Chapter 9: Formation and Requirements of Contracts

T/F: A contract that has been fully performed by both sides is called an executory contract.

F

T/F: A person who disaffirms a contract based on intoxication is not legally obligated to return the consideration he or she received under the contract to the other party.

F

T/F: A person who has dealt with an insane person need not place that insane person in status quo if the contract is either void or voided by the insane person.

F

T/F: A preexisting duty is sufficient consideration to support a new contract.

F

T/F: A unilateral contract can be accepted without the performance of an act by the offeree.

F

T/F: A voidable contract is also termed as an unenforceable contract.

F

T/F: An act of performance is necessary to create a bilateral contract.

F

T/F: Consideration is defined as something of legal value given in exchange for termination of an offer.

F

T/F: If an insane person who has not been adjudged insane enters into a contract, the contract is non-voidable by the insane person.

F

T/F: Past consideration is sufficient consideration to support a new contract.

F

T/F: To create an implied-in-fact contract, it must be established that the plaintiff provided the property or services gratuitously.

F

T/F: A rejection of an offer is not effective until it is actually received by the offeror.

T

T/F: An express contract can be stated orally.

T

T/F: An implied-in-fact contract is a contract in which agreement between parties has been inferred from their conduct.

T

T/F: An offer to create a unilateral contract can be revoked by the offeror any time prior to the offeree's performance of the requested act.

T

T/F: An offer to create a unilateral contract cannot be accepted by a promise to perform.

T

T/F: Any contract entered into by a person who has been adjudged insane is void.

T

T/F: Provision of services qualifies as consideration for an enforceable contract.

T

T/F: To meet the mirror image rule, the offeree must accept the terms of the offer without modification.

T

T/F: Unconscionable contracts are sometimes found where there is a consumer contract that takes advantage of uneducated, poor, or elderly people who have been persuaded to enter into unfair contracts.

T

A(n) ________ is a contract that courts refuse to enforce in part or at all because it is so oppressive or manifestly unfair as to be unjust. A) unconscionable contract B) contract of attrition C) contract in furtherance of trade D) quasi-contract

A

Kyle goes to a used automobile dealership to buy a truck. He signs an agreement with the dealership that includes a description of the truck, its price, and other details. This is an example of a(n) ________ contract. A) express B) unilateral C) implied-in-law D) implied-in-fact

A

Two brothers, Sam and Jim, were fighting over the division of their ancestral property. After ten years of legal battle, a frustrated Sam contacted a powerful politician who subjected Jim to extreme duress, forcing him to sign a contract in favor of Sam. When Sam takes this contract to court, the contract will be declared ________. A) voidable B) void C) null D) unenforceable

A

Windsor, the owner of Windsor's Sandwiches, contacts Gary, a new supplier. He promises Gary that he will pay him $375 if Gary delivers 20 pounds of cheese the following morning. Gary promises to make the delivery as requested by Windsor. This creates a(n) ________ A) bilateral B) unilateral C) executed D) voidable

A

Elizabeth signs a contract to purchase a new car from Quickcash Motors. She has not yet paid for the car, and Quickcash Motors has not yet delivered the car to Elizabeth. This is an example of a(n) ________ contract. A) unenforceable B) executory C) void D) executed

B

In terms of a contract's enforcement, which of the following is true? A) A contract is only considered valid if it is enforceable by both parties. B) Parties may voluntarily perform a contract that is unenforceable. C) An unenforceable contract allows at least one party the option to void his or her contract obligations. D) Void contracts are enforceable in cases involving mutual mistake.

B

Which of the following statements is true about a counteroffer? A) An offeree who makes a counteroffer is still considered the offeree. B) A counteroffer terminates the existing offer. C) A counteroffer can only be made by the original offeror. D) A counteroffer is effective even before it has been received by the original offeror.

