Business Law exam 2
Contract rescission can sometimes be based upon a unilateral mistake. T or F
True
Which of the following types of property would be Goods under the Uniform Commercial Code?
A computer
Acme Co. Offers to buy 1000 widgets from widget World company. The written offer provides for a thousand at $10 per widget, to be delivered May 1st. The offer has no other Provisions. Widget World sends a written acceptance. However, the acceptance also states that if any claim arises under this contract, widget world must be notified within 10 days. Acme does not object to this provision. Both parties are merchants. Which of the following best describes this situation?
A contract exists. If the additional terms are construed to be material Kama they are not part of the contract. If the additional terms are not Material. They are part of the contract
In the case of Worldwide Insurance V. Klopp , the Supreme Court of Delaware found
A contract provision requiring arbitration and permitting appeal by either party was void as unconscionable
An unliquidated debt can be described as
A debt in which the existence or amount is in dispute
An example of the type of relationship required to find undue influence would be
A doctor-patient relationship
Pamela is planning to sell her home decorating store to her daughter. Pamela has
A greater duty to reveal problems in the business because her daughter assumes she will be honest.
A force majeure event is
A natural disaster that claims human life or leads to the Declaration of a state of emergency
Which of the following are generally considered to be legal offers?
A note scribbled on a restaurant napkin that includes the details of the offer
What is not required to establish promissory estoppel
A promise made by the plaintiff in response to the defendants promise
The taverns secret recipe for its pizza sauce would be considered
A trade secret, and an employment non-compete clauses would be enforceable to protect it
Jennifer has offered to sell her laptop computer for $750 to Jack. She tells Jack that the computer is only six months old but, in fact, it is 3 years old, and Jennifer wants to unload the lemon. Jack agrees to buy the computer based on Jennifer's representations. This contract is
A voidable contract, one that Jack can void
A+ modeling agency signs a contract with Sandy to do a photo shoot for the local used car dealers advertising. The contract was probably written by
A+ modeling agencies lawyer
Under the Uniform Commercial Code, and agreement modifying a contract
May not require consideration
To be valid a non-compete clause must be
All of the above
Generally, a seller has no duty to disclose facts. However, there is a duty to disclose information or facts if the disclosure is necessary to
All of the above are true
The UCC deals with unconscionability in a contract by providing that a court the UCC deals with unconscionability in a contract by providing that a Court May
All of the above.
Which of the following promises ordinarily must be in writing to be enforceable?
All of the above.
Which of the following offers are considered to be irrevocable for a given period?
All of the above. Firm offer is. Opinion contract period he signed writing by a merchant offering to hold open an offer for the sale of goods for a stated period.
The common law governs contracts for
All of the above. Services. Real estate. Employment.
For the purpose of the statute of frauds, and interest in land includes
All of the above. The house. A real estate mortgage. An easement.
Courts May award damages called quantum meruit
All of the above. Which means as much as he deserves. Which is money the court believes the plaintiff morally ought to have. Even though there was no contract and titling the plaintiff to it.
Angie, a minor, wants to avoid a contract she made with Cumberland Cycles. She may disaffirm the contract by
All of the answers are correct
Alpha and Xenon companies are both major International conglomerates. They are negotiating a contract where by Alpha will install a computer system for Xenon. One clause in the contract states that Alpha will not be liable for damages caused by the negligent installation of the computer system, except the alpha Warren's the system and will fix any problem for a period of two years after following installation. Alpha completes the installation of the computer system. Xenon loads extensive amounts of information honor System, but all of it is destroyed because Alfred negligently install the memory chips. Alpha fixes the memory, but seen on incurred significant expenses and recreated the Lost information. Xenon sues for these expenses. Alpha defends with the noted clause in the contract.
Alpha wins. This exculpatory clause is enforceable
Nate works as a Carnival Barker. His Employment contract specifies that he can be fired if he "loses his voice." This is an example of
Ambiguity
Jerry offers to shovel the snow from Ben's driveway for $35. Ben replies ok. This is an example of
An Express, bilateral contract
If Crosby and Dash are in disagreement as to the exact amount of money that Crosby owes Dash Dash, then they may choose to form a new agreement as a set amount. If they both perform the new agreement, their conduct would be an example of
An accord and satisfaction.
Bailey CO. And spirit Bros. Enter into a contract for the manufacture and sale a400 lawn chairs. If both parties agree that a modification is necessary
An agreement to rescind the contract will terminate the contractual rights of Bailey CO. And spirit Bros. If neither of them had completed their obligations.
When Muhammad was hired by Pomico, Inc., he signed the following agreement, upon termination of my employment with Pomico, I agree not to work for a competing company within 30 miles of headquarters for one year. This agreement, important to protecting secret information develop in the employer's business, is
An enforceable agreement not to compete.
Which of the following exculpatory clauses will most likely be enforceable?
An exculpatory clause that reveals a riding stable of negligence
I'll sell you my car if I decide to sell it, is an example of
An illusionary promise
Marco agrees to sell clowns R Us some balloons. The contract states that clowns made by as many balloons as it wishes. The agreement is
An illusory contract
Ralph is a professional football player. He signs a valid contract with the Jets. Later, he claims that he was also promised free use of the Jets private jet, but this was not in the contract. What type of clause in his contract would prevent him from flying away with this claim?
An integration clause
Vicki entered into a written contract to buy a car from Valley Motors. The written contract included a provision that stated, this writing is the full and final expression of the parties agreement, anything said before signing or while signing is irrelevant. This is
An integration clause
An agreement in which a buyer agrees to buy all the goods produced by a manufacturer is known as
An output contract
What are the factors leading courts away from a laissez-faire approach to contract law was
And change and relative bargaining power between parties to contracts
Deborah purchased a boat from Sun & Surf Marine period She later learns that the salesman had made misrepresentations to induce her to make the purchase. Under UCC section 2 - 721, Deborah can rescind the contract
And sue for damages whether the misrepresentation was fraudulent or innocent.
Which of the following would suffice for a signature on a writing under the statute of frauds?
Any of the above would suffice. Judges Define signature very broadly
Virginia borrowed money from G&L Lending at 35% interest per year the state maximum interest rate is 20% per year. Virginia defaulted on the loan. What amount can G&L collect from Virginia?
