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BLAW Chapter 10

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____ of an offer must be unequivocal or definite. (A) Acceptance (B) Rejection (C) Resection (D) Consideration (E) Revelation Answer : (A)

(A) Acceptance

____ is something of value or something bargained for in exchange for a promise. (A) Consideration (B) Realization (C) Compensation (D) A bargaining chip (E) An asset

(A) Consideration

In Deschamps v. Treasure State Trailer Court, Ltd. where Deschamps was sued after he bought a mobile home trailer park and then stopped making payments on it because he claimed the seller told him the water system was in good condition when in fact it required $400,000 of repairs, the supreme court of Montana held that: (A) Deschamps had to make the full payment because his claims of reliance on verbal information were barred under the parol evidence rule (B) Deschamps did not have to make the full payment because his claims of reliance on verbal information were barred under the parol evidence rule (C) Deschamps should not have to make the full payment because there was a lack of agreement in the contract (D) Deschamps should not have to make the full payment because there was a lack of consideration in the contract (E) the original contract was void

(A) Deschamps had to make the full payment because his claims of reliance on verbal information were barred under the parol evidence rule

____ occurs when someone is "forced" to sign a contract; that is, the contract is made because of a threat that gave no sensible way out. (A) Duress (B) Fraud (C) Discomfort (D) Misrepresentation (E) none of the other choices are correct

(A) Duress

In Hinson v. N&W Construction, where Hinson submitted the low bid to N&W for plumbing work to be part of a larger construction project by N&W, but then refused to do the work when construction was started by N&W, the court held that: (A) Hinson was liable for the value of the contract because N&W relied on his verbal quote of $92,000 (B) Hinson was not liable for the value of the contract because N&W should not have relied on his verbal quote (C) a verbal quote cannot be a promise (D) Hinson was not liable because there was not a contract due to lack of proper acceptance by N&W (E) none of the other choices

(A) Hinson was liable for the value of the contract because N&W relied on his verbal quote of $92,000

Modern definitions of contracts center on: (A) a binding promise (B) lex mercatoria (C) commercial rules (D) evidence of seals (E) duties imposed by the International Convention on Contracts

(A) a binding promise

An unconscionable contract is: (A) a contract so unfair to an innocent party that the courts, in equity, will not enforce it (B) enforced if the contract is for the sale of perishable goods whose demand fluctuates widely (C) one involving public servants, such as legislators (D) one involving minors (E) all of the other choices

(A) a contract so unfair to an innocent party that the courts, in equity, will not enforce it

The freedom of contract is: (A) a hallmark of the law of contracts (B) a minor part of the law of contracts (C) not binding in most states (D) only relevant in cases involving easements (E) restricted by the Constitution

(A) a hallmark of the law of contracts

The Restatement (2d) of Contracts defines a promise as: (A) a manifestation of the intention [of a party] to act or refrain from acting in a specified manner (B) an unwritten agreement [of a party] to act or refrain from acting in a specified manner (C) a legally binding understanding between parties not to act in a specified manner that would affect the rights of others (D) the positive intention of a party not to act in a specified manner (E) none of the other choices are correct

(A) a manifestation of the intention [of a party] to act or refrain from acting in a specified manner

The general rule regarding acceptance is: (A) a reasonable acceptance is valid when sent to the offeror (B) all acceptances are valid and binding on offerors (C) acceptances are valid when received by offerors (D) an acceptance will be valid only if mailed to offeror (E) an acceptance is a void unless received by offeror within forty-eight hours of the offer

(A) a reasonable acceptance is valid when sent to the offeror

Consideration is the element of a contract that: (A) allows it to be a gift (B) prevents it from being a gift (C) gives the offeror a better deal (D) gives the offeree a better deal (E) provides the terms of contract execution

(A) allows it to be a gift

A hires B to work for his logging operation, which is dangerous work. A has B sign a contract that says that B will not sue A in the event of injuries that happen on the job. This contract, which is probably illegal is: (A) an exculpatory agreement (B) an unconscionable contract (C) a non-voidable contract (D) detrimental reliance contract (E) none of the other choices; the contract is legal

(A) an exculpatory agreement

If a company required a subcontractor it worked with to agree not to do business with any of its clients that it introduced it to unless it paid a fee, the subcontractor would likely claim the agreement was void: (A) as a contract in restraint of trade (B) as an unconscionable contract (C) as a contract with a public servant (D) as an exculpatory agreement (E) none of the other choices

(A) as a contract in restraint of trade

A transfer of contract rights to another party is: (A) assignment (B) reenlistment (C) delegation (D) termination (E) reassignment

(A) assignment

Jan owes you $500. Since you owe Bob some money, you give Bob the right to collect the money Jan owes you. This is: (A) assignment (B) delegation (C) repudiation (D) beneficiary (E) none of the other choices

(A) assignment

To transfer contract rights to a third party is: (A) assignment (B) delegation (C) repudiation (D) beneficiary (E) none of the other choices

(A) assignment

A contract is formed only when an offer is accepted: (A) by the offeree (B) by the offeror (C) by the rules of the UCC (D) by the promisor (E) none of the other choices

(A) by the offeree

Army enlistment contracts and marriage contracts are examples of: (A) contracts that minors may not disaffirm (B) contracts that minors can always disaffirm (C) contracts that anyone can disaffirm (D) contracts that minors may not enter into (E) none of the other choices are correct

(A) contracts that minors may not disaffirm

___ is the legal ability to create a contract. (A) contractual capacity (B) understanding capacity (C) real capacity (D) final capacity (E) coherent capacity

