Chapter 10 Contract Law
The party who makes an offer can require the acceptance to be communicated in a very specific way or the acceptance is not good.
True
Two promises or an exchange of promises are involved in bilateral contracts.
True
Usually, the acceptance of an offer is legally effective when the acceptance is sent.
True
When the courts use the doctrine of promissory estoppel (detrimental reliance), it means that despite the lack of the elements of a contract, the court may require payment to be made as if a contract had existed.
True
You return a lost dog to its owner. You did not know a reward was being offered for the dog. You do not have a legal right to the reward.
True
An offer may be revoked before the offeree has a chance to respond to it.
True
Consideration is something of value in exchange for a promise.
True
Contract law is primarily state common law.
True
Contracts created by an intoxicated person may be voidable by that person because he only had partial capacity to contract.
True
Contracts that unreasonably restrict competition are unenforceable.
True
Fraud requires scienter; that is the party accused of fraud must have wanted to mislead the other party.
True
The acceptance of an offer to form a contract may be communicated in any "reasonable" way and be effective, in most instances.
True
The basic elements of a contract are: offer, acceptance, consideration, lawful subject matter, and genuine consent.
True
The general rule in contract law is that an acceptance of an offer must be its "mirror image."
True
The parol evidence rule holds that oral testimony by one party that contradicts a written contract cannot be accepted as evidence in court.
True
If a 16-year-old buys a car, uses it for six months, then decides to disaffirm the contract to buy the car on a three-year payment plan, the contract is voidable.
True
If a person signs a contract because of "undue influence" by the other party to the contract, the person can later disaffirm the contract.
True
If an acceptance is mailed before a revocation of an offer is received, the acceptance is effective.
True
If parties enter into a contract by mistake, the contract may be disaffirmed.
True
If the offeree accepts an offer through performance requested, unilateral contract is formed.
True
If you promise to give $1 million to a church, which begins new construction based on your promise, you may be held legally obligated to make the gift even though there is no contract.
True
In unilateral contracts, performance is acceptance of an offer.
True
Most contracts are bilateral.
True
Not all promises are enforceable contracts.
True
Offers may be terminated by the destruction of the subject matter of the contract.
True
Express contracts must be in writing to be valid.
False
Freedom of contract means businesses may enter into any contracts they wish to.
False
If a minor agrees to join the Army, the minor's agreement to join is voidable.
False
If a party fails to perform a nonbinding promise the law will provide a remedy.
False
Option contracts are binding promises to keep a specific offer open to a specific party for, say, one month.
True
If a printed advertisement states the price of a good offered for sale, the seller must sell to any customer who wants the good at that price.
False
If an offeree accepts an offer through an exchange of mutual promises, a unilateral contract is formed.
False
Promissory estoppel is also known as detrimental reliance.
True
If no time is specified in an offer, the law presumes the offer exists for one year before it is terminated by lapse of time.
False
In an express contract, promises are inferred from the behavior of the parties in relation to one another.
False
Most contracts are unilateral.
False
Option contracts are binding promises to keep an offer to sell a good open to the public for a certain length of time.
False
Preliminary negotiations are generally considered to create as binding offers.
False
Promissory estoppel applies when, to avoid injustice, a court refuses to enforce a grossly unfair promise.
False
Termination of an offer can only occur through the operation of law.
False
The Statute of Frauds applies to the sale of all vehicles.
False
The Statute of Frauds states that all contracts that involve more than $1,000 must be in writing.
False
The basic elements of a contract are: offer, acceptance, consideration, genuine consent and court approval.
False
The basic elements of a contract are: offer, acceptance, fair value, lawful subject matter, and genuine consent.
False
The parol evidence rule allows oral testimony to revise the terms of contracts written more than one year ago.
False
Unconscionable contracts are upheld by the courts unless force was used to obtain them.
False
Usually, acceptance of an offer is legally effective when the acceptance is received.
False
The Statute of Frauds holds that if you are going to paint my house two years from today, the contract should be in writing.
True
"I want $10,000 for my car," says Sam. "I would love to have it," says Jan. We have an offer that has been accepted to form a contract.
False
"Unless you say no, then you must buy my car for $5,000," says A. B says nothing. B must buy the car.
False
A minor always has the ability to disaffirm a contract.
False
A promise not to do something may not be consideration for a valid contract.
False
A signs a contract to buy B's ranch for $900,000 then learns that the true market value is $500,000. There is not adequate consideration, so the contract will not be enforced.
False
A voidable contract never was or will be a valid contract.
False
Acceptance of an offer must be conditional, unequivocal, and legally communicated to be effective.
False
An intoxicated person has no capacity to contract.
False
An offer is made by an offeree.
False
An offer that is missing only one key element will be accepted as the basis of a contract; the court will clarify the offer.
False
Consideration involves the right of individuals to be considered to be able to enter into contracts legally.
False
Contract law enforces duties imposed on citizens by the government.
False
Courts will not enforce contracts if the consideration is not "reasonably consistent" with what is received in exchange.
False
The Statute of Frauds is quite old, having evolved from an English law of 1677.
True
The Statute of Frauds requires that a promise to pay debts of another person must be in writing to be a valid contract.
True
The Statute of Frauds requires that all contracts for the sale of property must be proven by written evidence signed by the defendant.
True
An implied contract is based on promises inferred from the behavior or circumstances of the parties involved.
True
An intoxicated person often has partial capacity to contract.
True
An offer is made by an offeror.
True
An offer is made to the offeree.
True
"I will pay you $100 to not sell your $500,000 house to anyone else for the next month so I can see if I can get the money together to buy it," you say. "Ok," says the home owner. The $100 payment is a valid contract.
True
"I will pay you $100 to not sell your $500,000 house to anyone else for the next month so I can see if I can get the money together to buy it," you say. "Ok," says the home owner. The $100 payment is an option contract.
True
"I will sell you my car for $5,000," says A. "How about $4,000 instead?" says B. The offer to sell for $5,000 has been terminated.
True
A contract formed under conditions of fraud is voidable.
True
A contract may be based on a promise not to do something.
True
A counteroffer terminates the original offer.
True
A legal detriment may be good consideration for a contract.
True
A minor may ratify a contract, upon reaching the age of majority, that she had the right to disaffirm if she so desired.
True
A void contract never was or will be a valid contract.
True
A voidable contract is a contract that one party has the right to avoid.
True
Acceptance of an offer must be unconditional, unequivocal, and legally communicated to be effective.
True
Advertisements that state prices are usually not considered binding offers.
True
An effective offer requires a clear manifestation of intent, definite terms and conditions, and communication of the offer.
True