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BUSLAW 3rd Midterm

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In which of the following situations will a smaller sum be unable to discharge a larger debt?

If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency.

The UCC provides that a merchant is bound to keep a written offer open for a stated period but no longer than:

90 days.

Which of the following normally is an acceptance?

A "grumbling acceptance"

Which of the following are the two basic elements to consideration?

Bargained-for exchange and legal sufficiency

An offer need not take any particular form to have legal validity. To be effective, however, it must:

Be communicated to the offeree

Why does it matter whether or not a contracting party is an Article 2 merchant?

Because Article 2 sometimes creates different rules for merchants in sale-of-goods cases.

Why is past consideration not consideration?

Because it is not bargained-for exchange

Why is nominal consideration usually not consideration?

Because it suggests the absence of a genuine bargain

Anna by mistake delivers to Bob a plain, unaddressed envelope containing $50 intended for Cora.

Bob's obligation to return the money is quasi contractual.

Leonard offers to sell his diamond ring to Emily. If Diane overhears the offer and says, "I accept the offer":

Diane cannot accept the offer, because it wasn't made to her.

Tate enters into a contract with Smith under the terms of which Smith is to pay Tate $7,000 and Tate is to build a garage, repair a boat, and build a doghouse. If the doghouse has not yet been built, which term describes the type of contract in existence?

Executory contract

Jerry received a bill for $300 from Johnson for a tune-up Johnson had performed on Jerry's car. Jerry called Johnson and told him, "The car runs no better now than before the tune-up. I am sending you $100 and no more." Johnson received the $100 check which was marked "paid in full" and cashed it. Jerry is still liable to Johnson for $200.

Which of the following is necessary for the existence of an offer?

Facts and circumstances that reasonably indicate the offeror's intent to contract

A valid contract may be unenforceable for which reason(s)?

Failure to satisfy the statute of frauds,Running of the statute of limitations

Which of the following is not generally required in order to have a valid contract?

Fairness of the bargain

"I promise to pay you $100 if you will promise to fix my car next month." This is an offer for a unilateral contract.

False

An auctioneer is free to withdraw the goods from sale if the sale is advertised or announced in explicit terms to be without reserve.

False

An auctioneer is the offeror and each bid is a counteroffer until a final bid is accepted.

False

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

False

Maria posted several signs in the neighborhood offering $50 for the return of her lost cat. Dave calls to get a description of the cat and tells Maria, "I'll look for your cat." A contract is formed by Dave's call to Maria.

False

Past actions unbargained for by the parties in an agreement can become valid consideration for a contract.

False

Silence can never be an acceptance.

False

Under the UCC, an acceptance must always be identical to an offer for a valid contract to be formed.

False

A liquidated debt is an obligation the existence or amount of which is in dispute.

False.

D owes C a past-due undisputed debt of $500. D sees C in a bar and pays him $400. C then says to D, "Forget about the other $100 you owe me. I'm glad to get the $400." C's promise to discharge the remainder of the debt is binding.

Dana gives care to Marnie's dog when Dana finds Marnie's dog ill on the side of the road. After Marnie locates her dog, Marnie promises to reimburse Dana for the cost of treating the dog. Marnie's promise is binding, because there is a bargained-for-exchange.

An exclusive dealing contract is one type of contract which is illusory because it lacks consideration.

False.

Consideration has only one basic element, which is a bargained-for exchange.

False.

Contracts generally require adequacy of consideration where the consideration given by both parties is of fair value and equitable.

False.

In most states, a contract under seal is binding without consideration.

False.

Legal detriment means the obtaining by the promisor of that which he had no prior legal right to obtain.

False.

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

False.

Past actions unbargained for by the parties in an agreement can become valid consideration for a contract.

False.

Sandy's private secretary promises to keep the contents of a letter she typed secret if Sandy will give her the next day off with pay. If the secretary takes the day off, Sandy has to pay her for the day.

False.

Sparky, Nancy's pet dog was lost. Nancy ran an ad in a local paper offering $50 for Sparky's return. Jane did not know of the advertisement but found Sparky, and because Nancy's address was on Sparky's collar returned the dog to Nancy.

Jane could not accept Nancy's offer because she did not know of it.

Chad has offered to take Miles into his accounting firm as a partner upon payment of $5,000 cash. In response, Miles says, "I'll give you $3,000 cash now and I will pay you the remainder in two months after I see whether things are working out as a partnership."

Miles has made a counteroffer; hence there is no contract.

Specific lender usury statutes rather than the general usury statute generally apply to real estate mortgages and small consumer loans.

The UCC imposes a duty of good faith on the performance and enforcement of every contract it covers.

The communication of an offer can be made by the offeror or the offeror's agent.

Under the common law, an offeree's proposal to make a material change in the terms of an offer will most likely constitute a counter-offer.

Under the common law, in order to be enforceable, a modification of an existing contract must be supported by mutual consideration.

When a contractor submits a bid for a construction project, the submission of the bid is an offer.

When both parties to a contract are minors, either or both of them may avoid the contract.

Where a stipulation in restraint of trade is a part of the contract for the sale of a business, it may be valid if the restraint is within reasonable limitations to protect the business's goodwill.

Mike, the owner of a yogurt shop, orders 500 quarts of yogurt from his supplier. Nothing, however, is said by either party about the price or method of payment. The supplier ships the yogurt as ordered. Since this is a contract implied in fact, Mike must pay his supplier for the yogurt.

True

Marcus has a contract to purchase a new CD player. The law governing this contract is Article 2 of the UCC.

True

Deanna, an attorney, has a personal injury case which is set for trial next week. She needs a good doctor to testify on behalf of her client, so she contacts Dr. Dogood who agrees to testify on behalf of Deanna's client at the trial. In return for Dr. Dogood's testimony, Deanna agrees to pay Dr. Dogood $10,000 if they win the case, and $5,000 if they lose. Dr. Dogood agrees. The agreement between Deanna and Dr. Dogood is unenforceable.

Generally, advertisements, catalogs, price lists, etc. are not treated as offers.

If Sam agrees to sell to Thomas all of the tomatoes he wants at $25 a bushel, there is no contract for lack of consideration.

In a bilateral contract, if one party is not bound, neither party is bound.

In a unilateral contract, a promise is exchanged for an act or forbearance to act.

In cases where one party to an illegal agreement is less at fault than the other, he will be allowed to recover payments made or property transferred.

In general, ambiguities in a written agreement are resolved against the party who drafted the agreement.

In some states a promise under seal is binding without consideration.

A promise to pay $1,000 a year to a local police officer not to have your store vandalized is legally unenforceable under the rule that makes performance of a pre-existing legal obligation legally insufficient consideration.

An offer made as a joke, where a reasonable person would conclude that it was made as a joke, cannot result in a contract.

At common law, a valid contract may be entered into on Sunday or on any other day.

Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.

As a general principle of contract law:

the courts do not evaluate the adequacy of consideration.

The validity of a contract is not affected by:

the fact that the contract turned out to be a bad bargain for one of the parties.

An obligation which is either contested as its existence or as to its amount is considered a ___________ debt.

unliquidated

An output and requirement contract is

usually enforceable.

An output or requirement contract is

usually enforceable.

Silence in response to an offer:

usually is not an acceptance.

Ace Electric Company has entered into an agreement with Tri-State Metal to buy its actual requirements of conduit for six months from Tri-State. Tri-State has agreed to sell all required conduit for the next six months to Ace. The agreement is

valid and enforceable.

A contract which requires a buyer to purchase all that he needs from a seller is

valid.

Lee has been declared incompetent by the court and is under the care of his sister. Without his sister's knowledge, Lee rents the 30,000-seat civic center for his birthday party. Lee's contract to rent the civic center is best described as a:

void contract.

When there is no consideration for a promise, the agreement is:

void.

A contract whose formation is induced by duress (force or compulsion) is:

voidable.

Steven intentionally makes a material misrepresentation of fact regarding his motorcycle to Thelma who agrees to buy the motorcycle based upon the misrepresentation. This contract is:

voidable.

Steven makes a material misrepresentation of fact regarding his motorcycle to Thelma who agrees to buy the motorcycle based upon the misrepresentation. This contract is.

voidable.

The Code's firm offer rule applies only to offers in writing that are made by a merchant offeror.

True

The death or insanity of the offeror or offeree does not terminate an option.

