Legal Environment Test 3 Mindtap (Chapters 13-16, 18,19)
A police officer who finds a missing child as part of his duties may not collect any reward for finding the child. Why? Because the officer did not accept the offer prior to finding the child. Because the officer already had a pre-existing duty to do so. Because the officer did not promise to perform the act. Because the reward is not a valid offer.
Because the officer already had a pre-existing duty to do so.
Which mistake is likely to be voidable? Unilateral mistake A prediction mistake Bilateral mistake Mistakes of Value
Bilateral mistake
What must a party show to win a substantial performance lawsuit? Choose 2 answer choices. The breach caused no monetary damages. He or she acted in good faith. There were no deviations from the contractual requirements. The breach was not intentional.
He or she acted in good faith AND The breach was not intentional.
What is the difference between commercial impracticability and frustration of purpose? Choose 2 answer choices. One focuses on the challenges in performing the contract. One focuses on the reasons why the parties entered into the contract. One focuses on the financial positions of the parties. One applies only to contracts between businesses and not to contracts between a business and a consumer.
One focuses on the challenges in performing the contract AND One focuses on the reasons why the parties entered into the contract.
Korbyn enters into a contract with Peyton to sell Peyton a 1956 roadster. The contract has a condition precedent that the roadster will pass inspection by an independent appraiser, verifying that the roadster contains all original parts and is in good working order. This contract provision means that: Peyton is not required to perform under the contract until the appraisal is complete. Peyton must have the appraisal completed within thirty days of performing the contract and provide the results to Korbyn. if the appraisal is not satisfactory to both parties, the contract price will be adjusted accordingly. Peyton must pay for the roadster at the time of contracting, and Korbyn will then order the appraisal.
Peyton is not required to perform under the contract until the appraisal is complete.
What factors may cause a person to lack contractual capacity? Choose 3 answers. mental incompetence severe intoxication being under the age of majority (usually 18) being an emancipated minor
mental incompetence AND severe intoxication AND being under the age of majority (usually 18)
What is the principle that is applied to determine how much compensation a party receives in a quasi-contract settlement? de facto justification quantum meruit bona fide reliance quasi benefit
quantum meruit
Specific performance is a remedy which is always available in: sales contracts. personal services contracts. real estate contracts. contracts which take at least one year to perform.
real estate contracts.
A contract for an illegal purpose is: dischargeable. void. voidable. enforceable as a quasi-contract.
void.
An agreement will lack consideration if: a person settles a disputed claim through an accord and satisfaction. a person makes a promise in return for an act which has yet to take place. a person makes a promise in return for an act which has already taken place. a person performs an act required by an offer.
a person makes a promise in return for an act which has already taken place.
Which of the following is legally sufficient consideration? Choose 2 answers. a promise to do a legal act a promise maybe pay money in the future forbearance of a legal act forbearance of an illegal act
a promise to do a legal act AND forbearance of a legal act
What is the term for when a party to a contract performs his duties exactly according to the terms of the contract? substantial performance perfect performance specific performance strict performance
strict performance
If Ramona changes her will at age 88 to leave the bulk of her fortune to her home health care nurse instead of her children, what factor will the courts consider in judging whether or not her will is valid? undue influence mistake duress fraudulent misrepresentation
undue influence
Which of the following may constitutes duress? (Choose 2 answers.) threatening to sue someone threatening to financially harm someone threating to boycott a company threatening to physical harm someone
threatening to financially harm someone AND threatening to physical harm someone
Melissa felt pressured into signing a contract that released her employer from any liability if she is injured on the job. What prohibited behavior under public policy could this be? Substantive Unconscionability Exculpatory Clause Restraint of Trade Procedural Unconscionability
Exculpatory Clause
You collect antiques and regularly travel the country looking for good deals. In your wanderings, you find an old fiddle and offer the owner $5. The owner accepts, and you take your treasure home. After you get the fiddle home and do your research on it, you discover the fiddle is actually worth $5,000. What a find! What do you think would happen if the owner tried to cancel the contract and get the fiddle back? Mutual mistake is not a valid defense to a contract, so the owner could not get his fiddle back. Mistake of value is a valid defense to a contract, so the owner could get his fiddle back. Mutual mistake is a valid defense to a contract, so the owner could get his fiddle back. Mistake of value is not a valid defense to a contract, so the owner could not get his fiddle back.
Mistake of value is not a valid defense to a contract, so the owner could not get his fiddle back.
What is the result of a contract in which both parties are wrong about a material fact of the contract? The contract is void. The contract is voidable. The contract is enforceable by both parties as both parties assumed the risk in making the contract. The contract must be nullified and renegotiated.
The contract is voidable.
Courts may reform a contract: to reflect the parties' true intentions. to bring consideration up to fair market value. to make any illegal provision into a legal one. to correct a lack of consideration.
to reflect the parties' true intentions.
To succeed on a promissory estoppel claim, and plaintiff must show: (Select all that apply) the defendant knew the plaintiff would rely on the promise. the plaintiff received a benefit from the defendant the plaintiff relied on the defendant's promise. the plaintiff expected payment from the defendant. the defendant made a promise to the plaintiff
the defendant knew the plaintiff would rely on the promise AND the plaintiff relied on the defendant's promise AND the defendant made a promise to the plaintiff
Isabel is 17 years old and wants to stop paying for the use of the local gym, but wishes to continue teaching classes. Her contract with the company includes terms regarding her employment and use of the facility. What must she do to properly disaffirm the contract? Choose 2 answer choices. Isabel must disaffirm both the gym membership obligations and the employment terms in the contract. Isabel must let gym staff know she is terminating the contract. Isabel can choose to disaffirm the gym membership portion of the contract and retain the employment terms. Isabel must wait until she turns 18 to disaffirm the contract.
Isabel must disaffirm both the gym membership obligations and the employment terms in the contract AND Isabel must let gym staff know she is terminating the contract.
