blw 302 chapter 11
14. In most states the legal age capacity for contracts is ___ years old.
18
9. Which of the following contracts would be void?
A contract with a person declared mentally incompetent.
16. Which of the following acts would be a defense for nonperformance of a contract?
Accountant hired to do corporate audit is denied access to records and company headquarters.
11. Competency licensing statutes do not prevent enforcement of contracts by unlicensed parties.
F
12. Contracts with illegal subject matter are voidable.
F
13. Usury is regulation of licensing.
F
15. Covenants not to compete are valid only in sales of a business.
F
17. Substantial performance is available for all types of contracts.
F
19. Liquidated damages are void as penalties.
F
2. A contract with a party who has been declared incompetent is voidable.
F
22. Void and voidable contracts are one and the same.
F
24. Covenants not to compete are generally considered void as against public policy.
F
25. A force majeure clause is a clause that prevents additional terms in acceptances from becoming part of the contract.
F
27. In most states the age of majority is still 21 years old for contracting.
F
30. An accord and satisfaction is a void contract.
F
38. An exculpatory clause seeking to hold a party completely blameless in a contract is acceptable in all states except Louisiana, California, and Florida.
F
39. Covenants not to compete are void only in sale-of-business contracts.
F
45. There is no difference between assignments and delegation.
F
46. A bill of lading is a receipt for shipment issued by the seller.
F
56. A minor who has received medical care can never be responsible for payment for those services.
F
58. A valid defense makes a contract automatically void.
F
59. A defense of age capacity applies to all contracts made by parties under the age of 18.
F
8. James Krieg has finished law school but has unsuccessfully taken the bar exam twice. Krieg is running low on patience and cash. He has begun writing wills to see him through this time of crisis and is charging $200 per will. Some of his will clients have refused to pay Krieg and he wishes to take them to a small claims court. Which of the following statements is true?
Krieg agreements are void.
2. Which of these is not a contract defense?
Rejection
10. Undue influence requires proof of a confidential relationship.
T
14. Unconscionability is an illegality defense.
T
16. Conditions precedent are events that must happen before contract performance is required.
T
18. A force majeure clause is one that provides excuses for nonperformance.
T
23. Exculpatory clauses are generally considered void as against public policy.
T
28. A television rent-to-own contract that requires 24 payments of $30 each before the renter owns the $199 television set is unconscionable.
T
3. Minors are liable for the reasonable value of necessaries.
T
31. The doctrine of substantial performance applies in construction contracts.
T
35. All contracts have conditions for performance.
T
40. Commercial impracticability and impossibility of performance are essentially the same standard.
T
42. Conditions are promise modifiers.
T
43. The failure to deal fairly with a party to a contract can result in damages for breach.
T
44. In a relationship of dependence, the failure to deal fairly can result in liability for the party controlling the contract term.
T
47. Goods can be transferred physically or by transfer of the bill of lading.
T
48. A letter of credit is issued by the buyer's bank.
T
49. A lawyer/client relationship is an example of a confidential relationship.
T
50. An example of a condition precedent in a home purchase contract is that the buyer must qualify for financing first.
T
51. Telling your broker to sell a particular stock when it reaches $50 a share is a condition precedent.
T
52. Parents of minors can be held liable for the reasonable value of necessaries that their minor children contracted for.
T
55. An assignment is the transfer of benefits under a contract.
T
60. Using a threatening tone of voice when negotiating a contract may lead to a valid charge of duress.
T
62. Courts rarely apply the excuse of commercial impracticability, even when the cost of the contract has increased dramatically for one party.
T
A contract with a minor is voidable at the minor's option.
T
21. The Hoffmans were having their home remodeled by All-Right Contractors. The roof had to be removed in order to build the second story the Hoffmans had contracted and designed to build. After All-Right had removed the roof, but before a covering was placed over the exposed half of the home, All-Right's foreman said the job would cost an additional $12,500. The Hoffmans refused to agree to the additional fees and All-Right's foreman said, "Suit yourselves. Looks like rain for the next day or two," and left. The Hoffmans called All-Right and agreed to pay the $12,500 extra and went in to sign the paperwork. Which of the following statements is true?
