combine 4
Carlos and David contract for the sale of five hundred head of Carlos's cattle for $95 per head. Unknown to either party, an unforeseen storm has struck the herd and many of the cattle have died. David is a. entitled to recover the value of the lost cattle. b. not required to pay due to the bilateral mistake. c. not required to pay due to the unilateral mistake. d. required to pay because he assumed the risk the cattle might die.
b. not required to pay due to the bilateral mistake.
Meatpackers, Inc., enters into a contract with Nevada Ranch for the delivery of a certain number of beef cattle on a set schedule. The ranch delays the first delivery for five days, aware that Meatpackers loses a certain percentage of profit each day. An award to Meatpackers of consequential damages would a. establish, as a matter of principle, that the seller acted wrongfully. b. provide the buyer with funds for a foreseeable loss beyond the contract. c. provide the buyer with funds for its loss of the bargain. d. punish the seller and deter others from similar acts.
b. provide the buyer with funds for a foreseeable loss beyond the contract.
A contract for a sale of land from Bayside Properties, Inc., to City Development Corporation contains an erroneous legal description. The most appropriate remedy for these parties is a. a quasi contract. b. reformation. c. rescission. d. specific performance.
b. reformation.
Ricky agrees to sell his Sunrise Breakfast Café to Tia. As part of the deal, Ricky signs a covenant not to open a competing business within a hundred-mile radius for ten years. If this covenant is later determined to be unreasonable, the appropriate remedy is most likely a. damages. b. reformation. c. rescission. d. specific performance.
b. reformation.
Ridgeview Mining Inc. agrees to deliver a certain quantity of oil to Static Energy Corporation. The agreement states that delivery is to be within "9" days, although the parties intend "90" days. Ridgeview cannot convince Static to amend the contract. Ridgeview should seek a. damages. b. reformation. c. rescission. d. specific performance.
b. reformation.
Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in Overseas Bank through Newt's investment firm. Unknown to Mona, Newt realizes ongoing commissions from the investment. Most likely, Mona may a. not rescind the contract. b. rescind the contract on the basis of undue influence. c. rescind the contract on the basis of mistake. d. rescind the contract on the basis of unconscionability.
b. rescind the contract on the basis of undue influence
Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in Overseas Bank through Newt's investment firm. Unknown to Mona, Newt realizes ongoing commissions from the investment. Most likely, Mona may
b. rescind the contract on the basis of undue influence.
Stephen offers Theresa $1,000 for her collection of rare coins. She accepts. If a dispute arises, a court would likely
not question the adequacy of the consideration
Carlos and David contract for the sale of five hundred head of Carlos's cattle for $95 per head. Unknown to either party, an unforeseen storm has struck the herd and and many of the cattle have died. David is:
not required to pay due to the bilateralmistake
Dix agrees to sell Eli, for $1,500, a remote parcel of land. They believe the land to be worthless, but beneath it is shale rock containing oil. A court would:
not rescind the contract
Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Relay's acceptance by e-mail will be considered effective when a. received. b. sent. c. followed up by a confirmation letter sent by regular mail. d. composed on a Relay computer.
b. sent.
Ozzie contracts for the sale of 500 shares of stock in Premium Quality, Inc., to Ray, with payment to go to Scholar University to pay Thalia's tuition. The contract reserves to Ozzie and Ray the right to modify its terms. Scholar's right to payment is a. not affected by the reservation. b. subject to any change that Ozzie and Ray make. c. limited only if Thalia agrees to any changes. d. terminated by the reservation.
b. subject to any change that Ozzie and Ray make.
Rafi offers a tour of Bay Harbor aboard his sailboat, Sea Siren, to Tiara's Travel Group for $500. Referring to the prices for similar tours, Tiara's says, "We'll pay no more than $400." Rafi's offer is a. still open. b. terminated. c. rejected and subject to a counteroffer. d. revoked.
b. terminated.
Don and Evon orally agree on the sale of Don's Electrical Supplies Company to Evon and jot down the terms on the back of one of Don's blank invoices, which they both sign. A written memorandum evidencing an oral contract that would otherwise be unenforceable must contain a. all terms. b. the essential terms. c. the preliminary terms. d. the qualitative terms.
b. the essential terms.
. Lestor and MaryElise enter into a contract. Lestor agrees to mow MaryElise's yard every week for the summer. MaryElise is a. the obligor. b. the obligee. c. the assignee. d. the assignor.
b. the obligee.
Refer to Fact Pattern 16-1. The transaction between Grain and Hearty falls within the provision of the Statute of Frauds involving a. collateral promises. b. the one-year rule. c. sales of goods. d. secondary contracts.
b. the one-year rule.
Lucy, a minor, disaffirms a contract for necessaries without returning the goods. To Manny's Food Mart, the seller, Lucy is required to pay
b. the reasonable value of the goods.
Lou and Mike negotiate a deal to transfer stolen body building equipment for counterfeit currency that Mike will attempt to spend at Now! Discount Mart. This contract is
b. void.
Robin claims that her contract with Stroud for tennis lessons is voidable as the lessons were never provided and the tennis club burnt down. If their contract is avoided a. a wholly different contract is agreed to. b. both parties must fully perform their obligations under it. c. a wholly different contract is imposed "as if" the parties had agreed. d. both parties are released from it.
both parties are released from it
Car Lot's salesperson Dick offers to sell Ernie, who is twenty years old, a car. Dick intentionally misrepresents the vehicle's use and repairs. In reliance, Ernie buys the car. To prove fraud, Ernie does not have to show that a. Dick intentionally deceived Ernie. b. Dick misrepresented material facts. c. Ernie is under twenty-one. d. Ernie justifiably relied on Dick's misrepresentations.
c. Ernie is under twenty-one.
Lucas orally agrees to sell Mountain Spring Water to Natural Beverages, Inc. Lucas notes the terms on a sheet of Mountain Spring stationery and signs it. This agreement is most likely enforceable against a. no one. b. Lucas and Natural. c. Lucas. d. Natural.
c. Lucas.
Ohio charges Pablo, an architect, a fee to practice his profession in the state. This is a. usurious. b. unconscionable. c. a license. d. exculpatory.
c. a license.
Gliding Light, LLC, and Hang Gliders, Inc., are parties to a contract. They subsequently agree that High Riders Inc. should take Gliding Light's place and assume all of its rights and duties under the contract. This is a. a mutual agreement to rescind. b. an accord and satisfaction. c. a novation. d. a settlement agreement.
c. a novation.
Refer to Fact Pattern 13-5. The agreement between Brick and Carmen is a. a covenant not to sue. b. an illusory promise. c. a release. d. promissory estoppel.
c. a release.
On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil says that he has changed his mind. These parties had a. an expired contract when Neil said that he had changed his mind. b. a quasi contract when Neil said that he would pay for certain work. c. a unilateral contract as soon as Outdoor began to perform. d. no contract.
c. a unilateral contract as soon as Outdoor began to perform.
Lane applies for a firefighter's job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is "an employment offer conditioned on the applicant passing the exam." This is a. a bilateral contract that Lane accepted by applying for the job. b. a quasi contract on which Lane can rely for employment. c. a unilateral contract that Lane can accept by passing the exam. d. no contract.
c. a unilateral contract that Lane can accept by passing the exam.
Data Storage Inc. offers to provide cloud-computing services to Enterprises, LLC, but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Enterprises accepts the written offer. 38. Refer to Fact Pattern 15-1. Enterprises' best argument in favor of enforcement of the contract is that a. a bilateral mistake does not afford relief from a contract. b. a mistake of value does not afford relief from a contract. c. a unilateral mistake does not afford relief from a contract. d. the price was below the prices of comparable devices.
c. a unilateral mistake does not afford relief from a contract.
Drake enters into a contract with Eve, who claims to have access to a stock-trading algorithm that will multiply an investment many times over. When the results do not match this promise, Drake learns that Eve does not have access to any unique software and files a suit against her, alleging fraud. Proof of an injury is required to
recover damages
Betty sells her Clothes Shop to Diane. In the sale agreement, there is a covenant not to compete that prohibits Betty from opening another clothing store within a certain distance. If a court concludes that this restriction is unreasonable, it will most likely
reform the covenant
Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in Overseas Bank through Newt's investment firm. Unknown to Mona, Newt realizes ongoing commissions from the investment. Most likely, Mona may
rescind the contract on the basis of undue influence.
Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Relay's acceptance by e-mail will be considered effective when
sent
Downtown Contractors and Equipment Rental Corporation are parties to an oral agreement for a one-year lease of a crane with payments totaling more than $10,000. They may satisfy the Statute of Frauds by
setting out the terms in a memo.
Great Gear, Inc., enters into a contract to sell sports clothing and equipment to Healthways Workout store, which in turn sells a pair of bike shorts to Ilene, a consumer. In comparison to standards that apply to consumers, the UCC imposes on merchants
special business standards.
Herb's Hot Dog Vending, Inc., enters into a contract to pay Idris for a business survey and review of Herb's competitors, which Idris delivers on August 1. Herb's offer, on the same date, to pay Idris is
tender
Leif contracts to sell his Micro Brewery & Pub to Naomi on April 1. On March 15, Leif tells Naomi that he will not go through with the deal. Naomi can recover
the Micro Brewery & Pub.
Countrywide Trucking Inc. contract with Dewey to transport crated goods to a certain destination for $5,000. Countrywide delivers the crates but Dewey doesn't pay. Countrywide learns that the crates contained stolen goods. Country Wide can recover from Dewey.
$5,000, but not the goods
Flora enters into a contract with Global Shipping, Ltd., to insure and ship a painting from France to the United States for a certain price. Global makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would
allow the parties to rescind the contract.
Floyd signs a contract to buy a drum kit just before reaching the age of majority. After reaching the age of majority, Floyd does not take possession or make payments. With respect to the contract, most courts would hold that this is
disaffirmance
A contract between Kim and Larry to lease residential property contains an exculpatory clause. This clause is
generally unenforceable
Baylor obtains a loan from City Bank at 4.5 percent interest. Their state's usury statute limits interest rates to a 3.5 percent maximum. Baylor's contract with the bank is enforceable only if
none of the choices
Holly, a real estate broker licensed only in Iowa, concludes a sale of farmland in Illinois. Holly can
none of the choices.
Dix agrees to sell Eli, for $1,500, a remote parcel of land. They believe the land to be worthless, but beneath it is shale rock containing oil. A court would
not rescind the contract.
Jon says to Kris, "I would like to sell you my sports memorabilia collection." This is not an offer because it
only invites Kris to negotiate.
Susan enters into a contract with Troy to act as his personal sports trainer. If a dispute later arises and the contract contains unclear terms, the rules of contract interpretation will give effect to a. what the promisor claims was the parties' intent. b. what the parties now agree they intended. c. what the promisee claims was the parties' intent. d. the parties' intent as expressed in their contract.
the parties' intent as expressed in their contract
Don enters into a contract with Eve, who claims to have access to a stock-trading algorithm that will multiply an investment many times over. When the results do not match this promise, Don learns that Eve does not have access to any unique software and files a suit, alleging fraud. Proof of an injury is required to
recover damages
Fabien offers to sell his Graphic Signs, LLC, business to Hama for $100,000. Hanna replies, "The price is too high. I will buy it for for $75,000." Hanna has:
rejected the offer and made a counteroffer.
Fact Pattern 15-B1 Digital Storage, Inc., offers to sell provide cloud-computing services to Entrepreneur Enterprises, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Entrepreneur Enterprises accepts the written offer. Refer to Fact Pattern 15-B1. Digital Storage's best defense against enforcement of the contract is that Entrepreneur Enterprises knew
the price was below the prices of comparable devices.
Retail company and sales wholesale corporation enter into a contract for a sale of beach toys
the quantity
Elena, a minor, obtains fruits and vegetables on credit from Fred at Growers' Market. Later, Elena disaffirms the purchase. She owes Fred
the reasonable value of the goods
Dawson owns Evergreen, a complex under construction that will include commercial and residential suites, as well as a parking garage. Dawson allows First Call Construction, Inc., the contractor, to complete a stage of construction late. This waives Dawson's right to sue for
this delay only
ApartmentsRUs, a property management firm, presents a standard-form lease for an apartment to Barnaby, a potential tenant. ApartmentsRUs does not pressure Barnaby to sign the lease, but offers it on a take-it-or-leave-it basis. Barnaby signs the lease, but later wants to withdraw from the contract. He is most likely to avoid enforcement of the lease on the ground of
unconscionably
Industrial Engineering, promises to give stock options to Jasmine for processes she has already designed for the firm. This promise is enforceable:
under no circumstances
Carly pledges to donate $10,000 to disaster Recovery Inc.. On the basis of the pledge, DRI orders additional supplies. If Carly does not fulfill the pledge, a court may enforce it:
under the doctrine of promissory estoppel.
Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OptiBank through Newt's investment firm. Unknown to Mona, Newt realizes a commission from the investment. Most likely, Mona may rescind the contract on the basis of
undue influence
Wilson buys a lottery ticket. Wilson has accepted an offer for a. a void contract. b. a bilateral contract. c. a unilateral contract. d. an unenforceable contract.
unilateral contract
A court adjudicates Henry mentally incompetent and appoints Inez to be his guardian. Later, without Inez's knowledge. Henry signs a contract to sell his farm to Jason for its real market value. The contract is_________.
void
Laramie contracts to provide cattle-herding services to Miles for $1,400 per month. Laramie cannot transfer this duty:
without continuing to be potentially liable
Research Data Corporation sells access to its database of scientific research to users for a certain price per month. Research Data files a suit against its user Tom when, in violation of their contract, he stops making payments. Tom claims that the deal is unconscionable. The court will most likely consider
the parties' relative bargaining power.
Refer to Fact Pattern 15-1. Data Storage's best defense against enforcement of the contract is that Enterprises knew
the price was below the prices of comparable services.
Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OptiBank through Newt's investment firm. Unknown to Mona, Newt realizes a commission from the investment. Most likely, Mona may rescind the contract on the basis of
undue influence
Oxley contracts to buy a pizza oven from Restaurant Supplies Warehouse (RSW) for $2,500, but RSW fails to deliver. Oxley buys the appliance else-where for $3,500. Oxley's measure of damages is
$1,000 plus incidental damages
Cow's Milk Creamery, Inc., needs a certain part for its pasteurizing equipment to continue its operations and orders one for $3,000 from Dairy Supplies Company. Cow's Milk tells Dairy Supplies that it must receive the part by Tuesday or it will lose $10,000. Dairy Supplies ships the part late. Cow's Milk can recover
$10,000
Sara contracts to work exclusively for Thermal Company during July for $5,000. On June 30, Thermal cancels the contract. Sara finds a similar job for the month of July but earns only $3,000. Sara files a suit against Thermal. As compensatory damages, Sara can recover
$2,000
Clay Pots pays Dora $25,000 to propose an online marketing campaign. Two days later, Dora tells Clay Pots that she has accepted a job with its competitor Earthenware Inc. and cannot plan the campaign. As compensatory damages, Clay Pots can recover
$25,000
Rita contracts to work for Social Media Corporation (SMC) during April for $4,500. On March 31, SMC cancels the contact. Rita declines a job of a different type and rank with Tech Talk, Inc., which would have paid $3,500. Rita files a suit against SMC. As compensatory damages, Rita can recover
$4,500
Countrywide Trucking Inc. contracts with Dewey to transport crated goods to a certain destination for $5,000. Countrywide delivers the crates, but Dewey does not pay. Countrywide learns that the crates contained stolen goods. Countrywide can recover from Dewey
$5,000, but not the goods
Ray agrees to buy one hundred pounds of almonds from Sol. To be enforceable, the agreement must be in writing if the almonds cost at least
$500
Expressly designating a third party as a beneficiary in a contract does not indicate whether the beneficiary is intended or incidental.
. False
On May 1 Ralph offers to cure and smoke Sam's pork. On May 3 Ralph mails Sam a letter revoking the offer. Sam receives the letter on May 5 and responds on May 6. Ralph's revocation of the offer
Became effective on May 5.
Simone offers Thom a dozen piano lessons for a certain price per lesson but conditions the deal on Thom accepting the offer by April 1. Simone may revoke the offer
Before Thom accepts the offer
Duffy and Elbert agree to hijack a truck carrying a load of almonds. Duffy later refuses to go through with the crime. Elbert can a. enforce the agreement. b. obtain damages from Duffy in the amount of Duffy's probable share of the illegal profits. c. recover in quasi contract for the loss of his share of the illegal profits. d. not enforce the agreement or recover damages.
D
Jolie signs a contract with Keaton, an unlicensed physician, to perform a medical procedure. This contract is enforceable by a. Jolie. b. Jolie's medical insurance company. c. Keaton. d. no one.
D
Rosalind, a seventeen-year-old, signs a contract to sell her car to Street Fleet Used Cars. The next day, Rosalind tells Street Fleet that she's decided not to sell the car. Rosalind is liable to Street Fleet for a. the cost of a car of comparable value. b. the value of her performance under the contract. c. the amount of its profit on the deal. d. nothing.
D
Daredevil Rides Inc. owes debts to Equipment Repair Company and Food Supplies, Inc. Equipment orally agrees to assume Daredevil's debt to Food to prevent the concessionaire form filing a suit against Daredevil. This agreement is enforceable by
Daredevil, Equipment, or Food
Dick's Burgers n' Shakes enters into an oral contract with Restaurant Equipment Warehouse (REW) for REW's sale to Dick's of a single-spindle milkshake mixer for $300. Assuming the terms can be proved, the contract is enforceable by
Dick's or REW
Rita, a minor, misrepresents her age as twenty-one and signs a contract with Sporty Motors to buy a sport utility vehicle (SUV). In most states, Rita may
Disaffirm the contract
Rita, a minor, misrepresents her age as twenty-one and signs a contract with Sporty Motors to buy a sport utility vehicle (SUV. In most states, Rita may
Disaffirm the contract
Bobbie is a minor subject to her parents' care and control. She signs a contract to rent a lake cabin from Cleve for one year. Before the end of the term, Bobbie moves out. She can
Disaffirm the contract and avoid liability for the rent
Floyd signs a contract to buy a drum kit just before reaching the age of majority. After reaching the age of majority, Floyd does not take possession or make payments. With respect to the contract, most courts would hold that this is
Disaffirmance
Dim threatens physical harm to force Ed to sell his business, Flowers, Inc., to Dim for a below-market price. This is
Duress
Anton tells Brooke, who has no knowledge of Shakespearean comedy, that he will tutor her in the subject for $50. As an offer, this is
Effective
Colin and Delta Water Company enter into an oral contract under which Delta agrees to provide Colin with lifetime employment. This contract may be enforceable by
Either Colin or Delta
Ed orally agrees with Far East Restaurant to provide delivery service to its customers for six months. This contract is enforceable by
Either Ed or Far East
Guardian Security, Inc., and Hedge Fund Corporation enter into an oral contract under which Guardian agrees to provide security services for Hedge's offices for as long as Hedge needs them. This contract may be enforceable by
Either Guardian or Hedge
Leon relinquishes the right to his daughter Meredith's control, care, custody, and earnings. This is
Emancipation
Flo agrees to assume a debt owed by Guitars Inc. to Home Bank. The agreement is not in writing. To be enforceable under the "main purpose" rule, the promise must be for the benefit of
Flo
Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan knowingly misrepresents a number of material features about the restaurant and the business. When Beth discovers the truth, she can rescind the contract on the basis of
Fraud
Berry enters into a contract with Clyde for a guided tour of Deep Canyon. Clyde represents that he is an experienced, knowledgeable guide, when in reality he has never been in the canyon. Berry is most likely a victim of
Fraud
Ken, a real estate agent, assures Lily that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Lily buys the property and then discovers that the street has no more traffic than any other in its vicinity. Lily is most likely a victim of
Fraud
Lee applies to Marketing Corporation for a position as a software engineer. Lee has no training in computers or programming and no background as an engineer. After Lee is hired, Marketing learns the truth. The employer can rescind the contract on the basis of
Fraud
Olive, the owner of Olive's Orchard, contracts to sell its harvest to Pure Foods, Inc. Later Olive refuses to perform. Pure Foods files a suit to enforce the contract. Olive and Pure Foods are in a state that does not recognize the doctrine of unconscionability. To defend successfully against enforcement of the contract on similar grounds, Olive might rely on traditional notions of
Fraud
Which of the following would NOT be considered a defense to the enforcement of a contract?
Genuine Consent
Meatpackers, Inc., enters into a contract with Nevada Ranch for the delivery of a certain number of beef cattle on a set schedule. The ranch delays the first delivery for five days, aware that Meatpackers loses a certain percentage of profit each day. An award to Meatpackers of consequential damages would
Provide the buyer with funds for a foreseeable loss beyond the contract.
Digital Storage, Inc., offers to sell provide cloud-computing services to Entrepreneur Enterprises, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Entrepreneur Enterprises accepts the written offer. Refer to Fact Pattern 15-B1. Entrepreneur Enterprises' best argument in favor of enforcement of the contract is that a. a bilateral mistake does not afford relief from a contract. b. a mistake of value does not afford relief from a contract. c. a unilateral mistake does not afford relief from a contract. d. the price was below the prices of comparable devices.
c. a unilateral mistake does not afford relief from a contract.
Bay City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault. Coco's Chocolate Creations signs a lease with Bay City that contains the clause.
c. an exculpatory
Paolho and Roth agree that Paolho will fix Roth's boat dock in exchange for $5,000. Paolho spends half of the amount due under the contract to acquire the materials for the job from Sav-U Economy Lumber. Sav-U is a. a delegatee. b. an intended beneficiary. c. an incidental beneficiary. d. an assignor.
c. an incidental beneficiary.
Refer to Fact Pattern 17-1. Delta will realize a profit from the sale of products to Four-Square to remodel Carol's store. Delta is a. a delegatee. b. an assignee. c. an incidental beneficiary. d. an intended beneficiary.
c. an incidental beneficiary.
Business Loans, LLC, is a creditor beneficiary in a deal that involves Carla's Hair Salon and Dani's Nails. Like most creditor beneficiaries, Business Loans is a. a donee beneficiary. b. an incidental beneficiary. c. an intended beneficiary. d. an original contracting party.
c. an intended beneficiary.
In a bike shop, Barrie, who is not knowledgeable about bikes, overhears Cullen say, "This bike could win any race!" Barrie buys the bike, but does not win any races with it. Cullen's statement is
c. an opinion.
In a bike shop, Jessie, who is not knowledgeable about bikes, overhears Kevin say, "This bike could win any race!" Jessie buys the bike, but does not win any races with it. Kevin's statement is a. a mistake. b. fraudulent. c. an opinion. d. an attempt at undue influence.
c. an opinion.
Frisco offers to buy a Gibson guitar owned by Hayden for twice what Hayden paid for it. She accepts and hands the guitar to Frisco. Her delivery of the guitar is a. not consideration because her voluntary consent may be lacking. b. not consideration because the exchange is not a bargain. c. consideration. d. not consideration because the value is not legally sufficient.
c. consideration.
. Kent buys Lizzie's house for $100,000, which is the fair market value of the house. If the contract is later disputed in court, the court is likely to declare Kent's consideration a. inadequate. b. past. c. legally sufficient. d. illusory.
c. legally sufficient.
Rory questions whether there is consideration for his contract with Silver Spurs Club to exchange his performance of country music on certain dates for Silver's payment of a certain amount. To constitute consideration, the value of whatever is exchanged must be a. objectively worthy. b. precisely adequate. c. legally sufficient. d. practically sound.
c. legally sufficient.
Joy and Kris enter into a contract for Kris to lay sod in Joy's yard for which she agrees to pay Kris. When Kris's schedule conflicts, she contacts Leza, to whom Kris "assigns all rights under the contract." Kris is a. absolved of any liability under the contract. b. liable to Joy for breach of contract. c. liable to Joy if Leza does not perform. d. liable to Leza for inducing a prohibited contract.
c. liable to Joy if Leza does not perform.
Refer to Fact Pattern 15-4. On learning the truth, Sam confronts Riley, who says he was not trying to fool Sam—he was only trying to make a sale. This is a. a mistake of value. b. a valid defense to a charge of fraud. c. misrepresentation. d. unconscionable.
c. misrepresentation.
Maya tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nero, a passerby who owns Nero's Motors, hands Maya $10. This is a. a valid acceptance because Maya is seriously frustrated. b. a valid acceptance because Nero is a professional dealer. c. not a valid acceptance because Maya does not seriously intend to sell. d. not a valid acceptance because Nero is only passing by.
c. not a valid acceptance because Maya does not seriously intend to sell.
Idina admires Jules's collection of guitars. July says, "I plan to sell the collection when I get tired of it." Jules's statement is a. an offer. b. not an offer because it has not been communicated to Idina. c. not an offer because July expressed only an intent to enter into a future contract. d. an acceptance.
c. not an offer because July expressed only an intent to enter into a future contract.
Leah and Mason are parties to a contract for the sale of Mason's day care facility to Leah. Before the deal closes, they agree to substitute Nell for Leah as a party to the deal. This novation does not require a. the existence of a previous, valid obligation. b. the agreement by all of the parties to the new contract. c. performance of the original contract by all of the parties. d. a new, valid contract.
c. performance of the original contract by all of the parties.
Odina signs a covenant not to compete with her employer, Penultimate Sales Corporation. A court decides that the covenant is overly restrictive. Depending on the jurisdiction, the court will like
c. reform its terms to prevent any undue burden.
Betty sells her Clothes Shop to Diane. In the sale agreement, there is a covenant not to compete that prohibits Betty from opening another clothing store within a certain distance. If a court concludes that this restriction is unreasonable, it will most likely a. award Betty damages equal to the speculative profit of a closer store. b. order Diane to stop doing business. c. reform the covenant. d. prohibit both parties from opening clothing stores.
c. reform the covenant.
Pacific Charter Company offers to provide an air-conditioned bus to Quincy's tour group for $1,500 plus the cost of the fuel. The mailbox rule applies if Quincy accepts the offer by a. e-mail. b. phone. c. regular mail. d. any of the choices.
c. regular mail.
Fabien offers to sell his Graphic Signs, LLC, business to Hanna for $100,000. Hanna replies, "The price is too high. I will buy it for $75,000." Hanna has a. accepted the offer. b. made a counteroffer without rejecting the offer. c. rejected the offer and made a counteroffer. d. rejected the offer without making a counteroffer.
c. rejected the offer and made a counteroffer.
Renee contracts with Scott to pay him $25,000 for his work on Renee's new album "Hip Pop." After Scott performs, they sign an accord, in which Renee promises to pay him $21,000 within thirty days instead of $25,000 later. But she does not pay. Scott can sue Renee on a. neither the accord nor the original obligation. b. the accord only. c. the accord or the original obligation. d. the original obligation only.
c. the accord or the original obligation.
Contractors LLC agrees to build a store for Discount Retail, Inc., at a specific location. Before construction begins, the local zoning law is changed to prohibit commercial buildings at that location. In this situation a. Contractors is in breach of contract. b. the local zoning authority is in breach of contract. c. the contract is discharged. d. Discount must compensate Contractors for its lost profit.
c. the contract is discharged.
Fact Pattern 19-1 Andre enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery. 43. Refer to Fact Pattern 19-1. If Andre breaches the contract, Belle Vista's remedy would most likely be a. the amount that Andre expected to invest in the project. b. a percentage of Andre's unrealized profit. c. the difference between the land's contract and market prices. d. specific performance.
c. the difference between the land's contract and market prices.
