Ch. 6 BLW

19.) Scott, who is 15-years-old, purchased a laptop computer on a lease plan for $100 a month over 18 months from Laptops-R-Us. Under the law of contracts, this is A.) a valid contract. B.) a voidable contract. C.) a void contract. D.) an unenforceable contract.

B.) a voidable contract.

5.) TechnoPlus, a corporation that sold high end digital printer/copiers, entered into a written contract with Wesley, a lawyer, which included a payment of $500 per month for the printer/copier itself and $200 a month for a service agreement. The sales representative and Wesley negotiated the price of this contract in a serious of email and personal exchanges. Which of the following describes this type of contract? A.) Unilateral and incidental B.) Hybrid and express C.) Hybrid and implied D.) Bilateral and voidable

B.) Hybrid and express

2.) Flick entered into an oral agreement with Ralphie where he agreed to sneak out at night and spray paint graffiti on the walls of Warren G. Harding Elementary School in consideration of $25. The two negotiated over the price and Flick finally agreed to do it when Ralphie "double dog dared" him. With respect to the laws of contracts, which type of contract is this? A.) This is an implied, unilateral and void contract. B.) This is an express, bilateral and void contract. C.) This is an implied, bilateral and void contract. D.) This is a quasi, unilateral and voidable contract.

B.) This is an express, bilateral and void contract.

12.) On June 1, Farnsworth, the CEO of Thriftyco, sent a letter to Bainbridge, the regional sales manager of Technopress Corp. The letter stated: "We offer you the job of national sales manager for Thriftyco in consideration of $200,000 a year and 2% of gross sales revenues. Acceptance must be by regular mail." On June 3, Farnsworth had second thoughts and sent an mail to Bainbridge saying "The offer is revoked, we are going in another direction." On June 4, Bainbridge sent a letter accepting the offer. On June 5, Farnsworth's revocation arrived at Bainbridge's house. Was a contract formed in this case? Why/why not? A.) Yes, a contract was formed because an offeror may not revoke before the offeree has had fair opportunity to consider the offer. B.) Yes, a contract was formed because Bainbridge accepted the offer before receiving Farnsworth's revocation. C.) No, a contract was not formed because Farnsworth sent his revocation before Bainbridge sent his acceptance. D.) No, a contract was not formed because an offeror may always revoke an offer, even after acceptance, prior to the performance commencing.

B.) Yes, a contract was formed because Bainbridge accepted the offer before receiving Farnsworth's revocation.

21.) Alexis, a lawyer, entered into a contract to perform consulting work with Technology Associates, a software development corporation. This agreement is governed by what source of law? A.) Common law. B.) Statutory law. C.) The Uniform Commercial Code. D.) Law at equity.

A.) Common law.

3.) Merv is a bulldozer operator. He was hired by Carla to fill in a swampland on her property and they signed a contract for him to do it on March 1st. On February 28th, Merv is informed by a city official that the swampland Carla wanted filled in is protected wetlands and it would violate environmental law to do the job. If Merv then calls Carla telling her the deal is off and Carla threatens to sue for breach of contract, what result? A.) The contract is void, Carla loses. B.) The contract is voidable, Carla loses. C.) The contract is valid as there was offer and acceptance, Carla wins. D.) The contract is valid as it was bilateral, Carla wins.

A.) The contract is void, Carla loses.

18.) Darnell, a professor, entered into a contract with Felicity, a 22-year-old graduate student, for Felicity to proofread and correct the grammar in his new textbook. Felicity dropped off a contract at Darnell's office, but she made a mistake and accidentally wrote 15 cents an hour rather than 15 dollars an hour for her services, then signed the contract. Darnell noticed the error, signed the contract also, and now is trying to hold Felicity to the 15 cent amount. What would be the likely result and why if Felicity goes to court to get out of the agreement? A.) The court will allow her to cancel the agreement on grounds of unilateral mistake. B.) The court will allow her to cancel the agreement on grounds of bilateral mistake. C.) The court will not allow her to cancel the contract because nominal consideration is valid. D.) The court will not allow her to cancel the contract because a mistake is no grounds for getting out of a contract.

A.) The court will allow her to cancel the agreement on grounds of unilateral mistake.

11.) Billy offered Shane $500 if he would run around the football stadium three times wearing a duck outfit during the playoff game. Which of the following is true? A.) The offer is for a unilateral contract. B.) This is a void contract. C.) This contract is enforceable only if it is in writing. D.) This contract is enforceable only if Shane verbally or in writing accepts the offer prior to starting the run.

A.) The offer is for a unilateral contract.