The contract for the additional $12,500 is invalid because of duress.
31. Which contractual defense requires a confidential relationship?
Undue influence
Contracts with illegal subject matter are
VOID
35. An elite preschool has a long waiting list of children whose parents want to enroll them there. In the contract, the preschool has a requirement that the child be "potty trained" and no longer wearing diapers. This requirement is:
a condition precedent.
5. A provision in a contract requiring that a buyer obtain financing before a deal can go through is an example of:
a condition precedent.
24. Monique and Seth agree, due to increased fuel charges, that Monique will pay Seth twenty cents more per mile of transportation than in their original contract. This new agreement is called a(n):
accord and satisfaction.
30. Sue and Kevin Kellman signed a contract for the construction of a cabin near Pinetop. In building the $562,000 cabin, the builder discovered that it had to put the vent for the heating system in the area where the hall closet is located. The result was that the Kellman's had a half-closet there instead of a full-length closet that was open to the floor. The Kellmans:
can be compensated under the doctrine of substantial performance.
3. Duress requires proof of:
deprivation of a meaningful choice.
32. Costco, Inc. had a contract to purchase 300,000 electric mini-Mercedes from HUMBENZ Toy Co. The toy cars were to be delivered by November 1. On October 23, the Consumer Product Safety Commission announced a recall of the toy cars as well as a ban on their sales because of electrical shorts and a high risk of fire in the cars. HUMBENZ has not delivered the cars to Costco. HUMBENZ:
has a void contract with Costco because the subject matter is now illegal.
26. Angela, age 17, is injured in a car accident and receives $5,200 in medical treatment at the emergency room. The hospital sends a bill to Angela, who signed the admitting form in which she agreed to pay for the treatment. Angela:
is liable for the bill as a necessity.
10. The seller of a dry cleaning business has agreed not to open another dry cleaning business for two years within a one-mile radius of the sold business. Such an agreement:
is valid and enforceable.
29. Ralph Deuschle owned an ice sculpture company. Ralph provides ice sculptures for private weddings, parties, and receptions. The Canasta Resort was a large hotel located near Ralph that was not satisfied with its current catering company's ice sculptures and its events manager liked Ralph's work. The events manager approached Ralph and indicated the Canasta would like to have an ongoing supply contract but that its needs would require Ralph to expand his business, both with additional space and 3 new employees. Ralph entered into a supply contract with the Canasta and the events manager told a lending officer at the bank where Ralph got his construction mortgage for the business expansion that the Canasta would be sending all of its business to Ralph. The Canasta then began to rethink its events focus and marketing and decided to cut back on ice sculptures. Ralph could not use the additional space and the three employees had to be laid off. The Canasta:
may be liable to Ralph under a theory of a lack of good faith.
13. Undue influence requires the presence of:
none of the above
28. Lisa and Mandy have a contract. Mandy wants out of the contract; Carla Sue is willing to take Mandy's place, which is satisfactory with Lisa. When the Carla Sue for Mandy exchange is made, this is known as:
novation
11. A minor's purchase of a necessity is voidable, but the minor must pay _____ value.
reasonable
20. A bill of lading helps the _____ with receiving payment and the _____ with assurance of the arrival of the goods.
seller; buyer
6. Force majeure clauses:
serve to shift the risk of unforeseen events.
17. Paddock Pools constructed a swimming pool and deck for the Jensens' home. Paddock installed the wrong trim on the pool. It would cost $2800 to change the trim - one-fifth the total cost of the pool. The Jensens refuse to pay anything for the pool. Paddock's best defense is:
substantial performance.
22. A life insurance policy beneficiary is a good example of a:
third party beneficiary.
12. Cindy Nanson had a contract with Bob Greenly for Bob to repay Cindy $2000 plus interest by July 2010. It is now August 2014 and Cindy has not received any payment. Cindy wishes to file suit to collect the $2000. Bob reminds her that the statute of limitations for contract suits is four years. Cindy's contract with Bob is:
unenforceable
27. Contracts with a clause that violates a public policy provision generally are held to be:
unenforceable
1. Bob, age 17, has entered into a contract to buy a car. The contract is:
voidable.