(A) contractual capacity

A transfer of contractual duties to a third party is a(n): (A) delegation (B) assignment (C) reassignment (D) termination (E) enlistment

(A) delegation

The doctrine that prevents an injustice due to the promisee's reasonable reliance on the promisor's promise is: (A) detrimental reliance (B) promissory reliance (C) forced fulfillment (D) promissory binding (E) promissory reasonableness Answer : (A)

(A) detrimental reliance

In DCS Sanitary Management v. Castillo, where a company had employees agree not to work for any competitors within 100 miles of any customer of DCS, the appeals court held that the agreement: (A) effectively put the former employees out of the cleaning business within an extensive region and so were too broad to be enforced (B) effectively put the former employees out of the cleaning business within an extensive region and so could be enforced (C) ineffectively put the former employees out of the cleaning business within an extensive region and so were too broad to be enforced (D) did not put the former employees out of the cleaning business within an extensive region and so could be enforced (E) none of the other choices are correct

(A) effectively put the former employees out of the cleaning business within an extensive region and so were too broad to be enforced

____ is an effort by a party to induce another party to enter into a contract based on false information. (A) fraud (B) duress (C) exculpatory behavior (D) dominance (E) none of the other choices are correct

(A) fraud

If parties contract via the Internet, the digital signature provided by the parties is: (A) generally presumed to be valid (B) presumed to be valid, but must eventually be backed by a written signature (C) presumed to be valid if notarized (D) not valid; the law does not accept digital signatures for contract formation (E) not valid; the law will accept digital signatures when they can be proven secure

(A) generally presumed to be valid

To make an offer, the offeror must: (A) have the intent to be bound to the contract, and that intent must be clearly expressed or manifested (B) have the intent to be bound to the contract, but need not express or manifest that intent (C) have filed a copy of the offer with the county court house (D) have written documentation of the intent (E) have known the offeree for at least 1 year

(A) have the intent to be bound to the contract, and that intent must be clearly expressed or manifested

Ads are usually considered: (A) invitations for others to submit offers to buy (B) fully binding contracts (C) partially binding contracts (D) express contracts (E) implied contracts

(A) invitations for others to submit offers to buy

An option contract requires the offeror to: (A) keep an offer open for a specified period of time (B) offer more than one option (C) keep an offer under a certain price (D) limit an offer to a certain number of offerees (E) give at least a day's notice before withdrawing the offer

(A) keep an offer open for a specified period of time

Acceptance of an offer requires ____ by the offeree. (A) knowledge of the offer (B) understanding of the offer (C) realization of the offer (D) rejection of the offer (E) consideration of the offer

(A) knowledge of the offer

The ____ evolved in commerce over the centuries. (A) law of contracts (B) law of commerce (C) law of trade (D) law of documents (E) law of freedom

(A) law of contracts

A(n) ____ is an act, or a promise to act, or the refraining from an action, such as giving up a legal right. (A) legal detriment (B) illegal detriment (C) conscientious detriment (D) neutral detriment (E) legal benefit

(A) legal detriment

19th century English courts referenced ____ when resolving contract disputes. (A) lex mercatoria (B) res judicata (C) semper fi (D) the English Constitution (E) France's laws on contracts

(A) lex mercatoria

For an exchange of promises to be legally binding, parties must make sure the exchange: (A) meets the requirements of a contract (B) is witnessed by a third party (C) is in writing (D) is unique (E) takes place before a court official

(A) meets the requirements of a contract

An effective revocation: (A) must be communicated to the offeree before acceptance (B) must be communicated to the offeree after acceptance (C) need not be communicated to the offeree before acceptance (D) must be filed through a court (E) must be initiated by the offeree

(A) must be communicated to the offeree before acceptance

A offers B $100,000 for his farm, and they sign an agreement for the sale. Before the money is paid, A finds out that the market value of the farm is only $55,000. A: (A) must pay $100,000; the contract is valid (B) does not have to go through with the contract because there is not adequate consideration (C) does not have to go through with the contract because there was a mistake of fact (D) must buy the farm, but the price will be lowered when the court reforms the contract (E) must buy the farm, but the price will be lowered to create consideration of proper value

(A) must pay $100,000; the contract is valid

Basic elements of a contract need not include: (A) negotiation (B) agreement (C) consideration (D) legal capacity (E) all other choices

(A) negotiation

A promise to do something or to refrain from doing some specific thing is a(n): (A) offer (B) suggestion (C) legal promise (D) bid (E) proposal

(A) offer

In DCS Sanitary Management v. Castillo, where a company had employees agree not to work for any competitors within 100 miles of any customer of DCS, the appeals court held that the agreement: (A) overly broad and could not be enforced (B) violated public policy and that the company must pay damages to the employees (C) was not enforceable due to lack of consideration (D) was a reasonable restraint on competition that could be enforced (E) was a valid restraint on competition since such agreements are legal unless they violate the antitrust laws

(A) overly broad and could not be enforced

The doctrine that prevents an injustice due to the promisee's reasonable reliance on the promisor's promise is: (A) promissory estoppel (B) promissory reliance (C) forced fulfillment (D) promissory binding (E) promissory reasonableness

(A) promissory estoppel

Nguyen promised to paint Carara's house for $2,000 in the next month. When he got behind in his work, he asked if she would hire someone else instead, and Carara agreed. This is: (A) rescission (B) novation (C) accord and satisfaction (D) discharge by operation of law (E) equitable remedy

