chapter 10 - adaptive test prep

Rick buys himself a new grill for his backyard patio and offers to sell Ron his old one for $250. Ron replies that he would love to buy the grill but that he will only pay $200. Do Rick and Ron have a valid contract and why or why not? a.) No, Ron did not accept the terms of the offer and so there is no agreement. b.) No, Rick was not clear about the condition of the grill and so there is no consideration. c.) Yes, all of the elements of a contract are present. d.) Yes, they clearly intend to trade the grill for money and so a court will enforce this agreement.

No, Ron did not accept the terms of the offer and so there is no agreement.

Which of the following elements need not be proved to establish that an implied contract exists? a. The plaintiff provided some property or service to the defendant. b. The defendant could have rejected the goods or services but did not. c. The defendant was unable to and could not have rejected the goods or services. d. The plaintiff expected payment for some property or service and the defendant should have known this.

The defendant was unable to and could not have rejected the goods or services.

Engelcke Manufacturing, Inc., planned to design and manufacture Whizball, an electronic game. Engelcke asked Eaton to design the electronic schematic for the toy and told him that he would be paid the reasonable value of his services upon the project's completion. No written contract was signed, nor were any specific terms or amounts discussed. Eaton had finished 90 percent of the project when Engelcke terminated his employment. Eaton filed a lawsuit against Engelcke, claiming breach of an implied-in-fact contract. Would the court most likely find that an implied-in-fact contract existed? a. Yes, because it was in the interests of fairness and justice that Eaton receive payment for his work on the project. b. No, because the conduct of Engelcke and Eaton indicated that they did not have an agreement. c. No, because Engelcke and Eaton intended, but failed, to put their agreement in writing. d. Yes, because the conduct of Engelcke and Eaton indicated that they had mutually agreed that Eaton would be paid to design a game for Engelcke.

Yes, because the conduct of Engelcke and Eaton indicated that they had mutually agreed that Eaton would be paid to design a game for Engelcke.

Sosa Crisan, an eighty-seven-year old widow, collapsed while shopping at a local grocery store. The Detroit police took her to the Detroit city hospital by ambulance. She was admitted and remained there for fourteen days. She was then transferred to another hospital, where she died eleven months later. She had never regained consciousness. After she died, the hospitals and the ambulance company filed a lawsuit against her estate to recover the expenses of the ambulance and her hospital stays. Will Crisan's estate be held liable for the medical bills? a. Yes, because there was an actual contract. b. No, because she could not have entered a contract while she was unconscious. c. No, because there was no quasi contract. d. Yes, because there was a quasi contract.

Yes, because there was a quasi contract.

If you verbally offer Rosanna $40 for her used business law text, and she responds by saying she agrees to sell it to you for that amount, you and Rosanna have formed: a. a unilateral contract. b. an implied in fact contract. c. no contract at all. d. a bilateral contract.

a bilateral contract.

An executory contract is: a.) a contract between executives. b.) a fully performed contract. c.) a contract not yet fully performed. d.) an offer only.

a contract not yet fully performed.

Lou claims that he and Mira entered into an implied-in-fact contract. To establish this contract, it is not necessary to show that: a. Lou provided Mira with services or property. b. a court imposed a promise in the interest of fairness. c. Lou expected to be paid for providing services or property. d. Mira failed to reject services or property provided by Lou.

a court imposed a promise in the interest of fairness.

The requirements for a valid contract do not include: a. consideration. b. a fair price. c. agreement. d. acceptance.

a fair price

A quasi contract can be defined as: a. a fictional contract. b. a true contract. c. an actual contract. d. an implied-in-fact contract.

a fictional contract.

Opie offers to sell his guitar to Pinky for $100. Pinky agrees. They complete and sign a printed form that includes, near the blanks for their signatures, the word "seal." This is: a.) no contract. b.) a social contract. c.) an informal contract. d.) a formal contract.

a formal contract

Jolly Sales Company and Kwik Distributors, Inc., enter into an agreement that contains some express terms and some that are implied. This is: a. an implied-in-law contract. b. a mixture of an express contract and an implied-in-fact contract. c. an express contract only. d. not a contract.

a mixture of an express contract and an implied-in-fact contract.