True

The difference between an express contract and an implied in fact contract is the manner in which assent is manifested.

True

The element of exchange is absent where a promise is given for an act that has already been done.

True

The parties may enter into a contract for the sale of goods even though they have reached no agreement on that price.

True

The parties to a contract may modify the agreement with no additional consideration by simply substituting a new contract.

True

The performance of a pre-existing contractual duty is legally insufficient consideration.

True

The person to whom an offer is made is an offeree.

True

A conditional promise is a promise the performance of which depends upon the happening or nonhappening of an event not certain to occur.

True.

A few states provide by statute that the parties need to provide no new consideration when modifying any contract.

True.

A modification of a preexisting contract occurs when the parties agree to change one or more of its terms.

True.

If a promise is illusory, mutuality of obligation is lacking.

True.

In a bilateral contract, if one party is not bound, neither party is bound.

True.

Abe is involved in an automobile accident and is injured. While he is unconscious, the police call an ambulance which takes him to

a hospital. Abe is treated at the hospital and released a day later. The hospital sends him a bill for $2,400, which Abe refuses to pay, claiming it is too high and he never consented to the treatment because he was unconscious. b. This is a quasi-contractual agreement.

Which of the following is not a basic requirement of a contract?

Writing

According to common law, informing someone of an intention to do an act or an intention to refrain from acting in a specified manner is considered to be:

a promise

According to the Restatement, manifesting an intention to act or an intention to refrain from acting in a specified manner is considered to be:

a promise.

A condition precedent is:

a requirement which must be met before the obligations of the contract are enforceable.

Which is an irrevocable offer?

a. A bid to construct a bridge for the city b. An offer to buy stock in the ABC Corporation once it is formed c. A unilateral offer to pay John $30 to mow your lawn at the point that he has completed half the job and indicates he wishes to finish d. All of the above.

Under Article 2 of the UCC, which of the following would be considered a sale?

a. Bill trades his car for a motorcycle.

Contracts that are implied in law:

all of the above

The UCC Battle of the Forms rule:

all of the above

The concept of consideration in contract law includes:

an inducement to each party to make a return exchange.

Which of the following gratuitous promises are enforceable by statute? a.A good-faith contract modification in a contract for the sale of goods b.A written offer signed by a merchant to buy or sell goods that assures it will be kept open for one month c.A renunciation of a claim in a written waiver that is signed and delivered by the aggrieved party when the contract involves a sale of goods d.All of the above are enforceable by statute.

d.All of the above are enforceable by statute.

The main ingredient which causes an option to be a binding offer is

consideration.

Which of the following would most probably be considered a valid offer?

d. "$100 reward for return of lost white-gold, men's wedding band inscribed with initials 'TEA' to Tony Adams, 350 Main Street, Peoria."

Gail sent a letter of acceptance to an offer that has expired. Gail has made:

d. an offer.

If no definite time for delivery is fixed by the terms of the contract, delivery:

d. and acceptance must happen within a reasonable amount of time.

A contract that has been fully performed by all of the parties is a(n)

executed contract.

A contract under which one or both parties have not as yet fully performed is termed a(n):

executory contract.

A(n) ____ contract is one in which the parties have manifested their agreement by oral or written language, or both.

express

A contract for the sale of a copyright is governed by Article 2 of the Uniform Commercial Code.

false

A negotiable instrument, such as a check, is not a formal contract.

false

All written contracts are considered to be formal contracts.

false

An advertisement is usually an offer to sell.

false

An offer which does not specify when it will terminate remains open:

for a reasonable period of time, depending on the circumstances.

A debt in which the amount owing is not disputed and can be expressed as a certain sum of money fixed debt is known as.

liquidated debt.

As a general rule, the acceptance must be the mirror image of the ____________.

offer

Alice attends an auction during which she makes a bid on a painting. Alice's bid is a(n):

offer.

The person to whom an offer is made is called the:

offeree.

An offer may be accepted

only by the designated offeree.

Any property other than an interest in real property is:

personal property.

A person who makes a promise is a(n):

promisor.

An obligation imposed by law where there has been no agreement or expression of assent by word or act on the part of either party involved is a(n):

quasi contract.

A letter of revocation for an existing offer takes effect when:

received by offeree.

An offeror's revocation is effective when

received by offeree.

An offeree's rejection is effective when

received by offeror.

An offer is effective when it is

received by the offeree.

If a promise is illusory, mutuality of obligation is lacking.

True

Which of the following is not effective when received?

acceptance

When the auctioneer brings the hammer down on the bidding, the result is

acceptance.

Which of the following is a true illusory promise?

"I promise to mow your lawn on such occasions as I designate."

Water Works had a long-standing policy of offering employees $100 for suggestions actually used. Due to inflation and a decline in the level of quality of suggestions received, Water Works decided to increase the award of $500. Several suggestions were under consideration at that time. Two days prior to the public announcement of the increase to $500, a suggestion by Farber was accepted and put into use. Farber is seeking to collect $500. Farber is entitled to

$100 in accordance with the original offer.

$60, since the modified agreement is supported by additional consideration.

Which of the following would most probably be considered a valid offer?

$75 reward for return of lost ring to Arthur Adams, 350 Main Street, Peoria, IL.

Promissory estoppel is found in Section ____ of the Restatement (Second) of Contracts.

Sales of personal property are governed by Article ____ of the Uniform Commercial Code (UCC).

Which of the following will often not constitute valid consideration?

A charitable subscription

Albert read Gem City's ad in the local newspaper advertising a one-quarter carat diamond ring for $89. Albert rushed to the store to buy the ring only to be told by the salesperson that the ad was a misprint and the price should have been $289. Albert gave the salesperson $89 plus sales tax and demanded the ring.

Albert is merely making an offer to Gem City to buy the ring for $89 plus sales tax.

Which of the following is enforceable without consideration?

A new promise to pay a debt barred by the statute of limitations

Which of the following is enforceable without consideration?

A new promise to pay a debt barred by the statute of limitations.

Which of the following is correct with regard to a contract?

A person who deposits money in a bank account has entered into a contract with the bank.

Which of the following would NOT be a merchant under Article 2 of the UCC?

A person who inherits three speedboats and wants to sell them to buy a car

Which of the following would most likely be enforceable?

A promise following the rendering of emergency services that is not supported by new consideration

Which of the following situations are not considered to be sufficient legal consideration?

A promise given in exchange for past occurrence,Where there is a pre-existing duty,Where there is a moral obligation,Where there is an illusory promise

Within the law of consideration, which of the following is a correct statement of law?

A promise in writing to pay a debt barred by the statute of limitations is binding without new consideration.

Which of the following will be legally binding despite lack of consideration?

A promise to donate money to a charity on which the charity relied in incurring large expenditures

Which of the following will be legally binding on all the parties despite the lack of consideration?

A promise to donate money to a charity that was relied upon by the charity in incurring large expenditures.

Which of the following would not be enforceable without consideration?

A promise to pay a debt discharged in bankruptcy where the promise meets the requirements of the Bankruptcy Act

Which of the following would most likely be enforceable?

A substitute agreement to settle an undisputed debt

Which of the following is NOT always necessary in order for a valid contract to be formed?

A writing

Which of the following is not a required element of a contract?

A writing

Which of the following is not always necessary in order for a valid contract to be formed?

A writing

Albert read ElectroCorp's ad in the local newspaper advertising a 4-head VCR for $89. Albert rushed to the store to buy the VCR only to be told by the salesperson that the ad was a misprint and the price should have been $289. Albert gave the salesperson $89 plus sales tax and demanded the VCR.

Albert is merely making an offer to ElectroCorp to buy the VCR for $89 plus sales tax.

Barnes was holding an annual auction at his farm to sell tools, animals, and leftover crops. Adams showed up at the auction and saw a plow among the merchandise. Adams bid $50 for the plow, and no one bid against her. The auctioneer did not accept Adams' bid and stated that the plow would not be sold for such a low price.

Adams' bid was only an offer.

Adele borrowed $1,000 from Beatrice and signed a promissory note due on June 1st. On May 1st, a month before the debt was due Beatrice agreed to accept immediate payment of $800 in full satisfaction of the debt. In January of the following year, Beatrice sought to receive the $200 unpaid balance. What will be the result?

Adele will win because she provided consideration for Beatrice's new promise.

If there is no time specified for the acceptance of an offer, when does the offer terminate?

