deemed to be indefinite.
FALSE
Pratt, owner of an appliance store, has a garage sale at his home where he sells old furniture and books. He sells a set of books to his neighbor, Stacey. Pratt is considered a merchant under Article 2 of the UCC in selling the books to Stacey.
FALSE
Speaking generally, a quasi-contract applies where there has been foreseeable reliance on an express promise.
FALSE
The Uniform Commercial Code sufficiently addresses the concerns that parties have when contracts are made to create or distribute information.
FALSE
The legal term for innocent misrepresentation is "scienter."
FALSE
The mutual agreement necessary to create an express contract is evidenced by writing.
FALSE
The offeror's death automatically terminates an offer, but the offeree's death does not.
FALSE
The only manner in which a request for prompt or current shipment of goods can be honored is by a prompt or current shipment of the goods to the buyer.
FALSE
Threats to institute legal actions cannot be considered improper threats that constitute duress.
FALSE
To accept an offer for a bilateral contract, the offeree must perform the requested act.
FALSE
To accept an offer for a unilateral contract, the offeree must make the promise requested by the offer.
FALSE
Transfer of title deeds is a function wherein silence signals acceptance of the offer.
FALSE
Unlike the UCC, the CISG requires new consideration to modify a contract.
FALSE
When Carol Whittaker makes an offer to a contractor Jacob Phelps directing him to inform her of his acceptance through registered letter mail, she is making an ambiguous offer.
FALSE
When an offer is unclear about the form of acceptance it requires, ideally it must not be accepted.
FALSE
When contracting, one party is entering into an agreement with the federal government to enforce behavior on another party.
FALSE
When determining the presence of the intent to accept, a subjective standard is used.
FALSE
Where an offer stipulates a certain means of acceptance, the offeree's acceptance is effective upon dispatch even if it uses means other than those specified in the offer.
FALSE
While economic pressure may amount to undue influence, it cannot constitute duress.
FALSE
A contract may be voidable even if the person making the misrepresentation believes in good faith that what he/she says is true.
TRUE
A creditor who fails to file suit to collect a debt within the time prescribed by the appropriate statute of limitations loses the right to collect it.
TRUE
A mistake in the principle of law will not justify a recession in a contract.
TRUE
A party injured by fraud in a contract for the sale of goods can both rescind the contract and sue for damages.
TRUE
A promise to refrain from smoking can be legal consideration because refraining from a legal right, the right to smoke, can be consideration.
TRUE
Abby promises to pay Brian $50 if he mows her lawn. Brian does not promise to mow Abby's lawn; however, later that day, Brian completely and satisfactorily does mow Abby's lawn. This is an example of a unilateral contract.
TRUE
Acceptances by instantaneous forms of communication are effective immediately upon communication to the offeror.
TRUE
Alan and Ben have a contract. Alan has performed 100 percent and Ben has performed 50 percent of it. This contract is now executory.
TRUE
An acceptance is assent to a proposal by the offeree to the offeror.
TRUE
An advertisement offering a reward for the return of lost property is usually treated as an offer for a unilateral contract.
TRUE
An offer is the first step in the contract formation process.
TRUE
Bob offers to sell his bike to Sue for $100, and promises to keep his offer open for five days. Sue thanks him and leaves. At this point, Bob still has the power to revoke his offer.
TRUE
CISG applies only to sale of goods and commercial parties.
TRUE
Concealment involves the active hiding of a fact, whereas nondisclosure is the failure to volunteer information.
TRUE
Consideration can be a promise for another promise.
TRUE
Consideration is what distinguishes enforceable agreements from gratuitous promises.
TRUE
David, a debtor, owes debts to creditors Paul, Mark, and Gary. Paul, Mark, and Gary agree with each other and with David to release him from his debts, in exchange for his promise to pay Paul, Mark, and Gary 75 percent of the amount he owes each of them. This is called a composition agreement, and such agreements generally are binding contracts.
TRUE
Duress involves threats and coercion while undue influence involves persuasion to susceptible individuals.
TRUE
Generally speaking, the UCC's rules for the definiteness of an offer make it easier to form a contract than traditional common law rules.
TRUE
If a term is left open in a sale of goods contract, that open term or "gap" can be filled by inserting a presumption found in the UCC's "gap-filling" rules.
TRUE
If no Code rule applies to an issue regarding a sale of goods contract, the common law rules apply.
TRUE
If the offeree accepts the offeror's terms while complaining about them, it is called a grumbling acceptance.
TRUE
In determining whether consideration exists, the law is not concerned with any disproportion in value between the things exchanged in a contract.
TRUE
In order for a unilateral mistake to make a contract voidable, either the nonmistaken party must have caused or had reason to know of the mistake, or enforcement of the contract must be unconscionable.
TRUE
In recent times, the mirror-image rule is applied such that only a material difference between offer and acceptance creates a rejection of the offer.
TRUE
In return for services Charles performed for Richard in the past, Richard promises to pay Charles $1000. There is no consideration for Richard's promise.
TRUE
John promises to pay Robert $100 per week, in exchange for Robert's promise not to beat John up. There is no consideration for John's promise.
TRUE
Kevin offered to mow the lawn for his Uncle Jordan's for $100. To his offer, Uncle Jordan replied by saying "I know you're taking advantage of me but I accept." Uncle Jordan has indeed accepted the offer made by Kevin.