A contract is: a. an agreement that always involves parties who are not family members. b. a nonbinding promise to act. c. a promise or agreement that can be enforced in court. d. an agreement that always involves people over the age of twenty-one.

a promise or agreement that can be enforced in court.

If someone would be unjustly enriched unless that person were held liable for the benefits that he or she has received, a court may create and impose on the parties: a. an executory contract. b. an implied-in-fact contract. c. a quasi contract. d. All of these choices.

a quasi contract

The doctrine of quasi contract is not used to impose a contract on the parties: a. only if one party conferred a benefit on another as a result of misconduct. b. only if there is an actual contract between the parties. c. only if one party conferred a benefit on another unnecessarily. d. a quasi contract would not be used in all of these circumstances.

a quasi contract would not be used in all of these circumstances.

Jill offers to pay Kyle $500 if he jogs across the Golden Gate Bridge. Kyle can accept the offer only by jogging across the bridge. If Kyle jogs across the bridge, he and Jill will have formed: a.) a unilateral contract. b.) a social contract. c.) a moral obligation. d.) a bilateral contract.

a unilateral contract

Sam makes an offer to Tina to enter into a contract. Tina accepts the offer. A valid contract requires: a.) neither a valid offer nor a valid acceptance. b.) a valid offer and a valid acceptance. c.) valid acceptance only. d.) a valid offer only.

a valid offer and a valid acceptance

A court will consider a contract to be ambiguous when: a.) all of these choices. b.) when a term is susceptible of more than one interpretation. c.) when it lacks a provision on an issue of dispute. d.) the intent of the parties cannot be determined from its language.

all of these choices

A voidable contract is: a. one that can be voided at the option of one of the parties. b. one that can be voided at the option of both of parties. c. a valid contract. d. all of these choices.

all of these choices

Contract law comes from: a.) all of these choices. b.) statutory law. c.) the common law. d.) administrative agency regulations.

all of these choices

The common law generally governs which of the following types of contracts? a.) All of these types of contracts b.) Only employment contracts c.) Only contracts involving insurance d.) Only contracts involving real estate

all of these types of contracts

Alpha Design Company and Beta Products, Inc., sign a document that states Alpha agrees to design a Web page for Beta and Beta agrees to pay Alpha for this service. Alpha and Beta have made: a. an implied-in-law contract. b. an express contract. c. an implied-in-fact contract. d. a quasi contract.

an express contract

Kamil, a college student, offers to sell his 2009 Toyota Camry, which has been driven 24,000 miles and has no mechanical problems that Kamil is aware of, to his friend Jason for $25,000. Jason accepts Kamil's offer. This is an example of: a.) a quasi contract. b.) an executed contract. c.) an implied contract. d.) an express contract.

an express contract

Tom enters a coffee shop in which he has an open account, fills a cup of coffee, holds it up so the cashier can see it, acknowledges the cashier's nod, and walks out with the coffee, knowing that he will be billed for it at the end of the month. Tom has formed: a. an implied-in-law contract. b. an express contract. c. an implied-in-fact contract. d. a quasi contract.

an implied-in-fact contract.

In contract law, "agreement" means: a.) a likely legal offer and an acceptance have been made between parties, at least one of whom likely has the contractual capacity to do so. b.) the promises made were supported by legally sufficient consideration. c.) an offer and an acceptance have been made between parties. d.) a party makes an offer to enter into a legal arrangement.

an offer and an acceptance have been made between parties.

An agreement to form a contract must include: a. an offer and an acceptance. b. a fair bargain. c. a fair price. d. a physical sample of the good for sale.

an offer and an acceptance.

Max begins to perform, intending that the completion of his performance act as an acceptance of Nia's offer, which can only be accepted by the completion of the act. Nia can revoke her offer any time: a. before Max has substantially begun performance of the act. b. after Nia makes it. c. before Max completes performance of the act. d. before Max indicates that he will perform.

before Max has substantially begun performance of the act.