What is the difference between legal remedies and equitable remedies for breach of contract? Equitable remedies are only available in quasi-contract, while legal remedies are available in all other types of contracts. Equitable remedies are monetary, while legal remedies are non-monetary. Legal remedies must be applied by the courts, while equitable remedies can be written into the contract. Legal remedies are monetary while equitable remedies are non-monetary.
Legal remedies are monetary while equitable remedies are non-monetary.
Which statement is true about the ability of minors to enter into contracts? A minor cannot legally enter into contracts. A minor may enter into a contract but must ratify it within one year of the date of the contract. A minor may enter into a contract only if the minor has an adult co-signer. A minor may enter into any contract an adult can, except for contracts that are expressly prohibited for minors.
A minor may enter into any contract an adult can, except for contracts that are expressly prohibited for minors.
Why is a court unlikely to grant a remedy for specific performance when a contract for personal services is breached? Because people to perform personal services are easily found in the market place. Because monetary damages will always be fair and equitable. Because no personal service is unique. Because it is tantamount to court ordered involuntary servitude.
Because it is tantamount to court ordered involuntary servitude.
Would one party's mistaken belief about the law governing a contract be enough to rescind the contract? Yes, even if the other party had no knowledge about the mistake. Yes, because it is a mistake about the law. No, because a mistake about the law is not factual. No, because it is unilateral and concerns the law.
No, because it is unilateral and concerns the law.
Fred and Wilma enter into a contract for horse riding lessons. Fred accidentally types the price for lessons to be $4.00 each instead of $44.00 each. Wilma wishes to enforce the contract at $4.00 per lesson. Which remedy would be most effective? Specific performance Injunction Reformation Rescission
Reformation
What are the legal differences between a material breach and an immaterial breach of contract? Choose 2 answer choices. The level of the performance of the contractual obligations The dollar amount of damages Whether a party has announced repudiation of the contract Whether the court will discharge the contract
The level of the performance of the contractual obligations AND Whether the court will discharge the contract
Why would parties use accord and satisfaction regarding a negotiable instrument? Choose 2 answer choices. Accord and satisfaction is a legal method to force both parties to perform the terms of the original instrument. The parties might wish to avoid a lawsuit. The parties could use it as a first step to filing a lawsuit. The parties could wish to end the obligation without further conflict.
The parties might wish to avoid a lawsuit AND The parties could wish to end the obligation without further conflict.
Manuel contracts to sell a painting that was painted by his deceased grandmother, then has a change of heart and decides to hang it in his own bedroom. He notifies Nadine, the person who had planned to buy it. Can Nadine have the contract enforced? Yes, it can be enforced under the equitable remedy of specific performance. No, it can't be enforced because Manuel canceled the contract before it was executed. Yes, it can be enforced under the theory of quasi-contract because Nadine had relied on Manuel's promise. No, it can't be enforced because this is of a personal nature, and Manuel retains the rights to the painting.
Yes, it can be enforced under the equitable remedy of specific performance.
What is an example of commercial impracticability? The parties work to modify a contract and cannot come to an agreement. Tariffs quadruple on a key raw material, making the manufacturing of a product very expensive. Oil prices increase, making delivery obligations under a contract more expensive. One of the parties no longer needs the product or service required by the contract.
Tariffs quadruple on a key raw material, making the manufacturing of a product very expensive.
Restitution is an appropriate remedy when: (Select three) an injunction is necessary. a contract has been breached. a contract has been rescinded. when the parties never had a contract.
a contract has been breached AND a contract has been rescinded AND when the parties never had a contract.
Reformation of a contract is considered: a legal and an equitable remedy. a quasi-remedy. an equitable remedy. a legal remedy.
an equitable remedy.
When may a contract be modified? at any time, if the contract is oral at any time, if the parties are in agreement never only before it is signed by all parties
at any time, if the parties are in agreement
What remedies are available in the case of a unilateral mistake in making a contract? Choose 2 answers. enforcement rescission punitive damages reformation
rescission AND reformation
Rescission of a contract will: forces the breaching party to pay a penalty fee for imperfect performance. transform unenforceable terms into enforceable ones. return the parties to the position they were in before the contract was formed. force the breaching party to perform their end of the bargain.
return the parties to the position they were in before the contract was formed.
What is the standard to which most personal satisfaction contracts must adhere? Choose 2 answers. satisfaction of the receiving party (buyer) satisfaction of the performing party (seller) satisfaction of a reasonable person satisfaction of an expert third party
satisfaction of the receiving party (buyer) AND satisfaction of a reasonable person
Ellen offers to sell her 1997 Mustang convertible to Fred for $2,000. Fred agrees to pay $2,000 for Ellen's Mustang. Before Fred picks up the Mustang, Ellen discovers that the Mustang is considered a classic car and is worth much more than $2,000. Ellen refuses to sell the Mustang to Fred, stating that the consideration is insufficient. If Fred tries to enforce the deal by taking Ellen to court: the court would probably enforce the deal because there was valid consideration on both sides. the court would probably not enforce the deal because there is no consideration flowing from Ellen to Fred. the court would probably enforce the deal because the amount of consideration is never an issue. the court would not enforce the deal because $2,000 is too low to be valid consideration.
the court would probably enforce the deal because there was valid consideration on both sides.
A quantum meruit remedy is equivalent to: an equitable remedy. a reliance interest. the reasonable value of the agreement. an expectation interest.
the reasonable value of the agreement.
In what situation could a party enforce strict performance? When the parties specifically agree to it in the contract The plaintiff received sufficient benefit and the difference can be compensated with monetary damages When the requirement is reasonable When one of the parties did not act in good faith
When the parties specifically agree to it in the contract AND When the requirement is reasonable
You own a lawn care service. A new customer calls and asks that you mow and weed eat her lawn. You tell her the price will be $150 and she agrees. You show up while she is at work and get the lawn mowed and the weed eating done by the time she gets home. Unfortunately, when she gets home, you discover that you have serviced the lawn of your customer's next-door neighbor instead of hers! Do you think you have any chance of getting any money from the neighbor for the services you have provided? No, but you can collect the money from your new customer. Yes, the neighbor will have to pay you a reasonable price (not necessarily the contract price) for the work. No, because you did not have a contract with the neighbor. Yes, the neighbor will have to pay you the contract price because you performed the work.