Any one of the above may be correct. The answer depends on the particular state law
In bailment cases comma exploratory causes
Are somewhat more likely to be enforced than in other types of cases
In order to satisfy the statute of frauds, a writing must
Be signed by the defendant and contain the name of each party, the subject matter of the agreement, and the essential terms and Promises.
Jamie is building a house on her lot. She invites Ernie of Ernie's excavation to bid on the excavation job. Ernie observes that the lot next to Jamie is also under excavation and the soil and that what is normal and not excessively Rocky. Based on the assumption that the soil and Jamie's lot will be similar, he and Jamie agree that the excavation will cost $3,000. When he starts digging, he learns there is solid rock under Jamie's lot. Ernie says it will cost an extra $2,500 for the excavation work. Jamie agrees just to get the job done but later refuses to pay a dime more than $3,000. If Ernie sues, most likely result will be
Bernie wins, as the modification was due to unforeseen difficulties.
Standard Provisions in a contract that are often listed under the heading miscellaneous are called
Boilerplate
Ethel's exercise World plans to order 3 weight machines from Pete's push, petal, and pull incorporated for a total of $15,000. Pete's demands that Ethel's friend, Moneybags, a wealthy Independent Business woman, not connected with Ethel's business in any way, I promise to pay Pete's for the three machines if those exercise world does not. Which of the following promises in this problem must be in writing to be enforceable?
Both Moneybags promise and Ethel's exercise worlds promise.
When one party to a contract fails to perform as promised it is called
Breach
Which of the following is not a standard provision frequently found in contracts
Choice of compensation
the courts will find an implied contract when
Conduct of the parties indicates they intended and agreement
Public policy means the law that comes from the
Courts that decide would have a negative impact on society.
If the subject of the contract includes issues that may be controversial, it is best to
Deal with them up front before the relationship is strained
The Uniform Electronic Transmission Act, ueta
Declares that a contract or signature may not be denied enforceability just because it is an electronic form.
Bob, a house Builder, contracts with Ollie to build a house on Ollie's lot. Bob hires Rob to take his place as the Builder on this contract. What has Bob done?
Delegated his duties
The title of a contract should be
Descriptive of the agreement, and typed in all capital letters
Which of the following relationships will ordinarily not create an insurable interest?
Doctor and patient
Mark's home had burned to the ground period when he met with his insurance adjuster, she accused him of Burning Down the House, and said she would have him criminally prosecuted if he couldn't settle the claim for much less than the house was worth. Mark agreed to the settlement. If he changes his mind, he can probably rescind the settlement on the basis of
Duress
Which of the following is least likely to be regarded as a necessary?
Educational expenses
Peter, a minor, purchased a car from Acme Motors. Using a fake ID Kama he misrepresented his age to be 18. The contract is fully executed. Which of the following is correct?
Either b or c may be applicable depending on the law of jurisdiction in which the contract was formed.
Travel lines offered to sell 10 round trip tickets to Elaine. Travel lines stated that the acceptance must be in writing by UPS next day service. Which of the following acceptances will create a contract between travel lines and Elaine?
Elaine sends a letter by UPS next day service to travalliance stating that she will buy the tickets
Bob signed an agreement with Joe under which Bob agreed to purchase all the hay that you grew during the coming growing season. This contract will be
Enforceable as long as both parties act in good faith and Bob doesn't suddenly demand more hay than what was reasonably estimated
Tuan is President and sole shareholder of entertainment Incorporated. Entertainment Incorporated wishes to borrow money, but to do so, the bank requires Tuan to orally agreed to personally pay the debt of the corporation if entertainment Incorporated cannot. Tuan's guaranteed to repay is
Enforceable because of the leading object rule.
Robin and Bellman Kama both Merchants, really agree to contract for the sale of $5,000 of accessories. Belman, the buyer , sends to Robin, the seller, a written confirmation of the sale, which is sufficient against Bellman under the statute of frauds and which Bellman signs. Robin does not sign. Robin fails to perform the contract and does not ship out the goods. Bellman sues. This contract is
Enforceable even without Robin's signature because both parties are merchants.
A Promise by Derkin restaurants to buy all of the produce it needs this next year and established price from Elfredo's produce would be an
Enforceable requirements contract
An agreement to pay a lesser amount to settle an unliquidated debt is
Enforceable, as there is consideration.
Mike made the following offer to Mick: " I will pay you $500 if you agree to paint my house." Mick replied that he would at this point the contract is an
Executory, bilateral , express contract
A letter of intent summarizes progress made during business negotiations, but more importantly, it creates a binding contract. T or F
False
A party to a contract has a duty to investigate the other party's factual statements. T or F
False
A valid contract can be legally voided by either party. T or F
False
Ambiguities and contracts are always interpreted in favor of what the side that wrote the contract, since they are the ones who know what the provisions are supposed to mean. T or F
False
An illusionary promise is valid consideration t or F
False
April put an advertisement in the newspaper advertising the sale of her computer for $500. Simultaneously six people responded to the ad by mail with formal written acceptances. April is bound on all six contract to sell her computer for $500. T or F
False
Barbara, a skilled welder, was hired at Mainco Enterprises for a welding position. She was asked to sign non-compete clauses limiting future employment if she left Mainco. A court would be very likely to enforce the non-compete clause unless the time or Geographic restriction is unreasonable. T or F
False
Because details can always be added later it's better not to overwhelm a contract with specifics in the beginning. T or F
False
Billy is a liquidated debt of $3,000 to Rihanna, his personal weight trainer. Billy sends Rihanna a check for $300 on which he has Mark, payment in full. If Rihanna cashes the check she will not be able to successfully sue Billy for the remainder of the debt. T or F
False
Candy, Inc. Signed an agreement with sweet Plantation. Under the contract, candy agreed to purchase all the sugar cane sweet Plantation group during the coming season. This contract will be unenforceable due to its vagueness. T or F
False
Contracts generally do not require bargaining that leads to an exchange between the parties. T or F
False
Contracts in which one party agrees to buy all his requirements of certain goods from the other party are generally unenforceable because there is no definite amount t or F
False
Contracts must begin with the word, whereas, in order to be legal. T or F
False
Courts enforce all promises in the interests of simple morality. T or F
False
Courts normally require consideration to be approximately equal on both sides of the bargain. T or F
False
Cynthia and Brian were friends. Brian was a daredevil. Because of his Antics, Cynthia thought Brian wasn't long for this life. Cynthia purchased a life insurance policy on Brian's life. Subsequently, Brian was killed in a car accident. Since Cynthia and Brian were friends, Cynthia had an insurance interest in his life and will be entitled to the insurance proceeds. T or F
False
Denton agreed to buy a cedar deck for the Thrashers for $7,000. After he begins to work, the Thrashers asked him to add cedar flower boxes at one side. Denton replied he would, but it would cost an extra $600 the Thrasher's would not be obligated to pay the additional some because the original agreement already obligated Denton to complete the deck for $7,000. T or F
False
Either party may demand Precision of a fully executed oral contract if it was required to have been in writing under the statute of frauds. T or F
False