Handicrafts & Hobbies Store agrees to hire Iliana for one year at a salary of $600 per week. When Handicrafts & Hobbies cancels the contract, Iliana spends $150 to obtain a similar job that pays $450 per week for a year. Iliana is entitled to recover a. the amount of the wages that Handicrafts & Hobbies promised only. b. the difference between the wages at the two jobs only. c. the difference between the wages at the two jobs plus $150. d. $150 only.
c. the difference between the wages at the two jobs plus $150.
Ben makes an appointment for a $50 haircut, buys a bike for $250, and agrees to work for Coding Associates for one year for $5,000 per month, starting at the beginning of next month. To be enforceable, a writing is required for a. the appointment. b. the purchase. c. the employment agreement. d. none of the choices.
c. the employment agreement.
Rehab Center signs an agreement with Savers Bank to borrow $40,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest to 15 percent. Rehab's best argument for avoiding payment to Savers is that a. performance of the contract is commercially impracticable. b. payment of the loan would force Rehab into bankruptcy. c. the law has rendered performance of the contract illegal. d. the specific subject matter of the contract has been destroyed.
c. the law has rendered performance of the contract illegal.
Tile & Grout (T&G) contracts to resurface the insides of the pools at Water Park. T&G knows that without the resurfacing, Water Park will have to delay its seasonal opening. T&G does not perform as promised. As consequential damages, Water Park can recover a. the cost of new pools. b. the difference between T&G's price and the eventual cost of resurfacing. c. the loss of profit from the delayed opening. d. nothing.
c. the loss of profit from the delayed opening.
ApartmentsRUs, a property management firm, presents a standard-form lease for an apartment to Barnaby, a potential tenant. ApartmentsRUs does not pressure Barnaby to sign the lease, but offers it on a take-it-or-leave-it basis. Barnaby signs the lease, but later wants to withdraw from the contract. He is most likely to avoid enforcement of the lease on the ground of a. economic duress. b. undue influence. c. unconscionability. d. mistake.
c. unconscionability.
Oceans Inc., a seafood distributor, agrees to buy from Paul, a commercial fisherman, any "overstock" of fish that Paul catches in excess of his legal limit. This agreement is most likely a. enforceable. b. quasi. c. void. d. voidable.
c. void.
Kevin obtains a loan from Liberty Credit Bank at an interest rate that exceeds the states maximum. Liberty has:
committed usury
Refer to Fact Pattern 16-2. Later Dill disputes some of the provisions in the deal with Charlie. If the dispute results in litigation, a court will most likely exclude evidence that
contradicts the written terms
Khan offers to buy Lonnie's 1967 Mustang only if an appraiser estimates that it can be restored for less than a certain price. This requirement is a. an implied condition. b. a concurrent condition. c. a condition subsequent. d. a condition precedent.
d. a condition precedent.
State University provides housing on campus and in some adjacent off-campus neighborhoods. To lease a university house or apartment, a person must be student at State. This requirement is a. an implied condition . b. a concurrent condition. c. a condition subsequent. d. a condition precedent.
d. a condition precedent.
Bea takes out a life insurance policy with Vida Insurance Corporation that names her spouse Wendell as the beneficiary. This is a. a delegation. b. an assignment. c. a third party incidental beneficiary contract. d. a third party intended beneficiary contract.
d. a third party intended beneficiary contract.
Becca is a minor. As a minor, Becca
d. all of the choices.
Ann offers to buy Beth's land only if an appraiser estimates that its current value is more than a certain price. Later, the appraiser deems the worth of the land to be less than Beth's price. Ann and Beth's obligations a. must still be performed. b. must now be renegotiated. c. are on "hold." d. are discharged.
d. are discharged.
Inez hires Josh to paint her portrait to her satisfaction for $4,000. When Josh finishes the portrait, Inez announces that she is not satisfied with it. Inez a. must pay Josh the contract price. b. must pay Josh half of the contract price as a compromise. c. must pay Josh only the cost of his materials. d. does not have to pay Josh.
d. does not have to pay Josh.
Colin and Delta Water Company enter into an oral contract under which Delta agrees to provide Colin with lifetime employment. This contract may be enforceable by a. Colin only. b. Delta only. c. any interested third party, such as a Delta supplier. d. either Colin or Delta.
d. either Colin or Delta.
Guardian Security, Inc., and Hedge Fund Corporation enter into an oral contract under which Guardian agrees to provide security services for Hedge's offices for as long as Hedge needs them. This contract may be enforceable by a. none of the choices. b. Hedge only. c. any interested third party, such as a Hedge shareholder. d. either Guardian or Hedge.
d. either Guardian or Hedge.
Byron agrees to sell to Charity, for $1,500, a remote parcel of land. They be-lieve the land to be worthless, but beneath it is a gold mine. A court would
d. enforce the contract.
Bob wants to sell his recreational vehicle (RV) for $21,000. He e-mails Curt with an offer, but mistakenly types that the price is $20,100. Curt accepts the offer and pays Bob $20,100. Bob a. can avoid the deal due to a unilateral mistake. b. can avoid the deal due to a bilateral mistake. c. can avoid the deal due to a mistake of value. d. must deliver the RV.
d. must deliver the RV.
Jolie signs a contract with Keaton, an unlicensed physician, to perform a medical procedure. This contract is enforceable by
d. no one.
Shannon signs a contract with Tevin, an unlicensed contractor, to build a deck and gazebo at the rear of her house. This contract is enforceable by a. Shannon. b. any supplier of tools and materials with whom Tevin deals. c. Tevin. d. no one.
d. no one.
Dry Gulch Farms hires Elliot to repair its irrigation system on site on a certain date for $2,500, but Elliot does not show up as agreed. Dry Gulch hires Fernando to do the job for $2,000. Dry Gulch may recover from Elliot a. nothing. b. compensatory damages. c. consequential damages. d. nominal damages.
d. nominal damages.
. Holly, a real estate broker licensed only in Iowa, concludes a sale of farmland in Illinois. Holly can a. collect the commission if it has not been paid. b. keep the commission if it has already been paid. c. foreclose on the property to obtain any unpaid amount. d. none of the choices.
d. none of the choices.
ActioNOW and Becca enter into an oral contract in which Becca agrees to work on a project for ActioNOW for eighteen months. This contract is enforceable by a. ActioNOW. b. Becca. c. any third party, such as ActioNOW's clients. d. none of the choices.
d. none of the choices.
Air Flo, Inc., and Banyan Grove Apartments enter into an oral contract in which Air Flo agrees to provide air-conditioning and heating maintenance for Banyan Grove's facilities for two years. This contract is enforceable by a. Air Flo. b. Banyan Grove. c. any third party, such as a HVAC supplies provider. d. none of the choices.
d. none of the choices.
Fagin and Gage agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gage can a. enforce the agreement. b. obtain damages in the amount of his partner's share of the illegal profits. c. obtain damages in the amount of his own share of the illegal profits. d. none of the choices.
d. none of the choices.
Rough Canyon Adventures, Inc., and Sturdy Stuff Inc. enter into an oral contract for Sturdy's sale to Rough of five rafts for $2,000 each. Before Rough takes possession of the rafts, this contract is enforceable by a. Sturdy only. b. Rough only. c. any interested third party, such as a Rough tour guide or client. d. none of the choices.
d. none of the choices.
Pastries, Inc., sends its catalogue to Rollo and includes a "personalized" letter inviting the purchase of any item at the advertised price. This is a. an offer because of the "personalized" letter. b. an offer because there is no room for price negotiation. c. an offer only if Rollo previously bought items from Pastries. d. not an offer.
d. not an offer.
Jenny promises to pay Kay $500 because "she does not have as much money as other people." Jenny's promise is a. enforceable because society wants people to keep their promises. b. enforceable because the redistribution of wealth is a valid social goal. c. not enforceable because Jenny could have paid Kyle more. d. not enforceable because Kay has not given consideration in return.
d. not enforceable because Kay has not given consideration in return.
Intoxicated and not aware of the consequences, Grady agrees to a two-year phone service contract with Horizon, Inc., at more than the average market price. This contract is a. enforceable. b. not enforceable because contracting parties can change their minds. c. not enforceable because the contract favors Horizon. d. not enforceable if Grady was intoxicated enough to lack mental capacity.
d. not enforceable if Grady was intoxicated enough to lack mental capacity.
Molly's motorcycle is damaged in an accident caused by Luc's negligence. Luc agrees to pay Molly $25,000 if she agrees to release him from further liability. Molly agrees. If Molly's damages ultimately exceed $25,000, she can a. recover the balance for lack of consideration. b. recover the balance because the consideration was past. c. recover the balance due to unforeseen events. d. not recover the balance.
d. not recover the balance.
Rosalind, a seventeen-year-old, signs a contract to sell her car to Street Fleet Used Cars. The next day, Rosalind tells Street Fleet that she's decided not to sell the car. Rosalind is liable to Street Fleet for
d. nothing
In selling a 300 acres of rural land to Organic Farms, Peyton tells the buyer that the land "will be worth twice as much by next year." This is a. adhesion. b. fraud. c. mistake. d. opinion.
d. opinion.
Builders, Inc., agrees to construct an office building for Champ Fitness Clubs, Inc. The project proceeds according to plan, but before it is done, Champ tells Builders to quit. Builders may recover a. the contract price less costs of materials and labor. b. the contract price. c. the costs needed to complete construction. d. profits plus the costs incurred up to the time of the breach.
d. profits plus the costs incurred up to the time of the breach.
Forest Lumber Company orally contracts with Gail for the purchase of five acres of Gail's timberland. Gail makes the transfer but Forest Lumber does not pay the price. Gail could most likely recover on a theory of a. reformation. b. restitution. c. liquidated damages. d. quasi contract.
d. quasi contract.
Ida orally agrees to pay Jim to seed and harvest a quarter of Ida's farm acreage for four hay seasons. After Jim prepares the land and plants the first crop, Ida says that their deal is off. Jim can most likely recover on a theory of a. reformation. b. restitution. c. liquidated damages. d. quasi contract.
d. quasi contract.
Gina, a minor, enters into a contract to buy a tractor from Herb, an adult. The deal is set aside. Restoring Herb to the position he held before the contract is the duty of a. ratification. b. emancipation. c. disaffirmance. d. restitution.
d. restitution.
44. Refer to Fact Pattern 19-1. If Belle Vista breaches the contract, Andre's remedy would most likely be a. the amount that Andre expected to invest in the project. b. a percentage of Belle Vista's unrealized profit. c. the difference between the land's contract and market prices. d. specific performance.
d. specific performance.
Isabel orally agrees to buy a unique collection of nineteenth-century cowboy memorabilia for $10,000 from Jessie and sends $2,500 as a down payment. When Isabel pays the rest of the price, Jessie refuses to ship the collection. Isabel should seek a. damages. b. restitution. c. rescission. d. specific performance.
d. specific performance.
Refer to Fact Pattern 19-1. If Belle Vista breaches the contract, Andre's remedy would most likely be a. the amount that Andre expected to invest in the project. b. a percentage of Belle Vista's unrealized profit. c. the difference between the land's contract and market prices. d. specific performance.
d. specific performance.
Ready Repair Service enters into a contract to fix washers and dryers in Scrub n' Dry Company's coin-operated laundries. If Ready Repair breaches the contract, Scrub n' Dry can a. do nothing but make a deal with a different service provider. b. do nothing but temporarily suspend operations and wait. c. file a criminal complaint against Ready Repair. d. sue Ready Repair for damages.
d. sue Ready Repair for damages.
Wally offers to repair and service a forklift for Valu Lumber Outlet, but Wally dies before Valu accepts. Most likely, Wally's death a. does not affect the offer. b. shortens the time of the offer but does not terminate it. c. extends the time of the offer. d. terminates the offer.
d. terminates the offer.
Digital Storage, Inc., offers to sell provide cloud-computing services to Entrepreneur Enterprises, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Entrepreneur Enterprises accepts the written offer. Refer to Fact Pattern 15-B1. Digital Storage's best defense against enforcement of the contract is that Entrepreneur Enterprises knew a. a bilateral mistake supports the cancellation of a contract. b. a mistake of value supports the cancellation of a contract. c. a unilateral mistake supports the cancellation of a contract. d. the price was below the prices of comparable devices.
d. the price was below the prices of comparable devices.
Don enters into a contract with Eve, who claims to have access to a stock-trading algorithm that will multiply an investment many times over. When the results do not match this promise, Don learns that Eve does not have access to any unique software and files a suit, alleging fraud. Proof of an injury is required to
Recover damages
Garth owns two all-terrain vehicles (ATVs), worth $1,000 and $500, re¬spec-tively. Helen agrees to buy "Garth's ATV" for $750. Garth believes, in good faith, that he is selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this situation
d. there is no contract.
A minor who enters into a contract for necessaries may disaffirm the contract but remains liable for the reasonable value of the goods.
T
All states' laws permit minors to disaffirm contracts.
T
An intoxicated person, after becoming sober, may ratify a contract expressly or impliedly.
T
Clothing is a "necessary."
T
In certain circumstances, bargains are so oppressive that the courts relieve innocent parties of part or all of their duties.
T
In general, an illegal contract is void.
T
In most illegal contracts, both parties are considered to be equally at fault, and neither party can enforce it or recover damages under it.
T
In some states, misrepresentation of age is enough to prevent disaffirmance.
T
When one party uses fraud to induce another party to enter into an illegal bargain, the second party will be allowed to recover for the performance or its value.
T
Wally offers to repair and service a forklift for Valu Lumber Outlet, but Wally dies before Valu accepts. Most likely, Wally's death
Terminates the offer
ApartmentsRUs, a property management firm, presents a standard-form lease for an apartment to Barnaby, a potential tenant. ApartmentsRUs does not pressure Barnaby to sign the lease, but offers it on a take-it-or-leave-it basis. Barnaby signs the lease, but later wants to withdraw from the contract. He is most likely to avoid enforcement of the lease on the ground of
d. unconscionability.
Carly pledges to donate $10,000 to Disaster Recovery Inc. (DRI). On the basis of the pledge, DRI orders additional supplies. If Carly does not fulfill the pledge, a court may enforce it a. under the preexisting duty rule. b. on the basis of unforeseen difficulties. c. as an illusory promise. d. under the doctrine of promissory estoppel.
d. under the doctrine of promissory estoppel.