(A) rescission

When both parties agree that their contractual relationship should be terminated without performance and their obligations are discharged, this is: (A) rescission (B) novation (C) accord and satisfaction (D) discharge by operation of law (E) equitable remedy

(A) rescission

When the obligations of a contracted have been performed, the contract is: (A) terminated or discharged (B) finished or written off (C) finalized (D) burned (E) destroyed

(A) terminated or discharged

An authoritative document that provides an orderly summary and presentation of the common law of contract is: (A) the Restatement (2d) of Contracts (B) the Contracts Commercial Code (C) Cohen on Contracts (D) the Statute of Frauds (E) the Federal Register

(A) the Restatement (2d) of Contracts

The code that was designed to promote uniformity of the laws relating to commercial sales of goods is known as: (A) the Uniform Commercial Code (B) the Universal Commercial Code (C) the Commercial Code of the United States of America (D) the Commercial Code (E) the Ultimate Commercial Code

(A) the Uniform Commercial Code

Implied contracts arise from: (A) the actions rather than the expressions of the parties (B) the expressions rather than the actions of the parties (C) the intentions rather than the actions of the parties (D) the consequences of the actions of the parties (E) none of the other choices are correct

(A) the actions rather than the expressions of the parties

n general, if there is an error in a contract and if the other party should have known of the error: (A) the contract cannot be enforced to allow one party to profit from a simple error (B) the contract will still be enforced so long as both parties had the chance to read the contract (C) some states will still enforce the contract (D) the state Supreme Court will have to decide if the contract should be enforced (E) none of the other choices are correct

(A) the contract cannot be enforced to allow one party to profit from a simple error

314. If an offeror or offeree dies: (A) the contract is terminated by the operation of law (B) the contract is still binding (C) the offeror or offeree's estate must fulfill the contract (D) the closest relative of the offeror or offeree inherits the contract (E) the court takes over the contract

(A) the contract is terminated by the operation of law

Contract law governs the enforceability of: (A) the legal relationship that consists of the rights and duties of the agreeing parties growing out of promises (B) noncontractual promises (C) nonbinding promises involving third parties (D) binding and nonbinding promises (E) the legal relationship that consists of the rights and duties of the agreeing parties growing out of court orders

(A) the legal relationship that consists of the rights and duties of the agreeing parties growing out of promises

In Caley v. Gulfstream Aerospace, the employer told the employees that as a condition of continued employment they had to agree to a new dispute resolution policy that would take effect in two weeks. Caley sued, contending the new policy was not backed by consideration, so there was no enforceable contract. The appeals court held that: (A) there was an offer, acceptance and consideration so there was a contract (B) there was an offer and acceptance, but no consideration so there was no contract (C) there was an offer and consideration, but continued employment was not a sufficient method of acceptance so there was no contract (D) none of the conditions necessary for a contract were present so there was no contract (E) companies cannot offer employees contracts, so whether or not there was consideration is irrelevant

(A) there was an offer, acceptance and consideration so there was a contract

An effective acceptance must be: (A) unconditional (B) equivocal (C) improperly communicated (D) all of the other specific choices are correct (E) none of the other specific choices are correct

(A) unconditional

Contracts where one party, being in a position of strength, takes advantage of the other party, and which are held to be unenforceable, are called: (A) unconscionable contracts (B) contracts in restraint of trade (C) exculpatory agreements (D) contracts with public servants (E) none of the other choices

(A) unconscionable contracts

Because of the war on terrorism, the U.S. government prohibited doing business with certain countries. Contracts that existed at the time the prohibition was announced were: (A) unenforceable (B) unconscionable (C) exculpatory (D) quasi-contracts (E) unilateral

(A) unenforceable

A acceptance is properly communicated: (A) when it is sent by the offeree (B) when it is received by the offeror (C) when it is sent by the offeror (D) any of the other specific choices are proper acceptances (E) none of the other choices are correct Answer : (A)

(A) when it is sent by the offeree

A acceptance is properly communicated at the point: (A) when the offeree signs the contract (B) when it is received by the offeror (C) when it is sent by the offeror (D) only if certified or registered mail is used (E) none of the other choices are correct

(A) when the offeree signs the contract

When a party to a contract does not perform as required, there is: (A) a failure to perform (B) a breach of contract (C) a breach of trust (D) a failure of contract (E) a rescinding of the contract

(B) a breach of contract

If the performance promised by a party is clearly inferior to the requirements of the contract, there has been: (A) substantial performance (B) a material breach of the contract (C) an immaterial breach of the contract (D) a and c (E) none of the other choices

(B) a material breach of the contract

16-year-old Green bought a car that he later wanted to return for a full refund. If the dealer refuses a court is likely to hold that: (A) contracts do not permit refunds, so the sale was final (B) as a minor Green can disaffirm the contract and be given a refund, less the value of the benefits received from the use of the car (C) as a minor Green cannot disaffirm the contract (D) as a minor he could disaffirm the contract; his parents would have to take responsibility for the contract (E) as a minor Green could disaffirm the contract, receive a refund and receive damages for fraud against a minor

(B) as a minor Green can disaffirm the contract and be given a refund, less the value of the benefits received from the use of the car

Termination of an offer by operation of law occurs: (A) if the offeree decides to revocate (B) by death of the offeror (C) if the offeree claims a lapse has occurred (D) if the offer was an option contract (E) all of the other choices are correct and termination occurs