Yes, the neighbor will have to pay you a reasonable price (not necessarily the contract price) for the work.
You agree to paint your neighbor's house for a certain price. You get ninety percent of the painting done and then have to leave town for your real job. Your neighbor is pretty mad because you didn't finish the job, and says she is not going to pay you a penny! What do you think will happen when you try to collect payment from your neighbor for painting her house? You will probably receive nothing because you did not finish the job. You will probably receive the cost of your materials. You will probably receive the full contract price. You will probably receive the price you agreed on, less the amount it will take for her to have the painting finished.
You will probably receive the price you agreed on, less the amount it will take for her to have the painting finished.
In a contract where there was a bilateral mistake of fact: both parties misunderstood a word or term in the contract. one party misunderstood a word or term in the contract. both parties misunderstood the value of the subject of the contract. one party misunderstood the value of the subject of the contract.
both parties misunderstood a word or term in the contract.
What is the term for the legal ability to enter into a binding contract? emancipation legal capability mental competence contractual capacity
contractual capacity
Forcing a party to agree to the terms of a contract through the use of threats or blackmail is called: usury. adhesion. duress. undue influence.
duress
In January, Victor contracted with Delrita to cater a Cinco de Mayo (May 5th raised to the th power) party for 500 of his closest friends. Neither of them anticipated that their entire state would be under stay-at-home orders on May 5 due to a global pandemic. Under what principle may Victor cancel his contract with Delrita? time is of the essence commercial impossibility statute of limitations frustration of purpose
frustration of purpose
A contract for a purpose that causes the parties to violate a law is: illegal and voidable. illegal and void. illegal and dischargeable. enforceable as a quasi-contract.
illegal and void.
A creditor on a liquidated debt of $1 million may agree to take which of the following from the debtor in satisfaction of that debt? (Choose 2 answers.) 100 cents on the dollar a horse in exchange for the $1 million that is due $500,000 a promise by the debtor not to engage in any illegal behavior
100 cents on the dollar AND a horse in exchange for the $1 million that is due
Which of these contracts would be enforceable, despite the existence of a mistake? Choose 2 answer choices. Christopher agrees to sell his washer and dryer to Ella. Ella thinks the dryer uses gas instead of electricity, but she is incorrect. Christopher agrees to sell his washer and dryer to Ella. He bought them at a yard sale and the sellers told him they were new. Ella believes they are new as well and, as a result, pays a higher price. When Ella encounters problems, a friend shows her parts that are worn. Christopher agrees to sell his washer and dryer to Ella in "as is" condition. Ella thinks the set is in excellent condition and is willing to take a chance on buying it. Neither works after a few weeks of use. Christopher agrees to sell his washer and dryer to Ella. Christopher overhears Ella telling her friend that she is happy she is getting such a great deal on a new washer and dryer, although Christopher knows he has used them for a year, but he does not correct her.
Christopher agrees to sell his washer and dryer to Ella. Ella thinks the dryer uses gas instead of electricity, but she is incorrect AND Christopher agrees to sell his washer and dryer to Ella in "as is" condition. Ella thinks the set is in excellent condition and is willing to take a chance on buying it. Neither works after a few weeks of use.
Logan agrees to deliver fifty pounds of crab claws to Dominique by May 15. Dominique needs the crab claws for a wedding party that Dominique is catering on May 16, so time is of the essence of the contract. Logan contacts Dominique on May 15 and tells Dominique that the earliest Logan can deliver the crab claws is on May 17. Dominique cancels the order and quickly makes other arrangements for the wedding party she is catering. Logan then demands payment from Dominique for the full contract price, and Dominique refuses. If Logan sues Dominique for damages under the contract: Dominique will have to pay or be in breach of contract. Dominique will have to pay, but Logan must deliver the crab claws. Dominique will have to pay Logan the difference between what Logan was charging for the crab claws and what Dominique eventually paid. Dominique will not have to pay because Logan breached the contract.
Dominique will not have to pay because Logan breached the contract.
In which of the following scenarios is a court likely to order reformation of a contract? Select all that apply. Fraud by one of the parties Clerical error in the contract Mutual mistake by the parties Non-performance by one party
Fraud by one of the parties AND Clerical error in the contract AND Mutual mistake by the parties
Anwah runs an antique store that specializes in paintings and other types of artwork. Lionel visits Anwah's antique store and discovers a beautiful old painting in a gilded frame. Lionel is excited because it looks like a painting by Gomez that he saw in his art review class that is worth $5,000. Lionel asks Anwah to confirm that the painting is indeed a Gomez original. Anwah smiles and winks at him. Lionel purchases the painting from Anway for $1,500. When Lionel takes the painting to an art dealer, he discovers that the painting is not a Gomez original and is only worth $20. If Lionel tries to rescind the contract with Anwah: Lionel will not be able to rescind the contract because a mistake of value is a not a defense to a contract. Lionel will be able to successfully rescind the contract because the painting was not worth as much as Lionel believed it was worth. Lionel will be able to successfully rescind the contract because Anwah committed fraud. Lionel will not be able to rescind the contract because Anwah did not state that the painting was indeed a Gomez original.
Lionel will be able to successfully rescind the contract because Anwah committed fraud.
