BUL3310 Unit 6 Quiz

How is promissory estoppel best described?

An equitable remedy when one party suffers an unbargained-for detriment

Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim catches during the season for $35 per bushel. This is an example of ___________ contract.

An output

What does consideration in a bilateral contract always involve?

A legal benefit and a legal detriment

Which of the following promises would be legally adequate consideration in a bilateral contract? A promise not to break the law A promise to do what one is already obligated by contract to do. A promise not to sue someone on a claim that the promisor knows is not valid. A promise not to sue someone on a claim that the promisor believes in good faith is valid.

A promise not to sue someone on a claim that the promisor believes in good faith is valid.

Big Oil Company has a contract with Homeowner to deliver however much heating oil Homeowner needs for the fall and winter seasons. This is an example of ____________ contract.

A requirements

Which of the following is not an element of a valid contract? Agreement Consideration Legal capacity of the parties to the contract A written document with notarized signatures

A written document with notarized signatures

Ellen has a contract with Sue to buy her riding lawn mower for $200. Ellen has given Sue $200 in cash and Sue has given Ellen possession of the mower. The status of this contract between Sue and Ellen is __________________.

Executed

What is another term for punitive damages?

Exemplary

Mutuality of consideration is a requirement for a(n) _________________.

Bilateral contract

T or F: 1. Legal detriments always entail economic losses.

False

T or F: A plaintiff may be awarded either compensatory damages or consequential damages, but not both.

False

T or F: Contracts formed by the conduct of the parties, rather than expressed in words, are implied-in-law contracts.

False

T or F: Courts do not enforce output contracts as a matter of public policy.

False

T or F: Damages that involve only a very small monetary award are called liquidated damages.

False

T or F: During a violent storm, Nelson saved Reggie's boat from being destroyed. Reggie was so grateful that he promised to give Nelson $100. Reggie's promise is unenforceable because it is based on moral obligation.

False

T or F: Only liquidated debts can be discharged in an accord and satisfaction

False

T or F: Promissory estoppel is the contract doctrine which requires that accords be in writing.

False

T or F: Since it is up to the parties to determine the dollar amount in a liquidated damages clause, courts will enforce any amount called for in the contract.

False

T or F: The Uniform Commercial Code governs the sale of all commercial services and goods.

False

T or F: You make an appointment with a dentist. Upon arriving at the Dentist's office, you enter the office and receive treatment. Since you've said nothing about paying, it is not a term of the contract

False

Kelly received a cookbook in the mail that she had not ordered. The packing slip read: " Return this book to the publisher within 14 days or send $35 to the address below." She did not return the book within the 14 days and she did not send the money as requested. Is Kelly required to pay it?

No, federal law allows Kelly to treat the unsolicited book as a gift and she may do whatever she wants with it.

Under which of the following circumstances will cashing a check marked "paid in full" create an accord and satisfaction? The check is for a lesser sum that the amount due on a liquidated debt. The check is for an unliquidated debt and both parties know of the dispute The check is for any transaction governed by the Code. The check is in payment of a court judgment.

The check is for an unliquidated debt and both parties know of the dispute

Which of the following is NOT an element of promissory estoppel? There must be an underlying enforceable bilateral contract. The promissor must foresee that the promissee would rely on the promise. The promissee did in fact reasonably rely on the promise.

There must be an underlying enforceable bilateral contract.

Famous Chef told Shrimp Boat Captain: "I will buy your catch if I think the shrimp are large enough." What is the status of this promise?

This is an illusory promise because the chef has complete control over whether or not he will keep the promise.

T or F: A firm offer that is in writing and signed by a merchant cannot be revoked even though the other party gave no consideration.

True

T or F: A renunciation is a written waiver of a right arising out of a contract.

True

T or F: An illusory promise is not a promise at all.

True

T or F: Bob promises to sell Jane his Harley Davidson for $13,000, and Jane promises to pay Bob $13,000 for his Harely Davidson. This is a bilateral contract.

True

T or F: Courts generally cannot order specific performance when the contract is for personal services because of the Thirteenth Amendment.

True

T or F: Excessive punitive damage awards may violate the constitutional protection of due process.

True

T or F: General damages are also called compensatory damages.

True

T or F: Grace has a valid contract with Al to buy a desk once owned by James Madison. Al now refuses to go through with the sale. Because the item is unique, Grace can seek a decree of specific performance to enforce the contract.

True

T or F: In a liquidated debt, the parties agree on the exact amount that is due.