(B) by death of the offeror

You pay $200 for the right to be the only buyer a seller will deal with for ten days for a piece of property that is for sale for $250,000. This is: (A) called a terminable contract (B) called an option contract (C) called a revocable contract (D) not a contract because the consideration is not relevant to the value of the property (E) none of the other choices

(B) called an option contract

In Caley v. Gulfstream Aerospace, the employer told the employees that as a condition of continued employment they had to agree to a new dispute resolution policy that would take effect in two weeks. Caley sued, contending the new policy was not backed by consideration, so there was no enforceable contract. The appeals court held that: (A) the employees would have to be given something extra beyond the same employment conditions for there to be consideration for a contract (B) continued employment was consideration; there was a contract (C) there was no contract because the parties never bargained (D) in employment relationships there are no contracts, so consideration is irrelevant (E) none of the other choices

(B) continued employment was consideration; there was a contract

If a party fails to perform a nonbinding promise: (A) contract law will provide a remedy (B) contract law will not provide a remedy (C) contract law will provide a remedy in some states, but not others (D) the injured party must bring the case to the Supreme Court (E) the party that fails to perform will be held liable for up to $100,000 worth of damages

(B) contract law will not provide a remedy

To transfer contractual duties to a third party is: (A) assignment (B) delegation (C) repudiation (D) beneficiary (E) none of the other choices

(B) delegation

You are hired to mow a lawn on Saturday. Being busy, you hire your brother to do the job for you and get paid for it. This is: (A) assignment (B) delegation (C) repudiation (D) beneficiary (E) none of the other choices

(B) delegation

Rescission, novation, and accord and satisfaction are all forms of: (A) performance (B) discharge by agreement (C) contract writing (D) contract enforcement (E) none of the other choices are correct

(B) discharge by agreement

A contract made by a person with partial capacity is: (A) not enforceable (B) enforceable unless the person with partial capacity exercises the right to disaffirm the contract (C) enforceable in some states, but not others (D) enforceable only if the other party has complete capacity to contract with persons of partial capacity (E) not enforceable unless it deals with property worth less than $100 and there is a written agreement

(B) enforceable unless the person with partial capacity exercises the right to disaffirm the contract

Which of the following is usually not a requirement for a contract to be valid? (A) offer and acceptance (B) equal value in exchange (C) contractual capacity (D) purpose of contract must be legal (E) all of the other choices are required

(B) equal value in exchange

The ____ means that there are also responsibilities imposed on parties who commit to binding relationships in contracts. (A) freedom of speech (B) freedom of contract (C) freedom of sales (D) freedom of economics (E) freedom of torts

(B) freedom of contract

The party claiming incapacity, or the lack of legal ability to create a contract: (A) does not have the burden of proving it (B) has the burden of proving it (C) must have at least 3 witnesses who can testify on his behalf (D) must claim incapacity before acceptance (E) must claim incapacity before the discovery stage of a trial

(B) has the burden of proving it

A contract that violates state or federal statutory law is: (A) illegal, but enforceable (B) illegal and unenforceable (C) legal, but unenforceable (D) legal and enforceable (E) subject to a variety of fines and extra regulations

(B) illegal and unenforceable

If the offeree does not accept the offer, after a reasonable length of time the offer may terminate through: (A) lack of time (B) lapse of time (C) excess of time (D) extension of time (E) loss of time Answer : (B)

(B) lapse of time

When both parties to an agreement are mistaken as to a material fact, the contract: (A) is enforced because the mistake is mutual (B) may be voidable (C) is enforced because a mistake does not provide a basis for relief (D) requires amendment by the court (E) none of the other choices

(B) may be voidable

The ____ controls the terms of the offer when a contract is made. (A) offeree (B) offeror (C) judge (D) contractor (E) unbiased third party

(B) offeror

Some contracts must be in writing and signed to be enforceable. Contracts that are covered by the statute of frauds include: (A) contracts for the sale of personal property (B) promises to pay the debt of another (C) contracts that must be performed within a year (D) contracts for vehicles (E) none of the other choices

(B) promises to pay the debt of another

Once an offer has been made, the offeree can terminate the offer by: (A) accepting it (B) rejecting it (C) rescinding it (D) returning it (E) rationalizing it

(B) rejecting it

An exculpatory agreement: (A) is the offeree's initial expression of agreement before a contract is formalized in writing (B) releases one party from the consequences brought about by wrongful acts or negligence (C) is a form of counteroffer whereby the offeree accepts part and rejects part of a contract (D) is an agreement that has not been fully performed by either party (E) none of the other choices

(B) releases one party from the consequences brought about by wrongful acts or negligence

Withdrawal of an offer by the offeror is a: (A) counteroffer (B) revocation (C) reinstitution (D) reinstallation (E) resection

(B) revocation

Contract law is primarily: (A) federal statutory law (B) state common law (C) federal common law (D) state statutes (E) international code law

(B) state common law

A counteroffer ____ the original offer. (A) completes (B) terminates (C) enhances (D) improves (E) increases

(B) terminates

Prohibiting the introduction of oral evidence when it contradicts the terms of a written contract is an example of: (A) the right to disaffirm (B) the parol evidence rule (C) promissory estoppel (D) a legal detriment (E) none of the other choices

(B) the parol evidence rule

A(n) ____ is a party who is not part of an original contract who acquires rights under the contract. (A) second-party beneficiary (B) third-party beneficiary (C) sub-standard beneficiary (D) offeror (E) offeree