Which type of lack of capacity is easiest to prove? Intoxication Mental incompetence Contracting for necessities Minor status
Minor status
Geraldo is the owner/manager of Geraldo's Cleaning Service, a firm that cleans office building. Geraldo has a team of seven employees who do a fantastic job. To encourage them to keep up the good work, Geraldo tells his employees that if they continue to work hard until the end of the quarter and if he is pleased with his profits at the end of the quarter, he will give them each a $100 bonus. At the end of the quarter, the company's profits were extremely high. Will Geraldo have to make good on his promise of a $100 bonus for each employee? No, Geraldo will not have to award the bonuses because the work of the employees is not valid consideration. Yes, Geraldo will have to award the bonuses because profits were extremely high. No, Geraldo will not have to award the bonuses because his offer of a $100 bonus if he is pleased with his profits was an illusory promise. Yes, Geraldo will have to award the bonuses because the work of the employees is valid consideration.
No, Geraldo will not have to award the bonuses because his offer of a $100 bonus if he is pleased with his profits was an illusory promise.
Anna purchases a wedding dress and takes the dress to Jessica for alteration. Anna and Jessica agree that Anna will pay Jessica $75 for the alterations. After Jessica begins working on the dress, she has second thoughts. Jessica contacts Anna and advises her that the alternations will cost $150 instead of $75. Because Anna's wedding is in just two weeks, Anna reluctantly agrees. Once the alterations are completed, Anna pays Jessica the $75 originally agreed on. Is Jessica entitled to the additional $75? Yes, Jessica is entitled to the additional $75 because the original contract contained insufficient consideration. Yes, Jessica is entitled to the additional $75 because Anna agreed to it, forming a valid contract. No, Jessica is not entitled to the additional $75 because contracts cannot be altered once the terms are agreed on. No, Jessica is not entitled to the additional $75 because there is no additional consideration for the revision to the contract.
No, Jessica is not entitled to the additional $75 because there is no additional consideration for the revision to the contract.
You go out drinking and playing cards with your buddies. After you have consumed a huge amount of alcohol, you agree to sell your motorcycle to your buddy. The next morning, after you sober up, your buddy tells you what you did. Do you think your buddy can legally hold you to the deal to sell him your motorcycle? Yes, he can, even though you were so intoxicated that you could not form the mental capacity to enter into a contract, whether or not your buddy knew you were intoxicated. No, he can't, if you were so intoxicated that you could not form the mental capacity to enter into a contract, and your buddy knew you were intoxicated. No, he can't, if you were so intoxicated that you could not form the mental capacity to enter into a contract, whether or not your buddy knew that you were intoxicated. Yes, he can, even though you were so intoxicated that you could not form the mental capacity to enter into a contract, and your buddy knew you were intoxicated.
No, he can't, if you were so intoxicated that you could not form the mental capacity to enter into a contract, and your buddy knew you were intoxicated.
What does the law require for a personal service contract? The personal service requirement must be stated. The experts who will be evaluating the work must be listed so the parties are on notice in advance. A special acknowledgement by each party that the contract is a personal satisfaction contract The specific standards must be clearly delineated.
The personal service requirement must be stated.
How can the legal concepts of accord and satisfaction apply to negotiable instruments? Choose 2 answer choices. The UCC provides debtors a way to prove accord and satisfaction. Similar to bankruptcy, the debt is forgiven with accord and satisfaction. The parties can agree to discharge the instrument for less than the stated amount. Accord and satisfaction offers guidelines regarding how the parties should discharge the debt.
The UCC provides debtors a way to prove accord and satisfaction AND The parties can agree to discharge the instrument for less than the stated amount.
If the terms of an agreement seem to be very one-sided, which public policy could it be violating? Choose 2 answer choices Restraint of Trade Substantive Unconscionability Mutual mistake Duress
Restraint of Trade AND Substantive Unconscionability
What are the possible remedies for a contract formed under duress? Choose 3 answer choices. Allow duress as a defense for breach of contract. Make the contract voidable. Enforce the contract. Rescind the contract.
Allow duress as a defense for breach of contract AND Make the contract voidable AND Rescind the contract.
Gavin and Allison are having drinks after work. After several rounds, the topic of Gavin's sports car comes up. Gavin is extremely proud of his sports car and brags about it all the time. To impress Allison, Gavin offers to sell Allison his expensive sports car for $5,000. Allison jumps at the deal, because she knows the car is worth much more than $5,000. They even write the "deal" down on a napkin, and both Gavin and Allison sign the napkin. The next morning, when Allison brings $5,000 to purchase the sports car, Gavin explodes. Gavin tells Allison that he was just kidding and that he would never sell his expensive sports car for such a low price. When Allison tries to enforce the deal: Either Gavin or Allison can rescind the contract based on incapacity or ratify the contract. Neither Gavin nor Allison can rescind the contract because it is in writing. Gavin can either rescind the contract based on incapacity or ratify the contract. Allison can either rescind the contract based on incapacity or ratify the contract.
Gavin can either rescind the contract based on incapacity or ratify the contract.
Which of the following distinguishes promissory estoppel cases from quasi-contract cases? In promissory estoppel cases, there is a valid contract but not in a quasi-contract case. In promissory estoppel cases there is a promise; in quasi-contract cases there is not. In promissory estoppel cases there is never a promise, but in quasi-contract cases there are. In a quasi-contract case, the plaintiff did not expect to be paid, but in a promissory estoppel case they did.
In promissory estoppel cases there is a promise; in quasi-contract cases there is not.
What function does a severability clause serve? Choose 2 answers. It specifies what will happen with a potentially unenforceable part of a contract. It preserves the rest of the contract if one part is unenforceable. It specifies how the contract will be terminated. It sets the amount of damages to be paid if one party breaches the agreement.
It specifies what will happen with a potentially unenforceable part of a contract AND It preserves the rest of the contract if one part is unenforceable
Jamal purchases a refrigerator from Appliances For You under an installment agreement. The price of the refrigerator is $1,500. Jamal is required to pay very low monthly payments, but the payments are to be made over a period of several years. By the end of the contract, Jamal will have paid $12,000 for the refrigerator. Jamal signs the agreement anyway, because he really needs a refrigerator. If Jamal later tries to rescind the contract: Jamal may rescind the contract because the contract is illegal on its face. Jamal may rescind the contract because it is a contract of adhesion. Jamal may not rescind the contract because it is in writing. Jamal may not rescind the contract because it meets all the requirements of a valid contract for the sale of goods under the U.C.C.
