Business Law test 2

Contracts that are shockingly unfair and unjust are known as: corporate contracts. unrequited contracts. inadequate contracts. unconscionable contracts.

unconscionable contracts.

A party to an existing contract may appoint a third person to perform contractual duties by: transference. recovery. assignment. delegation.

delegation.

A memorandum must include all of the following to satisfy the Statute of Frauds, except the: signatures of the parties. names of the parties. purpose of the agreement. family details of the parties.

family details of the parties.

A promise that consists of an indefinite, open-ended statement purporting to be an agreement is known as a(n): gratuitous promise. illusory promise. preexisting duty. barren promise.

illusory promise.

Any agreements to sell an interest in real property must be: approved by a court-appointed judge. an oral contract to be enforceable. signed in the presence of an administrator. in writing unless there has been partial performance

in writing unless there has been partial performance

A guaranty to pay the debts or settle the wrongdoings of another if he or she does not make settlement personally is not enforceable unless it is _________. in oral format in written format approved by a non-interested third party submitted to a court for review

in written format

A person who is heavily intoxicated is considered ________ to enter into a contract by the courts. incompetent competent devoid of consideration a valid party

incompetent

An entire contract is also known as a(n): indivisible contract. divisible contract. specialty contract. executed contract.

indivisible contract.

Agreements that lack consideration are generally: not enforceable. enforceable. unlawful. valid.

not enforceable.

A promise to do something that one is already required to do either by law or by contract represents no additional sacrifice and is: a general release. an illegal act. not valid consideration. fraudulent.

not valid consideration.

Legality of purpose is the requirement that a contract: be voidable. can be void. may contain a mala fide intention. not violate the law.

not violate the law.

A(n) __________ transfers all rights and obligations in a contract. novation gift exemption execution

novation

In order for an offer to be valid it must be communicated to the ___________. offeree. local court. Secretary of State. Securities and Exchange Commission.

offeree.

An exchange of promises made by persons planning to marry is known as a(n): arranged agreement. self-arranged agreement. mutual agreement. prenuptial agreement.

prenuptial agreement.

All of the following are ways of terminating a contract EXCEPT: ratification. agreement. impossibility of performance. performance.

ratification.

A monopoly is illegal because it causes a(n) __________ on trade. enhancement enlargement restraint adhesion

restraint

A life insurance policy is not an example of a third-party contract. True False

False

A counteroffer, that is, a conditional, or qualified, acceptance of an offer, is not an acceptance and is not binding on the parties. True False

True

A party who announces the intention to break a contract is said to have created an anticipatory breach. True False

True

Competency of parties is a mandatory requirement to make a contract valid. True False

True

Duress is the act of applying unlawful or improper pressure or influence to a person in order to gain his agreement to a contract. True False

True

If the parties to a contract are legally competent and have reached mutual agreement, the law requires that the purpose of the agreement be legal. True False

True

A contract may be terminated after a certain time or after ____________. a new president is elected a certain event occurs one party loses profit one party decides they no longer like the contract

a certain event occurs

An indication made by the offeree that he or she agrees to be bound by the terms of the offer is known as: an enforceable offer. a mutual agreement. free consent. acceptance.

acceptance.

Offers are terminated for the following reason(s): lapse of time. revocation. rejection. all of the options are correct.

all of the options are correct.

An executed contract is a type of contract where the acts and obligations of the parties are completed __________. in the past in the future at the time of execution of the contract in the time allowed by the court

at the time of execution of the contract (not)

Entering into a contract with persons of legal age and normal mentality is considered within the element of: legality of purpose. competency of the parties. mutual agreement. proper form.

competency of the parties.

What is the legal term for parties to a contract having a clear understanding of what they are undertaking with no confusion on whether there is a contract? legality of purpose. mutual agreement. consideration. competency of the parties.

competency of the parties.

A ________________ is a person of legal age and at least normal mentality who is considered by law to be capable of understanding the meaning of a contract and is permitted to enter into a valid contract. incorporator competent party valid participant contractor

competent party

If only one party promises something, such as paying a certain amount of money, and the other party promises nothing, then the agreement lacks: offer and acceptance. competence. legality of purpose. consideration.

consideration.

If a minor enters into a contract relating to food, shelter, clothing, employment, or medical care, then such a contract is known as a: contract for necessaries. contract for service. contract of service. contract of forbearance.

contract for necessaries.

A(n) __________________ has legal authority to arrange for the distribution of the assets of a deceased person. executor or administrator incorporator beneficiary organizer

executor or administrator

A contract in which some future act or obligation remains to be performed under its terms is known as a(n): executed contract. executory contract. contingent contract. statutory contract.

executory contract.

Advertising is generally regarded as a(n): rejection of the offer. invitation to trade. commitment to sell. executory contract.

invitation to trade.

A legally enforceable contract will not be enforced if it: poses unforeseen expenses. is inconvenient to fulfill. is difficult to fulfill. is impossible to fulfil

is impossible to fulfil

Agreements to defraud creditors and other persons are void and unenforceable because they lack the element of: optimum communication. competency of parties. offer and acceptance. legality of purpose.

legality of purpose.

An incidental beneficiary has _____ rights under a contract in comparison to the contracting parties. more diminished equal no

no

According to the Statute of Frauds, to be enforceable, agreements that cannot be completed in less than one year: must be oral if for an amount of more than $500. can be oral. can be oral only if witnessed. must be in writing.

must be in writing.

A contract may prohibit _______ from assigning their rights or delegating their duties. one party or both parties only one party only both parties only third parties

one party or both parties

A valid offer must be all of the following EXCEPT: definite and certain. stated in writing. made with serious intent. communicated to the offeree.

stated in writing.

In a bankruptcy, the assets and contracts of a bankrupt person or business will be assigned to: the party to the contract. the trustee. the state. the creditors.

the trustee.

A person, who is not a party to a contract but is intended by the contracting parties to benefit as a consequence of a contract, is termed a(n): incorporator. third-party beneficiary. official receiver. arbitrator.

third-party beneficiary.

A party's rights in a contract can be assigned to another party; and also a party's duties can be transferred to a third party if the duties do not involve: unique skills. royalty. goodwill. charity

unique skills.

All but one of the following elements is required of an enforceable contract. The exception is: unjust enrichment. mutual agreement. consideration. offer and acceptance.

unjust enrichment.

If a loan is made at an interest rate higher than that allowed by state law, the lender is guilty of _______, which is defined as charging interest higher than the law permits. larceny usury adhesion speculation

usury

A(n) _____ contract is an agreement that results in an obligation that is legally enforceable. void invalid voidable valid

valid

A promise of an act by one party in exchange for the promise of an act by another is an example of: a void contract. valid consideration. incorporation. a voidable contract.

valid consideration.

An agreement that may be rejected by one of the parties for a legally acceptable reason is a(n): voidable contract. void contract. implied contract. valid contract.

voidable contract.

For the injured party to claim fraud, he or she must prove all of the following statements or acts EXCEPT that it: was a misstatement or nondisclosure of a material fact. was made with knowledge of its falsity or with reckless disregard of its truth. was not intended to cause the other party to enter into the agreement. was relied on by the injured party.

was made with knowledge of its falsity or with reckless disregard of its truth. (not)

Disaffirmance must be done by the minor: before receiving the consideration. within a reasonable time after reaching adulthood. after receiving the consideration for the contract. just prior to the minor reaching the legal age of adulthood.

within a reasonable time after reaching adulthood.