Emily runs a children's clothing boutique which takes in local homemade items on a consignment basis. Her standard form contract indicates that Emily has the right to put items on sale without prior approval, but does not specify what affects the sale has on the consigners payment percentage. Her intent is to keep the same profit she would have had without the sale. She is using ambiguity in her contract to increase her sales and profit. T or F
False
Fraudulent, but not innocent, misrepresentation permits the injured party to rescind the contract. T or F
False
Gambling contract is legal unless it is specifically prohibited by State Statute. T or F
False
Hannah orally agrees to sell her house to Brett for $175,000. If she delivers the deed to Brett with the expectation of payment in 2 weeks and he fails to pay, most courts will not enforce the contract since it was not in writing. T or F
False
If a court finds as a matter of law that a clause of a contract was unconscionable at the time the contract was made, the court must refuse to enforce the contract. T or F
False
If a salesperson says this is a great car and it's really fun to drive, but the car turns out to be a lemon, the sales person has committed fraud. T or F
False
If both parties believe they have a binding contract, this belief settles any later questions about the validity and enforceability of the agreement. T or F
False
In business law, a lawyer's primary job is to represent the client in contract litigation. T or F
False
It is unethical to use your lawyer as an excuse for a provision of a contract, such as, " my lawyer insist that I have a liquidated damages clause..." t or F
False
John was a licensed physician in Michigan. When he retired to Florida, he started providing Medical Services to the people in his condo Kama relying on his Michigan license. Isaac, Jon next door neighbor, oh John $2,000 for medical services. John will be able to enforce the contract he made with Isaac. T or F
False
Luckily, a contractor, enters into a contract with penny, a homeowner, to remodel her kitchen. The contract provides a specific completion date but does not specify what will happen if Lucky does not have the job finished by the date. So, Penny May deduct $100 per day from the contract price until the job is finished, because this is the industry Norm. T or F
False
Lucy and Rick sign a contract in which Lucy agrees to deliver 10 boxes of chocolates in exchange for Rick's promise to pay $5 per box. Lucy delivers the candy. Rick pays for the goods. This contract is fully executory. T or F
False
Morality plays no part of gambling contract legality. T or F
False
Nella offers to sell her crop of strawberries, which have just been picked, to Morgan's Market. Since she does not specify a time limit for acceptance, Morgan's can accept the offer the following week, as long as Nella has not revoked it. T or F
False
On Monday, Mick puts an offer in the mail to Sheri to sell his guitar for $50. Monday night when jamming with his buddies, he decides he will really miss his old guitar and has second thoughts about selling it. Tuesday morning he puts a revocation in the mail informing Sheri he has changed his mind in the guitar is no longer for sale. The revocation is effective on Tuesday morning. T or F
False
Paid surrogacy contracts are viewed by the Legislative majority in all states as immoral and illegal. T or F
False
Patrick owned an acre of land which was being divided into building Lots. Nancy was interested in purchasing the corner lot. Patrick stated, I will sell Nancy a lot on Route 70 for $5,500 cash, payable on April 30th, 2012. This writing is sufficient under the statute of frauds to make the contract enforceable. T or F
False
Pushy Pat , a persuasive salesman, talked nice Nancy Indy purchasing something she really didn't need or want. Nice Nancy may rescind the contract because of undue influence. T or F influence. T or F
False
Ramona, age 42, orally agreed to work for Brahma Incorporated for the rest of her life or $50,000 per year. This agreement would not be enforceable since it violates the one-year rule of the statute of frauds. T or F
False
Rudolph overhears Macys plans to go skydiving over spring break. Not really knowing Macy, but figuring it's worth a chance, Rudolph rushes out and buys an insurance policy for $100,000 on Macy's life. Macy doesn't fact meet her demise jumping out of the airplane. Rudolph can collect the $100,000. True or false
False
Section 2 - 306 of the UCC expressly disallows output contracts in the sale of goods. T or F
False
Strawley Corporation runs an adult bookstore in Metro City Kama leasing the building from megacorp. Then, Metro City passes an ordinance prohibiting the sales of the types of merchandise found in adult bookstores. Strawley is still bound to the contract. T or F
False
Sweet Plantation Incorporated made a written contract with Candy Incorporated whereby Sweet Plantation agreed to supply all of the candy's sugar requirements for the next year at $0.25 per pound. A dispute arose as to how much sugar Sweet is to supply. The parol evidence rule will bar Sweet's introduction of evidence concerning the intent of the requirements of Candy. T or F
False
The UCC requires consideration for agreements modifying contracts for the sale of goods. T or F
False
The age of minority to contract in all states is 21. T or F
False
The legal term for a promise in contracts is "provision" t or F
False
To raise revenues, the city of st.cloud requires restaurants to purchase a special permit if they wanted to serve food in an open-air patio. This is in addition to the sanitation inspection license. While at hula taco, a restaurant in Saint Cloud, a customer notices that hula tacos permit expired. This means the customer is not legally required to pay for her food. True or false
False
Typos are almost always detrimental to the validity of a contract because they cause the contract to not reflect the true agreement of the parties. T or F
False
Upon the recommendation of a friend, Hope hires Joey to rewire her kitchen and he completes the work within the time agreed. Then hope finds out the Joe is not a licensed electrician, and she refuses to pay him for the work. A court will enforce the agreement because otherwise hope will be unjustly enriched. T or F
False
Valerie promises Teresa that she will pay Teresa $75 if Teresa will clean Valerie's house by noon on Saturday. If Teresa cleans the house by noon on Saturday and Valerie pays the $75, then this is an implied, bilateral, excusatory contract. T or F
False
Vick valve company makes valves for plumbing fixtures. At the beginning of the year, it sends out a price list addressing each one, to our valued customers. Honest Hank Hardware orders a variety of valves at the prices quoted on the price list. Vick valve must honor the prices on the list and sell valves to Honest Hank. T or F
False
When Olga asks Sven if he wishes to sell his Harley motorcycle, he replies that he would not sell it for less than $2,000. Olga replies I accept, and hands him $2,000. A contract exists. T or F
False
When Randy accepted a job with Burton Construction comma Randy signed the following agreement, upon termination of my employment with Buren Construction, I agree never to work for another employer as an electrician. If Randy resigns from Buren Construction, this agreement would be upheld under the theory of freedom of contract. T or F
False
Whittle sent an order over the Internet for $1,200 garage door. His name keyed into the order will only be effective as a signature sufficient to create a writing, signed by the party against whom enforcement is sought, if he follows up with a signature on paper. T or F
False
You should hire a lawyer to review any legal papers you have to sign, including such papers as we sacraments or car purchases. T or F
False
Farmers Fortune insurance has contracted with farmer Fran to ensure her crops against insect damage. The contract does not specify which insects are covered or how much damage is necessary to make a claim. The contract will probably be enforced in favor of
Farmer Fran
When a party to a contract makes a unilateral mistake, the contract
Generally cannot be rescinded by the mistake and party unless the contract is unconscionable or it is proven that the non mistaken party knew of the error
Judith is a CPA with an excellent reputation and client base. She sells her tax preparation cases to Sean, and the sales contract includes a non-compete clauses restricting Judith from opening a smaller business for two years within a 10 mile radius of her former office. If she opens a tax preparation office 5 miles away after one year, Court would probably
Grant an injunction barring her from operating the new office
An express contract
Has both parties setting forth their intentions
Which of the following represents a unilateral offer?