Gene, an accountant, convinces his client Hazel to sign a contract to invest her savings in 2Gether, a nonexistent social-networking Web site. There is clear and convincing evidence that Hazel did not act out of her free will. This is a. duress. b. fraud. c. mistake. d. undue influence.
d. undue influence.
Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OptiBank through Newt's investment firm. Unknown to Mona, Newt realizes a commission from the investment. Most likely, Mona may rescind the contract on the basis of a. duress. b. fraud. c. mistake. d. undue influence.
d. undue influence.
Ruth, who is Sal's guardian, convinces him to buy a certain parcel of land from Tyrone at a greatly inflated price. Ruth may be liable for a. duress. b. fraud. c. mistake. d. undue influence.
d. undue influence.
. Refer to Fact Pattern 13-4. If Teatro offers no reason for the extra $250,000, but says only that it will stop work if it is not paid, the agreement is a. enforceable as the consideration is past. b. enforceable because of unforeseen difficulties. c. unenforceable as an illusory promise. d. unenforceable due to the preexisting duty rule.
d. unenforceable due to the preexisting duty rule.
Refer to Fact Pattern 13-4. If Teatro says it is asking for the extra $250,000 because ordinary business expenses have increased, the agreement is a. enforceable as the consideration is past. b. enforceable because of unforeseen difficulties. c. unenforceable as an illusory promise. d. unenforceable due to the preexisting duty rule.
d. unenforceable due to the preexisting duty rule.
Bay City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault. Coco's Chocolate Creations signs a lease with Bay City that contains the clause. The clause is most likely
d. unenforceable.
A court adjudicates Henry mentally incompetent and appoints Inez to be his guardian. Later, without Inez's knowledge, Henry signs a contract to sell his farm to Jason for its real market value. The contract is a. enforceable if Henry comprehended the consequences. b. enforceable if Henry knew the market value of the farm. c. enforceable if Henry was the record owner of the farm. d. void.
d. void.
A court adjudicates Jimi mentally incompetent and appoints Krispin to be his guardian. Later, without Krispin's knowledge, Jimi signs a contract to sell his lake cabin to Lazar for its real market value. The contract is
d. void.
Organic Farms Company contracts to buy two tracts of land from Prime Bottomland, Inc. Both parties believe that the two tracts are adjacent, but in fact they are not. Prime Bottomland is still willing to sell the land, but under these circumstances the deal would adversely affect Organic Farms. The parties' belief about the adjacency of the property is
d. voidable.
Fresh Service, Inc., offers to deliver produce to Growers' Market's customers for a certain price. Fresh's intent to extend a serious offer to Growers' Market is determined by reference to Fresh's a. assumptions. b. beliefs. c. intentions. d. words and conduct.
d. words and conduct.
Bobbie is a minor subject to her parents' care and control. She signs a contract to rent a lake cabin from Cleve for one year. Before the end of the term, Bobbie moves out. She can
disaffirm the contract and avoid liability for the rent.
Colette and Dealership Auto Sales Company enter into an oral contract under which Dealership Auto agrees to provide Colette with lifetime employment. This contract may be enforceable by
either Colette or Dealership Auto.
If a voidable contract is ratified, the parties must fully perform their respective legal obligations.
enforce the policy and recover from the insurer
The state of Illinois enacts a usury statute. The purpose is to
establish a maximum rate of interest that may be charged for loans
Kali contracts to sell Leony her car for $3,000. This contract will be fully discharged when Kali and Leony
exchange the car for the $3,000
Nora enters into a contract with Oceanic Transport, Inc., to insure and ship a painting from France to the United States for a certain price. But Oceanic makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would a. allow the parties to rescind the contract. b. award damages to Nora for the mistake. c. award damages to Oceanic for the mistake. d. enforce the contract as is.
a. allow the parties to rescind the contract.
On behalf of the jazz group Fusion, their manager Greg agrees to a performance in Hillside Amphitheatre on July 4. Hillside sends a written copy of the agreement to Greg to be signed. If Greg signs the copy, the parties will have a. an express contract. b. an implied contract. c. an implied-in-law contract. d. no contract.
a. an express contract.
Builders Corporation files a suit against Concrete Company to enforce a written contract. If the court finds that the parties intended the contract to be the final statement of their agreement, parol evidence can be admitted to prove a. an orally agreed-on condition precedent. b. terms discussed before the contract but not contained in it. c. terms discussed at the time of the contract that contradict the written terms. d. nothing.
a. an orally agreed-on condition precedent.
Refer to Fact Pattern 13-1. Sports Bar's discount is legally sufficient consideration a. because it is a promise of something of value. b. only if Sports Bar adds a cash rebate. c. only if Tea & Tarts uses it. d. under no circumstances.
a. because it is a promise of something of value.
Refer to Fact Pattern 13-1. Tea & Tarts's forbearance from towing is legally sufficient consideration a. because it is a promise of something of value. b. only if Sports Bar's patrons park in Tea & Tarts's lot. c. only if Tea & Tarts's customers cannot park in its lot because it is full. d. under no circumstances.
a. because it is a promise of something of value.
Home Construction LLC enters into a contract with Irene to build a house. Before Home starts to work, the market price for its services increases—in effect, Home will lose money by if it fulfills its contract with Irene. Home notifies her that it will not perform. Home's obligation to perform is a. breached. b. discharged. c. rescinded. d. suspended.
a. breached.
Refer to Fact Pattern 18-2. If the market price for organic produce exceeds the price in the contract with Harvesters, and Flora decides not to deliver the order, her contract with the grocery is a. breached. b. discharged. c. not affected. d. suspended.
a. breached.
Rita, a minor, misrepresents her age as twenty-one and signs a contract with Sporty Motors to buy a sport utility vehicle (SUV. In most states, Rita may a. disaffirm the contract. b. disaffirm the contract only if she makes full payment. c. disaffirm the contract only if she returns the SUV in good condition. d. not disaffirm the contract due to the misrepresentation.
a. disaffirm the contract.
Omni Insurance Company violates a state licensing statute when selling a policy to Petra, in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute, Petra can a. do nothing with respect to the policy. b. enforce the policy or recover the amount of the premiums paid. c. only enforce the policy. d. only recover the amount of the premiums paid.
a. do nothing with respect to the policy.
Francisca and Garden Estate, Inc., enter into a contract for the use of a Victorian mansion and its grounds for a wedding and reception. If ambiguities appear in the contract, they will be construed against the party who a. drafted the contract. b. has the greater bargaining power. c. made the offer to contract. d. offers the most confusing explanation of the terms.
a. drafted the contract.
Anton tells Brooke, who has no knowledge of Shakespearean comedy, that he will tutor her in the subject for $50. As an offer, this is a. effective. b. not effective because comedy is not a serious subject. c. not effective because Anton's tutoring will be subjective. d. not effective because Brooke has no knowledge of the subject.
a. effective.
While sailboarding, Jolene is injured when Kirby carelessly crosses her path. Kirby's insurance company offers Jolene $50,000 to release Kirby from liability, and she accepts. Later, Jolene learns that her injuries are more serious than she realized. The release is a. enforceable. b. unenforceable because Jolene's injuries are unforeseeably difficult. c. unenforceable because Kirby has a preexisting duty to pay. d. unenforceable because the release is an illusory promise.
a. enforceable.
Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan knowingly misrepresents a number of material features about the restaurant and the business. When Beth discovers the truth, she can rescind the contract on the basis of a. fraud. b. undue influence. c. mistake. d. none of the choices.
a. fraud.
At an auction for the first time, Dulcinea bids on a one-hundred-year-old Edison-brand phonograph, believing that it is worth more than the price asked. When the item proves to be less valuable, Dulcinea is a. liable on the bid. b. not liable on the bid because Dulcinea overestimated the value of the auctioned item. c. not liable on the bid because the auctioneer overstated the value of the auctioned item. d. not liable on the bid because this was Dulcinea's first auction.
a. liable on the bid.
At an auction for the first time, Dulcinea bids on a one-hundred-year-old Edison-brand phonograph, believing that it is worth more than the price asked. When the item proves to be less valuable, Dulcinea is
a. liable on the bid.
Jake and Kline make an illegal contract that unjustly enriches Jake at the expense of Kline. A court will a. not be concerned with the unjust enrichment of Jake. b. award damages to Kline. c. reform the contract to prevent undue burdens. d. enforce the contract as it was originally written.
a. not be concerned with the unjust enrichment of Jake.
Dix agrees to sell Eli, for $1,500, a remote parcel of land. They believe the land to be worthless, but beneath it is shale rock containing oil. A court would a. not rescind the contract. b. rescind the contract on the basis of fraud. c. rescind the contract on the basis of mistake. d. rescind the contract on the basis of undue influence.
a. not rescind the contract.
Ray buys a rural vineyard from Sergio, who claims that it would be a prime site for a housing subdivision. Ray later learns that the law does not permit the land to be used for housing. Ray may a. not rescind the contract. b. rescind the contract only if Ray did not know the law before the deal. c. rescind the contract only if Sergio knew about the law before the deal. d. rescind the contract only if the law is not common knowledge.
a. not rescind the contract.
Dana believes that a new phone to be sold by Ear Fruit Inc. will become the most popular phone in the global market. Dana enters into a contract to buy 500 shares of Ear Fruit stock, anticipating an increase in its value. The phone does not become popular, and the price of the stock does not rise. Dana can recover a. nothing. b. the amount of the purchase price. c. the amount of the purchase price plus the expected increase. d. the amount of the purchase price plus the unexpected decrease.
a. nothing.
Eleanor offers Flossy the amount of an investment in Flossy's start-up business venture if she marries Eleanor's son Glen. This promise is enforceable a. only if it is in writing. b. only if the amount of the investment is more than $500. c. only if Glen agrees to marry Flossy. d. under no circumstances.
a. only if it is in writing.
Quinn contracts to provide ten tons of scrap steel at $500 per ton to Rendered Materials, Inc. An unforeseen shortage of scrap steel suddenly develops, making it impossible for Quinn to fulfill the contract for less than $5,000 per ton. Quinn's best defense against performing the contract would be that a. performance of the contract is commercially impracticable. b. procuring the steel would force Quinn into bankruptcy. c. the law has rendered performance of the contract illegal. d. the specific subject matter of the contract has been destroyed.
a. performance of the contract is commercially impracticable.
Coffee Brokers, Inc., offers to buy Dining Company's coffee-roasting services for a certain price. Dining responds that the price is too low and thereby rejects the offer. The offer is a. terminated. b. valid for a reasonable time to give Interstate a "second chance." c. valid for the period of time prescribed by a state statute. d. valid until Interstate revokes the offer.
a. terminated.
In an exchange of e-mails, Rob, a landlord, and Sam agree to a lease of a certain apartment for one year. Under the Statute of Frauds, this lease is enforceable provided a. the e-mail is signed by the party against whom enforcement is sought. b. the parties print and sign a hard copy of a document titled "Lease." c. there is outside evidence, such as a security deposit, of the lease. d. no one else signs a lease for the apartment before Sam moves in.
a. the e-mail is signed by the party against whom enforcement is sought.
Barbara and Johann are parties to a contract. They agree on a novation. The novation requires a. the existence of a previous, valid obligation. b. consideration greater than $5,000. c. performance of the original contract by all of the parties. d. an accord and satisfaction.
a. the existence of a previous, valid obligation.
Susan enters into a contract with Troy to act as his personal sports trainer. If a dispute later arises and the contract contains unclear terms, the rules of contract interpretation will give effect to a. the parties' intent as expressed in their contract. b. what the promisor claims was the parties' intent. c. what the promisee claims was the parties' intent. d. what the parties now agree they intended.
a. the parties' intent as expressed in their contract.
Elena, a minor, obtains fruits and vegetables on credit from Fred at Growers' Market. Later, Elena disaffirms the purchase. She owes Fred a. the reasonable value of the goods. b. the retail value of the goods. c. the goods. d. nothing.
a. the reasonable value of the goods.
Under a contract with Valley Vineyard, Walsh begins grading a terraced hillside for the planting of grapes. Halfway through the project, Walsh asks for $5,000 over the contract price, claiming an increase in the "cost of doing business." Valley agrees but later refuses to pay. Valley's agreement to pay more is a. unenforceable because Walsh's performance was a preexisting duty. b. unenforceable because Valley's promise was illusory. c. enforceable. d. unenforceable because Walsh's request modified the contract.
a. unenforceable because Walsh's performance was a preexisting duty.
Delightful Weddings, LLC, and Event Catering Inc. have an executory contract. They agree to rescind their contract and simultaneously enter into a new contract. If the initial contract was subject to a preexisting duty, the new contract will most likely be a. unenforceable. b. enforceable. c. valid. d. voidable.
a. unenforceable.
Smith & Jones, Accountants, agrees to perform an audit for Brick & Mortar Stores, Inc. Whether or not this agreement meets all of the requirements of a contract, the parties are likely to follow the rules of contract law because they a. want to avoid potential disputes. b. are conscious of those rules. c. are not conscious of those rules. d. have a moral obligation to do so.
a. want to avoid potential disputes.
Diet & Health Food stores orders 1,000 boxes of granola bars from Energy Products, Inc., but fails to specify the varieties. The granola bars are delivered in an assortment of varieties. Diet & Health may
accept only the granola bars that it wants and reject the rest.
Omar and Penn want to discharge their contract by executing a new agreement with performance different from what they originally promised. They can best accomplish this by
an accord and satisfaction.