Jamal may rescind the contract because it is a contract of adhesion.
Lupita enters into a contract with Faith to purchase a used car. At the time they sign the contract, Lupita appears to be very intoxicated. Faith notices this but signs the contract anyway. If Lupita later decides she wants to get out of the contract: Lupita cannot get out of the contract if both parties signed it. Lupita can raise the issue of undue influence, because Faith took advantage of Lupita while she was drinking. Lupita can raise the defense of lack of contractual capacity due to intoxication. Lupita cannot get out of the contract even though she had been drinking excessively.
Lupita can raise the defense of lack of contractual capacity due to intoxication.
Selma wants to buy Matilda's house. Selma has been admiring the house for a long time and has asked Matilda repeatedly to sell the house to her, but Matilda has always refused. Finally, Selma tells Matilda that if Matilda does not sell Selma the house, Selma will kill Matilda's daughter. Afraid for her daughter's life, Matilda signs the contract to sell the house to Selma. If Matilda later tries to rescind the contract: Matilda may rescind the contract on the grounds that she signed the contract under duress. Matilda may rescind the contract on the grounds of unconscionability. Matilda may not rescind the contract because it has all the elements of a valid contract. Matilda may rescind the contract on the grounds of undue influence.
Matilda may rescind the contract on the grounds that she signed the contract under duress.
Your friend meets you for coffee one day driving a brand new motor scooter. You immediately fall in love with it and offer them $2,000 for it. Your friend politely declines and states they paid $3,000 but goes on to say "I may sell you my scooter, if you pay $2,700." If your friend later refuses to go through on the deal, can you hold them liable for breach of contract? No, because there was never any consideration. Yes, because there was a valid offer and acceptance. Yes, because you agreed to pay $2,700. No, because the value of the scooter is not equal to the value of the agreement.
No, because there was never any consideration.
Kellen is selling a vehicle which has been previously been in an accident and which shows obvious damage. If he does not tell the buyer about the accident, has he committed fraudulent misrepresentation? Yes, because the vehicle history is a material fact. Yes, even though the damage is obvious. No, because it would be inappropriate and not justifiable for a buyer to rely on any of his representations. No, if the buyer does not ask about the vehicle history.
No, if the buyer does not ask about the vehicle history.
What are the differences between legal and equitable remedies? Choose 2 answer choices. Both attempt to reform the contract. One requires actions instead of damages. One attempts to assist one party and penalize or restrict the other party. One is monetary.
One requires actions instead of damages AND One is monetary.
Which situation would be considered sufficient consideration for a contract to exist? Alice's grandson quit smoking, so Alice promises to give him $5,000. Alice promises to give her granddaughter $10,000. Bethany is remodeling a kitchen for Tonya. Bethany tells Tonya she will finish the work within a reasonable time if Tonya pays her a bonus. Pam agrees to pay Derek $500 if he does not sit next to her in class anymore.
Pam agrees to pay Derek $500 if he does not sit next to her in class anymore.
What factors are used to judge if consideration is adequate to ensure a fair bargain? Choose 2 answers. Consideration must be a promise to pay money. Items or promises exchanged must be of nearly equal value. Promises must be made with voluntary consent. Promises exchanged may not be a preexisting duty.
Promises must be made with voluntary consent AND Promises exchanged may not be a preexisting duty.
Ruby, a seventeen-year-old, purchases a car from Smitz Used Auto Sales and agrees to pay for it over a period of twenty-four months. Ruby makes the payments for four months but then decides the car payment is too much for her limited budget. Ruby tells Smitz that she wants to stop making payments and that she wants out of the contract completely. The contract between Ruby and Smitz can be canceled by: Ruby, because she is a minor, and Ruby may keep the car. Ruby, because she is a minor, but Ruby must return the car. Smitz, because Ruby is a minor, but Smitz must allow Ruby to keep the car. Smitz or Ruby, because Ruby is a minor, and Ruby may keep the car.
Ruby, because she is a minor, but Ruby must return the car.
Which of the following elements are required to show fraudulent misrepresentation in a contract? (Select all that apply) Scienter Justifiable reliance on the fact by the innocent party Latent defect Misrepresentation of any fact Misrepresentation of a material fact Damages
Scienter AND Justifiable reliance on the fact by the innocent party AND Misrepresentation of a material fact AND Damages
What is the evaluation standard for a personal satisfaction contract? Choose 2 answer choices. Subjective personal taste Expert standards Objective, reasonable person standard Accepted standards for the area or region
Subjective personal taste AND Objective, reasonable person standard
How is substantial performance involved with the classification of material breaches versus immaterial breaches? Substantial performance involves a material breach. Substantial performance involves an immaterial breach. Anticipatory repudiation determines the status of substantial performance. Substantial performance can occur with either a material or an immaterial breach.
Substantial performance involves an immaterial breach.
What factors must be present to prove fraudulent misrepresentation in a contract? Choose 3 answers. The innocent party has justifiably relied on the misrepresentation. The defrauding party must have exerted undue influence on the innocent party. There has been an intent to deceive. A misrepresentation of a material fact has occurred.
The innocent party has justifiably relied on the misrepresentation AND There has been an intent to deceive AND A misrepresentation of a material fact has occurred.
What factors may overturn a minor's right to disaffirm a contract? Choose 3 answers. The object of the contract has been destroyed. The minor ratifies the contract after reaching the age of majority. The minor misrepresented the minor's age while engaging in business as an adult. The contract is for necessaries.
The minor ratifies the contract after reaching the age of majority AND The minor misrepresented the minor's age while engaging in business as an adult AND The contract is for necessaries.
What elements are required for an offer to be effective under the common law? Choose 3 answers. The offeror must intend to be bound by the offer. The offer must be irrevocable for a set period of time to allow acceptance. The terms of the offer must be reasonably definite so that all parties understand them. The offer must be communicated to the offeree.