Sarah and Chloe enter into a contract. In order for their contract to be valid, who must have contractual capacity? a. Both Sarah and Chloe b. Sarah only c. Chloe only d. Neither Sarah nor Chloe

both sarah and chloe

Quasi contracts describe: a. void contracts. b. contracts implied in law. c. a certification earned by judges that allows them to interpret ambiguous terms in contracts. d. contracts entered into by minors.

contracts implied in law

The primary purpose of the rules of interpretation is to: a. give the greatest consideration to express terms and course of dealing. b. give the greatest consideration to general language. c. determine the parties' intent from any use of standardized terms. d. determine the parties' intent from the language used in their agreement and to give effect to that intent.

determine the parties' intent from the language used in their agreement and to give effect to that intent.

William Tackaberry was a real estate agent who spent several months helping Thomas Ryan to purchase a particular piece of property. At the beginning of the process, and during all subsequent discussions, Tackaberry informed Ryan that his commission was 10 percent of the sale price, payable at closing. Ryan refused to sign a contract spelling out the terms of the commission and several times attempted to negotiate a lower commission. Tackaberry repeated that his commission was 10 percent, due at closing. After the deal was finalized, Tackaberry sent Ryan a bill for 10 percent of the sale price. When Ryan did not pay, Tackaberry filed a lawsuit to recover the full amount. Tackaberry claimed that he and Ryan had an implied-in-fact contract. The court most likely found that an implied-in-fact contract: a. did not exist, because Ryan's conduct indicated that he had never agreed to the 10 percent commission. b. existed, because Ryan's conduct indicated that he had agreed to the 10 percent commission. c. existed, because Ryan's conduct indicated that he had agreed to pay an 8 percent commission. d. did not exist, because Ryan had refused to sign a written contract.

did not exist, because Ryan's conduct indicated that he had never agreed to the 10 percent commission.

On behalf of the rock group Uno, their manager Thalia agrees to a performance in Seaside Amphitheatre on July 4. Rex, acting for Seaside Productions, sends a written copy of the agreement to Thalia to be signed. Typically, businesspersons put their contracts in writing to: a.) practice their "letters of credit." b.) obtain a check or other negotiable instrument. c.) create substance from form. d.) ensure proof of the contracts' existence.

ensure proof of the contracts' existence.

One of the main purposes of contract law is to: a. discourage harms against society. b. ensure that one party does not threaten another. c. ensure that certain promises are legally binding. d. discourage misuse of the environment.

ensure that certain promises are legally binding.

Quasi contracts are: a.) None of these choices. b.) legal contracts. c.) equitable contracts. d.) those that arise from implied agreement between the parties themselves.

equitable contracts

Asa mistakenly pays property taxes that should have been assessed against Bud. Asa can recover the amount from Bud in quasi contract: a. only if Bud was aware of the error. b. even if Bud was not aware of the error. c. only if Bud tried to conceal the error. d. under no circumstances.

even if Bud was not aware of the error.

Cole drives into Dino's Service Station and asks Erin, the attendant, to fill the tank in Cole's hybrid vehicle. After Erin fills the tank, but before Cole pays for the gas, any contract between Cole and Dino's is: a.) unenforceable. b.) void. c.) executory. d.) executed.

executory

Federal Oil Company and Great Apartments, Inc., sign a contract in which Federal agrees to deliver heating oil in exchange for Great's promise to pay for it. Federal delivers the oil. The contract is: a. fully executed. b. executory on the part of Federal. c. executory on the part of Great. d. neither executed nor executory on the part of either party.

executory on the part of Great.