8.) Allie, a 24-year-old graduate accounting student, entered into a written agreement with her father to give up drinking until she completed her master's degree. Her father agreed to pay her $100,000 if she did so. Does Allie have a right to collect if she lives up to her end of the bargain? A.) Yes, because this is a bargained-for exchange and has adequate consideration. B.) Yes, because giving something up always creates legal forbearance. C.) No, because giving up drinking is inadequate consideration for $100,000. D.) No, because Allie did not give anything to her father, thus there was no legally valid exchange.

A.) Yes, because this is a bargained-for exchange and has adequate consideration.

16.) Arnold offered to sell his zero turn lawnmower to Bambi in consideration of $2,500. Bambi thanked him for the offer, said nothing else, but immediately headed to her bank, withdrew $2,500, and headed to Arnold's house with the money. When she arrived, Arnold told her that he sold the mower 30 minutes after they spoke on the phone to someone else. Is Arnold in breach of contract? Why/why not? A.) Arnold is in breach because this was an irrevocable offer. B.) Arnold is in breach because he had a duty to inform Bambi that he had sold the mower. C.) Arnold is not in breach because he revoked the offer by doing an action inconsistent with maintaining it. D.) Arnold is not in breach because an offeror has no duty to maintain an offer even after verbal acceptance unless delivery has been made.

C.) Arnold is not in breach because he revoked the offer by doing an action inconsistent with maintaining it.

10.) Which of the following is an example of the preexisting duty rule? A.) Kristi was sitting at a bus stop when she saw Tim absent mindedly walking into traffic. She warned Tim, and he stepped back just in time. Tim offered Kristi $1,000 in consideration.' B.) Aubrey entered into an agreement with Ping in which Aubrey would deliver the computers that Ping made in consideration of $25 per delivery. C.) Deputy Kelly entered into a written agreement with Babe in which Kelly agreed to find the person who stole Babe's skateboard in consideration of $100. D.) All of the hypotheticals are examples of the preexisting duty rule.

C.) Deputy Kelly entered into a written agreement with Babe in which Kelly agreed to find the person who stole Babe's skateboard in consideration of $100.

9.) Which of the following would be nominal consideration? A.) Jorge entered into an agreement with Drake to sell him his motorcycle for $10,000. The motorcycle was worth $20,000. B.) Frazier entered into a written contract to train Foreman for a boxing match in consideration of $5,000. C.) Grover entered into a written contract with Oscar to sell him his house in consideration of $10. Oscar never turned over the $10. D.) Belinda pulled April out of a burning car, saving her life. April then offered Belinda $1,000 in consideration of her heroism.

C.) Grover entered into a written contract with Oscar to sell him his house in consideration of $10. Oscar never turned over the $10.

17.) Aaron has entered into a contract with Wilson, a man who is elderly and suffers from dementia and was unable to understand the nature of the contract he was signing. Wilson had not been legally declared to be incompetent at the time the contract was signed. It was an agreement for Aaron to mow Wilson's lawn each week in consideration of $50, which is a fair price for the service. Aaron was not aware that Wilson had dementia. What is the legal status of this agreement? A.) It is a valid contract. B.) It is a void contract. C.) It is a voidable contract. D.) It is unilateral contract.

C.) It is a voidable contract.

14.) Marcus was offered a job as a senior manager by Super Corp. The offer, which was made over the phone, was for a three-year contract for $120,000 salary per year. Marcus orally accepted, there was no writing. The state in which Marcus was offered the job requires that such contracts be in writing. Marcus quit his current job, which paid $75,000 a year, and headed to the state where Super Corp was headquartered. When he arrived, the director at Super Corp who had originally offered him the job said that they were revoking and that there was no contract, as Marcus never signed an employment agreement. If Marcus sues Super Corp, what is the likely result? A.) Super Corp owes Marcus nothing because he did not perform the required acceptance by writing. B.) Super Corp owes Marcus nothing because an offeror may always revoke even after acceptance so long as the contract has not yet commenced. C.) Marcus is owed something by Super Corp because he relied reasonably and to his detriment on Super Corp's offer. D.) Marcus is owed something by Super Corp because an offeror may never revoke until the offeree has exhausted their right to contemplate the contract.

C.) Marcus is owed something by Super Corp because he relied reasonably and to his detriment on Super Corp's offer.

