Chapter 16 Questions

True

A contract for the sale of goods with a price of $500 or more requires written proof to be enforceable. A. True B. Flase

The contract will be interpreted to be for $4,000.

A contract is created by which the terms are stated to be for consideration in the amount of $3,000. If typewritten in the contract is the term "four thousand dollars," while the amount of $3,000 is printed within the form: A. the contract will be interpreted to be for $3,000. B. the contract will be interpreted to be for $4,000. C. there is a contract but the courts will not specify the dollar amount, as a conflict exists. D. a compromise settlement amount of $3,500 will be used.

The intent of the parties.

A contract is interpreted to give effect to: A. the intent of the parties. B. what the court believes is a fair contract. C. what the defendant thought the contract meant. D. what will be best for the economic life of the community.

True

A court can imply details of a performance which are not expressly stated in a contract. A. True B. False

False

A father's handshake and oral promise to his daughter and her fiancee made in consideration of their contemplated marriage is binding. A. True B. False

False

A note or memorandum does not have to contain all the essential terms of the contract to be valid. A. True B. False

False

A person who is prevented from enforcing a contract because of the statute of frauds also is prevented from recovering the value of services, property, or money furnished the other party to the oral contract. A. True B. False

False

A promise to grant a mortgage on real property does not require a writing because it is not a transfer of land. A. True B. False

The promise is to pay the debt of another.

A promise to pay a debt must be in writing if: A. the debt is for more than $500 B. the debt is now due and payable C. the promise is to pay the debt of another D. the debt owed is the promisor's

False

A promise to pay an attorney a fee owed by a third person can be enforced without a writing. A. True B. False

True

An insurance company cannot refuse to pay the fire loss of the buyer of a house on the grounds that the sales contract for the house was signed by electronic signature. A. True B. False

True

An oral agreement to supply a line of credit for 2 years cannot be enforced because of the statute of frauds. A. True B. False

The purchase of a television set for $200.

An oral contract can be enforced when it relates to: A. the purchase of a television set for $200 B. the sale of an interest in land for $400 C. managing a factory for five years D. a promise to answer for the debt of another

Binding.

An oral contract containing a promise by an executor to pay estate debts from estate funds is: A. binding B. voidable by the executor or administrator C. enforceable against the executor only if the executor signs written proof of the agreement. D. enforceable against the other contracting party only if that party signs a written agreement.

The buyer paid the price and received the deed of conveyance.

An oral contract to sell a house is binding if: A. the agreement is witnessed by a member of the clergy B. there is a tape recording of the agreement C. the buyer paid the price and received the deed of conveyance D. the seller is a merchant

The parties intended to formalize their understanding with a written agreement.

An oral understanding is not binding if: A. the services performed were not to the satisfaction of the other party B. the amount agreed to be paid for services rendered was not a fair and reasonable amount C. the parties intended to formalize their understanding with a written agreement D. the understanding may be terminated at will by either party

Part performance.

Any of the following could satisfy the requirement of a writing under the statute of frauds EXCEPT: A. a note B. a memorandum C. a contract D. part performance

False

Because contracts are legally binding agreements, they must be in writing to be enforceable. A. True B. False

False

Customs and trade usage can override the express provisions of a contract. A. True B. False

True

If a contract is unclear, it will be interpreted against the party who drafted it. A. True B. False

True

If the main purpose of a promise is to pay the debt of another and benefit the promisor, the statute of frauds is not applicable, and the oral promise to pay the debt is binding. A. True B. False

True

If words and numbers contradict each other in a contract, the rule of construction favors the words. A. True B. False

Must be viewed in connection with the rest of the contract.

In interpreting an ambiguous contract, one part of the contract: A. must be viewed in isolation. B. must be viewed as a condition. C. must be viewed in connection with the rest of the contract. D. must be viewed as indicating joint and several liability.

True

In the absence of a statute requiring a writing, a contract may be oral or written. A. True B. False

True

No writing is required for a service contract that can be performed within one year after the date of the agreement. A. True B. False

Ambiguous terms.

Parol evidence generally is admissible to explain: A. ambiguous terms B. why signatures are missing C. why a contract was not performed D. implied terms

False

Parol evidence is not admissible to show fraud, duress or mistake. A. True B. False

Oral modification.

Parol evidence may be admitted to show that a provision was omitted as the result of: A. fraud B. mistaken understanding C. oral additions D. oral modification

Goods.

The Uniform Commercial Code contains a statute of frauds rule relating to sales of personal property, specifically: A. goods B. chattel paper C. real property D. prenuptial agreements

The parties to the oral contract.