Gwen agrees to paint Holly's Gift Shop. Gwen does the work, but Holly does not pay. To recover the price, Gwen can collect from Holly on the basis of their: a. implied-in-law contract. b. express contract. c. implied-in-fact contract. d. quasi contract.

express contract

Courts will give the greatest weight to: a.) course of performance. b.) express terms. c.) custom and usage of trade. d.) course of dealing.

express terms

Sylvia and Marco enter into a written contract for the sale of Sylvia's house and some of the furniture inside the house to Marco. If the contract is unclear regarding whether a particular item of furniture is included in the contract, a court could look to which of the following to decide the issue? a.) Extraneous evidence b.) Extrinsic evidence c.) Inherent evidence d.) Extrapolated evidence

extrinsic evidence

"Consideration" refers to the genuine assent of all of the parties to a contract. True False

false

A contract's general intent will usually be subordinated to specific clauses contained within the contract. True False

false

A party who confers a benefit on someone else unnecessarily can recover the cost under the principle of quasi contract. True False

false

An express contract must be in writing. True False

false

An offer to form a unilateral contract is accepted by a promise to perform. True False

false

An oral contract is an implied-in-fact contract. True False

false

Contract disputes rarely arise on a promise of future performance. True False

false

In determining whether a contract has been formed between two parties, the court will determine whether the parties intended to form a contract by considering the subjective facts. True False

false

Offers may not be revoked before they are accepted. True False

false

One of the requirements of a valid contract is a fair price. True False

false

The doctrine of quasi contract applies only if there is an actual contract. True False

false

There are no exceptions to the rule that contracts voluntarily entered into will be enforced. True False

false

Three elements—agreement, consideration, and contractual capacity—are sufficient to form a binding contract. True False

false

To be valid, a contract must be enforceable by all of the parties to it. True False

false

When the words in a contract have more than one meaning, they are cut from the contract. True False

false

A contract may be defined as an agreement: a.) that sometimes is capable of being enforced in a court. b.) that entails a nonbinding promise to act. c.) formed by two or more parties to perform or refrain from performing some act now or in the future. d.) that always and only involves parties in a moral obligation.

formed by two or more parties to perform or refrain from performing some act now or in the future.

Regarding the interpretation of contracts, courts use all of these rules EXCEPT: a.) the plain meaning rule. b.) if ambiguous, the court will consider extrinsic evidence. c.) general wording will be given greater weight than specific wording. d.) an ambiguous term will be construed against the party drafting it.

general wording will be given greater weight than specific wording.

Samuel Nichols, Inc., is a real estate firm. Nichols signed an exclusive brokerage agreement to find a purchaser for Molway's property within ninety days. Under the agreement, Molway agreed to pay Nichols a commission if Nichols found a buyer for the property within the ninety-day period. Nichols advertised the property, put up a "for sale" sign, and showed the property to prospective buyers. Before the ninety-day term expired, Molway tried to cancel the brokerage agreement, claiming that she could cancel at any time before Nichols found a buyer. Nichols claimed that Molway's cancellation breached their unilateral contract. The court most likely found that Molway: a. had not breached, because Nichols had not found a buyer. b. had breached, because Nichols had begun performing the contract. c. had breached, because she was trying to avoid paying Nichols a commission. d. had not breached, because Nichols was not trying to find a buyer.

had breached, because Nichols had begun performing the contract.

Ambiguous terms in a contract are generally: a. interpreted according to what the parties claim their intent was when they drafted the contract. b. interpreted against the party with greater bargaining power. c. not enforced. d. interpreted against the party who drafted the contract containing ambiguous language.

interpreted against the party who drafted the contract containing ambiguous language.

The objective theory of contracts: a. maintains the importance of the subjective intentions of the parties involved. b. maintains the importance of going beyond what was openly said or manifested by conduct to determine whether a contract has been formed. c. means that a party's intention to enter into a legally binding agreement is judged by outward, objective facts as interpreted by a reasonable person. d. is a theory concerning the objectionable aspects of contract disputes.

means that a party's intention to enter into a legally binding agreement is judged by outward, objective facts as interpreted by a reasonable person.

An aspect of modern life that is entirely free of rights and obligations is when: a. you form a business. b. you lease a house. c. you borrow funds. d. None of these.

none of these

Tori and Nitara agree that Tori will pay Nitara to house-sit for Tori's home and cat while Tori is away for a week. That is the sum total of their agreement. Tori and Nitara have: a. entered into an enforceable preliminary agreement. b. formed a legally enforceable contract, since all contract elements are present. c. not formed a legally enforceable contract because a contract term is missing. d. none of these choices.

not formed a legally enforceable contract because a contract term is missing.