After a reasonable period of time

X, a manufacturer of pencils, offers to sell Y 1,000,000 pencils for $1 million. The offer, which is signed by X's president, says that it will remain open for six months. The offer does not request that Y pay any consideration for the promise to keep the offer open, and Y does not pay X any consideration. When can X revoke the offer?

After three months

Anita saw an ad for Marlin's Department Store in which the store advertised word processors for $5. When she went to the store to buy one, the salesclerk told her that the ad was a misprint and should have indicated the price to be $500.

Anita is making an offer to buy the word processor.

Which of the following is correct with regard to counteroffers?

All of the above are correct.

Which of the following transactions would be subject to Article 2 of the UCC?

An agreement to sell a television set

In general, which of the following will not terminate an offer?

An inquiry by the offeree as to size or materials

An off-duty deputy sheriff from a county other than the one where the arrest occurred

Andrew gives no additional consideration in return for modification of a preexisting contract.

Arthur contracts to build a garage for Bob for a price of $6,000. Because of an increase in the cost of labor and materials, Arthur refuses to perform. Bob wants the garage, so he agrees to pay an additional $500.

Arthur has given no additional consideration, and under the common law must perform at the agreed upon original price.

Which of the following would most likely be a merchant with respect to the goods in question under the Code definition?

Arthur is an authorized IBM computer dealer.,Brian employs two salesmen to sell his homemade furniture.,Clarence has a store in which he sells used lawnmowers.

Bart sends Carla an offer by express mail. Carla receives it at 10 a.m. on Tuesday. At 11 a.m. on Tuesday, Carla delivers an acceptance to Federal Express, but due to an error, the letter is not sent out by the company until Wednesday at 8 a.m. At what time does the law consider the acceptance to be effective?

At 11 a.m. on Tuesday

Able made a public offer of a reward for information leading to the arrest of a thief. Without knowledge of the reward, Baker furnished information to the police that resulted in arrest of the thief. Which is correct?

Baker could not accept the offer without knowledge of its existence.

Arthur has offered to take Bob into his accounting firm as a partner upon payment of $5,000 cash. In response, Bob says, "I'll give you $3,000 cash now and I will pay you the remainder in two months after I see whether things are working out as a partnership."

Bob has made a counteroffer and hence there is no contract.

Promissory estoppel is a contractual doctrine that includes the following considerations:

Both (a) and (b).

Both (b) and (c).

Wilcox mailed Norriss an unsigned contract for the purchase of a tract of real property. The contract represented the oral understanding of the parties as to the purchase price, closing date, type of deed, and other details. It called for payment in full in advance or certified check at the closing. Norriss signed the contract, but added above his signature the following:This contract is subject to my (Norriss) being able to obtain conventional mortgage financing of $100,000 at 13% or less interest for a period of not less than 25 years.Which of the following is correct?

By adding the "conventional mortgage" language above his signature, Norriss created a condition precedent to his contractual obligation and made a counteroffer.

Carlos must pay $179.99.

Which of the following is a type of counteroffer?

Conditional acceptance

The Acme Corporation is having a "T.V. giveaway." To win, a person must guess the number of marbles in a large jar. No purchase is necessary. This is probably not an illegal lottery because what element is lacking?

Consideration

Which of the following is a true statement about the requirements of an assignment?

Consideration is not required.

Contracts generally require adequacy of consideration where the consideration given by both parties is of fair value and equitable.

Elmer wrote a letter to his friend Fred offering to sell Fred an 80-acre farm for $200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000 and changes his mind about selling.

Elmer can revoke his offer at any time before acceptance, because there is no consideration to keep the offer open.

Cara offered to pay Peter to paint a house located at 103 Canton Street, and he accepted. However, Peter incorrectly wrote down the address as 108 Canton Street. As a result, he painted the wrong house. Fred Fibs, the owner of 108 Canton Street, say Peter painting his house but said nothing. When the job was completed, Peter tried to collect the contract price. He will be able to recover from

Fibs under the theory of quasi-contract.

Which of the following will support a contract?

Forbearance to do an act

Rob repairs a door for Howard. In return, Howard is supposed to pay Rob $75 on November 1 at Howard's house. Which of the following would constitute legally sufficient consideration?

Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment to Rob's house.

To announce the grand opening of a new retail business, Hudson placed an advertisement in a local newspaper quoting sales prices on certain items in stock. The grand opening was so successful that Hudson was unable to totally satisfy customer demands. Which of the following statements is correct?

Hudson made an invitation seeking offers.

If Isaac agrees to accept $600 to settle the dispute and Stan agrees to pay that amount, the substitute agreement is enforceable.

Ann Mayer wrote Tom Jackson and offered to sell Jackson a building for $200,000. The offer stated it would expire 30 days from July 1. Mayer changed her mind and does not wish to be bound by the offer. If a legal dispute arises between the parties regarding whether there has been a valid acceptance of the offer, which of the following is correct?

If Jackson categorically rejects the offer on July 10th, Jackson cannot validly accept within the remaining stated period of time.

Which of the following is correct with regard to consideration?

In a unilateral contract, a promise is exchanged for an act or forbearance to act.,In a bilateral contract, there is an exchange of promises.

The case in which the court held that a newspaper advertisement was an offer because it contained a promise of performance in definite terms in return for a requested act was:

Lefkowitz v. Great Minneapolis Surplus Store, Inc.

Which of the following statements is correct?

Legal sufficiency has nothing to do with adequacy.

Which of the following requires consideration in order to be binding upon the parties?

Material alteration of a personal service contract

Which of the following requires consideration to be binding on the parties?

Material modification of a contract involving the sale of real estate

McHenry is liable to Nancy based on the concept of promissory estoppel.

The elements of an enforceable contract include all but which of the following?

Mutual promises

An offeree is generally under what legal duty to reply to an offer?

No legal duty

Which of the following normally is effective upon dispatch?

None of the above

What standard is used when determining the intent of an offer?

Objective

Which of the following represents the basic distinction between a bilateral contract and a unilateral contract?

Only one promise is involved if the contract is unilateral but two if it is bilateral.

To be effective, an offer must be definite and complete. Which of the following is correct?

Only reasonable definiteness is necessary.

Which of the following statements is most descriptive of past consideration?

Past consideration is no consideration.

Article 2 of the Uniform Commercial Code deals with what type of property?

Personal

is/are any property other than an interest in real property.

Personal property

Who makes the offer in an auction?

Persons attending auction

Which of the following is an exception to the consideration requirement?

Promissory estoppels,Promises to pay debts whose enforcement is barred by the statute of limitations,Charitable subscriptions

Steven offered to sell his portable CD player to Thomas for $50, and told Thomas that he had ten days in which to accept. One week later Thomas saw the CD player at Violet's house. Violet tells Thomas that she just bought it from Steven.

Steven has revoked his offer to Thomas.

A promise to act or to refrain from doing an act can serve as consideration.

A promise to do some specified thing in the future is an offer.

"Consideration" does not require an actual benefit to both sides of an agreement.

A "quasi-contract" is not really a contract.

Marilyn read an ad in the school newspaper offering a thousand dollar swimming scholarship to anyone who could swim 500 laps in the school pool. Marilyn called the advertiser and began swimming. She has reached lap number 460; she feels great and is sure she can make it all the way.

The advertiser must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or pay damages if he interferes with the completion of the laps.

A and B contract for the sale of goods. Later A, who is 13 years old, wants to cancel the contract on grounds of incapacity. Which of the following is true? Assume that neither A nor B is a merchant.

The common law capacity rules apply, because Article 2 of the UCC has no rules on the subject.

Bill Businessman obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years.

The manufacturer is obligated to use his best efforts to supply the goods even if no such clause appears in the written franchise agreement.

Shirley hears about a reward being offered by the local television station for information leading to the arrest and conviction of a local rapist. She supplies the requested information, and the suspect is then arrested and convicted.

The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Shirley has accepted.

Destruction of the subject matter has what effect on the offer?

The offer is terminated.

For an offer to be valid, which of the following elements must be present?

The offeree must have knowledge of the offer.

The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000.

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code?

The sale of a new Ford Mustang

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code?

The sale of a new car

Which of the following agreements is unenforceable because of indefiniteness?

The seller agrees to supply a quantity of pears dependent upon the buyer's wish.