(B) third-party beneficiary

An effective acceptance must be: (A) conditional (B) unequivocal (C) witnessed in court (D) all of the other specific choices are correct (E) none of the other specific choices are correct

(B) unequivocal

A(n) ____ contract is one that is accepted by performance. (A) bilateral (B) unilateral (C) real (D) performance (E) nonbinding

(B) unilateral

A ____ occurs when one party to a contract enters into it with false information or accidentally makes an error in a significant matter. (A) bilateral mistake (B) unilateral mistake (C) known mistake (D) consolidated mistake (E) voidable mistake

(B) unilateral mistake

Contracts created by those with partial capacity are: (A) not voidable (B) voidable (C) executory (D) exemplary (E) illegal

(B) voidable

Which is not an element for an offer to be effective: (A) clear intent by offeror (B) willingness to accept consideration (C) proper communication (D) clear and certain terms and conditions (E) all other choices are necessary

(B) willingness to accept consideration

____ means that the contract basically has been fulfilled and payments must be made. (A) Serious performance (B) Final performance (C) Substantial performance (D) Material fulfillment (E) Good faith

An effective offer includes which of the following: (A) a clear intent by the offeree to become contractually bound (B) unclear and uncertain basic terms and conditions of the offer (C) a clear intent by the offeror to become contractually bound (D) all of the other specific choices are correct (E) none of the other specific choices are correct

The legal relationship that consists of the rights and duties of the agreeing parties growing out of promises is: (A) an easement (B) an agreement (C) a contract (D) a copyright (E) a patent

If communication of an offer occurs after the act of acceptance: (A) a proper acceptance can take place (B) a delayed acceptance takes place (C) a proper acceptance did not take place (D) the offeror must behave as though a proper acceptance took place if the offeree insists (E) the court system will decided whether proper acceptance can take place after the fact

A owes B $10,000. A promises to pay the money back to C, to whom B owes $10,000. C would be called: (A) an assignee (B) a repudiator (C) a third party beneficiary (D) a performer in place (E) a rescission

"Bozo, if you wash my car I will pay you $10." Bozo says nothing but washes the car later that day. There is what may be called: (A) a voidable contract (B) an unenforceable contract (C) a unilateral contract (D) an executory contract (E) no contract

A legally binding contract that can be terminated at the option of one of the parties is called: (A) an executed contract (B) a formal contract with an escape clause (C) a voidable contract (D) a void contract (E) a parol evidence contract

The Restatement (2d) of Contracts is: (A) Britain's legal code concerning contracts (B) an amendment to the Constitution (C) an authoritative document that provides a summary of the common law of contract (D) an unwritten code concerning contract law (E) a document detailing the rules for engaging in international commerce

The basic elements of a contract: (A) vary from state to state (B) vary from business to business (C) are constant across states (D) come from ancient Greek law (E) are understood by few

An offer that has unclear major terms, or is missing important terms: (A) can be the basis for an implicit, but not express, contract (B) can be the basis for an express, but not implicit, contract (C) cannot be the basis for a contract (D) makes the offeror liable if not executed properly (E) makes the offeree liable if not executed properly

An effective offer includes which of the following: (A) a clear intent by the offeree to become contractually bound (B) unclear and uncertain basic terms and conditions of the offer (C) clear and certain basic terms of the offer (D) all of the other specific choices are correct (E) none of the other specific choices are correct

A proposal by the offeree to change the terms of the original offer is a: (A) final offer (B) proposal of change (C) counteroffer (D) reoffer (E) suboffer

Anticipatory breach: (A) is addressed by U.C.C. Section 2-207, not by the common law (B) requires that a valid contract will not be enforced by the courts because of a subsequent illegality (C) discharges the duties of the non-breaching party and allows that party to sue for damages from the repudiation (D) is prohibited by the U.C.C., but allowed by the common law (E) none of the other choices

Roberta says "Susan, I will sell you my car for $5,000." Susan says, "I'll give you $4,500." Roberta says "No." Later Susan calls Roberta and says, "I have $5,000 and want the car." Roberta: (A) must sell the car for $5,000, since the offer was accepted (B) must sell the car for $5,000 since the offer was accepted in a timely fashion (C) does not have to sell the car due to the counteroffer, which is a rejection (D) does not have to sell the car because her offer was not accepted in a timely fashion (E) none of the other choices

A(n) ____ releases one party from the consequences brought about by wrongful acts or negligence. (A) unconscionable contract (B) conscionable contract (C) exculpatory agreement (D) releasing agreement (E) unfair agreement

When making an offer, the offeror must: (A) intend to obligate other parties (B) discuss her offer with more than one party (C) express a desire to be bound (D) avoid unjust enrichment of the offeror (E) comply with the Uniform Commercial Code

Without ____ a contract may be void. (A) a fair exchange of property (B) the presence of a witness (C) genuine consent by both parties (D) a court order (E) none of the other choices are correct

A contract cannot be formed if ____ is lacking. (A) feeling (B) friendship (C) intent (D) purpose (E) meaning

Preliminary negotiations are: (A) a clear manifestation of intent to be bound to a contract (B) legally an offer (C) invitations to negotiate or to make an offer (D) all of the other choices (E) none of the other choices

A ____ to the promisor exists when the promisor acquires some legal right through the promisee's act, promise to act, or refraining from doing some act. (A) legal detriment (B) legal right (C) legal benefit (D) neutral benefit (E) conscious detriment

____ is quite similar to fraud; it requires a false statement to significantly influence the making of a contract: (A) materiality (B) influence (C) misrepresentation (D) voidable contract (E) none of the other choices