The offeror must intend to be bound by the offer AND The terms of the offer must be reasonably definite so that all parties understand them AND The offer must be communicated to the offeree.
What must a plaintiff prove to show duress in the formation of a contract? Choose 2 answer choices. The plaintiff was injured or feared he or she would be injured. The plaintiff was incapable of voluntarily agreeing to the contract. The defendant committed a wrongful or illegal act. The defendant intended to harm the plaintiff.
The plaintiff was incapable of voluntarily agreeing to the contract AND The defendant committed a wrongful or illegal act.
What elements are required for courts to apply the doctrine of promissory estoppel? Choose 3 answers. There was a detrimental result from reliance on the promise. Enforcement of the promise is necessary to avoid injustice to the promisee. The promise must be definite and relied upon. There must have been consideration given with the promise. Assessment question
There was a detrimental result from reliance on the promise AND Enforcement of the promise is necessary to avoid injustice to the promisee AND The promise must be definite and relied upon.
In what situation is a minor most likely to be able to terminate a contract? When a minor lied about his or her age when making the contract When the minor purchases food When a minor orders books for school A minor entering into a marriage contract
When a minor orders books for school
Robert inherited lots of antique tools when his father died. Because Robert is not interested in woodworking, he decides to sell several of the tools. Robert agrees to sell an antique hand-held wood planer to Geoffrey for $50. After agreeing to the deal, Robert discovers that the planer is a pre-WWII Norris Jointer Planer worth over $5,000, and refuses to sell the planer to Geoffrey. Can Geoffrey enforce the deal? Yes, Geoffrey can enforce the deal because the contract contained valid consideration. Yes, Geoffrey can enforce the deal but only if Geoffrey was not aware of the true value of the planer. No, Geoffrey cannot enforce the deal because Robert was unaware of the true value of the planer. No, Geoffrey cannot enforce the deal because the amount of consideration is insufficient.
Yes, Geoffrey can enforce the deal because the contract contained valid consideration.
If a buyer agrees to purchase "all the widgets I require" and the seller agrees to sell him "all the widgets you require" is there sufficient consideration? No, because without knowing the number of widgets, there can be no bargained-for exchange. No, this is illusory. Yes, because this is an output contract. Yes, because this is a requirements contract.
Yes, because this is a requirements contract.
If unforeseen difficulties arise during the performance of a contract, may the parties change the terms of the contract without giving additional consideration? No, both parties must provide new consideration. Yes, but only if the modification is a rescission of the contract. Yes, if the modification is fair and equitable. No, at least one of the parties must provide additional consideration.
Yes, if the modification is fair and equitable.
What types of contracts violate public policy? Choose 3 answers. a contract to allow a political candidate exclusive use of billboards you own a candidate for public office paying his competitor to retire employment contracts that forbid membership in a union conducting trade with a country that is an enemy to the United States
a candidate for public office paying his competitor to retire AND employment contracts that forbid membership in a union AND conducting trade with a country that is an enemy to the United States
What type of condition specifies an event that must happen before a person is obligated to perform the duties specified in the contract? a condition subsequent a condition specific a condition concurrent a condition precedent
a condition precedent
A misrepresentation of fact may occur in a contract, by silence, when: (Choose 2 answers.) when the buyer is unsophisticated a party is under a duty to speak (such as a professional from whom the other party is seeking an opinion) when the seller knows there is an obvious defect in a product the seller knows of a serious problem that the buyer in unlikely able to discover
a party is under a duty to speak (such as a professional from whom the other party is seeking an opinion) AND the seller knows of a serious problem that the buyer in unlikely able to discover
In a bilateral contract, the consideration which supports the forming of the contract is: a past promise. an act. a past act. a promise to perform.
a promise to perform.
What are the elements of consideration? Choose 2 answer choices. a preexisting duty an exchange to which the parties agree something of value from each party past consideration
an exchange to which the parties agree AND something of value from each party
Which of the following is an equitable remedy for breach of contract? compensatory damages for having to hire extra help to correct nonconforming goods payment of the cost of cover for items not delivered on time punitive damages when a seller has repeatedly shipped unsafe goods an order for specific performance
an order for specific performance
What is the most common way that duties under a contract are discharged? frustration of purpose by performance breach by proving undue influence
by performance
Jayden is restoring a house for Jane when Hurricane Emma hits and washes out the foundations of the house. The cost for restoration has just increased by 400%. Under what principle may Jayden's obligations be excused? impossibility insurable interest commercial impracticality statute of limitations
commercial impracticality
Christiana is seventeen years old and has been emancipated. Christiana shares an apartment with a roommate and totally supports herself. Christiana purchases a stereo from Best Stereo Place, Inc. and signs an installment agreement to pay for the stereo over the next twelve months. After paying on the stereo for three months, Christiana decides she no longer wants the stereo. To avoid the rest of the payments on the stereo, Christiana can: do nothing. Because Christiana signed the contract as an emancipated minor, she has no grounds to rescind the contract. give notice to Best Stereo Place that she wishes to rescind the contract based on her minority status. ask Best Stereo Place to rescind the contract based on Christiana's minority status. just stop paying. Because Christiana is a minor, she is not required to give notice to Best Stereo.
do nothing. Because Christiana signed the contract as an emancipated minor, she has no grounds to rescind the contract.
Sylvia agrees to deliver one hundred computers to Ralph's Tech Store by Saturday. On Friday, Sylvia delivers ninety-nine computers. Ralph's Tech Store refuses to accept the shipment and accuses Sylvia of breaching the contract. By not delivering the entire one hundred computers, Sylvia: has not materially breached the contract and can recover the full contract price from Ralph's Tech Store without any further action on Sylvia's part. has materially breached the contract and must forfeit any payment for the computers. has not materially breached the contract and will be allowed the opportunity to cure by providing the one remaining computer. has materially breached the contract, and Ralph's Tech Store can sue for the amount it will take to get one more computer.
has not materially breached the contract and will be allowed the opportunity to cure by providing the one remaining computer.