Theodore agreed to pay Hal Hays, the owner of a grocery store, $50 if Hays would send a $100 gift certificate, identifying Theodore as the donor, to a recipient chosen randomly from a phone book. Hays mailed the gift certificate. Which of the following is correct?

Theodore's promise to pay is supported by consideration.

Jack has been in the business of selling carpeting for 20 years. He calls Bob, who is opening another branch of his furniture stores, and offers to sell him 100 yards of carpet at $20 per yard. Bob agrees and sends back the following letter confirming the deal: Dear Jack: As we discussed on the phone January 3, we accept your offer of 100 yards of Saxony "heather blue" carpeting at the price of $20 per yard. We also reserve the right to purchase any additional yardage we need to carpet our other showroom facilities at the same rate for one year from that date. Very truly yours, Bob Which of the following is true?

There is a contract for only 100 yards of carpeting.

Watts offered to buy a car from Stills for $1,200, in writing, by mail. Stills, thinking that was too low, wrote, "Your bid is low. I will only sell it for $1,400," and mailed the letter to Watts. A few hours later, Stills reconsidered and telegraphed, "I accept your deal, regards, Stills."

There is a contract if the acceptance gets to Watts first.

A orally offers to sell B 100 premium-grade fountain pens but neglects to state the price. B orally accepts. Immediately thereafter, A tries to back out of the deal. At this point in time, which of the following is most likely to be true?

There is a contract, if the parties intended to make a contract and there is a reasonably certain basis for determining the price.

Which of the following statements is most accurate concerning charitable subscription promises?

They are generally enforceable if there is reliance by the charity.

If a promise is illusory, mutuality of obligation is lacking

True

"Consideration" does not require an actual benefit to both sides of an agreement.

True

Tyler has given no additional consideration, and under the common law must perform at the agreed upon original price.

Which of the following does not require consideration to be effective and binding?

Waiver of a breach

When does acceptance of an offer to enter into a unilateral contract occur?

Upon full performance by the offeree

When does acceptance of an offer to enter into a unilateral contract generally occur?

Upon full performance by the offeree with the intention of accepting.

The courts usually consider all of the following matters relevant to contracts except:

adequacy of consideration.

Vantage telephoned Breyer on December 18, and offered to sell a plot of land to Breyer for $5,000. Vantage promised to keep the offer open until December 27. Breyer said he was interested in the land but wanted to inspect it before making any commitment. Which of the following best describes the legal significance of these events?

Vantage may revoke the offer at will.

Victor thought that Wade's house was ugly, so he decided to paint it while Wade was out of town. When Wade returned, Victor presented him with a bill for $1,200, the amount a professional house painter would have charge. A court would find:

Wade has no obligation to pay Victor.

A and B exchanged standard forms regarding the sale of goods, and the standard forms do not agree on material terms. Under UCC section 2-207, when will there be a contract anyway? Assume that B did not make its acceptance conditional on A's assent to any additional or different terms.

When B's form is a definite and seasonable expression of acceptance.,When there is conduct by both parties recognizing the existence of a contract.

An acceptance is generally effective at what point?

When dispatched

To which of the following situations does the common law "pre-existing duty" rule not apply?

Where the alleged promise to perform a pre-existing duty really contains some new obligation, no matter how small,Where unforeseen and unforeseeable circumstances make performance of the pre-existing obligation far more difficult than originally believed,Where the parties mutually agree to terminate the first contract between them

Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract?

Yes, because Robbie gave up a legal right

Bill sends Carla an offer by express mail. Carla receives it at 10 a.m. on Tuesday. At 11 a.m. on Tuesday, Carla delivers an acceptance to Post Office express mail, but due to an error, the letter is not sent out by the Post Office until Wednesday at 8 a.m. At what time does the law consider the acceptance to be effective?

at 11 a.m. on Tuesday

A statute or court decision that makes an offer illegal will

automatically terminate the offer.

Elvis makes an offer to Miguel, but before Miguel can accept, the state supreme court decides a case that makes the offer illegal. The court decision:

automatically terminates the offer.

Which of the following is an exception to the suretyship provision requirement under the statute of frauds?

b. A promise, the leading object of which is to obtain an economic benefit for oneself

A contract by which of the following is void?

b. A thirty-six-year-old man under a court-ordered guardianship for mental incompetency.

Which of the following is NOT an element of fraud?

b. Competent parties

Which of the following results in a void, rather than voidable, agreement?

b. Fraud in the execution

Janet promises Eli $4,000 for one of his original paintings on the condition that she receive $1 million from her mother's will.

b. Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million.

Jim contracted with Kevin to serve as a guide for Kevin on his three-week fishing trip to Canada. The contract was made on April 1 with the trip to begin on June 1. On May 1, Kevin notified Jim that he had changed his mind and would be unable to make the trip. He also refused to pay Jim any compensation.

b. Kevin has anticipatorily repudiated the contract and is liable to Jim for damages. c. Jim is discharged from his duty to serve as guide, and he may bring suit immediately against Kevin. d. Both (b) and (c) above are correct.

Harry said to Marge, "I have a ring once owned by Marilyn Monroe. Would you like to buy it for $500?" Marge pays for the ring, but the next day a friend tells her that Harry had recently purchased the ring at a local department store. Marge enjoys wearing the ring and wears it constantly for twelve months. Finally, she goes to Harry and says, "Here is the ring you lied about. Give me my $500." Most likely:

b. Marge will not get her money back since she should have investigated the facts about the ring more carefully.

Barry's Sport Shop calls Champs Tee Shirt Company to order 200 designer tee shirts at $2 per shirt. The next day, Barry decides he can easily sell 100 more. Before the order is filled, he calls to change the order to 300 tee shirts. Champs sends 200. Can Barry force Champs to send the additional 100?

b. No, because Barry does not have a writing signed by Champs Tee Shirts

Bill bets his friend $100 that the Patriots will win the next Super Bowl. a.This is an unconscionable contract and therefore illegal. b.This is an illegal wagering agreement. c.This is an agreement to obstruct justice and therefore illegal. d.This is an illegal restraint of trade.

b.This is an illegal wagering agreement.

Non-compete agreements drafted for employees of Internet companies: a.are interpreted no differently in terms of standards of reasonableness than are agreements for other types of companies. b.are subject to larger geographic restrictions than for other types of companies. c.are subject to longer periods of reasonable duration. d.are irrelevant.

b.are subject to larger geographic restrictions than for other types of companies.

An offer need not take any particular form to have legal validity. To be effective, however, it must:

be communicated to the offeree.

The person who makes an offer in an auction is the

bidder.

A contract in which both parties exchange promises is a:

bilateral contract.

To constitute consideration, a promise must be:

binding.

An offer to sell a tract of real property is terminated at the time the

buyer learns of the sale of the property to a third party.

Percy, age 17, purchased a used mobile home from a mobile home dealer for $20,000. This price, however, was twice the reasonable value of the mobile home. One month later, Percy wishes to disaffirm the contract. If the mobile home is considered a necessary, then:

c. Percy may keep the mobile home but is only liable for the reasonable value of the mobile home.

If untrue, which of the following would probably be considered a misrepresentation of a material fact?

c. "This car has new brakes."

c. $60, since the modified agreement is supported by additional consideration.

Which of the following products would impose strict liability in tort according to Section 402A?

c. A chain saw sold with the safety shielding removed

Which of the following would NOT be a merchant under Article 2 of the UCC?

c. A person who inherits three speedboats and wants to sell them to buy a car

Anna by mistake delivers to Bob a plain, unaddressed envelope containing $50 intended for Cora.

c. Bob's obligation to return the money is quasi contractual.

A small damage amount fixed without regard to the amount of loss is known as:

c. nominal damages.

Carl and Rob are both engaged in road construction work. They know that several jobs are going to be up for public bids, and agree between themselves that Carl will bid on one job and Rob will bid on the other, so that they both have work for the summer. When the bids are opened, Carl realizes that Rob has bid on both jobs. Rob is awarded both contracts. Carl now wants to sue Rob for breach of contract. a.Carl would probably win on the basis of promissory estoppel since he has detrimentally relied upon Rob's representation that he would not bid. b.Since Carl is less at fault than Rob, the court will likely award Carl damages. c.This is an agreement in violation of public policy that will not be enforced by the courts. d.This is an agreement obstructing the administration of justice that will not be enforced by the courts.

c.This is an agreement in violation of public policy that will not be enforced by the courts.