Rachel and Stuart enter into a contract for the sale of Rachel's textbook at the end of the fall semester for which Stuart agrees to pay $75. Rachel wants to transfer her right to payment for the book to Terry. This transfer is
an assignment
Vicky asks Walt, a cobbler, to repair a pair of boots. There is no discussion of a price, and Vicky and Walt do not sign any documents. After the repair, Walt hands Vicky a bill. With respect to Vicky's obligation to pay the bill, this is a. an implied contract. b. no contract. c. an express contract. d. a quasi contract.
an implied contract
A valid contract requires a. a duration and termination provision. b. a price and a subject. c. an offer and an acceptance. d. specific quality standards
an offer and an acceptance
Lana applies for a firefighter's job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is "an employment offer conditioned on the applicant passing the exam." This letter is a. an offer which will become firm in the event Lana meets the condition precedent. b. a bilateral contract that Lana accepted by applying for the job. c. a quasi contract on which Lana can rely for employment. d. no contract.
an offer which will become firm in the event Lana meets the condition precedent
A contract between Laser Equipment, Inc., and Medical Center contains a clause stating that any assignment is "void." This ordinarily prohibits
any assignment
La-Z Days Motels, Inc., and Beds R Us Corporation enter into a contract that does not specify the payment terms. Payment may be made in
any commercially normal or acceptable means.
Nature's Products, Inc., sends its standard order form to Omni Distribution Corporation to evidence a sale of packing materials. Omni responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless
any of the choices
App Developers, Inc. (ADI), enters into a contract with Carmen, the chief executive officer of SalesCorp, to create an app for the firm. To fulfill the contract, ADI hires Max and ten other student interns. With respect to the contract, Max is a. an intended beneficiary. b. an incidental beneficiary. c. a delegatee. d. an assignee.
b. an incidental beneficiary.
Lyle and Miranda agree that Lyle will fix the refrigeration unit in Miranda's Buns n' Burgers in exchange for her payment of a debt that Lyle owes to New Credit Corporation. New Credit is a. a delegatee. b. an intended beneficiary. c. an incidental beneficiary. d. an assignor.
b. an intended beneficiary.
Jason and Kelly enter into a contract for Jason to renovate Kelly's house by a certain date. Jason never performs. After the applicable limitations period has passed, Kelly decides to bring a suit against Jason for breach. This suit a. must be filed within ten to twenty years, depending on state law. b. can no longer be brought. c. can be filed within four years after Kelly decides to sue. d. must be filed between four and five years after Kelly decides to sue.
b. can no longer be brought.
Amy and Bob enter into a contract for Bob to perform waste management services for Amy's commercial properties. Later, Bob alters a material term—increases the price—without Amy's knowledge or consent. Amy a. can alter a material term, such as the payment date, without Bob's consent. b. can treat the contract as discharged. c. must adapt his performance accordingly. d. must determine whether Bob's alteration constitutes substantial performance.
b. can treat the contract as discharged.
Laredo advertises a reward for the return of his lost dog. Miguel, who does not know of the reward, finds and returns the dog, without asking for reward. Miguel cannot recover the reward, because he a. did not confer a benefit on Laredo by returning the dog. b. did not know of the reward when he returned the dog. c. did not ask for the reward when he returned the dog. d. returned the dog.
b. did not know of the reward when he returned the dog.
Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan knowingly misrepresent a number of material features about the restaurant and the business. When Beth discuss the truth, she can rescind the contract on basis.
fraud
Kari, a real estate agent, assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Linc buys the property and then discovers that the street has no more traffic than any other in its vicinity. Linc is most likely a victim of
fraud
Ken, a real estate agent, assures Lily that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Lily buys the property and then discovers that the street has no more traffic than any other in its vicinity. Lily is most likely a victim of:
fraud
Refer to Fact Pattern 15-2. Any contract with AgriCo-op that includes the mistake may be rescinded
if AgriCo-op knew or should have known of the mistake
Bobbie is a minor subject to her parents' care and control. She signs a contract to rent a lake cabin from Cleve for one year. Before the end of the term, Bobbie moves out. She can a. avoid liability for the rent but not disaffirm the contract. b. disaffirm the contract and avoid liability for the rent. c. disaffirm the contract but not avoid liability for the rent. d. neither disaffirm the contract nor avoid liability for the rent.
b. disaffirm the contract and avoid liability for the rent.
Stella is fifteen. In most states, for contractual purposes, Stella would be considered a minor until she is
b. eighteen.
Ed orally agrees with Far East Restaurant to provide delivery service to its customers for six months. This contract is enforceable by a. none of the choices. b. either Ed or Far East. c. any interested third party, such as a Far East customer. d. Far East only.
b. either Ed or Far East.
Omni Insurance Company violates a state licensing statute when selling an insur¬ance policy to Petra, in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute, Petra can
b. enforce the policy or recover the amount of the premiums paid.
Intoxicated but capable of comprehending the consequences of her actions, Cricket signs a contract to sell her phone app design to Download, Ltd. This contract is a. unenforceable because Cricket was intoxicated. b. enforceable. c. unenforceable if Cricket disaffirms it. d. unenforceable if Download disaffirms it.
b. enforceable.
Intoxicated but still capable of comprehending the consequences of her actions, Cricket signs a contract to sell her phone app design to Downloads, Inc. This contract is
b. enforceable.
Gene sells a trail bike to Hollis without disclosing that the odometer, which reads 10,000 miles, was disconnected 90,000 miles ago. Gene is most likely liable for a. unconscionability. b. fraud. c. mistake. d. nothing.
b. fraud.
Gene sells a trail bike to Hollis without disclosing that the odometer, which reads 10,000 miles, was disconnected 90,000 miles ago. Gene is most likely liable for
b. fraud.
Kari, a real estate agent, assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Linc buys the property and then discovers that the street has no more traffic than any other in its vicinity. Linc is most likely a victim of a. opinion. b. fraud. c. mistake. d. nothing.
b. fraud.
Kari, a real estate agent, assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Linc buys the property and then discovers that the street has no more traffic than any other in its vicinity. Linc is most likely a victim of
b. fraud.
Ken, a real estate agent, assures Lily that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Lily buys the property and then discovers that the street has no more traffic than any other in its vicinity. Lily is most likely a victim of a. opinion. b. fraud. c. mistake. d. an adhesion contract.
b. fraud.
Rudy files a suit against Shakes & Shingles, Roofing Contractor, Inc., under the doctrine of promissory estoppel. Rudy must show that a. he justifiably refused to fulfill a promise to Shakes & Shingles. b. he justifiably relied on Shakes & Shingles' promise to his detriment. c. Shakes & Shingles justifiably refused to fulfill a promise to him. d. Shakes & Shingles justifiably relied on his promise to its detriment.
b. he justifiably relied on Shakes & Shingles' promise to his detriment.
Laurel enters into a contract to sell her bike to Melanie. Melanie takes possession of the bike as a minor and continues to use it well after reaching the age of majority. She has a. expressly ratified the contract. b. impliedly ratified the contract. c. expressly disaffirmed the contract. d. impliedly disaffirmed the contract.
b. impliedly ratified the contract.
Vijay enters into a contract to sell his laptop to Winnie. Winnie takes possession of the laptop as a minor and continues to use it well after reaching the age of majority Winnie has
b. impliedly ratified the contract.
Orin signs a covenant not to compete with his employer, Product Distribution, Inc. The covenant will be enforced if it a. does not require either party to obtain a business license. b. is reasonable with respect to geographic area and duration. c. relieves the employer from liability for any injury to Orin. d. none of the choices.
b. is reasonable with respect to geographic area and duration.
Justin is mentally incompetent but has not been so adjudged by a court. Any contract Justin enters into is voidable if, at the time of contracting, Justin a. has a lucid interval. b. lacks the capacity to comprehend the consequences. c. does not inform the other party that he is incompetent. d. none of the choices.
b. lacks the capacity to comprehend the consequences.
Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is a. liable to Niki under the concept of rescission and new contract. b. liable to Niki under the doctrine of promissory estoppel. c. liable to Niki under the preexisting duty rule. d. not liable to Niki.
b. liable to Niki under the doctrine of promissory estoppel.
Geri is a minor. Without her parents' knowledge, she signs a contract to buy an airline ticket to Hawaii for spring break. Geri's parents are liable for
b. no part of the price of the ticket.
Geri is a minor. Without her parents' knowledge, she signs a contract to buy an airline ticket to Hawaii for spring break. Geri's parents are liable for a. the entire price of the ticket. b. no part of the price of the ticket. c. up to half of the price of the ticket. d. up to two-thirds of the price of the ticket.
b. no part of the price of the ticket.
Emma, a minor, buys a water bottle, a set of weights, and a treadmill from Fitness Warehouse. Later, Emma disaffirms the deal. If the goods are still in her possession or control, she can keep a. the water bottle, but not the weights or the treadmill. b. none of the goods. c. only the damaged or used goods. d. all of the goods.
b. none of the goods.
Lewis, an employee of Silos, Inc., makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently, Silos's bid is significantly low. Refer to Fact Pattern 15-2. Any contract with AgriCo-op that includes the mistake may be rescinded
if AgriCo-op knew or should have known of the mistake.
Maria is the sheriff of Narez, Texas. Oscar robs a Narez gas station and a $500 reward is offered for his capture. When, later, Maria finds and arrests him, with respect to the reward, she can a. collect it. b. not collect it because she had a preexisting duty to capture Oscar. c. not collect it because it is not legally sufficient consideration. d. not collect it because it would be unconscionable.
b. not collect it because she had a preexisting duty to capture Oscar.
Seth offers to buy a house from Tia for less than Tia paid for it, stating that he would "hate to see anything bad happen to Tia or her house." Tia agrees to sell. Regarding this agreement, a court would likely
b. not enforce it.
Lewis, an employee of Silos, Inc., makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently, Silos's bid is significantly low. Refer to Fact Pattern 15-2. Any contract with AgriCo-op that includes the mistake may be rescinded
if the error was made inadvertently and without gross negligence.
Lewis, an employee of Silos, Inc., makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently, Silos's bid is significantly low. Refer to Fact Pattern 15-2. Any contract with AgriCo-op that includes the mistake may be rescinded
if the mistake involves a material fact.
Ileana orally agrees to pay Jaime to plant and harvest a quarter of Ileana's farm acreage for four corn-planting seasons. After Jaime prepares the land and plants the first crop, Ileana says that their deal is off. Jaime can most likely recover
in quasi contract.
Reed agrees to sell his Sports Equipment Store to Taylor. As part of the sale. Reed promises not to open a similar, competing store anywhere. This promise is most likely_________because of the unreasonable terms of area and time.
invalid
Reed agrees to sell his Sports Equipment store to Taylor. As part of the sale, Reed promises not to open a similar, competing store anywhere. This promise is most likely
invalid because of the unreasonable terms of area and time.
Lana agrees to work as Michelle's personal assistant for one year but dies in the ninth month of the contract. Lana's estate
is discharged from any contractual liability.
Orin signs a covenant not to compete with his employer, Product Distribution, Inc. The covenant will be enforced if it
is reasonable with respect to geographic area and duration
Justin is mentally incompetent but has not been so adjudged by a court. Any contract Justin enters into is voidable if, at the time of contracting, Justin
lacks the capacity to comprehend the consequences.
In a divorce proceeding, Jonas promises to pay a certain amount of child support to Kelly every month until their daughter Lois is eighteen years old. Jonas's obligation with respect to his promise is
legal and moral
In a divorce proceeding, Jonas promises to pay a certain amount of child support to Kelly every month until their daughter Lois is eighteen years old. Jonas's obligation with respect to this promise is a. moral, not legal. b. legal, not moral. c. legal and moral. d. neither legal nor moral
legal and moral
At an auction for the first time, Dulcinea bids on a one-hundred-year-old Edison-brand phonograph, believing that it is worth more than the price asked. When the item proves to be less valuable, Dulcinea is
liable on the bid.
Lana, who is 17, enters into a contract with Rent-U-N-Go to lease a stereo for six months. After paying rent for three months, Lana decides she no longer wants the stereo. Lana
may void the contract.
Bobbie is a minor subject to her parents care and control. She signs a contract to rent a lake cabin from Cleve for one year. Before the end of the term, Bobbie moves out. She can:
neither disaffirm the contract nor avoid liability for the rent.
Shannon signs a contract with Tevin, an unlicensed contractor in a state that requires all contractors to be licensed for safety reasons, to build a deck and gazebo at the rear of her house. This contract is enforceable by
no one.
Gevi is a minor. Without her parents' knowledge, she signs a contract to buy n airline ticket to Hawaii for Spring break. Geri's parents are liable for___________.
no part of the price of the ticket
Dry Gulch Farms hires Elliot to repair its irrigation system on site on a certain date for $2,500, but Elliot does not show up as agreed. Dry Gulch hires Fernando to do the job for $2,000. Dry Gulch may recover from Elliot
nominal damages
Abner tells a representative of Brass & Woodwind Musical Instruments, Inc., that he will pay for Claudia's trumpet if she does not. Abner does not secure any personal benefit for this promise. Abner's oral promise is enforceable as a contract by
none of the choices
ActioNOW and Becca enter into an oral contract in which Becca agrees to work on a project for ActioNOW for eighteen months. This contract is enforceable by
none of the choices
ActioNOW and Becca enter into an oral contract in which Becca agrees to work on a project for ActioNOW for eighteen months. This contract is enforceable by:
none of the choices
Whitewater Canyon Adventures, Inc., and Xtra Overstock Company enter into an oral contract for Xtra's sale to Whitewater of five rafts for $2,000 each. Before Whitewater takes possession of the rafts, this contract is enforceable by
none of the choices
Air Flo, Inc., and Banyan Grove Apartments enter into an oral contract in which Air Flo agrees to provide air-conditioning and heating maintenance for Banyan Grove's facilities for two years. This contract is enforceable by
none of the choices.
Emma, a minor, buys a water bottle, a set of weights, and a treadmill from Fitness Warehouse. Later, Emma disaffirms the deal. If the goods are still in her possession or control, she can keep
none of the goods
Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on—a local law prohibits construction on the rest of the property. Ralph can
not avoid the contract because persons are assumed to know the law
Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on—a local law prohibits construction on the rest of the property. Ralph can
not avoid the contract because persons are assumed to know the law.