B

While Harry was intoxicated, he sold his car to Ben for substantially less than its fair market value. This contract is considered ________. A) valid B) voidable C) void D) unenforceable

B

Yvonne finds a carpenter to do some repairs for her house and tells him that if he finishes the job by Saturday, she will pay him $1,000. Yvonne's offer creates a(n) ________ contract. A) executed B) unilateral C) executory D) bilateral

B

A contract is ________ if the offeror's offer can be accepted only by the performance of an act by the offeree. A) executed B) executory C) unilateral D) bilateral

C

A contract that has been fully performed by one party but not by the other party is a(n) ________ contract. A) void B) voidable C) executory D) executed

C

If a contract is required to be in writing under the Statute of Frauds but is not, the contract is ________. A) executed B) unilateral C) unenforceable D) formal

C

In terms of contractual capacity, what is the most commonly-recognized age of majority? A) 15 B) 16 C) 18 D) 21

C

Stella is injured in a car accident and is transported to the local hospital by emergency personnel. She subsequently passes into a coma. The doctors and other staff perform the necessary medical procedures to save her life. Stella recovers after two months and is discharged from the hospital. Under the doctrine of ________ contract, Stella must pay the hospital for its services. A) implied-in-fact B) express C) quasi- D) formal

C

Why does an illusory contract lack consideration? A) because the consideration promised is unlawful and therefore void B) because the person promises to perform an act or do something he is already under an obligation to do C) because one or both of the parties can choose not to perform their contractual obligations D) because the compensation paid is for work done in the past

C

________ is defined as something of legal value given in exchange for a promise.

Consideration

A contract is a(n) ________ contract if the offeror's promise is answered with the offeree's promise of acceptance. A) voidable B) executed C) unilateral D) bilateral

D

Alan tells Sherry that he will pay her $5,000 if she runs the Boston Marathon. Once Sherry starts running the marathon, Alan ________. A) can revoke the contract, as an informal verbal agreement is not legally binding B) can revoke the contract, provided he does so before she completes the marathon C) can reduce the amount of money he offered her, provided he does so before she completes the marathon D) cannot revoke the contract

D

An oral agreement to purchase a neighbor's bicycle for $250 is a(n) ________ contract. A) void B) voidable C) implied D) express

D

Noelle uses blackmail to force Jeff to sign a contract for the sale of his home. This contract is ________. A) unenforceable B) valid C) void D) voidable

D

Which of the following elements must be established for a contract to be deemed unconscionable? A) The weaker party did not enter the contract under duress. B) The parties had equal bargaining power. C) The dominant party justly used its bargaining power. D) The adhering party had no reasonable alternative.

D

Which of the following elements must be established to create an implied-in-fact contract? A) The plaintiff provided property or services to the defendant gratuitously. B) The defendant accepted the plaintiff's property or services as payment for an illegal activity. C) The plaintiff made the defendant sign the contract and then changed its terms, identifying the new terms as "retroactively implied." D) The defendant was given an opportunity to reject the plaintiff's property or services but failed to do so.

D

Which of the following is a necessary condition for a contract to be considered valid? A) It can be voided by both parties. B) It can be voided by one of the parties. C) It is enforceable by both parties. D) It is enforceable by at least one of the parties.

D

Which of the following is acceptable consideration for a contract? A) a penalty B) an arrest C) a sentence D) money

D

T/F: A contract is a bilateral contract if the offeror's promise is answered with the offeree's promise of acceptance.

T

T/F: A counteroffer is considered a rejection of the original offer.

T

A(n) ________ contract is a contract entered into by way of an exchange of promises between the parties.

bilateral

A(n) ________ is a response by an offeree that contains terms and conditions different from or in addition to those of the offer.

counteroffer

A(n) ________ contract is a contract that has not been fully performed by either or both sides.

executory

A contract in which an agreement between the parties is inferred from their conduct is known as a(n) ________ contract.

implied-in-fact

The ________ rule states that the offeree must accept the terms of an offer as stated in the offer.

mirror-image

A(n) ________ is a contract in which the original offeree pays consideration (usually money) in return for the original offeror giving consideration (time of the option period).

option contract

A(n) ________ contract is only valid once the offeree performs the requested act.

unilateral

A contract is said to be ________ when one or both parties have the option to void the contractual obligations.

voidable