The defense of noncompliance may not be raised by: A. the parties to the oral contract B. third parties such as an insurance company or the IRS C. a promisor on the original contract D. a promisee on the original contract

On the day following the agreement.

The one-year performance requirement for an oral contract begins: A. on the day of the agreement B. on the first day of performance C. on the day following the agreement D. the day on which the agreement was placed in writing

Prove the modification or termination of a contract.

The parol evidence rule does not apply in which of the following scenarios? A. contradict a complete written contract B. prove the modification or termination of a contract C. replace the statute of frauds D. create a contract

True

The parol evidence rule does not apply to changes made after the signing of the contract. A. True B. False

True

The parol evidence rule generally excludes words spoken before or at the time a written contract was executed from contradicting the terms of the contract. A. True B. False

True

The parol evidence rule generally precludes testimony that would contradict a complete written contract. A. True B. False

True

The parol evidence rule is based on the theory that any oral agreement was abandoned when the contract was written. A. True B. False

The contract is materially incomplete.

The parol evidence rule may not apply if: A. the contract is materially incomplete B. the parties disagree on the meaning of the contract C. there is no ambiguity regarding the terms of the contract D. one party is unable to perform the contractual obligations

Applies to complete written contracts.

The parol evidence rule: A. applies to complete written contracts B. prevents proof of fraud C. applies to incomplete contracts D. is not designed to preserve the integrity of written contracts

False

The past performance of the parties under a continuing contract is irrelevant in determining what the contract means. A. True B. False

True

The provisions of a contract must be construed as a whole in such a way that every part is given effect. A. True B. False

False

The statute of frauds applies to promises to answer for another party's debt, but does not apply to a promise to answer for another party's default. A. True B. False

The cancellation of a written agreement for the sale and purchase of land.

The statute of frauds applies to: A. the lease of an apartment on a month-to-month basis B. the cancellation of a written agreement for the sale and purchase of land C. an employment agreement D. the sale of goods priced at less than $500

Requires that a contract for the sale of land be evidenced by a writing.

The statute of frauds: A. requires full disclosure in the case of consumer sales on credit B. requires a seller of real estate to obtain a broker's license C. specifies the punishment of perjury D. requires that a contract for the sale of land be evidenced by a writing

Describe the land to be sold.

The writing required by the statute of frauds in the case of a contract for the sale of land must: A. be addressed to the other party to the contract B. be made with the intent to create a writing to satisfy the statute of frauds C. be signed at the end of the writing D. describe the land to be sold

False

Through incorporation by deference, a contract can consist of both the original document and the detailed statement that is incorporated in it. A. True B. False

True

To be enforceable under the statute of frauds, the note or memorandum must be signed by the party sought to be bound by the contract. A. True B. False

False

Under the statute of frauds, an oral contract must be completed within one year after performance begins. A. True B. False

True

Unser the majority view, a contract that does not satisfy the statute of frauds is not enforceable. A. True B. False

The main purpose.

When ______ of the promisor's promise to pay the debt of another is to benefit the promisor, the statute of frauds is not applicable, and the oral promise to pay the debt is binding. A. part performance B. an oral version C. the main purpose D. promissory estoppel

False

When a contract falls within the statute of frauds, the signatures of both parties must be shown to the court. A. True B. False

Parties are generally still bound by the terms of the contract.

When a contract proves to be a bad bargain: A. the injured party is never bound by the terms of the contract B. courts will always imply terms that are necessary to avoid hardship C. parties are generally still bound by the terms of the contract D. the contract must be rewritten

Can recover the reasonable value of the services because there is a quasi-contractual duty to pay for the benefit received from such services.

When a person has performed services under an oral contract that cannot be enforced because of the statute of frauds, such person: A. can recover the agreed payment for the services because a refusal to make payment would be a breach of the contract. B. can recover the reasonable value of the services because there is a quasi-contractual duty to pay for the benefit received from such services. C. cannot recover the value of the services because they were rendered under a unilateral mistake of law. D. can have the party receiving the services arrested for obtaining property by false pretenses.

Against the insurer.

When an insurance policy is ambiguous, the policy is interpreted: A. against the insurer B. in favor of the insurer C. according to the dictionary meaning of the words D. according to the meaning of the words in the insurance industry

To show fraud.

When interpreting an integrated contract, a court will exclude parol evidence in all of the following cases except: A. to add to the terms of a contract. B. to modify the terms of a contract. C. to contradict the terms of a contract. D. to show fraud.

True

When persons enter into an agreement, it is presumed that they intent the agreement to have some effect. A. True B. False

Voidable by a party who has not signed.

When the statute of frauds applies and there is no written proof of the contract, the contract is: A. void B. enforceable if there are two credible witnesses C. voidable by a party who has not signed D. illegal