Seth offers to buy a house from Tia for less than Tia paid for it, stating that he would "hate to see anything bad happen to Tia or her house." Tia agrees to sell. Regarding this agreement, a court would likely
not enforce it
Jenny promises to pay Kay $500 because "she does not have as much money as other people." Jenny's promise is
not enforceable because Kay has not given consideration in return.
When both parties to a contract are mistaken about the same material fact, the contract cannot be rescinded.
True
When the dominant party in a fiduciary relationship benefits from that relationship, a presumption of undue influence arises
True
When the dominant party in a fiduciary relationship benefits from that relationship, a presumption of undue influence arises.
True
Words or terms in contracts that are subject to more than one reasonable interpretation can lead to bilateral mistakes.
True
Written evidence or an electronic record of a contract for a sale of goods priced at $500 or more is required by the Uniform Commercial Code.
True
In some states, an otherwise unenforceable oral contract may be enforced under the doctrine of promissory estoppel.
True
An innocent party can rescind a fraudulent contract and be restored to his or her original position
Truw
Property Management, Inc. (PMI), presents a standard-form lease for an apartment to Quentin, a potential tenant. PMI offers it on a take-it-or-leave-it basis. Quentin signs it, but later wants to withdraw from it. He is most likely to avoid enforcement of the lease on the ground of
Unconscionability
Gavin takes out an insurance policy on her car. Gavin can assign his policy to a third party
Under no circumstances
Industrial Engineering, Inc., promises to give stock options to Jasmine for processes she has already designed for the firm. This promise is enforceable:
Under no circumstances
Ruth, who is Sal's guardian, convinces him to buy a certain parcel of land from Tyrone at a greatly inflated price. Ruth may be liable for
Undue influence
Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients, to whom Oscar will aggressively market Payroll's services. This deal is
Void
Smith & Jones, Accountants, agrees to perform an audit for Brick & Mortar Stores, Inc. Whether or not this agreement meets all of the requirements of a contract, the parties are likely to follow the rules of contract law because they
Want to avoid potential disputes
Fix-It-Quik, Inc., offers Gina a job as a plumber. No time for acceptance is specified in the offer. The offer will terminate a. after a reasonable period. b. after a work week (five business days). c. after a month (thirty calendar days). d. never.
a. after a reasonable period.
Merry Music Inc. and Nina enter into a contract for Nina to write six songs for which Merry Music agrees to pay her. Nina transfers her right to payment under the contract to Omni Artists Agency. In the transfer of rights, Nina is
An assignor
Marketing Inc. offers to create a campaign to increase N'Ice Creamery, Inc.'s online business. N'Ice agrees to pay for the service. These parties have
An express contract
In a bike shop, Jessie, who is not knowledgeable about bikes, overhears Kevin say, "This bike could win any race!" Jessie buys the bike, but does not win any races with it. Kevin's statement is
An opinion
Chuck buys a lottery ticket for $5 dollars, but if he has the correct numbers, he can win $5,000,000. This is an example of bilateral contract.
False
Click-on agreements online are never enforceable
False
Damages that compensate the nonbreaching party for the loss of a bargain are known as consequential damages.
False
For a minor to disaffirm a contract, he or she must present the contract to a court.
False
Generally, a unilateral mistake affords the mistaken party a right to relief from the contract.
False
Generally, a unilateral mistake affords the mistaken party a right to relief from the contract.
False
If a promise is made, it will be enforced.
False
In an employment contract, a covenant not to compete is unenforceable.
False
In contract law, intent is determined by the subjective theory of contracts.
False
Misrepresentation cannot occur by silence
False
No contract can be simply implied, it must be expressly stated or written:
False
Once necessary effective offer is reasonable price related to market value.
False
One of the requirements of a valid contract is an adequate price:
False
Oral evidence of otherwise clear terms in a contract can be introduced at a trial to contradict those terms.
False
Punitive damages generally are awarded in lawsuits for breach of contract.
False
Reliance on misrepresentation is justified if the misrepresentation is an obviously extravagant statement:
False
The "mailbox rule" stipulates that an offer must arrive in the offeror's mailbox to be an acceptance
False
The fact that the word consideration is used in an agreement means, by itself, that consideration has been given:
False
The identity of one of the parties to a contract is an example of a material fact.
False
The person who makes a promise is the promisee.
False
To be legally sufficient, consideration must be evidenced by something tangible:
False
Under a finance lease, the lessee can stop performing and making lease payments if the leased equipment turns out to be defective.
False
Under the Statute of Frauds, all contracts must be in writing to be enforceable.
False
Under the doctrine of promissory estoppel, a promise will not be enforced unless it is supported by consideration.
False
Voluntary consent is never lacking because of a mistake.
False
When a Naive purchaser enters into a contract in reliance on the opinion of an expert, the innocent party is not entitled to the rescind the deal.
False
primary obligation is a promise to pay another's debt only if that party fails to pay
False
County Dentists Clinic offers to buy from Dental & Medical Supplies Company a certain quantity of floss and other items for a certain price. Dental & Medical can accept the offer by
a promise to ship or a prompt shipment of the goods.
Foster promises to buy Gideon's trumpet for $75. Gideon is a. an offeree. b. an offeror. c. a promisor. d. a promisee.
a promisee
Hal's Hardware Inc. and Ideal Tools Corporation sign a written contract for a sale of goods. To be enforceable, this written contract must include
a quantity term, such as "50 hammers" or "100 boxes of assorted nails."
Renew Turf, Inc., enters into a contract with Sports Park to provide surface material for Sports Park's baseball fields by October 1 for a series to begin October 5. The contract specifies an amount to be paid if the contract is breached. This is a liquidated damages clause if the amount is
a reasonable estimate of the loss on a breach.
Grain Farms, LLC, and Harvest-to-Market Truck & Transport Company sign a writ-ten con-tract that does not involve a sale of goods. To be enforceable, the writing must include
a statement of the consideration.
Ren offers to pay Sara to pick up and deliver certain business documents within thirty minutes. Sara can accept the offer only by completing the task within the deadline. If she does, Ren and Sara will have
a unilateral contract
On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil says that he has changed his mind. These parties had
a unilateral contract as soon as Outdoor began to perform
Fact Pattern 15-B1 Digital Storage, Inc., offers to sell provide cloud-computing services to Entrepreneur Enterprises, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Entrepreneur Enterprises accepts the written offer. Refer to Fact Pattern 15-B1. Entrepreneur Enterprises' best argument in favor of enforcement of the contract is that
a unilateral mistake does not afford relief from a contract.
Dick's Burgers n' Shakes enters into an oral contract with Restaurant Equipment Warehouse (REW) for REW's sale to Dick's of a single-spindle milkshake mixer for $300. Assuming the terms can be proved, the contract is enforceable by a. Dick's or REW. b. the manufacturer of the mixer. c. any third party with a material interest, such as one of Dick's suppliers. d. none of the choices.
a. Dick's or REW.
Henry files a suit against Irrigation Services to enforce an oral contract that would otherwise be unenforceable under the Statute of Frauds. The court could enforce such a contract if a. Henry foreseeably and justifiably relied on Irrigation's promise. b. Irrigation denies the existence of a contract. c. neither party has begun to perform. d. the deal does not involve goods.
a. Henry foreseeably and justifiably relied on Irrigation's promise.
Clay offers to pay Dian $50 for a golf lesson for Ewan. They agree to meet on Friday to exchange the cash for the lesson. These parties have a. a bilateral contract. b. a unilateral contract. c. a void contract. d. an executive contract.
a. a bilateral contract.
Bob claims Carla breached their contract for tutoring. Carla responds that she never intended to enter into a contract with Bob. The intent to enter into contract is determined with reference to:
the objective theory of contracts
Bob claims that Carla breached their contract for tutoring. Carla responds that she never intended to enter into a contract with Bob. The intent to enter into a contract is determined with reference to
the objective theory of contracts
Lark promises to buy Mac's used textbook for $60. Lark is
A promisor
Nevin negotiates a deal for the sale of twenty-five acres of farmland to Otis. Nevin promises to hold the offer open in return for a small payment but does not state an exact period of time. With respect to this offer
A reasonable period of time is implied
Nevin negotiates a deal for the sale of twenty-five acres of farmland to Otis. Nevin promises to hold the offer open in return for a small payment but does not state an exact period of time. With respect to this offer
A reasonable period of time is implied.
Ben and Ivy enter into a contract under which Ben agrees to cater Ivy's wedding in exchange for a cash down payment. The contract expressly prohibits any transfer of rights. A contract right may be transferred, however, if the transfer involves
A right to receive payment
Flora enters into a contract with Global Shipping, Ltd., to insure and ship a painting from France to the United States for a certain price. Global makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would
Allow the parties to rescind the contract
Revenue & Sales Corporation and Software, Inc., enter into a contract for the design of custom software for which Revenue & Sales agrees to pay $64,500. Software transfers the right to payment under the contract to CreditLine LLC. CreditLine is
An assignee
At age seventeen, Daryl enters into a contract to buy a dozen movies from eHD Stream, Inc., an online video service. Soon after reaching the age of majority, Daryl attempts to disaffirm the contract. eHD files a suit against him. The court will most likely consider the contract ratified if it is a. executed. b. exculpatory. c. express or implied. d. emancipated.
A
Lydia, a minor, charges the cost of a smartphone at a Mobile Devices & Minutes store. Two nights later, Lydia loses the phone at Natural Foods restaurant. She disaffirms the phone's purchase. Lydia owes Mobile Devices the reasonable value of the phone a. if it is deemed a necessary. b. if it is deemed a luxury. c. if it is deemed unique. d. under no circumstances.
A
While a minor, Uri misrepresents his age as twenty-one to purchase a motorbike from Van's Dirt Bikes & Scramblers. Ordinarily, Uri can a. disaffirm the contract but must return the motorbike. b. none of the choices. c. ratify the contract, keep the motorbike, and recover any payments that he made to Van's. d. reject the contract, keep the motorbike, and recover any payments that he made to Van's.
A
Rico, a user of SmartPhoneApps.com's Web site, can download apps for free if he first clicks on "I accept" after viewing certain terms. This is
A contract that includes the terms.
Jeff is seventeen years old. Legally, Jeff is considered
A minor
Jim tells Dana that he will take her out to lunch on Thursday. Jim has made Dana
A promise
Faye makes and sells furniture. Faye and Glen enter into a contract for the delivery of Faye's products to Glen's Gear retail locations for which he agrees to pay the invoiced price. Faye transfers her right to payment under the contract to Haulers Trucking Company. This transfer is
A third party beneficiary contract
Wilson buys a lottery ticket. Wilson has accepted an offer for
A unilateral contract
Sales Corporation and Real Properties, Inc., agree to the payment of a commission for the sale of certain property. If this deal has all of the elements necessary for one of the parties to enforce it in court, it is
A valid contract
Fix-It-Quik, Inc., offers Gina a job as a plumber. No time for acceptance is specified in the offer. The offer will terminate
After a reasonable period.
Requirements of a Valid Contract are:
Agreement, Consideration, Contractual Capacity, Legality
Jess, a nurse practitioner, renders aid to Kurt, who is injured and unconscious. Jess can recover the cost of the aid from Kurt
As if the parties had entered into an actual contract
Geri is a minor. Without her parents' knowledge, she signs a contract to buy an airline ticket to Hawaii for spring break. Geri's parents are liable for a. the entire price of the ticket. b. no part of the price of the ticket. c. up to half of the price of the ticket. d. up to two-thirds of the price of the ticket.
B
Intoxicated but still capable of comprehending the consequences of her actions, Cricket signs a contract to sell her phone app design to Downloads, Inc. This contract is a. unenforceable because Cricket was intoxicated. b. enforceable. c. unenforceable if Cricket disaffirms it. d. unenforceable if Downloads disaffirms it.
B
Jimenez is an emergency medical technician. Medical personnel such as Jimenez are prohibited by state statute from working more than a certain number of consecutive hours. One month, Jimenez works more than the legal limit. Jimenez can recover for a. the hours up to the statutory maximum but not more. b. the hours up to the statutory maximum and the extra hours. c. the hours up to the statutory maximum or the extra hours. d. nothing.
B
Lou and Mike negotiate a deal to transfer stolen body building equipment for counterfeit currency that Mike will attempt to spend at Now! Discount Mart. This contract is a. enforceable. b. void. c. voidable at the option of Lou or Mike. d. voidable at the option of Now!
B
Lucy, a minor, disaffirms a contract for necessaries without returning the goods. To Manny's Food Mart, the seller, Lucy is required to pay a. nothing. b. the reasonable value of the goods. c. the sales price of the goods. d. the ultimate worth of the goods.
B
Omni Insurance Company violates a state licensing statute when selling an insurance policy to Petra, in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute, Petra can a. do nothing with respect to the policy. b. enforce the policy or recover the amount of the premiums paid. c. only enforce the policy. d. only recover the amount of the premiums paid.
B
Stella is fifteen. In most states, for contractual purposes, Stella would be considered a minor until she is a. sixteen. b. eighteen. c. seventeen. d. twenty-one.
B
Vijay enters into a contract to sell his laptop to Winnie. Winnie takes possession of the laptop as a minor and continues to use it well after reaching the age of majority. Winnie has a. expressly ratified the contract. b. impliedly ratified the contract. c. disaffirmed the contract. d. none of the choices.
B
Jana tells Levi she will give him an Xbox if Levi promises to do Jana's chores for a month. Levi promises to do the chores but has not yet begun to do them. Jana and Levi have formed
Bilateral Contract
Bay City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault. Coco's Chocolate Creations signs a lease with Bay City that contains the clause. B15. Refer to Fact pattern 14-B1. This clause is a. a covenant not to compete. b. an adhesion contract. c. an exculpatory clause. d. an illusory promise.
C
Odina signs a covenant not to compete with her employer, Penultimate Sales Corporation. A court decides that the covenant is overly restrictive. Depending on the jurisdiction, the court will likely a. enforce it as written so as not to undercut the freedom of contract. b. enforce it but evaluate its effects over time. c. reform its terms to prevent any undue burden. d. refuse to enforce it unless Penultimate pays a fine to the court.