True

T or F: In bilateral contracts, both parties must be bound to the contract or neither party is bound.

True

T or F: Parties to a contract may not offer as consideration promises to do what they are already legally required to do.

True

T or F: Rescission is the remedy that cancels the contract and returns each party to his pre-contract position.

True

T or F: Susan says to Mark, "Mark, if you mow my lawn by the end of the day, I promise to pay you $50.00." Mark mowes Susan's lawn by the end of the day. A unilateral contract has been created.

True

T or F: The statute that requires that certain contracts be in writing is the Statute of Frauds.

True

T or F: To meet the element of consideration, each party to a contract must gain a legal benefit and incur a legal detriment.

True

T or F: Under common law, modifications to existing contracts require new consideration from each party.

True

T or F: Under the Code, parties may agree to modify the terms of an existing contract without providing new consideration.

True

T or F: Under the common law, modifications to existing contracts required new consideration from each party.

True

T or F: You are walking down Lexington Ave and come upon a grocery stand filled with apples under a sign stating 35 cents per apple. You pick up one and take a bite. At that moment, an implied in fact contract is created, largely based on conduct.

True

Mutuality of consideration is a requirement for which of the following?

A bilateral contract

The purposes of nominal damages is to

Acknowledge that a right has been violated even though no monetary loss resulted

Promissory estoppel is often used in which of the following business situations? When a contractor submits a bid in reliance on the bids of his subcontractors When a businessperson reasonably relies on representations that he will get a franchise When employees rely on employer promises about pensions and benefits

All of the above

Bill entered into a contract with Carl to supply him with carpeting. When Carl failed to deliver, Bill had to find similar carpeting for $5 a yard more than he would have paid to Carl. The difference between the cost of the carpet with Carl and the cost Bill had to pay can be recovered as

Compensatory

Which element of a contract is met by a bargained-for exchange?

Consideration

Which of the following is a requirement for a valid contract?

Offer and acceptance Consideration Legal capacity of the parties

Another term for promissory estoppel is ____________.

Detrimental reliance

Steve enters into a contract with Diana for $3,000, to buy Steve's favorite drug, crack cocaine. Steve smokes all the crack cocaine and refuses to pay Diana. Diana sues Steve in Court.

Diana will not recover because the sale of an illegal substance will not be enforceable in court

Which of the following is an illusory promise? I will buy tickets to the World Series if the Red Sox win the Pennant. I will go with you to the donkey basketball game if I can't think of anything better to do. I will drive you to work if your car is still in the repair shop. I will buy your car if my husband likes it.

I will go with you to the donkey basketball game if I can't think of anything better to do.

Which of the following statements is true about an accord and satisfaction? It is only used in construction contracts. It is only used in labor contracts It can only be used in liquidated debt contracts. It can be used for unliquidated debts based on contract or tort claims.

It can be used for unliquidated debts based on contract or tort claims.

Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim catches during the season for $35 per bushel. Which of the following actions would constitute a breach of the contract between Bay Crab and Jim? Jim sells crabs to another buyer. Jim buys crabs from other crabbers at $25 per bushel so that he can sell them to Bay Crab at the contract price of $35 per bushel. Bay Crab buys crabs from another crabber.

Jim sells crabs to another buyer. Jim buys crabs from other crabbers at $25 per bushel so that he can sell them to Bay Crab at the contract price of $35 per bushel.

Barbara sues Mike to recover $10,000 for a breach of contract. Barbara is seeking a___________________.

Legal remedy

Jerry agreed to sell Marge 12 cartons of cigars. Jerry then watched a commercial and decided he would never sell tobacco again. Marge was able to buy the cigars from Alan for the same price. Marge sues Jerry for breach of contract. What type of damages can she recover from Jerry?

Nominal

Which of the following statements about nominal consideration is correct? Nominal consideration is good to use when there are liquidated damages. Nominal consideration will support an enforceable contract. Nominal consideration is another term for sham consideration.

Nominal consideration will support an enforceable contract.

Which of the following is false about a renunciation? Renunciations are valid in common law but not under the Code A written renunciation does not require consideration. An oral renunciation does require consideration The right that is waived in a renunciation is a contract right.

Renunciations are valid in common law but not under the Code

What is another term for consequential damages?

Special

John bought a dishwasher from Local Appliance Store. What type of law governs the contract between John and Local?

The Uniform Commercial Code

When is an illusory promise created?

When the promise is conditional on an event happening first that is totally within the promissor's control.