I will pay you $50 if you mow my lawn.
Bernie owes an undisputed amount to Wilde's heating and air conditioning. Which of the following is true?
If Wilde's agrees to accept less than the full amount as full payment, the agreement is not binding.
In which case is the offer still valid at the time the acceptance is made
In a face-to-face transaction, had offers to sell Mike his stereo and Mike accepts
What phrase explains how a requirements contract can be valid
In good faith
A letter of intent is not likely to be enforceable unless
It is clear that both parties intended to be bound by the letter
A contract most likely will be declared unconscionable if
It is oppressive and the weaker party did not fully understand the consequences of the agreement.
Most accurate statement regarding economic duress is
It may be grounds for rescission
Jack mails an offer to join that states, I offer to sell you my car for $2,000. If I don't hear from you in 10 days, I will assume you are willing to buy the car for the stated price. Jack hears Nothing by the deadline and as soon as he has a deal. What is the result?
Joan is not bound. Generally an offeree must say or do something to accept an offer
Barb has been a children's daycare provider for several years in the small town of Salton. She is decided to give it all up and move to the big city for excitement and adventure. She sold her business to Ken, agreeing not to open a competing business within 5 miles of salt in for a period of 9 months. After 5 months of the big-city life, Barb is broke and move back to Salton. She opens a small daycare business. Kenzie's on the non-compete clause. What is the most likely result?
Ken winds. The agreement is enforceable
The Kelso V. International Woods products Inc. Case was an example of
Lack of consideration
Larson entered forester's Auto Mart to purchase a used car. Larson found a vehicle with a sales price of $11,000. After Forrester answered all of Larsen's questions , Forrester and Larson agreed to a sale. As Larson was leaving to get the money to pay for the car, Forester told Larson that Robert Redford formerly owned the car. Larson later learned that Robert Redford had never owned the car. If Larson seeks to rescind the deal based on Foresters statement Kama Larson will
Lose because he will not be able to prove reliance on the misrepresentation
Ryan, a minor, contracted to sell his Auto to Ed, a 28 year old. Ryan later refused to complete the sale. If Ed sues to enforce the contract, and will
Lose, because the contract is voidable by Ryan
Marty, a 16 year old Kama contracted with cream-of-the-crop Cycles to buy an $8,000 motorcycle. He agrees to make monthly payments until the purchase price plus interest were paid in full. It is 3 years later and Marty has not disaffirm the contract and has made Regular payments on the cycle since turning 18. Which of the following is correct?
Marty has ratified the contract and is now bound by its terms
Collector car displays his beer can collection at the local swap meet. Mary sees the collection and is interested in buying it. Carl says he will sell the collection for $1,500. Mary says she really likes the collection but is only willing to pay $1,000. Which of the following is correct
Mary's counteroffer terminates Carl's offer of $1,500
Walter enters a dentist office and points to a damaged tooth. The dentist, Matt, treats the truth. If Walter refuse to pay Matt and Matt sued
Matt would win, this is an implied contract
Hensley and Boyer have been negotiating for several months over issues related to the purchase and sale of some real estate. They draft a letter of intent which
May or may not be an offer , depending on the exact language and whether the document indicates that the parties have reached an agreement.
Alfred orally promise to pay Robert a salary of $30,000 per year for 5 years and his moving expenses for up to $10,000 if Robert would quit his job and come to work with him at his manufacturing plant. Robert agreed to do so, but requested a written contract. Also assured him that the company attorney would prepare such a contract as soon as possible, but Alfred needed Robert to start at once. Accordingly, Robert sold his house, move his family, and commenced work for Alfred. He was fired without cause two months later. No written contract was never executed. Can Robert enforce Alfred's or a promise?
Maybe. Robert should go to court under the theory of promissory estoppel. Alfred made an oral promise that Robert relied upon, and the way to avoid Injustice is to enforce the promise.
Non-competition Agreements are
More common today than they were in the past, although policy issues they raised in the 1700s have never gone away
When Myrtle comes home from work one evening Kama she finds that her yard has been mowed and trimmed. Later, a man comes to collect for the yard work done. Myrtle refuses to pay for the work since she has never seen the man before and did not hire him to do her yard work. Which of the following answers is most accurate?