Dot, a real estate agent, tells Elbert, a home seller, that her commission is 12 percent. Elbert agrees that Dot can sell his house but refuses to sign a contract unless the amount of the commission is reduced. After the house is sold, Elbert refuses to pay 12 percent. Dot is most likely to recover: a. on a theory of an implied-in-fact contract. b. nothing. c. on a theory of an express contract. d. on a theory of quasi contract.

on a theory of quasi contract.

A-One Pavers, Inc., contracts with Best Building Corporation to repave Best's parking lot. The elements of a contract do not include: a. legality. b. consideration. c. contractual capacity. d. practicality.

practicality

Newt and Odell enter into a bilateral contract, which is created when Newt gives a promise in exchange for Odell's: a. promise. b. particular act. c. performance. d. prudent awareness.

promise

Formal contracts: a.) are formed at least in part by the parties' conduct. b.) always entail a promise for an act. c.) require a special form or method of creation to be enforceable. d.) always entail a promise for a promise.

require a special form or method of creation to be enforceable.

Which of the following statements regarding contracts is correct? a. To be a valid contract, the contract must be in writing. b. All contracts must be in writing to be enforceable. c. Some contracts must be in writing to be enforceable. d. No contracts are required to be in writing to be enforceable.

some contracts must be in writing to be enforceable.

Don contracts to tutor Ellen in the principles of business law. For the breach of a contractual promise, contract law entitles innocent parties to: a.) some form of relief. b.) any relief that a plaintiff wants to seek. c.) any relief that a defendant wants to concede. d.) any relief that a court wants to provide.

some form of relief

In contract law, consideration means: a. something of value received or promised underlying the bargain. b. the genuine consent of both parties. c. the legality of the subject matter of a contract. d. the ability of a party to enter into a legal contract.

something of value received or promised underlying the bargain.

Quantum meruit refers to: a. the amount of compensation owed under a quasi contract. b. the amount of money that each party is contributing to a contract. c. the amount of damages that can be awarded to the non-breaching party for breach of an express contract. d. none of these choices.

the amount of compensation owed under a quasi contract.

Contracts are governed by: a.) the common law as modified by statutory and administrative law. b.) tort law. c.) public international law. d.) criminal law.

the common law as modified by statutory and administrative law.

Consent to a contract will be genuine if: a. only the parties are not mistaken in their understanding of the offer. b. the consent of both parties is sincere and free of fraud, mistake, or duress. c. the parties involved always agree verbally in an honest fashion. d. all of these choices.

the consent of both parties is sincere and free of fraud, mistake, or duress.

Mona asserts that a contract she entered into with Nate is unenforceable. Defenses to the enforcement of a contract include: a. results that do not match expectations. b. a desire not to perform. c. adverse economic consequences. d. the lack of a party's genuine assent.

the lack of a party's genuine assent.

Cory enters into a contract with Dian to act as her personal sports trainer. If they later dispute the meaning, and the contract contains unclear terms, the rules of contract interpretation will give effect to: a. what the plaintiff claims was the parties' intent. b. the parties' intent as expressed in their contract. c. what the defendant claims was the parties' intent. d. what the parties now agree they intended.

the parties' intent as expressed in their contract.

Laura and Mike enter into what Laura later claims is a contract. In deciding whether a valid contract was formed, a court will not look at: a. the parties' statements at the time of the alleged contract. b. the circumstances surrounding the alleged contract. c. the parties' conduct at the time of the alleged contract. d. the parties' subjective beliefs at the time of the alleged contract.

the parties' subjective beliefs at the time of the alleged contract.

Nora enters into a contract with Owen's Transport Company for the delivery of a shipment of fresh produce. If the language in the contract has more than one meaning, it will be construed against: a. the promisor. b. the party who drafted the contract. c. the party with the greater bargaining power. d. the promisee.

the party who drafted the contract.

If the terms of a contract are clear and unambiguous, a court may not consider extrinsic evidence when interpreting the document. This is known as: a. the plain meaning rule. b. the mailbox rule. c. the single letter rule. d. the rule against perpetuities.

the plain meaning rule.