Without consideration: (A) only the offeree can enforce the promise or agreement (B) only the offeror can enforce the promise or agreement (C) neither party can enforce the promise or agreement (D) both parties can enforce the promise or agreement (E) only a court can enforce the promise or agreement

The Restatement (2d) of Contracts defines a(n) ____ as "the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it." (A) proposal (B) suggestion (C) offer (D) bid (E) none of the other choices are correct

The legally binding agreement that is the essence of a contract is reached though a process of: (A) offer and rejection (B) offer and bargaining (C) offer and acceptance (D) acceptance and offer (E) offer and compliance

204. The Uniform Commercial Code (UCC) was designed to: (A) prevent copyright violations (B) increase the number of inventions patented by U.S. inventors (C) promote uniformity of the laws relating to commercial sales of goods (D) promote inter-state trade (E) promote intra-state trade

An effective offer includes which of the following: (A) a clear intent by the offeree to become contractually bound (B) unclear and uncertain basic terms and conditions of the offer (C) proper communication of the offer (D) all of the other specific choices are correct (E) none of the other specific choices are correct

An effective acceptance must be: (A) witnessed in court (B) equivocal (C) properly communicated (D) all of the other specific choices are correct (E) none of the other specific choices are correct

Jennifer enters into a contract when she is sixteen. When she reaches the age of majority she may manifest her intent to be bound to the contract; that is, to ____ the contract. (A) adjudicate (B) exculpate (C) ratify (D) covenant (E) assert

If the values of the items exchanged in a contract are unequal courts generally: (A) hold that the contract is not binding (B) require the parties to rewrite the contract (C) support the contract anyway (D) require the offeror to add something to the contract (E) require the offeree to add something to the contract

An offeror can ____ an offer by withdrawing it. (A) finish (B) complete (C) terminate (D) finalize (E) validate

A 16-year-old goes to a used car dealership and pays $2,000 cash to buy a car off the lot. (A) assuming no fraud by the dealer, and that the car is really worth about $2,000, the contract is valid (B) the dealer realizes that the car is worth more than $2,000, so he can void the contract and insist on the car back (C) the 16-year-old can bring the car back the next day and demand his money back (less damages) because the contract is voidable (D) the parents of the 16-year-old cannot try to get the money back for the car because parents are responsible for providing their children with necessities (E) none of the other choices

(C) the 16-year-old can bring the car back the next day and demand his money back (less damages) because the contract is voidable

Express contracts occur when: (A) the contract is created by more than two parties (B) the contract is created quickly (C) there is a written or oral expression of intent by the parties to enter into a legally binding agreement (D) there is a written or oral expression of intent by the parties to enter into a nonbinding agreement (E) none of the other choices are correct

In a case of ____, a person enters into a contract because they are so dominated by another person, or have so much trust in that person that they are subject to improper persuasion. (A) duress (B) misrepresentation (C) undue influence (D) dominance (E) none of the other choices are correct

For a contract to be valid, its subject matter must be lawful. A contract is illegal and unenforceable if its subject matter: (A) violates nonvoidable rationales (B) violates "ethical meritoria" (C) violates state or federal statutory law (D) violates judicial conscience (E) all of the other choices

For Amy's sixteenth birthday her parents give her money so she can make a down payment on a car she wants. She enters into a contract with a car dealer to make payments. This is a: (A) valid contract (B) void contract (C) voidable contract (D) unenforceable contract (E) none of the other choices

Twenty years after you take this class you are successful and wealthy. Knowing that this class was the key to your success, you look up your old professor and send a letter saying, "Because you helped me so much, I am going to send you a check for $100,000." Later you come to your senses and do not send the check. Your old professor sues you for the money: (A) you have to pay; there is a valid contract (B) you do not have to pay; the professor did not send a timely letter of acceptance (C) you do not have to pay; there is a lack of consideration (D) you do not have to pay; promissory estoppel applies (E) you do not have to pay; you were legally insane

To be enforceable, which of the following contracts require a written document under the statute of frauds? (A) your promise to buy a car from a dealership for $30,000 cash (B) your promise to write a software program next month for $11,000 (C) your promise to buy a warehouse for $40,000 (D) your promise to buy ten tons of coal for $2,000 (E) none of the other choices

If Scott makes a nonbinding promise to Lee and then fails to fulfill it: (A) Lee can expect contract law to provide a remedy (B) Lee can expect contract law to provide a remedy if he lives East of the Mississippi (C) Lee can expect that he will have to go to the Supreme Court for a remedy (D) Lee cannot expect contract law to provide a remedy (E) Lee is now legally allowed to force Scott to fulfill his promise

(D) Lee cannot expect contract law to provide a remedy

In a famous old case Sherwood v. Walker, Sherwood sold Walker a cow for $80 that both believed could not produce calves. When it was later discovered the cow could calve, which made her much more valuable, Sherwood sued to get the cow back. You would expect the Supreme Court of Michigan ruled for: (A) Walker; it was a valid contract; he keeps the cow (B) Sherwood; he did not get the cow back, but got the price for the more valuable animal (C) Sherwood; the contract violated the statute of frauds and so the contract was canceled (D) Sherwood; there was a mutual mistake as to an important fact, so the contract was void (E) Walker and imposed punitive damages on Sherwood for bringing a nuisance suit

(D) Sherwood; there was a mutual mistake as to an important fact, so the contract was void