Myrtle would not have to pay for the artwork
Mid-American oil how to contract with NSB company to supply 1000 gallons of oil by September 1st. The contract contained a provision which required all modifications to be written and signed by the company presidents period in early August, an executive of MidAmerican talked to the purchasing agent of NSB who orally agreed to 2 shipments of oil. One in September and the second one in December. By September 30, when only 50 gallons had been delivered, and as be sued. The likely outcome of the lawsuit is
NSB wins because the modification has to be in writing
Is Rudy offers Oscar $200 for his laptop valued at $600 and Oscar degrees, a court will probably
Not set aside the agreement based on the adequacy of the consideration.
Wendell, new to the area, selects a doctor from the telephone book and visits that doctor to have a splinter extracted. Beknownst 2 Wendell, the doctor has never passed the state licensing exam. Later, when when Dale discovers the truth, he refuses to pay his bill. If the doctor sues for the recovery of the fee, will the court support the doctors claim?
No, the court is likely to take the position that it is not in the Public's best interest to enforce contracts with unlicensed doctors.
If Jane persuades Linda into buying her horse by telling Linda that the horse runs like the wind, then Jane's statement is
Puffery
Mentally infirmed Sasha contracts to purchase a piano for $2,500 and 60 monthly installment payments. Six months later she tries to void the contract on grounds of mental impairment. A court will
Normally void the contract but we require Sasha to return the piano
TZ Corp. Hired Jose to bribe a foreign government official in to awarding three million dollars contract contract to TZ. TZ gave Jose $10,000 and cash to make the bribe payment and $2,000 for Jose's efforts. Instead of paying the bride, Jose pocketed all of its money. If TZ sues Jose TZ will
Not be able to recover the $12,000
Is Becky promises not to drink alcohol until she becomes a legal adult in exchange for Ben's promise of $1,000, the agreement is
Not enforceable because Becky does not have a legal right to drink alcohol
John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky Derby. Prince Charming came in last, much to John's frustration and embarrassment. John exclaims in a loud voice, I'm selling that horse to the first person who hands me a hundred bucks! John has
Not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer.
Renita, a merchant, has received a signed, written confirmation from Merchants Incorporated referring to good she had not ordered. Renita should
Objection to the confirmation in writing within 10 days
Jamie offered to buy Kevin's bike. Jamie is the
Offeror
An insurance contract is not considered to be legalized form of gambling because
One must have an insurable interest in the person being insured
The basic distinction between a bilateral contract and a unilateral contract is that
Only one promise is involved in a unilateral contract
Patty is a poor college student struggling to work and keep up with her studies. Fred, Uncle, promises to pay Patty support of $200 per month for the next 6 months. Although Fred didn't ask her to, she quits her current job in order to devote full time to her studies for the next six months. Fred makes one payment and then stops with no explanation. If Patty sues, what is the likely result?
Patty may win under the doctrine of promissory estoppel
Police officer Paul apprehend a wanted criminal and then demands the $10,000 reward offered by Crime Stoppers. Which of the following statements is true?
Police officer Paul is not entitled to the reward because he was under a pre-existing duty to make the arrest
As English judges were developing the common law of contracts in the twelfth and thirteenth centuries
Promises were found not binding unless written and sealed
Contracts that do not arise from mutual agreement but are created by courts to avoid unjust enrichment are
Quasi contracts
If each party's promises are listed separately in the contract, they are probably
Reciprocal promises
In the case of scrivener's errors, commonly known as typos, of Court will usually
Reform the contract if it is necessary that the mistake is not with the parties intended
Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days. The parties negotiated and meant to say in the written contract, delivery in 50 days. If the evidence is clear that the two parties intended to agree to 50 days, the courts will probably apply the remedy of
Reformation
When courts consider economic duress, they consider the following factors except
Relative size of the contract
Statements of facts about the past and present are called
Representations and warranties.
Under a contract for the sale of land, the statute of frauds
Requires the defendant to sign the agreement
When a business is concerned about selling to minors because of their right to disaffirm contracts, the business might protect itself by
Requiring an adult co-signer
Which of the following is not one of the four focused steps in reading a contract
Rewrite with a lawyer
Ron, a minor, go to the hospital for treatment of the flu. On the new patient form Ron signs Kama he agrees to pay for any care and treatment he received. When billed for the treatment
Ron must pay for the value of the benefit he receive, because medical care is a necessary
Which of the following is an example of an exculpatory clause?
Seller is not responsible for property damage regardless of the cause of the injury.
Seth told the salesperson at outdoor times that he wanted the sleeping bag that was advertised in the Sunday paper. One that would keep him comfortable if the temperature dropped to 10 degrees Fahrenheit. The sales person told says they were out of that bad, but there were two other styles that would meet his needs and the price was the same. Seth insisted he wanted the advertised bag and threatened to sue for breach of contract period which is true?
Seth will not Prevail, as the advertisement was simply an invitation to negotiate
Which of the following is most likely to constitute fraud?
Silence as to a toxic-waste problem on real property that the buyer would not reasonably find.
Mark works as a bartender at the little Nipper, a local bar period under state law, bartenders are required to be licensed. The licensing requires filling out an application and submitting a $50 application fee. The application does not require any special education or experience, just the $50 fee. Craig enters Mark's bar, ordered a round of drinks for the house, then notices that Mark's license is not on display behind the bar. Craig learns that Mark is not licensed and refuses to pay for the round of drinks. The little Nipper sues. What result?
Since this is a Revenue - raising statue, the little Nipper wins
Sonny, a a college student Tama places a telephone order for a new computer from computers Incorporated. The price of the computer is $1,500. The clerk who takes the order send Sonny a copy of the invoice. The next week, Sonny calls back and tries to cancel his order.
Sonny and cancel the order. The invoice is unenforceable against him, as he did not sign the invoice.
Contracts for the sale of fabric, automobiles, computers, furniture, and paper clips would all be governed by Article 2 of The Uniform Commercial Code. T or F
True
The Plaza Hotel contracts with EZ lawn to have EZ mow the grass on the Plaza grounds for the next 10 years. However there is a clause in the contract that states if the hotel chooses, the contract maybe terminated provided Plaza pays EX $2,000 on termination. Which of the following is correct
The contract is enforceable because the option to cancel clause is supported by consideration
Mario's $3,800 on her credit card. She sends the credit card company a check for $800 with the notation payment in full on the check. If the credit card issuer cashes the check
The check may be subject to a UCC exception to the general rules for accord and satisfaction cases involving checks
John enters into a contract to paint Chad's house. When Chad decides on a color, John will buy the paint and paint the house for the price of $2,500. This contract is governed by
The common law of contracts governance because the prominent factor of the contract is for the sale of services and not Goods
If Morales and Rufus Supply negotiate for the purchase and sale of a supply of fuel for a three-year period of Morales' business
The contract May indicate a method for determining a price, without stating a definite price.