TRUE
Michael and William contracted for Michael to mow William's lawn once a week for 20 weeks, at a price of $20 per week. Later, without terminating the first contract, the parties modify the contract as follows: Michael will mow William's lawn in exactly the same way for exactly the same time period, in exchange for William's promise to pay Michael $22 per week. There is no consideration for William's promise.
TRUE
Misrepresentations can either be innocent or fraudulent.
TRUE
Mr. Blue and Mr. Green are in negotiations for a regular delivery of newspapers to Mr. Blue's business. Mr. Blue did not formally announce his acceptance to the offer. But when Mr. Green sent a shipment of newspapers as had been agree, Mr. Blue accepted the shipment and paid for them. According to the UCC Mr. Blue and Mr. Green have an enforceable contract.
TRUE
Mr. Blue enters into negotiation with Mr. Green to build a house. Both parties expected a written and signed purchase agreement. After agreeing on terms, Mr. Green is told by his subcontractors that some of their prices have gone up. Mr. Blue objects and indicates that there was a contract when the parties agreed to the original terms orally. A court will find that indeed no contract existed since the parties expected acceptance to be in written form.
TRUE
Mr. Blue gave his favorite nephew Jim Jr, who is a mechanic, $1000 in January. Later that year he needed his car repaired. In the sales contract Mr. Blue indicated that the amount owed should be deducted from the money already paid. A court will find that Mr. Blue failed to give proper consideration for the contract.
TRUE
Mr. Green agrees to an offer to drive Ms. White to the airport for $20, but "only if I feel like it". Mr. Green has failed to give sufficient consideration to create a contract with Ms. White.
TRUE
Mr. Green agrees to purchase a lawn mower from Ms. White for $300. The act of payment of $300 by Mr. Green is consideration for the act of passing ownership of the lawn mower from Ms. White to Mr. Green.
TRUE
Mr. White contracts with Mr. Green for 100 black coffee mugs for a party. Mr. White decides he needs the mugs faster than the time allotted in the contract, and asks for a rush shipment. Mr. Green notifies Mr. White that he will ship 100 coffee mugs but that the only ones available are red. A court will find that the shipment of red mugs under the UCC is not a breach of the original agreement.
TRUE
Mr. White sends his acceptance for a business contract to Mr. Green. But Mr. White put insufficient postage on the envelope. One day later Mr. Green revokes the offer through the mail. Mr. White upon receipt of the undelivered acceptance, Mr. White overnighted the acceptance letter to Mr. Green. The court will find if it applies the UCC rule that a valid acceptance occurred and subsequent contract is now created between Mr. White and Mr. Green.
TRUE
Ms. Pink offers to landscape Mr. Green's yard for $100. Mr. Green is planning to say yes but before he has a chance to communicate with Ms. Pink he receives a text message from Ms. Pink indicating she has rescinded her offer due to her being too busy. Ms. Pink has effectively revoked her offer.
TRUE
Ms. White hired Mr. Blue to steal from Ms. Yellow. Ms. White is upset with how everything turned out and wants to sue Mr. Blue for breach of contract. But the court will refuse to recognize the contract and subsequently a breach of it because it is a contract for an illegal activity.
TRUE
Mutual mistake is more likely to make a contract voidable than is unilateral mistake.
TRUE
Promissory estoppel protects reliance on a promise from one party to another.
TRUE
Ratification ends the right to rescind a contract.
TRUE
Reliance means that an individual acts because of an assertion of another party.
TRUE
Sellers at a public auction are treated as makers of an invitation to offer.
TRUE
Sometimes, Article 2 of the UCC holds merchants to standards different from the standards it applies to nonmerchants.
TRUE
Strictly speaking, a contract has nothing to do with the personal intent of the parties.
TRUE
The UCC imposes a duty of good faith on the performance and enforcement of every contract it covers.
TRUE
The UCC often creates contractual liability in situations where no contract would have resulted at common law.
TRUE
The UCC section 2-207 allows a contract to be formed even though the terms of the offer and the terms of the acceptance differ.
TRUE
The essence of a contract is that it is a legally enforceable promise or set of promises.
TRUE
The intent to accept is objectively demonstrated by words or conduct or a combination of the two.
TRUE
The intention to accept an offer must be a present intent to contract.
TRUE
The offeror is said to be the "master of the offer." This means that offerors have the power to determine the terms and conditions under which they are bound to a contract.
TRUE
The only person with the legal power to accept an offer and create a contract is the original offeree.
TRUE
The rule on adequacy of consideration reflects the laissez-faire assumption of freedom of contract.
TRUE
The rules promulgated by the Restatement (Second) of Contracts often resemble the rules created by Article 2 of the UCC.
TRUE
The term rescind means to end a contract.
TRUE
The threat to institute a criminal prosecution against another party in order to force that party into a contract is almost always duress.
TRUE
The three requirements for a valid offer are: present intent to contract, definiteness, and communication to the offeree.
TRUE
Threatening to breach a contract unless the party agrees to modify the terms of a contract is an example of economic duress.
TRUE
UCC covers accord and satisfaction by the use of an instrument called "full payment" check.
TRUE
Undue influence cases often involve a relationship of trust and confidence between the contracting parties.
TRUE
When one of the parties offers a disproportionately small amount of money in settlement of a debt and refuses to pay more, it is a form of economic duress.
TRUE