An offer is: (A) a suggestion of a price for a good or service (B) a legally binding price for a good or service (C) an unofficial suggestion of a promise (D) a promise to do something or to refrain from doing some specific thing (E) a refusal to promise to do something or to refrain from doing some specific thing

(D) a promise to do something or to refrain from doing some specific thing Answer : (A)

A contract formed by performance of actions requested by another party may be called: (A) a voidable contract (B) a contract with a promissory estoppel clause (C) a pre-textual agreement (D) a unilateral contract (E) a parol evidence contract

(D) a unilateral contract

____ is an offeree's expression of assent or agreement to the terms of an offer. (A) agreement (B) unilateral acknowledgement (C) bilateral acknowledgement (D) acceptance (E) understanding

(D) acceptance

When someone accepts an offer by an exchange of mutual promises, what kind of contract has been formed? (A) implied (B) unilateral (C) executed (D) bilateral (E) commercial

(D) bilateral

The basic elements of a contract include agreement, lawful subject matter, legal capacity, consent, and: (A) offer (B) remedies (C) performance (D) consideration (E) acceptance

(D) consideration

In Hinson v. N&W Construction, where Hinson submitted the low bid to N&W for plumbing work to be part of a larger construction project by N&W, but then refused to do the work when construction was started by N&W, the court held that Hinson's bid: (A) could not be relied upon by N&W because he was not licensed for such work (B) was unrealistically low, which N&W recognized, so it could not rely on the bid (C) was valid, so there was a breach of contract; Hinson was liable for the full value of the contract (D) created liability based on promissory estoppel, so he was liable for the extra costs incurred by N&W (E) created liability based on promissory estoppel, so he was liable for the full value of the contract

(D) created liability based on promissory estoppel, so he was liable for the extra costs incurred by N&W

Tracy drinks beer at a bar, then goes to a car dealer and orders a new car. Tracy later claims he was drunk and should not have to buy the car. This: (A) is correct⎯people who have been drinking are not responsible for contracts they sign (B) is not correct⎯people who were drunk are responsible for their contracts, the law does not allow this excuse (C) is not correct⎯after drinking a few beers you are responsible for your contracts (D) depends if Tracy could show he was mentally incapacitated after a few beers, in which case he would not be held to the contract (E) none of the other choices

(D) depends if Tracy could show he was mentally incapacitated after a few beers, in which case he

The owner of a lost dog posts notices that she will pay $200 for its return. Someone who does not know about the reward finds the dog and returns it. The owner. (A) must pay the reward due to public policy considerations that encourage the completion of such contracts (B) must pay the reward because the unilateral contract was completed (C) must pay the reward because there was an intent to make a valid offer and to be bound by that offer (D) does not have to pay the reward because the offer was not communicated to the person who found the dog (E) does not have to pay the reward because there was no meeting of the minds

(D) does not have to pay the reward because the offer was not communicated to the person who found the dog

July 10, 2012, the following ad appeared in the newspaper: "Male Collie, age 2, lost near Highway 85 and Laurens Road, $250 reward. Call 654-1909." In July of 2014, someone returns the dog. The owner: (A) must pay the reward (B) must pay the reward unless a cancellation notice regarding the reward was published (C) does not have to pay the reward unless the person can show that they saw the ad (D) does not have to pay the reward⎯too much time has passed for there to be a contract (E) does not have to pay the reward because the dog is dirty

(D) does not have to pay the reward⎯too much time has passed for there to be a contract

The purpose of a contract is to: (A) make it easy to do international business transactions (B) encourage innovation (C) encourage investment (D) give parties confidence that bargained-for exchanges will be enforceable (E) give parties confidence that they will make a profit

(D) give parties confidence that bargained-for exchanges will be enforceable

Twenty years after you leave college you are rich and famous. Your college calls on you for a $10 million gift to renovate a classroom building and name the building in your honor. You tell them you will be glad to give the gift because you learned so much and that is why you are successful. A year later the building is renovated and the college asks for the money. You decide to spend it on a new jet and tell the college to get stuffed. You: (A) do not have to pay the money, promises of gifts do not create contracts (B) do not have to pay the money unless your promise was in writing and for a specific date (C) have to pay an amount equal to how much has been spent on the renovation work to date, not the full amount (D) have to pay the money under the rule of promissory estoppel (E) have to pay the money under the rule of unliquidated debt

(D) have to pay the money under the rule of promissory estoppel

You verbally agree to buy a house for $250,000. When the contract is prepared, the price is accidentally typed in as $25,000 rather than $250,000, but no one notices it until after you and the seller sign the document. At that point, you claim you only have to pay $25,000 and you claim that was the price you had agreed to originally. The court will say you are: (A) correct; under the Statute of Frauds, written documents control, not oral statements (B) correct; under the Statute of Frauds, written documents for real estate control the deal (C) incorrect; the consideration ($25,000) is insufficient given the value of the house (D) incorrect; $25,000 was obviously a mistake and the price goes to $250,000 (E) incorrect; you are guilty of perjury and will go to prison

(D) incorrect; $25,000 was obviously a mistake and the price goes to $250,000

An offer that terminates by operation of law through ____ occurs when a court decision or legislation makes an offer illegal after it has been made. (A) mental incapacity (B) court intervention (C) real illegality (D) intervening illegality (E) intervening legality

(D) intervening illegality

A smooth talking door-to-door salesman talks you into buying $200 worth of magazine subscriptions. After he leaves you want out of the deal. The contract you signed: (A) is voidable because you did not give genuine consent (B) is voidable because you were under duress (C) will be voidable only if you can show the subscriptions are worth far less than you paid (D) may be rescinded within 3 days under the FTC Cooling-Off Rule (E) is enforceable, you cannot walk away from this