Before granting an injunction enjoining a former employee from competing in a described territory, the courts insist that the employer demonstrate that the restriction is: a.exculpatory. b.conscionable. c.necessary to protect the employer's legitimate interest. d.in compliance with the state's Blue Law.

c.necessary to protect the employer's legitimate interest.

Sarah is working hard on the mayoral campaign of Timothy. She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 to register and vote. Violet does so, but Timothy loses the election, and Sarah now refuses to pay. a.This agreement is enforceable. b.This agreement is unenforceable and opposed to public policy. c.This is an agreement to obstruct the administration of justice. d.This is an unconscionable contract covered by the UCC.

d.This is an unconscionable contract covered by the UCC.

Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract? a.No, because Robbie gave no benefit to Aunt Ellie b.No, because Robbie did not suffer any detriment c.Yes, because stopping smoking will benefit Robbie's health d.Yes, because Robbie gave up a legal right

d.Yes, because Robbie gave up a legal right

A letter of acceptance, in answer to an offer made by letter, is effective when

deposited in the mail.

Able Sofa, Inc. sent Noll a letter offering to sell Noll a custom-made sofa for $5,000. Noll immediately mailed a letter to Able purporting to accept the offer. However, the post office erroneously delivered the letter to Abel Soda, Inc. Three days later, Able mailed a letter of revocation to Noll that was received by Noll. Able refused to sell Noll the sofa. Noll sued Able for breach of contract. Able

has a binding contract with Noll.

A promise against public policy:

has no legal remedy available for breach.

The attempted acceptance of an offer by a person to whom the offer was not made:

has the effect of an offer.

Abel owes Baker $100. Baker, tired of chasing Abel and listening to his excuses, finally corners Abel one day after class and tells him that if he pays him $50, Baker will cancel the entire debt. Abel quickly agrees, pulls out a wad of money, peels off a $100 dollar bill, demands and receives $50 in change. That night as Baker mulls over the situation, he gets more and more upset. When, the next day, Baker demands the other $50 from Abel:

he is legally entitled to it.

A promise to purchase such quantity of goods as one may desire is a(n)

illusory promise.

Twentieth century contract law is generally characterized by:

increased government intervention into private contracts.

One of the changes in contract law between the nineteenth century and the twentieth century is that in more recent times:

intended third-party beneficiaries may sue in their own right.

An ad in a newspaper or a circular describing goods and stating prices would generally be considered a(n):

invitation to buyers to make an offer to buy goods.

Usually, advertisements are construed by the courts as:

invitations to negotiate.

X and Y contract for X to build Y a house for $150,000. Later, without terminating the first contract, X and Y modify that contract so that Y will pay X $175,000. In return, X promises to build exactly the same house, but one day earlier than in the previous contract. Assume that all the other elements of a contract besides consideration are present; this is a consideration question. This second contract:

is a binding contract.

A "grumbling acceptance":

is a valid acceptance if it meets all other tests for a good acceptance.

An offer for a unilateral contract:

is accepted by full performance of the requested act.

A and B agree that A will sell B all B's requirements of coal at a stated price per ton. This agreement:

is binding, so long as B's requirements are in good faith, and are not disproportionate to any estimate in the contract or to B's normal previous requirements.

X and Y have a contract which obligated X to sell Y 100 boxes of screws for $100. The parties orally modify the contract so that X will sell Y the same 100 boxes of screws for $125. The second agreement:

is binding.

Andrew agrees to paint Betty's house for $500. Two days after he starts the job, he decides that As a general rule, a written promise to pay a debt barred by the statute of limitations:

is enforceable.

When Western Chicken Ranch offered to sell eggs to Deb's Dinner at 35 cents per dozen, Deb said, "I promise to pay for as many eggs as I order in the next six months." Deb's promise:

is illusory and therefore unenforceable.

The requirement of legally sufficient consideration:

is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor.

A contract is considered to be void, if:

it is missing an essential element of contract.

A nominal consideration is usually not consideration because:

it suggests the absence of a genuine bargain.

In order to form a contract, the parties must:

manifest their agreement objectively.

To be effective, notice of revocation of an offer:

may be communicated indirectly to the offeree through a third person.

The president of Deal Corp. wrote to Boyd, offering to sell the Deal factory for $300,000. The offer was sent by Deal on June 5 and was received by Boyd on June 9. The offer stated that it would remain open until December 20. The offer

may be revoked by Deal any time prior to Boyd's acceptance.

Which of the following is required for a "firm offer?"

merchant, in writing, signed, not over 90 days

A "firm offer" under UCC

must be in writing.

The manager of the local J.C. Penney store sends you a signed personal notice that its chainsaws will be on sale for 30% until January 15th. If you go in on January 12th and they refuse to give you 30% off, you will win if you argue that

no consideration is needed for the promise.

Baker Corporation sent a letter to Sampson Company in which Baker offered to purchase 10 acres of certain real estate from Sampson for $4,000. Sampson responded that it would sell 8 of these acres for that price. Baker and Sampson have created

no contract in this connection.

The Save the Earth Society mailed unsolicited a calendar to all graduates of U.S. West University, including Sidney, with a statement that, if the recipient did not return the calendar within 10 days, he or she would be billed $15. Sidney will be liable for the $15 if he:

none of the above.

According to the UCC, an enforceable agreement involving the transfer of title of goods from a seller to a buyer for a price is called a(n):

sale.

An announcement that an auction sale is to be conducted "without reserve," means that the:

seller cannot withdraw the goods if the bids are too low.

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by:

state common law.

Contracts are governed primarily by:

state common law.

Hannah, as a joke, offers to sell her violin to Mike. Her statement would have legal effect if:

the intended jest is so successful that Mike as a reasonable person under the circumstances believes the joke is an offer and he accepts.

the offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Shirley has accepted.

UCC section 2-207 (the Code's "battle of the forms" provision) says that additional terms in the acceptance are part of the contract when both parties are merchants, UNLESS:

the offer expressly limited acceptance to its own terms.,the additional terms materially altered the offer.,the offeror gave notice of his objection to the additional terms within a reasonable time.

The subject matter of a contract may relate to:

the performance of personal services

An offer may be accepted by:

the person to whom it is made.

The plaintiff in a quasi-contract action can recover:

the reasonable value of the benefit conferred upon the defendant.

The effective moment of rejection is

the receipt of the rejection by the offeror.

Susie offers to sell Ralph her Mustang for $500. Ralph says it will take him a week to talk his dad into giving him the money, but that he wants it. A contract is formed:

when Ralph accepts the deal.

Able Sofa, Inc. sent Noll a letter offering to sell Noll a sofa for $5,000. Noll immediately sent a letter to Able accepting the offer. However, the postal service erroneously delivered the letter to Abel Soda, Inc. Three days later, Able mailed a letter of revocation to Noll that was received by Noll. Able refused to sell Noll the sofa. Noll sued Able for breach of contract. Able

will be liable for breach of contract.

Beatrice purchased a rocking chair from the ABC Furniture Store. It was agreed that the store would deliver the chair to Beatrice's apartment. Beatrice lived in apartment number 4B. However, the chair was delivered to Beatrice's neighbor, Pamela, who lived in apartment number 4D. Pamela knew the rocking chair was meant for Beatrice, because Beatrice's name was on the invoice, but Pamela decided to keep the chair and not pay for it. If the ABC Furniture Store sued Pamela, it would:

win a lawsuit for quasi-contract and recover the reasonable value of the rocking chair.

An auction at which the auctioneer may not withdraw an article put up for sale is said to be held:

without reserve.

Which of the following would most probably be considered a valid offer?

"$100 reward for return of lost white-gold, men's wedding band inscribed with initials 'TEA' to Tony Adams, 350 Main Street, Peoria."

Alice offered to sell her computer, monitor and printer to Bradley for $300. Two days later Bradley mails a letter to Alice in which he accepts the offer. Three days later, before Alice has received the letter, Bradley calls to say he won't be able to accept her offer. What is the status of their negotiations?

A contract came into acceptance when Bradley mailed the letter.

Which of the following promises are enforceable without consideration?

A contract modification in a contract covered by the U.C.C.,A written offer signed by a merchant to buy or sell goods that assures it will be kept open for one month, A renunciation of a claim a written waiver that is signed and delivered by the aggrieved party when the contract involves a sale of goods

The Uniform Commercial Code would be applied in which of the following situations?