Scott is trying to introduce oral evidence in court to alter the terms of a written contract he had with Bonnie. Bonnie has not raised the parol evidence rule as an objection to Scott's testimony. In which of the following circumstances will Scott and not be able to introduce the oral evidence?
The contract has an integration clause in it and Scott's point of contention is covered in detail in the contract, although not to his favor.
Brahma entered into an oral agreement to sell 50 jet skis to Summer Sports. Brahma delivered 20 of the skis on May 1st. On June 1st summer Sports notified Brahma that it will not honor the agreement. Which statement is correct?
The contract is enforceable for 20 jet skis
Larry has the largest pizza business in the city. He words that Henry is thinking of opening a competing Pizza and Pasta delivery business very gives Henry $25,000 not to open his proposed business in the same city. Which statement is correct?
The contract is illegal and void
Emation entered into a contract with a consumer, Ezra, a recent immigrant to the United States, who spoke very little English, and had no formal education. The contract provided for Ezra pay $2,500 for a computer system. The system was worth $400. If a nation sued easier for enforcement the contract, what is the most likely result?
The contract is unenforceable because it is unconscionable
Mike owns a house in a poor area of a large city. Mike is on disability and his total monthly income is $700. A sales representative visits his home, selling a water purification system. Mike signs a contract that calls for monthly payments of $500 for the next 10 years. The water system is worth no more than $1,000. Mike thought he was signing a permission slip allowing the salesman to conduct a free water test to determine the toxins in the water. How would a court most likely describe this contract?
The contract is unenforceable because it is unconscionable
Marty, a sixteen-year-old, contracts with cream of the crop Cycles to buy an $8,000 motorcycle. Marty agrees to make monthly payments until the purchase plus interest are paid in full. Which of the following is correct?
The contract is voidable by Marty.
Suppose that any lawyer enters into an agreement with Cindy client that his fee will be a percentage of the recovery Lenny obtains for Cindy in her pending divorce. State law makes such a contingency fee Arrangement illegal in divorce actions. What will be the probable outcome if Lenny attempts to enforce the agreement?
The contract will be void as violating a statute. Lenny will not be able to recover anything
Abby dies, and her good friend, Clay is appointed to administer Abby's estate. Abby's house was in poor condition, so orally hired a contractor to make repairs. Clay also orally promise that if the is State could not pay the estate could not pay the repair Bill, he would pay it even though he does not live in the house and has no entitlement under Abby's estate. The estate does not pay the repair Bill. Who can a contractor collect from, if anyone?
The contractor can collect from the estate only
Emation Incorporated hires Marvin to steal trade secrets from one of its competitors for $10,000. Marvin demands half of the money upfront. A mission pays more than $5,000 but Marvin decides not to pursue theft of the Trade Secrets. A nation sues Marvin for the return of $5,000. What will the court do with his contract?
The court will not do anything to help emation get its money back.
Show me offers to sell Jean Goods both parties know are stolen. Jane accepts the offer, and agrees to pay for the goods. Later, Jane refuses to accept or pay for the goods. If Shelly Sue's Jane for breach of contract, what is the probable result?
The law would not enforce James promise, as it does not have a lawful purpose
Claude agrees to leave his house to Irvin for nine months, the lease to begin 6 months from the signing of the contract. Under the statute of frauds
The lease is required to be in writing because of the one-year rule
Which of the following is generally not in the introductory paragraph of a contract
The location of Contracting
Which of the following statements is incorrect concerning arbitration?
The losing party in an arbitration can file an appeal in The District Appellate Court
Dick offers to sell Jane his 1955 Thunderbird convertible period before Jane can accept the offer, lightning strikes the car and it is totally destroyed which of the following is true?
The offer is terminated by law.
Floyd offers to sell his 1967 Ford Mustang convertible to Tim. Before they conclude their negotiations, Floyd dies. Which of the following is true?
The offer terminates automatically upon Floyd's death.
If an offer specifies no time limit in which to accept
The offeree has the responsible period during which to accept
Which statement is true about definitions in a contract?
The parties to the contract may be defined with shorter designations than their actual names
Any contract modification, the phrase, "charged with such Amendment " means
The party who will be adversely affected by the change
Regency Construction place an order for two hundred two-by-fours from lumberjack. If the place of delivery and time for shipping the goods are not specified, the UCC provides
The place of delivery is Lumberjacks and the time for delivering the lumber is a reasonable time based on normal trade practice
Which of the following is not a true statement about fraud?
The plaintiff must show that although the defendant acted in good faith the statement was material because the defendant expected the plaintiff to rely on it and enter into the contract.
David and George have a contract wherein Georgia agrees to buy Sporting Goods and equipment. Since the goods are not to be delivered for several months, they left the price open. Under the UCC, which of the following will be true?
The price will be the reasonable price based on fair market value of the goods at the time of delivery.
One reason you may not need a written contract is
The terms of the agreement are simple and the value of the transaction is small
A seller's form clearly states no warranty is included. The buyer's form states that the seller warrants the goods for one year. In this case
The warranty term is a different term, in the majority of States hold that a contract can be formed but the contradictory terms cancel each other out.
The intent of the offeror to extend an offer to the offeree is generally determined by reference to
The words and conduct of the offeror
Which of the following statements, if made by a seller who knows the statement will be untruthful, would not be misrepresentation of material fact resulting in a cause of action for fraud?
There is no better car in the world
Peter help Jack with numerous personal and business chores towards the end of his life period two months before his death that dictated the memorandum to Peter in Greek stating. Peter is my best friend I have in this country Kama he treats me like a father and I think of him as my own son. For all of the services Peter has given me all these years, I owe him the amount of $50,000. I will shortly change my will to include him as my heir. Jax signed the memorandum, but he did not fact alter his wife to include Peter. This was a real case. The Utah appeals court would rule
There is no consideration to support Jack's promise
Oxtron Inc. sent the following price list to his customers: Which statement is correct?
These price quotes would generally not be considered offers
Robert, A minor, buys a stereo from Jane for $200. State law allows a minor to disaffirm contracts within a reasonable time after turning 18. Robert disaffirms the contract the day after turning 18 and Returns the stereo.