C
Chet, a minor, signs a contract with Denise, an adult. The contract is voidable at the option of
Chet only
Chet, a minor, signs a contract with Denise, an adult. The contract is voidable at the option of _____________.
Chet only
Frisco offers to buy a Gibson guitar owned by Hayden for twice what Hayden paid for it. She accepts and hands the guitar to Frisco. Her delivery of the guitar is:
Consideration
A court adjudicates Jimi mentally incompetent and appoints Krispin to be his guardian. Later, without Krispin's knowledge, Jimi signs a contract to sell his lake cabin to Lazar for its real market value. The contract is a. enforceable if Jimi comprehended the consequences. b. enforceable if Jimi knew the market value of the farm. c. enforceable if Lazar has been recorded to be the owner of the cabin. d. void.
D
Bay City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault. Coco's Chocolate Creations signs a lease with Bay City that contains the clause. B16. Refer to Fact pattern 14-B1. The clause is most likely a. enforceable as a matter of public policy. b. enforceable if either party is considered to be a business for essential services. c. enforceable if the lease also involves residential property. d. unenforceable.
D
Becca is a minor. As a minor, Becca a. is not usually legally bound by a contract. b. has the right to avoid liability under a valid contract. c. has the capacity to enter into a valid contract. d. all of the choices.
D
Brasilia, a real estate broker licensed only in Connecticut, concludes a land sale in Delaware. She can a. collect the commission if it has not been paid. b. keep the commission if it has already been paid. c. foreclose on the property to obtain any unpaid amount. d. not collect the commission, keep it, or foreclose on the property.
D
Intoxicated but capable of comprehending the consequences of her actions, Cricket signs a contract to sell her phone app design to Download, Ltd. This contract is
Enforceable
Car Lot's salesperson Dick offers to sell Ernie, who is twenty years old, a car. Dick intentionally misrepresents the vehicle's use and repairs. In reliance, Ernie buys the car. To prove fraud, Ernie does not have to show that
Ernie is under twenty-one
Bread & Bagels Bakery (B&B) enters into a contract with CinePass for discounted movie tickets for B&B's employees. CinePass breaches the contract and B&B enters into a contract with Dine+View for the same service at a lower price. B&B might be awarded nominal damages to
Establish, as a matter of principle, that CinePass acted wrongfully.
Lou offers to service Millie's heating and air conditioning system for one year for $500. Under the mirror image rule, Millie's response will be considered an acceptance if the terms of the acceptance
Exactly mirror those of the offer.
At age seventeen, Eve enters into a contract with Fit Health Club. Two years later, when Eve attempts to disaffirm the contract, Fit files a suit against her. The court will most likely consider the contract ratified if it is
Executed
Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal with Kasey to Jenny. Illya's right to the $1,000 is then
Extinguished
A contract entered into by a minor is voidable at the option of either of the contracting parties.
F
A contract entered into by an intoxicated person is never valid.
F
A contract with an unlicensed person is enforceable if the person is otherwise of good moral character.
F
A person who has been determined by a court to be mentally competent cannot form a legally binding contract with another party.
F
All adhesion contracts are unconscionable.
F
Contracts in restraint of trade usually positively affect the public policy that favors competition in the economy.
F
For business purposes, an adult may petition a court to treat minors as adults.
F
If a minor can return only damaged goods, the minor cannot disaffirm the contract and obtain a full refund of the purchase price.
F
If the illegal part of a bargain has not yet been performed, the party rendering performance must fulfill the contract before seeking damages.
F
In a contract, an exculpatory clause releases a party from liability in the event of monetary or physical injury no matter who is at fault.
F
It is easy to prove that an intoxicated person's judgment was so severely impaired that he or she could not comprehend the legal consequences of entering into a contract.
F
A contract involving an unlicensed practitioner is generally illegal and unenforceable.
False
A court will normally interpret the language of a contract according to what the parties claim their intent was when they made it.
False
A minor who enters into a contract for necessaries may disaffirm the contract without liability for the value of the goods.
False
A negligent misrepresentation is not a basis for rescinding a contract
False
A person who is intoxicated can avoid liability on any contract due to the intoxication.
False
A promise to do what one already has a legal duty to do constitutes legally sufficient consideration:
False
A special form is required to create a delegation of duties.
False
A statement of opinion is generally subject to a claim of fraud.
False
A unilateral mistake is a mistake made by both parties to a contract.
False
All collateral promises must be in writing to be enforceable
False
All contracts must be in writing to be enforceable:
False
An oral contract for a transfer of land is always enforceable
False
Any party who does not receive what he or she considers a fair bargain can argue mistake.
False
Henry files a suit against Irrigation Services to enforce an oral contract that would otherwise be unenforceable under the statute of frauds. The court could enforce such a contract if:
Henry foreseeably and justifiably relied on Irrigation's promise
Laurel enters into a contract to sell her bike to Melanie. Melanie takes possession of the bike as a minor and continues to use it well after reaching the age of majority. She has
Impliedly ratified the contract
Laurel enters into a contract to sell her bike to Melanie. Melanie takes possession of the bikes as a minor and continues to use it well after reaching the age of majority. She has
Impliedly ratified the contract
Alice and Bart enter into a contract for the sale of Canyon Ranch. To be enforceable, this contract must be
In writing or evidenced by written memorandum
Leon Contracts to install automatic watering thoughts in Kendell's dairy barn. Leon then becomes seriously ill and contracts with jake to install the troughs. Jake is unreliable and never shows up to install the troughs. In most states, Kendal can sue:
Jake or Leon
Field Construction, Inc., contracts with Mesa Ranch to build a new horse barn on Mesa's property for which Mesa agrees to pay. The elements of this, and any other, contract include
Legality
Lucas orally agrees to sell his Mountain Spring Beverage Company to Natural Soft Drinks, Inc. Lucas notes the terms on a sheet of Mountain Spring stationery and signs it. This agreement is most likely enforceable against
Lucas
Lucy agrees to work for Mung Manufacturing, Ltd., as a Chinese/ English/ French translator. In determining whether an employment contract has been formed, which of the following would the court be least likely to consider?
Lucy's language capabilities
Dana believes that a new phone to be sold by Ear Fruit Inc. will become the most popular phone in the global market. Dana enters into a contract to buy 500 shares of Ear Fruit stock, anticipating an increase in its value. The phone does not become popular, and the price of the stock does not rise. Dana can recover
Nothing
Rosa, a seventeen-year-old, signs a contract to sell her car to Street Fleet Cars. Later, Rosa decides not to sell the car. Rosa is liable to Street Fleet for
Nothing
Business Properties, Inc. (BPI), offers to sell a cold storage warehouse to Corporate Investments. Corporate says that it will pay BPI $100 to hold the offer open for three business days. This
Makes the offer irrevocable for 3 days if BPI accepts.
Bob wants to sell his recreational vehicle (RV) for $21,000. He e-mails Curt with an offer, but mistakenly types that the price is $20,100. Curt accepts the offer and pays Bob $20,100. Bob
Must deliver the RV
Nate promises to pay for dental services provided by Otto to Polly. Nate receives no personal benefit for the promise. To be enforceable, the promise must be in writing if
Nate promises to pay only if Polly does not pay
An ad on the NewsNow Web site asks viewers to "send us your story and we might share it with the world." Ollie submits a manuscript, adding, "I accept your offer." Between NewsNow and Ollie, there is
No contract
Shannon signs a contract with Tevin, an unlicensed contractor in a state that requires all contractors to be licensed for safety reasons, to build a deck and gazebo at the rear of her house. This contract is enforceable by
No one
Geri is a minor. Without her parents' knowledge, she signs a contract to buy an airline ticket to Hawaii for spring break. Geri's parents are liable for
No part of the price of the ticket
Global Enterprise enters into a contract with HealthCare Insurance to obtain insurance for Global employees. HealthCare breaches the contract and Global is awarded compensatory damages. The purpose is to
Provide Global with funds for its loss of the bargin
Air Flo, Inc., and Banyan Grove Apartments enter into an oral contract in which Air Flo agrees to provide air-conditioning and heating maintenance for Banyan Grove's facilities for two years. This contract is enforceable by
None of the choices
Stan, a salesperson for Trucks & Autos, promises Uri a certain car will give him a "smooth ride." Stan offers a test drive, which Uri declines. He buys the car but soon realizes its suspension is in poor condition. Uri can rescind the contract on the ground of
None of the choices.
Emma, a minor, buys a water bottle, a set of weights, and a treadmill from Fitness Warehouse. Later, Emma disaffirms the deal. If the goods are still in her possession or control, she can keep
None of the goods
Maya tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nero, a passerby who owns Nero's Motors, hands Maya $10. This is:
Not a valid acceptance because Maya does not seriously intend to sell.
Rhonda asks Steve, "Do you want to buy me to repair your fishing net?" This is
Not a valid offer because the terms are not definite.
Pastries, Inc., sends its catalog to Rollo and includes a "personalized" letter inviting the purchase of any item at the advertised price. This is
Not an offer
Idina admires Jule's collection of guitars. Jules says, "I plan to sell the collection when I get tired of it." Jule's statement is:
Not an offer because Jules expressed only an intent to enter into a future contract.
Idina admires Jules's collection of guitars. July says, "I plan to sell the collection when I get tired of it." Jules's statement is
Not an offer because July expressed only an internet to enter into a future contract.
Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on—a local law prohibits construction on the rest of the property. Ralph can
Not avoid the contract because persons are assumed to know the law.
Intoxicated and not aware of the consequences, Grady agrees to a two-year phone service contract with Horizon, Inc., at more than the average market price. This contract is
Not enforceable if Grady was intoxicated enough to lack mental capacity.
Carlos and David contract for the sale of five hundred head of Carlos's cattle for $95 per head. Unknown to either party, an unforeseen storm has struck the herd and many of the cattle have died. David is
Not required to pay due to the bilateral mistake
Dix agrees to sell Eli, for $1,500, a remote parcel of land. They believe the land to be worthless, but beneath it is shale rock containing oil. A court would
Not rescind the contract
Lewis tells a representative of Musical Instruments, Inc., that he will pay for Nora's trumpet if she does not. Lewis does not secure any personal benefit for this promise. This promise is enforceable as a contract
Only if it is in writing
In selling a 300 acres of rural land to Organic Farms, Peyton tells the buyer that the land "will be worth twice as much by next year." This is
Opinion
The requirements of a contract do not include
Practicality
Builders, Inc., agrees to construct an office building for Champ Fitness Clubs, Inc. The project proceeds according to plan, but before it is done, Champ tells Builders to quit. Builders may recover
Profits plus the costs incurred up to the time of the breach
Ross promises to pay Sara, his niece, $5,000 if she obtains her degree at Tech University, where she is in her third year. Sara graduated. Ross is:
Required to pay because Sara obtained a degree at Tech.
Moe threatens physical harm to force Norel to contract to pay him for protecting her store against vandalism and destruction. Norel may
Rescind the contract or refuse to comply with its terms.
Gina, a minor, enters into a contract to buy a tractor from Herb, an adult. The deal is set aside. Restoring Herb to the position he held before the contract is the duty of
Restitution
Green River Gas Company offers to sell Far East Energy, Ltd., a certain quantity of liquefied natural gas. If Far East sends an acceptance via Green River's authorized mode of communication, it will be effective when it is
Sent
Ray promises to give Steve his iPod in exchange for Steve's promise to pay Ray $50. Later, they exchange the device for the funds. A contract was created when
Steve promised to pay Ray for the iPod
Ready Repair Service enters into a contract to fix washers and dryers in Scrub n' Dry Company's coin-operated laundries. If Ready Repair breaches by only partially performing the contract, Scrub n' Dry can
Sue Ready Repair for compensatory and consequential damages
Retail Outlets, Inc., contracts with Smooth Paving Inc. to grade and pave a parking lot. Smooth assigns the contract to Tough Road Company, which has a poor record of completing projects. Retail could most successfully argue that the contract cannot be assigned because
The assignment will materially increase the risk of nonperformance.
Porches & Verandas, Inc., agrees to build a screen porch for Quinn, but fails to complete the job. Quinn hires Ramadas, Inc., to finish the project. Quinn may recover from Porches & Verandas
The costs needed to complete construction
Handicrafts & Hobbies Store agrees to hire Iliana for one year at a salary of $600 per week. When Handicrafts & Hobbies cancels the contract, Iliana spends $150 to obtain a similar job that pays $450 per week for a year. Iliana is entitled to recover
The difference between the wages at the two jobs plus $150.
In an exchange of e-mails, Rob, a landlord, and Sam agree to a lease of a certain apartment for one year. Under the Statute of Frauds, this lease is enforceable provided
The e-mail is signed by the party against whom enforcement is sought.
Ben makes an appointment for a $50 haircut, buys a bike for $250, and agrees to work for Coding Associates for one year for $5,000 per month, starting at the beginning of next month. To be enforceable, a writing is required for
The employment agreement
Mark fails to reveal a material fact in a business deal with Nancy. This constitutes fraud if
The facts concerns a serious defect known to Mark but not to Nancy.
Lestor and MaryElise enter into a contract. Lestor agrees to mow MaryElise's yard every week for the summer. MaryElise is
The obligee
Jan tells Lee she will give him her old car if he babysits her son Mark weekday evenings for six months. Lee agrees. Jan and Lee have formed a. a bilateral contract. b. a unilateral contract. c. a void contract. d. an unenforceable contract.
a. a bilateral contract.