A contract to buy living room furniture

Adams mails an offer to Baker on June 1. Baker receives the offer on June 2. Adams mails a revocation on June 3. Baker mails an acceptance on June 4. Baker receives the revocation on June 5.

A contract was formed on June 4.

Which of the following is correct with regard to counteroffers?

A counteroffer operates as a rejection of the original offer.,A conditional acceptance is a common type of counteroffer.,The receipt of a counteroffer terminates the original offer.

A offers to pay B $10,000 if B will cut down all the trees in a wooded area on A's land. B promises to cut down the trees and then begins work. A reasonable time to complete the job is ten days. After three days B has cut down 50% of the trees. Then, A walks up to B and says: "I revoke." To this, B says "Screw you," and eventually finishes the job eight days after A made his original offer. Which of the following is most true? Assume that an offer for a unilateral contract normally is accepted by full performance of the requested act.

A is bound contractually because, under one of several possible approaches, he could not revoke on these facts, and because B finished the job in time.

Which of the following is an informal contract?

A written contract for the sale of a 5-acre tract of land.

Which of the following promises is enforceable in most states?

A written promise to pay a debt barred by the statue of limitations

The State of Indiana agrees with the Ace Construction Company that Ace will do some repair work on a bridge. The agreement, however, does not specify the exact work to be done, the quality standards Ace must meet, and the time the job must be completed. Also, the agreement states an ambiguous formula for determining Ace's compensation. Later, before either it or the state has done anything, Ace backs out of the job. Then it is sued by the state. Ace defends by arguing that the contract fails because it (or the offer) is indefinite. Which of the following is true?

Ace's argument is correct and the state cannot recover.

Which of the following offers terminates earliest? Assume that there is no time limitation on the offer unless the question says otherwise.

An offer to purchase stock on a stock exchange

$500 isn't enough money. He refuses to finish the job, unless Betty agrees to pay him $100 more. What law applies to this fact situation?

Andrew was already obligated to paint the house. He gives no additional consideration in return for Betty's promise to pay more money.

Leonard offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer."

Diane cannot accept the offer, because it wasn't made to her.

"Blue laws" usually apply to activities of necessity and charity.

"I promise to pay you $100 if you will promise to fix my car next month." This is an offer for a unilateral contract.

70. _____ "I'll pay you $1,000 if you promise to paint my house this month." If the offeree accepts, this is a unilateral contract.

A contract for lawn mowing services falls under the scope of Article 2 of the UCC.

A contract to commit a tort will be enforced by the courts.

A contract to provide lawn and landscaping service for "the next six (6) months" falls within the scope of the statute of frauds, and must be in writing to be enforceable.

A counter-offer will generally be treated as an implied revocation, and a new offer.

A counteroffer is treated as both a revocation and a new offer.

A liquidated debt is an obligation the existence or amount of which is in dispute.

A modification of a contract for the sale of goods must always be supported by additional consideration.

A parent or parents who sign a contract on behalf of their minor child may disaffirm the contract just as their child may.

A party can always avoid a contract on the basis of a unilateral mistake of value.

A party to a contract may delegate his rights arising from the contract to another person.

A party who makes a mistake about the value of the object of a contract is normally permitted to avoid the contract.

A person who delegates his contractual duties is fully relieved of any further duty to perform under that contract.

A person who makes a contractual offer is referred to as an "offeree."

A person who makes a contractual promise is referred to as a "promisee."

A price list is considered an offer.

A quasi contract is another name for an oral contract.

A rejection normally is effective at the time it is dispatched by the offeree.

A revocation normally is effective at the time it is dispatched by the offeror.

A statement that a particular truck can haul a 3,000 pound load would be treated as an opinion and would not become an express warranty.

A void contract is a contract that one or both parties may cancel, at their option.

Advertisements are typically considered valid offers.

All promises are enforceable as contracts.

An "express" contract must be in writing.

An agreement for sale of an illegal substance will be enforced by the courts if all other elements of the contract are present.

An agreement to sell the entire production of a particular plant to a particular purchaser is a requirements contract.

An assignee must give consideration to the assignor in exchange for the assignment.

An exclusive dealing contract is one type of contract which is illusory because it lacks consideration.

An express contract is a contract that is evidenced by a writing.

An incidental beneficiary can directly sue the maker of a contract in the case of breach.

An offer can never be validly accepted by the offeree's silence.

An offer does not need to be communicated to the offeree to be effective.

An offeror's subjective beliefs or assumptions determine his or her intent to contract.

Any agreement made "after a few drinks" can be avoided for lack of seriousness of intent.

Bargains are illegal if they involve a crime or tort but not if they are merely against public policy.

Bill is currently enrolled in law school. He expects to graduate and take the bar exam in order to be able to practice law. Before Bill becomes a lawyer, he promises to represent his friend, Tom, in a breach of contract action if Tom will pay him 25% of the settlement. Bill negotiates and the case settles for $50,000. Tom refuses to pay Bill. Bill then graduates and attempts to sue Tom. Bill has a legal right to enforce the agreement.

Bob, a schoolteacher, sells his neighbor Sam an old office chair at a garage sale. Bob has given Sam an "implied warranty of merchantability."

Consideration has only one basic element, which is a bargained-for exchange.

Edward, an engineer, is working on a new design for some highly technical equipment which XYZ, Inc. hopes to market within the next five years. The employment agreement between Edward and XYZ states that Edward will not go to work for another company in the same business for a period of two years after termination of his employment with XYZ, Inc. This agreement is void and unenforceable, because it would make it difficult for Edward to find other employment.

Expenses, such as those incurred to obtain performance from a source other than the original contracting party, are called consequential damages.

For Article 2 of the UCC to apply, at least one party to the contract must be a merchant.

Generally, an offer is effective as soon as it is dispatched.

If Bill tells Sara that he will give her two days to decide if she wants to buy his car, he cannot sell it to anyone else during that time.

If a rejection is placed in the mail, with the proper address and postage, it will generally be considered effective on "deposit."

If an offer states that it MUST be received by a certain date, receipt is presumed in those situations when acceptance is mailed.

If an offeree makes a counteroffer, he becomes the "counter-offeror."

Implied warranties of merchantability can never be disclaimed.

In most states, a contract under seal is binding without consideration.

In settling a liquidated debt, payment of a smaller amount before the due date would constitute consideration, but paying a lesser amount on the due date at an agreed-upon different place of payment would not be legally sufficient consideration.

Legal detriment means the obtaining by the promisor of that which he had no prior legal right to obtain.

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

Mary was mistaken about a material fact concerning a contract she made with Bob. Mary can avoid the contract on the grounds of "fraud."

Maximum rates of interest that are permitted under usury statutes are uniform from state to state.

Nathan promises to take Debra to the show on Friday night. He then changes his mind so that he can stay home and study his business law. Nathan can be sued for breach of contract by Debra for breaking his promise.

Noncompete agreements for Internet-related jobs have the same limitations in determining what is reasonable as to time and place restrictions as other types of jobs.

Parol evidence is never admissible.

Past actions unbargained for by the parties in an agreement can become valid consideration for a contract.

Pat, who owns an appliance store, has a garage sale at his home where he sells old furniture and books. He sells a set of books to his neighbor Judy. Pat is considered a merchant under Article 2 of the UCC in selling the books to Judy.

Regulation of gambling is solely under federal jurisdiction, through Congressional legislation and U.S. court enforcement.

Robert agrees to buy a car from Jane for $400. This contract must be in writing to be enforceable.

Rolland just bought a new pair of eye glasses. He had to go to the eye doctor for an exam and to get a prescription. He then took the prescription to the eye-glass store to by his new glasses. Rolland's visit to the eye doctor is governed by the UCC; the purchase of his glasses from the eye-glasses store is not.

Stuart promises to act as a guide on a fishing trip for a group of visiting dignitaries. The dignitaries agree to pay him $200 for his services. Stu guides them, but when they discover that Stu does not have a fishing license, they refuse to pay him. The agreement between Stu and the dignitaries is an illegal one, which is not enforceable.

Sue leases her 3 Bedroom, 2-bath home to Trisha for $300,000 for one year. The parties sign a written lease. Article 2-A of the UCC governs this contract.

Sue sells her 3 bedroom, 2 bath home to Trisha for $300,000. The parties sign a written contract. Article 2 of the UCC governs this contract.