This contract was a voidable contract, Robert can disaffirm
Jeff was a subcontractor, binding on a contract for Ace Corporation, the general contractor. When adding up the total of materials and labor , Jeff's secretary mistakenly move the decimal point one place, ending up with a bid of $3,500 rather than $35,000. Ace Corp. Accepted Jeff's bid, mostly because all the other bids were over $30,000. When Jeff learned of the mistake, he tells Ace Corp. That he cannot do the job for $3,500. If Ace Corp. Sues to enforce this contract, what is the most likely
This is a unilateral mistake, but one where Ace Corp. Knew that a mistake had been made. Jeff should be able to rescind the contract
Which of the following types of contracts cannot be either contradicted or supplemented by evidence of Prior agreements or expressions?
Totally integrated contracts
A contract should have a descriptive title, which is generally in all capital letters, underlined and centered at the top of the page. T or F
True
A party injured by fraud generally has the choice of suing for damages or resending the contract. True or False
True
Consideration can be a promise or an act. T or F
True
According to the UCC, one or more open terms will not cause a sales contract to fail for indefinite list as long as the parties intended to make a contract and there is a reasonably certain basis for the court to determine the open terms. T or F
True
Agreeing not to open a competing business could be consideration. T or F
True
Alex promises to pay $100 to anyone who finds his lost watch. Kate finds it and Returns the watch to Alex after hearing of the reward money. Alex and Kate have an enforceable unilateral contract. T or F
True
Alice offers to sell her car to Barry for $500, and Barry except. Alice's car has a market value of $1,000 but this fact is unknown to Alice. The contract is enforceable. True or false
True
All states allow the remedy of rescinding the contract for the sale of goods while still allowing the remedy for suing for damages. T or F
True
Amanda, a recent University graduate, needed a car to get to her new job. To help Amanda secure a loan for the car, Ted, friend, agreed to pay the loan should Amanda default. Ted's promise to pay the loan is a collateral promise. His promise must be in writing to be enforceable. T or F
True
An agreement May violate public policy even if the agreement does not require a party to commit a crime, tort, or violate a statute. T or F
True
Boris skydives out of a plane and gets hung up on a tree, hopelessly suspended and Swinging precariously in his Parachute from the branches of the tree. Natasha see is that he is in trouble and comes to his rescue. Once Boris is safely on the ground, he gratefully promises to give Natasha half of his life savings. When he changes his mind, Natasha will probably be unsuccessful in enforcing his promise. T or F
True
Bry Incorporated and Gangl Co. Entered into an oral agreement for the sale of 3000 sweaters. Both parties performed as required under the contract. Bry delivered the sweaters and Gangl accepted and paid for them. Since the contract is fully executed, it makes no difference that it was oral. T or F
True
Frank suffers from a mental impairment due to a brain injury from a airplane accident. He contracts with Glenda to purchase her dining room furniture. A month later, he tries to void the contract. If he is unable to return the furniture, the court will not receive the agreement unless Frank can show that Glenda acted in bad faith. T or F
True
Hilda owes Lex $3,000, which is an Undisputed amount. If she offers him her car in full settlement of the debt and he accepts, the agreement is binding and he can no longer claim she owes him anything on the original debt. T or F
True
If a contact is made with a person required by law to hold a license, and the purpose of the license is protection of the public, the contract made by an unlicensed person will generally be enforced. T or f
True
If a minor can cancel a contract, it can be done at any time during minority or within a reasonable time after reaching minority. T or F
True
If the offer does not specify a type of acceptance, the offeree may accept in any reasonable manner and medium. T or F
True
In many states it is illegal to lend money to to help someone gamble. T or F
True
In seeking to determine whether there is a meeting of the minds, the courts look to how a reasonable person would objectively view the language or actions of the parties. T or F
True
L&M loans Joan $400 so that she could buy her textbooks for the current semester. L&M's terms for repayment of the loan R, $200 in 2 months, $200 and 4 months, and another $100 at the end of the fifth month. The legal maximum rate of interest on this type of loan is 6% per annum. L and M's loan is usurious. T or F
True
Mary goes into honest Harry's electronics and purchases a TV. Mary agrees to pay for the TV in 30 days on the store's 30 days same as cash plan. This is an Executory contract. T or F
True
Nunnsky's Retail send out newspaper inserts advertising wool suits for $50. In fact, the store had only two, out of style suits for sale at this price. Their other wool suits started at $175. This constitutes bad faith and its advertising, so consumers may have protection through State statuses. T or F
True
On her 18th birthday Laura May , my words or actions, ratify a contract she made during the previous year. T or F
True
One purpose of contract law is to make business matters more predictable. T or F
True
Parol evidence refers to anything, other than the written contract itself, that was said, done, or written before or as the parties sign the contract. T or F
True
Pastor Tom was employed by the first church for 40 years. On Pastor Tom's retirement there was no adequate Pension Plan Period 2 months after their retirement, a wealthy parishioner comma in consideration for pastor Tom's 40 Years of faithful service and for being such a sweet man, promise to pay him $500 per month for the rest of his life. This promise is probably not enforceable. T or F
True
Raul agrees to paint Mike's house for $1,000. Before finishing, Raul states it is too hot to finish, and Mike offers to pay $1,200 if Raul finishes. Mike's statement that he will pay $1,200 is unenforceable. T or F
True
Raymond agrees to transfer an easement right to Sandra for $1,000. This contract is within the statute of frauds and therefore needs to be in writing to be enforceable. T or F
True
Rest-well Hotel really ordered 1000 blankets monogrammed with its initials, rwh, from tricolor textiles. Tricolor had just finished monogramming the blankets when rest well called and cancelled the order. Tricolor will be able to enforce the agreement even though there was no writing. T or F
True
Revocation is the withdrawal of an offer by the offeror. T or F
True
Ricardo has agreed to sell his family farm to Walter for a price of $450,000. Even though both sides agree on the terms, it is still worth the money for Ricardo to hire a lawyer to write the contract. T or F
True
Robert offers to buy a car from Jane for $400 Jane must accept this offer in order to form an enforceable contract. T or F
True
Roger parked his car at a garage that has a large sign at the entrance saying, this garage is not liable for items stolen from a car. This type of notice is referred to as an exculpatory clause. T or F
True