(D) may be rescinded within 3 days under the FTC Cooling-Off Rule

Consideration is defined as something of value or something bargained for in exchange for a promise. Normally, if consideration is absent: (A) only the offeree may enforce the promise (B) only the offeror may enforce the promise (C) either party may enforce the promise (D) neither party may enforce the promise (E) none of the other choices

(D) neither party may enforce the promise

You leave your poodle at a new grooming shop and tell them to wash the dog⎯a $30 service. They do that and also paint the poodle's nails and tie ribbons in his hair⎯these services are an extra $10. You pay them for the wash. What about the extra $10 in services? (A) an express contract existed; you must pay the $10 (B) an implied contract existed; you must pay the $10 (C) a quasi-contract existed; you must pay the $10 (D) no contract for these services existed, no extra payment (E) the UCC would hold that no contract existed, so no payment

(D) no contract for these services existed, no extra payment

A binding promise may be defined as: (A) one made by parties whose words are "intended to be meaningful" (B) one that is enforced by tort law (C) one that is written and "sealed" (D) one that may be enforced by law in case of breach (E) one that is written in the presence of an attorney

(D) one that may be enforced by law in case of breach

Termination of the offer can occur through the action of the parties or by the operation of law. The parties can terminate the offer by: (A) revocation (B) rejection (C) fibulation (D) revocation or rejection (E) any of the other choices

(D) revocation or rejection

Suess signed a contract which included a covenant not to compete with his employer for a year if he left the firm. When Suess quit, he went into competition with his former employer and was sued. He argued that the covenant was not valid. The court held: (A) Suess was right, such covenants are void under federal law (B) in all states, such covenants violate public policy (C) such covenant are unconscionable in all states (D) the covenant is probably valid in states that allow them (E) the covenant was not backed up by consideration, so there was no contract to be violated

(D) the covenant is probably valid in states that allow them

Smith, who lives in your apartment building, drives you crazy. You agree to give Ratzo $5,000 if he gets rid of Smith for you. After disposing of her, Ratzo returns for his money. You refuse to pay. Ratzo sues you; the court holds the contract is: (A) enforceable and completed; you must pay what is owed (B) enforceable, but $5,000 is an unconscionable price, so it revises the contract (C) unenforceable because it involves a public servant (D) unenforceable because it involves an illegal agreement (E) enforceable because evidence proved Ms. Smith was driving everyone crazy

(D) unenforceable because it involves an illegal agreement

A "contract" that does not exist at law, such as a contract to commit a crime, is what kind of contract? (A) executed (B) voidable (C) executory (D) void (E) unenforceable

(D) void

The parol evidence rule prohibits the introduction of oral evidence into a lawsuit where the evidence presented is contrary to the terms of a written contract. Parol evidence may be introduced except when: (A) it will explain the written instrument through previous trade usage (B) the written contract is incomplete or ambiguous (C) it will prove fraud, mistake or misrepresentation (D) when one of the parties to the contract is not in court (E) none of the other choices

(D) when one of the parties to the contract is not in court

Uncle Jim tells his niece as she goes off to Creepy U. that if she maintains a 3.5 average that he will buy her a BMW convertible when she graduates. At graduation she has a 3.7 GPA and so she wants the BMW convertible. Uncle Jim says that he doesn't have to give her the BMW convertible because what she did was for her own good. Niece wants to sue Uncle Jim to get the BMW convertible. There probably is: (A) no breach of contract because the benefit to Uncle Jim is trivial compared to the BMW convertible (B) no breach of contract because what the niece did was a benefit for herself only (C) no breach of contract because it would violate public policy (D) no breach of contract; there was only a moral obligation (E) a breach of a valid contract

(E) a breach of a valid contract

17-year-old Robert purchased a car from King that was then destroyed by fire. Robert sued to recover the price of the car. The court would hold that: (A) no contract existed; Robert relied on King to his detriment (B) no contract existed because Robert is too young to enter into a contract; his parents are parties to the contract (C) a contract existed, but Robert was a minor and so could disaffirm the contract and get a full refund (D) a contract existed, but the uneven bargaining positions of the parties allowed the court to render the contract void as in violation of public policy (E) a contract existed that Robert could disaffirm, but he could only collect a refund equal to the value of the car after the fire

(E) a contract existed that Robert could disaffirm, but he could only collect a refund equal to the value of the car after the fire

Ford promises to deliver 100,000 new cars to Hertz by June 1 for its rental fleet. Ford only delivers 98,300 of the cars by June 1 and promises the rest soon. Ford has (A) breached the contract and Hertz may reject all the cars (B) engaged in anticipatory breach and Hertz may reject all the cars (C) engaged in rescission and Hertz may reject all the cars (D) violated a condition precedent and Hertz may reject all the cars (E) engaged in substantial performance; Hertz may not reject all the cars

(E) engaged in substantial performance; Hertz may not reject all the cars

A(n) ____ is a binding promise to keep an offer open for a specified period of time. (A) terminal contract (B) limited contract (C) express contract (D) explicit contract (E) option contract

(E) option contract

A doctrine to avoid injustice that is used by the courts to bind a promisor to promises that a reasonable person would rely upon without consideration, is called: (A) settlement agreement (B) accord and satisfaction (C) unliquidated debt (D) performance contract (E) promissory estoppel

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