4.) Precious, at a private party, agreed to sell LaStarshae her new Gucci purse for $2,000. LaStarshae asked Precious if she would hold the price open until the end of the month when LaStarshae received a quarterly bonus from her job. Precious agreed to do it for her as a favor. At the end of the month, LaStarshae approached Precious with $2,000 in hand, but Precious said "Sorry, LaStarshae, I just sold it to Celine, you're too late." What will be the result if LaStarshae sues for breach of contract? A.) LaStarshae wins as this was a valid option contract that Precious breached. B.) LaStarshae wins as this was a valid bilateral contract. C.) Precious wins as there was no exchange of consideration. D.) Precious wins as there was no writing.

C.) Precious wins as there was no exchange of consideration.

13.) Annias offers to sell her house to Tobias in consideration of $220,000. Tobias says he will pay $219,000. What is the status of this exchange of promises at this time? A.) This is a bilateral, valid contract because the difference of less than one-half of one percent is trivial and not material. B.) This is a unilateral contract that can only be accepted by performance. C.) This is an offer and a counteroffer that terminates Tobias's power of acceptance of the original offer. D.) This is an offer and a counteroffer that does not violate the mirror image rule of contracts, Tobias still has the power to accept the original offer.

C.) This is an offer and a counteroffer that terminates Tobias's power of acceptance of the original offer.

20.) Demetrius offers to sell his car to Ivana for $20,000 Ivana tells him she will pay him $15,000. Ivana's response is A.) an acceptance. B.) a rejection. C.) a counteroffer. D.) a mirror image offer.

C.) a counteroffer.

15.) The proper mode of acceptance of an offer up and until the offer has been accepted is established by A.) the offeree. B.) the subjective intentions of the offeree. C.) the offeror. D.) a third-party.

C.) the offeror.

22.) Akira, a hip hop star, was sitting in a hotel lobby when she was approached by Lucy, a record company executive. Lucy offered Akira $5 million for a three-year contract to record three albums for her company, which was the fair market value for a star of Akira's fame. Akira had no desire to record for Lucy's company, but after discussing the matter with Lucy for about half an hour, she signed a contract written on the back of a receipt from the hotel restaurant that Lucy wrote up on the spot. Akira thought it was a joke and had no subjective intentions of entering into the agreement. Which of the following is true of this situation? A.) There is no contract because Akira's subjective intentions prevent formation of the contract. B.) Since the contract was written without lawyers present, it was likely not really serious, so no contract was actually formed. C.) Because the terms were fair, the parties are bound by the contract regardless of their intent or capacity. D.) Akira's actions made her appear serious; therefore, she is bound by the contract despite what she was inwardly thinking.

D.) Akira's actions made her appear serious; therefore, she is bound by the contract despite what she was inwardly thinking.

7.) Alexander was a brilliant inventor who worked for GiantCo. Alexander received a salary of $90,000 a year, but also invented several products for GiantCo which made them in excess of $10 billion in profits in the five years he had worked for them. Alexander was dissatisfied with his salary and wanted a bonus based on the massive amount of money he made GiantCo, but they turned down his request and paid him only one dollar more than his base salary because he had signed an employment contract which called for him to give up "all rights to inventions in consideration of $1." Bill thinks this is unfair and has sued. What will be the likely court result? A.) Alexander wins because $1 is inadequate consideration for $10 billion in profits. B.) Alexander wins because there was no mutual assent in the contract. C.) GiantCo wins because the $1 agreement for the rights to inventions was past consideration and thus not enforceable. D.) GiantCo wins because this was a bargained-for exchange and consideration need not be of equal value.

D.) GiantCo wins because this was a bargained-for exchange and consideration need not be of equal value.

1.) Jake lost his wallet and put an ad in the online student newspaper saying "Lost wallet. Reward $100. Call Jake." Melanie, a classmate of Jake's, saw the ad, and spent two days looking for the wallet, missing three classes. Jake later found his wallet in the student parking lot. When Jake found out about all the work Melanie had done, he thanked her, but didn't give her $100 or anything for her troubles. Which of the following is true of this situation? A.) Jake offered a bilateral contract, and Melanie is entitled to be compensated for her efforts. B.) Jake offered a bilateral contract, and Melanie is entitled to nothing because she did not perform. C.) Jake offered a unilateral contract, and Melanie is entitled to be compensated for her efforts. D.) Jake offered a unilateral contract, and Melanie is entitled to nothing because she did not perform.

D.) Jake offered a unilateral contract, and Melanie is entitled to nothing because she did not perform.

6.) Gargantuan Corporation is negotiating with Drumph Commercial Properties to purchase a skyscraper to house their world headquarters in New York City. Which of the following would govern the sale of this building? A.) Hybrid laws. B.) The Uniform Commercial Code. C.) State statutory law based on the Uniform Commercial Code. D.) State common law.

D.) State common law.