Moe asserts that a deal he entered into with Nina to sponsor and host a motivational conference for independent sales representatives is an unenforceable contract. Defenses to the enforcement of a contract include
The lack of a party's voluntary consent
Tile & Grout (T&G) contracts to resurface the insides of the pools at Water Park. T&G knows that without the resurfacing, Water Park will have to delay its seasonal opening. T&G does not perform as promised. As consequential damages, Water Park can recover
The loss of profit from the delayed opening
Elena, a minor, obtains fruits and vegetables on credit from Fred at Growers' Market. Later, Elena disaffirms the purchase. She owes Fred
The reasonable value of the goods
Susie makes the offer "I sell you my mirror for $300" to Alice. Alice responds "I accept if you throw in two brushes for $5 more
There is no agreement because of the "mirror image" rule
Under the UCC, an agreement modifying a contract needs no consideration to be binding.
True
Under the UCC, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.
True
When an anticipatory repudiation occurs, it is treated as a material breach of a contract.
True
A collateral promise is one made by a third party to assume the debts or obligations of a primary party to a contract if that party does not perform.
True
A contract in which a party assumes a secondary obligation normally must be in writing to be enforceable.
True
A contract not to compete is enforceable only if it is reasonable in duration and geographic area___________.
True
A counteroffer is a rejection of the original offer and the simultaneous making of a new offer.
True
A liquidated damages provision specifies that a certain amount is to be paid in the event of a future default or breach of contract.
True
A material fact is a fact that a reasonable person would consider important when determining his or her course of action.
True
A price list is an invitation to negotiate
True
A promise by one party to pay another for refraining from an action that one has a legal right to undertake is enforceable
True
A sellers attempt to conceal a fact that is material to a contract can give rise to an action for fraud:
True
A transfer of contact rights to a third party is an assignment.
True
All states require that members of certain professions obtain licenses allowing them to practice.
True
An "assignment of all rights" creates an assignment of rights and a delegation of duties.
True
An "offer" to sell an item on an online auction site generally is treated as an invitation to negotiate.
True
An innocent party can rescind a fraudulent contract and be restored to his or her original position.
True
An intended beneficiary can sue directly to enforce a promisors promise.
True
An unilateral contract is formed at the moment when the contact is performed.
True
Any contract to commit a crime is unenforceable.
True
Because fraud actions necessarily involve wrongful conduct, courts may award punitive damages.
True
Common law governs all contracts except sales and leases
True
Contractual capacity refers to the legal ability to enter into a contract.
True
Disaffirmance is the legal avoidance, or setting aside, of a contractual obligation.
True
Essentially, adequacy of consideration concerns the fairness of the bargain.
True
Executed contracts are presumed ratified.
True
Forbearance is the act of refraining from doing something that one has a legal right to do.
True
If a minor disaffirms a contract, he or she must disaffirm the entire contract.
True
If a party against whom enforcement of an oral contract is sought admits under oath that a contract for sale was made, the contract will be enforceable:
True
If a person has been determined by a court to be mentally incompetent, any contract entered into by that person is void.
True
If a voidable contract is ratified, the parties must fully perform their respective legal obligations
True
If one of the wrongdoers in an illegal contract is unjustly enriched at the expense of the other, the courts are usually not concerned.
True
In an assignment, the assignee obtains only those rights that the assignor had:
True
In contract law, ratification is the act of accepting and giving legal force to an obligation that was previously not enforceable.
True
Many courts have broadened the concept of unconscionability to apply it in situations other than sales of goods.
True
Privity of contract establishes the basic concept that third parties have no rights in contracts to which they are not parties:
True
Reformation occurs when a court alters the terms of a contract to reflect the true intent of the parties.
True
Scienter clearly exists if a party knows a fact is not as stated.
True
The Statute of Frauds operates as a defense to the enforcement of an oral contract for the sale of land.
True
The requirement for an effective offer is a serious intent on the part of the offeror.
True
The statute of frauds operates as a defense to the enforcement of an oral contract for the sale of land.
True
Laramie contacts to provide cattle-herding services to Miles for $1,400 per month. Laramie cannot transfer this duty.
Without continuing to be potentially liable
Fresh Service, Inc., offers to deliver produce to Growers' Market's customers for a certain price. Fresh's intent to extend a serious offer to Growers' Market is determined by reference to Fresh's
Words and conduct
Organic Farms Company contracts to buy two tracts of land from Prime Bottomland, Inc. Both parties believe that the two tracts are adjacent, but in fact they are not. Prime Bottomland is still willing to sell the land, but under these circumstances the deal would adversely affect Organic Farms.
a. a bilateral mistake.
Refer to Fact Pattern 15-3. If Doyle and Ezra are both ignorant of the mistake, it is a. a bilateral mistake. b. a fraudulent misrepresentation. c. a unilateral mistake. d. unconscionable.
a. a bilateral mistake.
Bill and Charlene enter into a contract for the clearing, plowing, and preparing of Charlene's 100-acre tract for which she agrees to pay $1,000. Bill transfers his duty under this contract to Dewey. Dewey is a. a delegatee. b. an assignee. c. an obligee. d. a delegator.
a. a delegatee.
Brock enters into a contract with Casey's Coin-op Laundry to move a suite of dryers from one of Casey's locations to another. Brock subsequently transfers this duty to Darin. Darin is a. a delegatee. b. an obligee. c. a third-party beneficiary. d. an assignee.
a. a delegatee.
Refer to Fact Pattern 18-1. Natalie's performance is most likely a. a material breach. b. a minor breach. c. a reasonable breach. d. no breach.
a. a material breach.
After an accident with a vehicle licensed to Guardian Security Company, Heidi signs a covenant not to sue Guardian Security for damages in a tort action if it pays for the damage to her car. This covenant is
a bar to recovery if Guardian Security pays
Jana tells Levi she will give him an Xbox if Levi promises to do Jana's chores for a month. Levi promises to do the chores but has not yet begun to do them. Jana and Levi have formed a. a bilateral contract. b. a unilateral contract. c. an unenforceable contract. d. a void contract.
a bilateral contract
If Doyle and Ezra, are both ignorant of the mistake, it is:
a bilateral mistake
Market Company and Nick enter into a contract for Nick to cut and trim the landscaping around Market's building before a meeting of the company's sales staff. When Nick's schedule conflicts, he asks Otis to do the cutting and trimming. This transfer of duties is
a delegation
Uri and Victor enter into a contract by which Uri promises to deliver business cards, advertising banners, and other marketing materials to Victor. Uri later transfers his duty under the contract to Wren. Uri is
a delegator
Ranchland properties and Prairie State Investments sign a written contract for a sale of land. In some states, to be enforceable, this contract must include.
a description of the land.
A letter-of-credit agreement between Rural Feed Corporation and Soy Farms, Inc., requires Rural's bank to pay Soy on receipt of invoices. This is a. a formal contract. b. an implied contract. c. a quasi contract. d. an informal contract
a formal contract
Jeff is seventeen years old. Legally, Jeff is considered__________.
a minor
Drainage & Irrigation Equipment, Inc., contracts to sell its assets to Earth & Sky Aquatic Corporation. Before either party has performed, rescission of this contract requires
a mutual agreement to rescind.
Foster promises to buy Gideon's trumpet for $75. Gideon is
a promise
Rebecca hires Samson to perform music at Becca's Bistro, but he breaches the agreement to accept a higher-paying job at Three Courses Dinner Theater. Rebecca files a suit against him. The court will most likely
award damages to Rebecca.
Oxley contracts to buy a pizza oven from Restaurant Supplies Warehouse (RSW) for $2,500, but RSW fails to deliver. Oxley buys the appliance else-where for $3,500. Oxley's measure of damages is a. $1,000. b. $1,000 plus incidental damages. c. incidental damages only. d. $0.
b. $1,000 plus incidental damages.
Cow's Milk Creamery, Inc., needs a certain part for its pasteurizing equipment to continue its operations and orders one for $3,000 from Dairy Supplies Company. Cow's Milk tells Dairy Supplies that it must receive the part by Tuesday or it will lose $10,000. Dairy Supplies ships the part late. Cow's Milk can recover a. $13,000. b. $10,000. c. $3,000. d. $0.
b. $10,000.
Chet, a minor, signs a contract with Denise, an adult. The contract is voidable at the option of a. neither party. b. Chet only. c. either party. d. Denise only.
b. Chet only.
Daredevil Rides Inc. owes debts to Equipment Repair Company and Food Supplies, Inc. Equipment orally agrees to assume Daredevil's debt to Food to prevent the concessionaire from filing a suit against Daredevil. This agreement is enforceable by a. none of the choices. b. Daredevil, Equipment, or Food. c. Daredevil only. d. Equipment only.
b. Daredevil, Equipment, or Food.
Contractors Service, Inc., enters into a contract to build a restaurant for Dierdre's Soup Spoons Bistro with Dierdre's payment due on August 1. On August 1, her bank is closed, and for this reason, she claims that she cannot pay on time. In this situation a. Dierdre's bank is liable to Contractors Service. b. Dierdre is in breach of contract. c. the contract is discharged. d. the contract is suspended.
b. Dierdre is in breach of contract.
Flo agrees to assume a debt owed by Guitars Inc. to Home Bank. The agreement is not in writing. To be enforceable under the "main purpose" rule, the promise must be for the benefit of a. any third party, such as a Guitars Inc. customer. b. Flo. c. Guitars Inc. d. Home Bank.
b. Flo.
Pumps, Inc., agrees to assume a debt of Quality Parts Company to Reliable Finance LP. The agreement is not in writing. To be enforceable, the promise must be for the benefit of a. all of the choices. b. Pumps. c. Quality. d. Reliable.
b. Pumps.
Jeff is seventeen years old. Legally, Jeff is considered a. an adult. b. a minor. c. ratified. d. emancipated.
b. a minor.
Ren offers to pay Sara to pick up and deliver certain business documents within thirty minutes. Sara can accept the offer only by completing the task within the deadline. If she does, Ren and Sara will have a. a bilateral contract. b. a unilateral contract. c. a void contract. d. an executive contract.
b. a unilateral contract.
Wilson buys a lottery ticket. Wilson has accepted an offer for a. a bilateral contract. b. a unilateral contract. c. a void contract. d. an unenforceable contract.
b. a unilateral contract.
Omar and Penn want to discharge their contract by executing a new agreement with performance different from what they originally promised. They can best accomplish this by a. a mutual agreement to rescind. b. an accord and satisfaction. c. a novation. d. an alteration of the original contract.
b. an accord and satisfaction.
Merry Music Inc. and Nina enter into a contract for Nina to write six songs for which Merry Music agrees to pay her. Nina transfers her right to payment under the contract to Omni Artists Agency. In the transfer of rights, Nina is a. a delegator. b. an assignor. c. an obligor. d. a third party beneficiary.
b. an assignor.
Bo signs a lease with Capri Apartments to lease a studio apartment for the next year for $650 per month. Daisy signs on Capri's behalf. Bo and Capri have a. no contract. b. an express contract. c. an implied contract. d. a simple contract.
b. an express contract.
Flo tells Ginger during a phone call that she will buy her textbook from last semester for $65. Ginger agrees. These parties have a. no contract. b. an express contract. c. an implied contract. d. a quasi contract.
b. an express contract.
Marketing Inc. offers to create a campaign to increase N'Ice Creamery, Inc.'s online business. N'Ice agrees to pay for the service. These parties have a. no contract. b. an express contract. c. an implied contract. d. a quasi contract.
b. an express contract.
Vicky asks Walt, a cobbler, to repair a pair of boots. There is no discussion of a price, and Vicky and Walt do not sign any documents. After the repair, Walt hands Vicky a bill. With respect to Vicky's obligation to pay the bill, this is a. an express contract. b. an implied contract. c. a quasi contract. d. no contract.
b. an implied contract.
Even-Bilt Construction contracts to build a warehouse for Discount E-Sales Company. Even-Bilt completely performs. Discount E-Sales is entitled to
nothing more
Revocation of an offer is effective when
offeree or offeree's agent receives it
A voidable contract is one in which
one in which at least one party has the option to avoid his or her contractual obligations
Eleanor offers Flossy the amount of an investment in Flossy's start up business venture if she marries Eleanors son Glen, This promise is enforceable:
only if it is in writing
Leila enters into a contract with Metro Taxi Company to work as a cab driver. Under the plain meaning rule, if the contract's writing is clear and unequivocal, the meaning of the terms must be determined from
only the face of the instrument
In selling a 300 acres of rural land to Organic Farms, Peyton tells the buyer that the land "will be worth twice as much by next year." This is
opinion.
Adrian operates a recycled metals business and contracts to provide ten tons of scrap steel at $500 per ton to be delivered to Build-It-Rite Materials, Inc., in seven months. An unforeseen shortage of scrap steel suddenly develops, making it impossible for Adrian to fulfill the contract for less than $5,000 per ton. Adrian's best defense against performing the contract would be that
performance of the contract is commercially impracticable.
Dharma enters into a contract to manage the operations of Esther's dental office for one year, renewable for subsequent one-year terms. If this contract is discharged like most contracts, it will be
performed
Porches & Verandas, Inc., agrees to build a screen porch for Quinn, but fails to complete the job. Quinn hires Ramadas, Inc., to finish the project. Quinn may recover from Porches & Verandas
the costs needed to complete construction.
Global Outfitters Outlet and Hyacinth, a consumer, enter into a contract for a sale of ultra-weather camping gear. If the contract includes a clause that is perceived as grossly unfair to Hyacinth, its enforcement may be challenged under
the doctrine of unconscionability.
Ben makes an appointment for a $50 haircut, buys a bike for $250, and agrees to work for Coding Associates for one year for $5,000 per month, starting at the beginning of next month. To be enforceable, a writing is required for
the employment agreement
Larue buys an iPod for $150 and a new laptop for $1,200, and signs a one-year employment contract for a $4,800 monthly salary to start at the beginning of the next month. The Statute of Frauds covers
the employment contract and the laptop purchase only.
Mark fails to reveal a material fact in a business deal with Nancy. This constitutes fraud if
the fact concerns a serious defect known to Mark but not to Nancy.
OnTrack Rehabilitation Center signs an agreement with Platinum Bank to borrow $40,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest to 15 percent. OnTrack's best argument for avoiding payment to Platinum Bank is that
the law has rendered performance of the contract illegal.