No contract will have been formed if: a. the purpose of the contract is not to contribute something of value to society as a whole within the bounds of legality. b. the purpose of the contract is to accomplish some goal that is against public policy. c. the parties involved have the contractual capacity to do so. d. promises made by the parties to the contract may be supported by legally sufficient and bargained-for consideration.

the purpose of the contract is to accomplish some goal that is against public policy.

The Uniform Commercial Code (UCC) has modified the common law of contracts with respect to contracts for: a. the performance of services. b. the sale of real estate. c. the sale or lease of goods. d. all of these choices.

the sale or lease of goods.

Macro Corporation and Micro, Inc., enter into an agreement. To constitute a contract: a. the terms may be express, implied, or a mix of both. b. all terms must be express. c. all terms must be implied. d. the terms may be express or implied, but not both.

the terms may be express, implied, or a mix of both.

A contract is formed when two parties promise to perform a future act. True False

true

A contract that cannot be enforced because of certain legal defenses is an unenforceable contract. True False

true

A contract under seal is a formal contract. True False

true

A quasi contract is not an actual contract. True False

true

A reasonable, lawful, and effective meaning will normally be given to all of a contract's terms. True False

true

An agreement includes an offer and an acceptance. True False

true

An implied-in-fact contract is implied from the conduct of the parties. True False

true

An offeror is a person who makes an offer. True False

true

Informal contracts are usually based on substance rather than form. True False

true

One of the requirements of a valid contract is its acceptance. True False

true

Parties can form a contract without putting the terms in writing. True False

true

Parties with contractual capacity may form an enforceable contract. True False

true

Under the plain meaning rule, a court will enforce a contract in which the writing is clear and unequivocal. True False

true

When the words in a contract have more than one meaning, they are interpreted against the party who drafted the contract. True False

true

A bilateral contract is one in which: a.) a unilateral contract accompanies an exchange of promises. b.) a third party guarantees the promise of one of the parties. c.) a promise is given in return for an act. d.) two promises are exchanged.

two promises are exchanged

Curt promises to buy illegal copies of CDs and DVDs from Donna, who promises to deliver on May 1. These promises are most likely: a.) voidable. b.) void. c.) valid. d.) enforceable.

void

Employment Sources, Inc., enters into a contract with Fred. If Fred is a minor, this contract is most likely: a. void. b. enforceable. c. unenforceable. d. voidable.

voidable

Jennifer, a minor, collects valuable baseball cards. She orders online a vintage Babe Ruth, advertised to be in mint condition. It's not. As to Jennifer, the contract is: a. an executory contract. b. void. c. voidable. d. none of these choices.

voidable.

When Garris Briggs died, he left $782 in unpaid medical bills. Insurance checks to pay the bills were issued to his widow, Beatrice. For the previous five years, the Briggses had lived apart, with no financial connection whatsoever. A state law provided that if a person died without a will, a surviving spouse was entitled to his or her spouse's entire estate. Beatrice claimed that she did not have to pay Garris's bills, because their financial affairs were separate, but that she was entitled to keep the insurance checks as his surviving spouse. The physicians who had treated Garris filed a lawsuit against Beatrice to recover the insurance proceeds. The court most likely found that the physicians: a. were not entitled to the insurance proceeds under a quasi contract. b. were entitled to the insurance proceeds under a quasi-contract. c. were entitled to the insurance proceeds under an actual contract. d. were not entitled to the insurance proceeds, because there was no actual contract.

were entitled to the insurance proceeds under a quasi-contract.

The doctrine of quasi contract generally cannot be used: a. unless a unilateral contract is involved. b. when no contract governs the controversy. c. when an actual contract governs the controversy. d. unless both parties consent to the quasi contract.

when an actual contract governs the controversy.

The common law generally governs contracts except: a. those contracts relating to real estate. b. those contracts relating to insurance. c. when the common law has been modified or replaced by statutory law or by international agency regulations. d. when the common law has been replaced or modified by administrative agency regulations or by statutory law.

when the common law has been replaced or modified by administrative agency regulations or by statutory law.