Roger, a minor, by the stereo from tuneland. Roger uses the stereo for a few months, returns it, and demands his money back. In a majority of States, Roger may return the stereo and he does not have to pay for the use of the stereo or the damages. T or F
True
Scrivener's error is another fancier name for a typo
True
Software click wrap and shrink wrap agreements limiting the manufacturer's maximum responsibility to a refund of the purchase price even if the software destroys your Hardware Drive have generally been found to be binding against consumers. T or F
True
Some Contracting parties are intentionally vague in contract terms. T or F
True
Some of the elements of a contract our agreement, consideration, legality, and capacity. T or F
True
Spencer, age 18 and of sound mind, has the legal capacity to contract. T or F
True
The Uniform Commercial Code provides that, under certain circumstances a merchant may be liable on a written contract, even when the merchant has not signed it. T or F
True
The original statute of frauds is the English law that began the practice of requiring written evidence of certain kinds of contracts, but now the British government has repealed the writing requirement for most contracts. T or F
True
To be valid, an agreement not to compete must be ancillary to a legitimate bargain. True or false
True
Travis had too many beers at the baseball game. Ed realized Travis was so intoxicated he wouldn't know what he was doing, so he got Travis to sign a promise to sell his motorcycle today for $50. When Travis gets sober, he may void the contract. T or F
True
Under contract, Danielle is required to paint a room with paint chosen by the homeowners, the Flynn's. After Danielle paint the room according to the contract requirements, her duties under the contract are discharged. T or F
True
Under the statute of frauds, the writing must be signed by the defendant, and must state with reasonable certainty the name of each party, the subject matter of the agreement, and all of the essential terms and promises. T or F
True
When promissory estoppel is used by the courts, it is not because there is not an enforceable contract present. T or F
True
You have placed an antique sofa up for auction and the auctioneer has not made any special announcements about the sale. You can withdraw the sofa at any time before the auctioneer closes the sale by announcement or by the fall of the hammer. T or F
True
The main difference between the UCC requirement for writing a contract for the sale of goods and the common law is that the
UCC does not require all the terms of the agreement to be in writing
When a party to a contract intentionally makes the terms of a contract unclear it is called
Vagueness
An agreement in which parties intend to form a valid bargain, but a court declares that some rule of law prevents enforcing it is
Unenforceable
When a contract falls within the statute of frauds but is not reduced to a writing, the contract is
Unenforceable
Larry goes to his Barber who has cut his hair for the past several years. The barber proceeds to cut his hair as they talk about the most recent snowstorm to hit the area this is an example of a
Unilateral implied contract
Vivian goes to an auction and sees a rare antique lamp that is an identical match to one she already has. At the proper time she bids on the land and is the highest bidder. Even though she's the highest bidder, the auctioneer refuses to accept her bed and withdrawals the land from the auction. Can the auctioneer do that?
Unless otherwise stated, the auctioneer had the right to withdraw the item before the fall of the hammer.
Vince has begun forgetting things and is becoming very difficult to get along with. He is 85, and has been ill, and is very fond of his housekeeper Annie. He gives a deed to Annie for all of his real property. At Vince's death, his children, who got only his photograph albums according to the will, ask that's a deed be set aside and the land be put back in the estate for purposes of division among all the children. The probable result will be
Unless the children can prove that Vince was unable to understand what he was doing, or the Annie used her position to improperly influence Vince, and he can keep the property.
On January 16th comma Deb offers to sell her waterbed to Colleen for $600. Choline accepts and agrees to pay Deb $600 on January 27th. Which of the following is correct?
Until January 16th, the contract was executory
Which of the following is not one of the three steps to amend a written contract
Verbally agreed to the changes and shaking hands on the deal
Wally owns 200 acres of land. Wally offers to sell the land to Robert for $1,500 per acre. Robert replies that he does not need 200 acres of land but would like to buy 40 acres at $1,500 per acre. Wally agrees to sell but does not identify which 40 acres. Later, Wally refuses to sell any land to Robert. What is the result?
Wally wins. The agreement is too indefinite since it does not identify which 40 acres are to be sold.
Walter work nights as a clerk in a fast-food store. On his last work shift, Walters boss told him, I'm really grateful for the year that you have worked here. I'm going to give you a bonus of $1,000 in your paycheck. When Walter got his last paycheck, there was no bonus. If Walter sues the likely result will be
Walter will lose, as he gave no consideration
On January 8th , Qualstar Incorporated sent Hylavian company a letter to sell $10,000 and Restaurant Supplies. On January 18th, Hylavian mailed a letter to Qualstar accepting the offer. Qualstar receive the acceptance letter on January 20th. On January 17th, Qualstar sent a letter revoking the offer. Hylavian receive this letter on January 21st. A contract between Qualstar and Hylavian
Was formed on January 18th
Miles purchased a lawn mower with an attached warning that said, the manufacturer is not responsible in the case of an injury caused by the lawnmower. If miles is injured because of a defect in the lawn mower and Sue's the lawnmower manufacturer, he will most likely
When, as this morning would be unenforceable
In determining whether parties intended to reduce their agreement to writing, which of the following factors would normally not be considered
Whether or not the terms are complete
The Johnsons decided to sell their summer cabin on beach Lake they sent Flyers out to all who previously had expressed an interest in buying the cabin stating that they were planning on selling their cabin. The flyer described the location of the property, the size of the lot, and the price. If one of the recipients responds by sending a letter accepting, an agreement
Will not be formed because the flyer was sent out as an invitation to make an offer
In the historic case of hammer V in the historic case of hammer V. sidway, the nephew
Won, as there was consideration
In January, Alex promise to pay Y-K Inc. $500 if it would refrain from filing suit against him on a breach of contract action. Y - k agreed and accepted a $5,000 check from Alex. Which of the following statements is correct?
Y - K's promise to refrain from suing Alex was supported by legal consideration and is enforceable
Zero Inc. Agreed to build Millie a storage building for $8,000 after beginning the project, 0 realize that it could not complete the job and make a profit. 0 demanded $9,500 to complete the building. Milly agreed to pay the $9,500. When the project was complete Kama Millie tendered $8,000 to zero for the job. If Zero sues Millie for the remaining $1,500
Zero will lose because there was no legal consideration to support the additional $1,500