Marie and Molly enter into a written contract to sell Marie's home to Molly. At the time the contract is executed, Marie tells Molly that for the last six months she has been sharing the home with a family of extraterrestrial beings. Marie states that she has asked the extraterrestrials to move out, but they won't; therefore, she is selling the family home to get rid of them and is willing to sell the home to Molly for well below market price. After the sale of the home is complete, Marie's children challenge the sales contract on the grounds that Marie did not have the mental capacity necessary to enter into a contract, even though Marie has not been declared incompetent by the courts. The contract between Marie and Molly can be rescinded: if Marie's children can prove that Marie lacked the mental capacity to comprehend the nature, purpose, and consequences of the contract. by either Marie or Molly. only if Marie's children have Marie committed. under no circumstances, because Marie was not adjudicated insane before she signed the contract.
if Marie's children can prove that Marie lacked the mental capacity to comprehend the nature, purpose, and consequences of the contract.
Dora has been in a nursing home for three years and rarely has visitors. Vanita works at the nursing home and regularly takes care of Dora. Vanita and Dora have become very close, and Dora depends on Vanita to help her with decisions about her finances. Just before Dora dies, Vanita and Dora enter into a contract to sell Dora's family home to Vanita for $20,000. The home is worth $100,000. If Dora's children try to void the contract between Vanita and Dora: the children will not be successful in voiding the contract, because there is valid consideration and the contract is in writing. the children may be able to void the contract based on undue influence. the children may be able to void the contract based on fraud. the children may be able to void the contract based on illegality.
the children may be able to void the contract based on undue influence.
Huseyin and Ashish are negotiating the details of a new garage that Ashish plans to build on Huseyin's property. They agree on the building specs, the delivery date, and a price of $25,000. Ashish draws up the contract and sends it to Huseyin to sign. Huseyin reviews the contract and notices the price is listed as $2,500 instead of $25,000. Elated at the unbelievably low price, Huseyin quickly signs the contract and sends it back to Ashish, who signs it as well. If Ashish later tries to rescind the contract due to the mistaken price: Ashish will not be successful, because parol evidence is not admissible to disprove the terms of a written contract. Ashish will not be successful, because a unilateral mistake is not a basis to rescind a contract. Ashish will be successful, because it is a mathematical mistake that Huseyin was aware of. Ashish will be successful, because the parties made a mutual mistake.
Ashish will be successful, because it is a mathematical mistake that Huseyin was aware of.
Danny hires Evelyn to install a swimming pool at Danny's home for $40,000, to be completed by June 1. Evelyn completes the job on time. When Danny inspects the pool, he discovers that Evelyn used a vinyl lining, and the contract called for a fiberglass lining. Danny refuses to pay Evelyn, stating that Evelyn breached the contract because the contract was not completed according to the specifications stated in the contract. If Evelyn sues Danny for the contract price: Evelyn will probably receive the contract price less the cost to replace the pool liner with a fiberglass liner. Evelyn will probably receive the full contract price. Evelyn will probably receive restitution for any expenses she has incurred. Evelyn will receive nothing because performance under the contract was not complete.
Evelyn will probably receive the contract price less the cost to replace the pool liner with a fiberglass liner.
Evan offers to sell his 2016 John Deere Tractor to Jorge for $30,000. Jorge accepts and promises to meet Evan on Saturday to make the exchange. On Thursday, a fire on Evan's farm totally destroys the tractor. Jorge is upset, because the price of the tractor was really good, and he knows he cannot get another one for that price. If Jorge sues Evan for breach of contract, the likely result will be that: Evan's performance under the contract will be excused due to material alteration. Evan will have to pay Jorge the difference between the sales price of the tractor and the price Jorge must pay to find a replacement. Evan must find a replacement tractor for Jorge, because the court is likely to award specific performance as a remedy. Evan's performance under the contract will be excused due to impossibility of performance.
Evan's performance under the contract will be excused due to impossibility of performance.
Otto orally agrees to install three wells for Green Space Energy over the next eighteen months. When the three wells are completed, Green Space Energy will pay Otto $10,000. After the first well is completed, Green Space Energy tells Otto that it does not want any more wells. Green Space Energy refuses to pay Otto for the first well, claiming that the contract was not in writing and, therefore, not enforceable. If Otto sues Green Space Energy to enforce the contract: Green Space Energy will not have to pay Otto anything because the contract was for real estate. Green Space Energy will have to pay Otto a reasonable price for the one well that was installed. Green Space Energy will not have to pay Otto anything, because the contract could not be completed within one year. Green Space Energy will have to pay Otto the full contract price because Green Space Energy breached the contract.
Green Space Energy will have to pay Otto a reasonable price for the one well that was installed.
LaVon contracts with Nathan for Nathan to sing at her comedy club every Friday night in July. The first Friday, the crowd loved Nathan. The second Friday, they booed him. The next week, Nathan got a better offer, so he hired his twin brother Ethan to fill in for him at LaVon's club. Can LaVon compel Nathan to perform? No, because you cannot compel performance of personal services under specific performance. No, she can't compel him because Nathan has gotten a better offer. No, she can't compel him because Ethan is an acceptable substitute for Nathan. Yes, she can compel him under the theory of quasi-contract because LaVon had relied on Nathan's promise and she has printed posters and advertisements.
No, because you cannot compel performance of personal services under specific performance.
Will a mistake in value of the subject of the contract allow a contract to be rescinded? No, if only one party was mistaken. Yes, but only if the contract is for less than $250. Yes, if both parties were mistaken. No, even if both parties were mistaken.
No, even if both parties were mistaken.
Samuel has mental competency issues. Samuel entered into a contract with Beth, but now Samuel is petitioning the court to terminate the contract. What options does the court have in ruling in the case? Choose 2 answer choices. The contract is voidable if a court has previously determined Samuel to be mentally incompetent. The contract is void if Samuel has been previously determined to be mentally incompetent. The contract is void if Samuel was incompetent at the time the contract was formed. The contract is voidable if Samuel was incompetent at the time the contract was formed.