The Abbot Corporation contracts with the Baker Corporation to sell to Baker its entire production. After signing the agreement, Abbot can increase its production from one shift to two shifts and Baker will have to buy all of the doubled production.

The Code and the Restatement both contain definitions of what constitutes "unconscionable" conduct.

The UCC applies to contracts for services as well as to contracts for the sale of goods.

The courts will enforce an agreement declared illegal by statute.

The law enforces all promises, therefore, all promises are contracts.

The mirror image rule permits the offeree's acceptance of a contract to materially differ from the offer.

The mirror image rule permits the offeree's acceptance of a contract to vary from the offer.

The offeror is the party with the power to decide whether to create a contract.

The offeror's death automatically terminates an offer, but the offeree's death does not.

The performance of a pre-existing contractual duty which is neither doubtful nor the subject of an honest dispute is legally sufficient consideration to support a second contract.

The term "public policy" is precisely and narrowly defined in the Restatement and by state statutes.

Under the "American Rule" governing successive assignments, the first assignee in time has the superior right.

Under the UCC, the mirror image rule applies in the same manner as under common law.

Wendy offers to pay Jose $1,000 if he agrees to promise to paint her house this month. If Jose accepts the offer, it will create a unilateral, executed contract.

A contract for the sale of a copyright is governed by Article 2 of the Uniform Commercial Code.

False

A contract to sell five acres of land is governed by Article 2 of the UCC.

False

A contract to sell life insurance is covered by Article 2 of the Uniform Commercial Code.

False

A debt which has been reduced to a sum certain of money is called an unliquidated debt.

False

A liquidated debt is an obligation the existence or amount of which is in dispute.

False

A modification of a contract for the sale of goods must always be supported by additional consideration

False

A modification of a contract for the sale of goods must always be supported by additional consideration.

False

A negotiable instrument, such as a check, is not a formal contract.

False

A quasi contract is another name for an oral contract.

False

All written contracts are considered to be formal contracts.

False

An advertisement is usually an offer to sell.

False

An agreement to sell the entire production of a particular plant to a particular purchaser is a requirements contract.

False

An exclusive dealing contract is one type of contract which is illusory because it lacks consideration.

False

An implied contract is not an enforceable contract.

False

An offer is an indefinite proposal made by one person to another.

False

An offer is effective as soon as it is dispatched.

False

An offer must be in one particular form to have legal effect.

False

Ann makes a material misrepresentation of fact to Brian, and based upon the misrepresentation, Brian enters into a contract. Ann now thinks that the contract is not fair to her. This contract is voidable at Ann's option.

False

Arthur says to Bob, "If you will mow my lawn, I will give you ten dollars." Bob says nothing, but he mows the lawn. No contract exists under this fact situation, because Bob did not accept Arthur's offer.

False

Common law relating to the formation of contracts has little relevance in the business world today.

False

Consideration has only one basic element, which is a bargained-for exchange.

False

Contracts generally require adequacy of consideration where the consideration given by both parties is of fair value and equitable.

False

During the twentieth century it became harder to enter into a contract as well as to get out of one.

False

George offered to paint Catherine's barn for $4,000. Catherine said she would accept the offer if George would paint the woodshed, too. At this point, they have made a valid and enforceable contract.

False

Hugh recently purchased a motorcycle for $4,000 but has had extensive problems starting the motor. In disgust at not being able to start the motorcycle, Hugh shouts to his friends, "Any of you want to buy this thing for $20?" A contract will be formed if a friend gives Hugh a twenty-dollar bill.

False

If Bill tells Sara that he will give her two days to decide if she wants to buy his car, he cannot sell it to anyone else during that time.

False

If Thomas seemingly offers to sell to Raquel his Toro lawnmower but he intends to offer and believes he is offering her his Murray mower, and she accepts the offer, reasonably believing it was for the Toro, no contract has been formed because there is no mutual assent.

False

If a contract is not clearly unilateral or bilateral, the courts presume that the parties intended a unilateral contract.

False

If an offer states that a reply must be received by a certain date, the contract is formed at the time the offeree sends or dispatches the acceptance.

False

If no time limit is stated, an offer will not terminate until both parties agree.

False

In an output contract, the seller can operate a factory on a 24-hour-a-day schedule and insist that the buyer take all of the output when that buyer had operated only eight hours a day at the time the contract was made and the buyer had knowledge of the eight-hour-a-day operating schedule.

False

In most states, a contract under seal is binding without consideration.

False

In order for an offer to end by lapse of time, the offeror must specify the time within which the offer is to be accepted.

False

Legal detriment means the obtaining by the promisor of that which he had no prior legal right to obtain.

False

Quasi contract is another name for a contract that is implied in fact.

False

Ricardo posts a sign in the neighborhood offering $50 for the return of his Saint Bernard. Alicia, who knows nothing of the reward, finds the dog and returns it to Ricardo. Alicia is entitled to the reward.

False

Ron offers to sell Pete his stamp collection. Pete gives Ron $10 to induce him to keep his offer open for a week. If Ron decides on day four of the week that he really does not want to sell to Pete, he can revoke his offer without fear of a breach of contract lawsuit being filed against him.

False

The Code follows the common law rule and allows the parties to a contract to modify that contract without additional consideration.

False

The UCC and the Restatement make no provision for supplying terms omitted by the parties' contract.

False

The common law "mirror image" rule applies to an offer and the acceptance of that offer in a contract for the sale of goods.

False

The law applies a subjective standard of intent in determining whether there was the requisite intent to enter into a contract.

False

The performance of a pre-existing contractual duty which is neither doubtful nor the subject of an honest dispute is legally sufficient consideration to support a second contract.

False

There is no necessity to distinguish language which constitutes an offer from that which merely solicits or invites offers.

False

A modification of a contract for the sale of goods must always be supported by additional consideration.

False.

An agreement to sell the entire production of a particular plant to a particular purchaser is a requirements contract.

False.

The performance of a pre-existing contractual duty which is neither doubtful nor the subject of an honest dispute is legally sufficient consideration to support a second contract.

False.

Alice hands Henry a written offer to buy Henry's camera for $400. In which of the following situations would the court find that there is a rejection?

Henry tears up the written offer in front of Alice and says, "That's what I think of your offer.",Henry says nothing, but in front of Alice turns to his son, Chris, and says, "Here, this camera is yours.",Henry says to Alice, "I accept, provided you pay me $475 instead."

It is unenforceable, because Jason had already enrolled in school and there is no consideration.

UCC section 2-207 (the "battle of the forms" provision) implicitly distinguishes between different terms in the acceptance and additional terms in the acceptance. The latter refers to a subject not mentioned in the offer, while in the former case the acceptance treats some subject differently than the offer does. Under 2-207, why does this distinction matter?

It matters because, while additional terms can become part of the contract, it isn't clear what terms apply in "different terms" situations.

Which of the following is true regarding promissory estoppel?

It requires that the promisor should reasonably expect to induct the promisee's action or forbearance.

While Jane is swimming she cuts her foot on some coral and is quickly surrounded by several sharks. Within earshot of several startled sunbathers, Jane screams that she will pay one million dollars to anyone who saves her. Gertrude, the lifeguard on duty, throws Jane a line and pulls her in. When Jane refuses to pay, Gertrude sues. The court would find for:

Jane, since Gertrude was under a pre-existing duty to do as she did.

Janet promises Eli $4,000 for one of his original paintings on the condition that she receive $1 million from her mother's will.

Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million.

Maxine offered to sell her video camera to Tom for $200 and also stated to Tom, "I will give you two weeks to accept my offer." One week later Tom learned that Maxine had sold the video camera to Cindy.

Maxine has revoked her offer to Tom.

Miles has made a counteroffer; hence there is no contract.

A week before the concert, Joan told you she probably would not be able to use her concert tickets. Later that day, Joan wrote you a note offering to sell you the tickets for $50 and gave it to Betsy to deliver. Betsy stuck it in her purse and forgot about it. You called Joan the day of the concert, but she already sold the tickets. Is Joan liable to you for their value?

No, because there was no offer since it was never communicated.

Tom Payne had a toothache and stopped by Quick Fix Dentist during his lunch hour. Although he had never been to Quick Fix before, Fix accepts Payne as a patient and pulls a tooth. On Payne's way out, the receptionist hands him a bill for $500. Payne is outraged and claims that a contract was never formed.

Payne is only liable for a reasonable amount.

