GBUS2003 - Module 2

A toy merchant's display of a doll house in a store window for $100 constitutes:

an invitation to the public to make an offer for the doll house.

Which of the following is not a true contract and has been imposed by law in order to prevent one party benefiting unfairly at another's expense?

A quasicontract

What is the difference between an agreement and a contract?

An agreement results whenever two people's minds meet on a subject, but a contract only exists when the parties intend to be legally obligated by the terms of the agreement.

Which of the following is true of a contract between two minors?

Each minor has the right to avoid the contract.

Which of the following is true of quasi-contracts?

It prevents the unjust enrichment of a party.

Kenneth, aged sixteen, sells his car to Robin, aged 49. Later, Robin sells the car to Sarah, an innocent third party, before Kenneth can disaffirm the contract. In this case, which of the following will hold true?

Sarah can obtain good title to the property.

Judy promises to pay Ashley $50 to babysit her children. After Ashley babysits the children, Judy pays Ashley the $50; thus each party has completed performance of each part of the contract. This is an example of a(n):

executed contract.

Ryan, a college student, intends to sell his car. He contacts his friend Luiz and inquires whether he is interested in buying the car. Luiz finds the quoted price reasonable and buys the car from Ryan. In this scenario, Ryan is the _____.

offeror

If an offeror receives something of value in return for a promise to hold the offer open, it is said to be a(n) ________, and this type of offer cannot be revoked.

option

The term disaffirmation refers to:

the election to avoid a contract or set it aside

If a minor contracts for necessaries, the minor's liability is quasi-contractual in nature. This means that:

the minor is not required to pay the contract price.

The failure of a party to perform the obligations assumed under a contract is known as a(n):

​breach of contract.

A _______ contract must be in a special form or be created in a certain way.

​formal

A firm offer can be best defined as:

an offer that cannot revoked for a reasonable time if no time is stated.

What precaution can a business person take when contracting with a minor?

A business person can require an adult to join the contract as a cosigner.

Which of the following is true of a binding contract?

It is created when an offeree accepts an offer that has been properly communicated.

Maya, an elderly lady, wanted to sell her house. She offered the house to Lily, a friend. However, before the house deeds were transferred, Maya passed away. Which of the following scenarios is legally acceptable in such a case?

Lily must consider the offer automatically revoked and void.

Sam and Martha sign a contract in which Sam agrees to pay a certain price and buy Martha's house. Later, Sam's brother states that Sam often has intervals of delusions and hence the contract is invalid because it has been made by an incompetent person. Sam has not been declared by the court as insane. In such a scenario, according to law, which of the following will entitle Martha to the price agreed upon in the contract?

Sam was in a sane frame of mind and understood the contract when he signed it

An enforceable contract is made by an adult with a minor. Which of the following is most likely to hold true in this case?

The contract is enforceable against the adult but not against the minor.

An offeree's inquiry about the terms of an offer that differ from the offeror's terms will have what effect?

The inquiry will not reject the offer, and if the offeror says no, the original offer may still be accepted if it has not been revoked.

Which of the following conditions is a prerequisite for any agreement to be legally enforceable?

The parties entering into the agreement must have the mental capacity to contract

An offeree's response that rejects an offer by varying its terms is known as a(n) _____.

counteroffer

Which of the following is true of a valid offer?

​It is seriously intended.

Which of the following best describes the term "recognizance"?

​It refers to the obligations that people enter into before a court to do an act required by law.

Contracts made by people who have become so intoxicated that they cannot understand the meaning of their acts are:

​voidable