The contract is void if Samuel has been previously determined to be mentally incompetent AND The contract is voidable if Samuel was incompetent at the time the contract was formed.
When might a contract made by a mentally incompetent person be enforceable? The incompetent person signs a second contract affirming that he understands the nature of the contract. The incompetent person has a court-appointed guardian, and that guardian is aware of the contract. The incompetent person was lucid at the time the contract was made. The incompetent person has not been declared incompetent by a court.
The incompetent person was lucid at the time the contract was made.
For which of the following contracts would a court be likely to grant a remedy of specific performance? Select all that apply. A contract for the sale of a Picasso painting A contract for the sale of land A contract for the sale of 100 plain white shirts A contract for the painting of a portrait
A contract for the sale of a Picasso painting AND A contract for the sale of land
What is the difference between a material breach and an immaterial breach? A material breach results in damages to the non-breaching party, while an immaterial breach is minor. A material breach is one for which remedies are not spelled out in the contract, while remedies for an immaterial breach are specified. A material breach is one that makes the contract commercially impracticable for the non-breaching party. A material breach is one that affects more than 50% of the product of the contract.
A material breach results in damages to the non-breaching party, while an immaterial breach is minor.
What are the types of situations that may qualify as grounds for discharge due to impossibility? Choose 3 answers. The price of the subject matter of the contract more than doubles. A party to a personal contract dies or becomes incapacitated. The subject matter of the contract becomes illegal. The specific subject matter of the contract is destroyed.
A party to a personal contract dies or becomes incapacitated AND The subject matter of the contract becomes illegal AND The specific subject matter of the contract is destroyed.
Alfred is having trouble with his car so he visits his friend Glen, who is a mechanic, for some free advice. Alfred asks Glen just to look at the car and determine what is wrong, but not to fix it. Glen looks at the car, determines the problem, and repairs the car using parts and materials he already had in his garage. Alfred takes the car out for a test drive, and it performs better than it ever has. Alfred tells Glen that because Glen fixed his car, when Alfred gets paid again he will buy Glen the new torque wrench that Glen has been wanting. A week later, Glen asks Alfred about the torque wrench, and Alfred tells Glen that he has changed his mind. If Glen sues Alfred to enforce his promise to buy Glen the torque wrench: Alfred will win because the contract between Glen and Alfred was not in writing, and therefore not valid. Alfred will win because the act of repairing Alfred's car is past consideration, and therefore no valid contract was formed. Glen will win because consideration flowed from each party, and therefore a valid contract was formed. Glen will win because all the elements required for a valid contract are present.
Alfred will win because the act of repairing Alfred's car is past consideration, and therefore no valid contract was formed.
In order for an accord and satisfaction to be valid, the debt must be: over a year old. of fair market value for the exchange that took place. liquidated. unliquidated.
unliquidated
When are covenants not to compete in employment contracts considered to be against public policy? Choose 2 answers. when the business is mostly a service business when the specified time of restraint is excessive when the business is mostly online when the geographical restriction is too broad
when the specified time of restraint is excessive AND when the geographical restriction is too broad
Jordynne was the manager of Pets-R-Us, a pet store in Southern Valley Mall. Pets-R-Us had a one-year lease, and rent payments were $2,000.00 per month. Five months into the lease, Jordynne found a better site for the pet store. She notified Southern's manager, vacated the mall, and moved her store to its new location. After two months, Southern was able to re-lease the premises to another retail store, but at a reduced rent of $1,800.00 per month. If Southern successfully sues Pets-R-Us, Southern will likely receive: nothing, because Southern was successful in obtaining a new tenant for the property. $4,000.00 in damages. $5,000.00 in damages. $14,000.00 in damages.
$5,000.00 in damages.
Ben and Jerry have an agreement whereby Ben will deliver ice cream for Jerry to all of Jerry's retail customers for the next three years. After delivering ice cream for the first nine months, Ben decides that this is not how he wants to spend his time. Ben does not want to let Jerry down, though, so he contacts his buddy Baskin about delivering the ice cream. To protect Jerry from liability, the contract that the parties need to form to transfer the rights and duties under the contract to Baskin and relieve Ben from all responsibility should be a(n): accord and satisfaction. delegation. rescission. novation.
novation
Shania offers to sell her lakefront property to Tonya for $150,000, and Tonya agrees to buy it. Tonya and Shania both sign the real estate contract, but, before they close the deal, Shania learns that a new resort is being opened on the lake. The opening of the resort will drive property prices up in the area, so Shania believes she can sell her property to someone else and get a better price on the deal. Shania tells Tonya that she has decided not to sell the property to Tonya. If Tonya sues to enforce the contract, a court will likely: award monetary damages to Tonya. grant specific performance by requiring Shania to find a comparable piece of land for Tonya at a comparable price. not enforce the contract, because people are free to choose to whom they sell their property. require Shania to go through with the sale.
require Shania to go through with the sale.
Landscape Supply agrees to provide Delta Lawn Service eight pallets of sod for the price of $260 per pallet. The agreement contains the following provision: "This Agreement may not be amended or modified except by an instrument in writing signed by the party to be charged with such amendment or modification." Delta decides it now needs 160 pallets of sod, and Landscape is willing to reduce the price to $255 per pallet because of the increased amount. Delta and Landscape can accomplish this change to the contract by: signing an amendment or rewriting the entire contract to include the changed provisions only. crossing out the incorrect language and replacing it by hand with the correct terms only. crossing out the incorrect language and replacing it by hand with the correct terms or rewriting the entire contract to include the changed provisions. signing an amendment, crossing out the incorrect language and replacing it by hand with the correct terms, or rewriting the entire contract to include the changed provisions.
signing an amendment, crossing out the incorrect language and replacing it by hand with the correct terms, or rewriting the entire contract to include the changed provisions.