Stable Corp. offered in a signed writing to sell Mix an office building for $350,000. The offer, which was sent by Stable on April 1, indicated that it would remain open until July 9. On July 5, Mix mailed a letter rejecting Stable's offer. On July 6, Mix sent a telegram to Stable accepting the original offer. The letter of rejection was received by Stable on July 8 and the telegram of acceptance was received by Stable on July 7. Which of the following is correct?

Receipt of Mix's telegram resulted in the formation of a valid contract.

Brian makes a material misrepresentation of fact regarding his horse to Rosalind while out riding one day. Later that day, Rosalind makes an offer to buy the horse. Brain accepts without correcting his earlier misrepresentation of fact.

Rosalind may avoid the contract.

Brian makes a material misrepresentation of fact regarding his horse to Rosalind while out riding one day. Later that day, Rosalind makes an offer to buy the horse. Brian accepts without correcting his earlier misrepresentation of fact.

Rosalind may avoid the contract.

After making her bid at an auction, Alice wishes to withdraw her bid before the auctioneer's hammer falls:

She may do so since, generally, offers can be revoked any time before acceptance.

The Rogers family has always wanted to buy the beautiful house at the top of the hill. The owners of the house, the Thompsons, decided to sell and called Mr. Rogers. Before he could get back in touch with Mr. Thompson, Mr. Rogers suffered a heart attack and died. Mr. Rogers' adult daughter, to whom the Thompsons had not spoken, still wants the house.

She may not accept since the offer is terminated.

The Rogers family has always wanted to buy the beautiful house at the top of the hill. The owners of the house, the Thompsons, decided to sell and called Mr. Rogers. Before he could get back in touch with Mr. Thompson, he suffered a heart attack and died. Mrs. Rogers still wants the house.

She may not accept since the offer is terminated.

A conditional promise is a promise the performance of which depends upon the happening or nonhappening of an event not certain to occur.

A counteroffer operates as a rejection of the original offer.

A covenant not to compete is a type of restraint of trade that courts today will enforce under certain circumstances.

A few states provide by statute that the parties need to provide no new consideration when modifying any contract.

A model used in connection with selling goods will usually amount to a warranty that the goods will be as the model indicates.

A modification of a preexisting contract occurs when the parties agree to change one or more of its terms.

A new promise to perform a voidable obligation that has not been avoided previously is enforceable without new consideration.

A plaintiff must prove that he suffered actual injury to recover damages for fraud.

A promises to pay B $50 if B will mow A's lawn. B completely and satisfactorily mows A's lawn. This is a unilateral contract.

A unilateral contract may consist of a promise exchanged for an act or forbearance.

According to the UCC, only a merchant can make a firm offer to a buyer.

Advertisements are generally not considered as offers to enter into a contract.

Agreement is usually evidenced by an offer and an acceptance.

Alice makes a material misrepresentation of fact to Betty, and based upon the misrepresentation, Betty enters into a contract. Betty now realizes she was deceived and wants to get out of the contract. This contract is voidable at Betty's option only.

Although wagering is generally illegal, some states permit certain kinds of regulated gambling, especially wagering conducted by governmental agencies.

An adhesion contract is offered on a "take-it-or-leave-it" basis.

An advertisement offering a reward for the return of lost property usually is treated as an offer for a uilateral contract.

An agreement in connection with the sale of a business that prohibits the seller from engaging in the same or similar business for a period of twenty-five years would be unreasonable.

An agreement to refrain from a particular trade, profession, or business is enforceable if two requirements are met: that it protects a property interest of the promisee and that the restraint is no more extensive than is reasonably necessary to protect that interest.

An exculpatory clause attempts to excuse one from liability for her own tortious conduct.

An exculpatory clause excusing a party from liability for harm caused by reckless conduct will generally make a contract unenforceable as a violation of public policy.

An express contract may be either written or oral.

An expression of opinion is not a valid offer.

An illusory promise has the form of a promise but imposes no real obligation.

An implied warranty of merchantability arises in every sale or lease by a merchant.

An offer must be communicated to the offeree or his agent in order for the offer to be effective.

Charitable subscriptions are one of the most frequently occurring applications of the doctrine of promissory estoppel.

Consideration can consist of giving up a legal right.

Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.

Contracts have a number of legally essential elements, among which are an agreement and consideration.

Courts require that for a contract to unenforceable based on unconscionability, both substantive and procedural unconscionability must be equally present.

For the implied warranty of fitness for a particular purpose to apply, the seller must have actually known the purpose for which the buyer was purchasing the goods.

Fred offers to paint Debbie's home for $500. Debbie tells Fred she will only pay $450, and Fred agrees. Under these facts, Debbie is the "offeror."

Generally, a contract exists when an offer has been accepted.

Giving up a legal right to do something is enough to legally qualify as consideration.

If a person who has been declared incompetent by a court enters into an agreement, that agreement is void, because it does not meet all the requirements of a binding contract.

If a promise is illusory, mutuality of obligation is lacking.

If the offer specifies it MUST be accepted by letter, a telegram will not be a valid means of acceptance.

In most, if not all, cases where there is a legal detriment to the promisee, there is also a legal benefit to the promisor.

In order for an offer to be legally valid under the common law, it must have reasonably definite terms.

In ordinary sales transactions, the implied warranty of fitness for a particular purpose can be disclaimed, but the disclaimer must be in writing and conspicuous.

Many states impose no limit on the rate of interest which may be charged on loans to corporations.

On July 12th, 2008, Louis offers to employ Teresa as head chef in his restaurant next year. The very next day, Teresa accepts the offer. The parties agree on a term of nine (9) months, and a $10,000 salary per month. Per their agreement, Teresa is to begin work on January 1. This contract falls within the scope of the statute of frauds, and thus will likely have to be in writing to be enforceable.

One of the key issues in a promissory estoppel case is whether the defendant made a promise to the plaintiff that the plaintiff detrimentally relied upon.

One purpose of contract law is to make business matters more predictable.

One type of restraint of trade is a covenant not to compete.

Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.

Pablo promises to sell to Candice an automobile for $20,000, for which Candice promises $20,000. A bilateral contract exists.

Sarah, an artist, e-mails Patricia and offers to paint her portrait for $499.99. Patricia calls Sarah back and accepts the offer. Sarah promises to paint the portrait within one (1) year, if not sooner, and Patricia agrees to pay within six (6) months of the portrait's receipt. This is an enforceable, bilateral, executory contract.

The Code has changed the common law rule regarding modification of a preexisting contract by providing that a contract for the sale of goods can be effectively modified by the parties without new consideration, provided they intend to do so and act in good faith.

The Restatement provides that a promise following the rendering of emergency services is binding even if not supported by consideration if necessary to prevent injustice.

The central idea behind consideration is that the parties have intentionally entered into a bargained exchange with one another and have given each other something in exchange for a promise or performance.

The courts readily enforce a covenant not to compete during the period of employment.

The element of exchange is absent where a promise is given for an act that has already been done.

The elements to a contract are agreement, consideration, legality, and capacity.

The implied warranty of merchantability requires that goods be fit for the ordinary purposes for which they are intended.

The mirror image rule requires that the acceptance exactly match the offer.

The nonbreaching party normally may not recover punitive damages in a breach of contract claim.

The parties to a contract may modify the agreement with no additional consideration by simply substituting a new contract.

The party to whom an offer is made is an offeree.

The term "past consideration" is not really consideration at all because the law will not find a contract where there is no bargained-for-exchange.

The usual means of enforcing an agreement prohibiting an employee from competing in a described territory for a stated period of time is by injunction.

Under a unilateral contract only one party makes a promise.

Under the "mailbox rule," some acceptances are deemed effective upon dispatch.

Under the UCC, exclusive dealing contracts are binding because sufficient consideration is deemed to be present.

Under the common law, an offer must contain reasonably definite terms to be enforced.

Which of the following is true regarding the approach taken by the UCC toward the proper means of acceptance and the implications of using it or not using it?

The UCC does not change the traditional rule that, where the offer stipulates a certain means of acceptance, the acceptance must use that means or there is no contract.

A makes an offer to sell B a computer by testing B the offer. The offer says nothing about authorized or stipulated means of acceptance. Which of the following is true?

The acceptance is effective upon dispatch if it is by any reasonable means of communication.

Michelle's Boutique places an ad in the Sunday paper for beautiful, top-of-the-line designer suits for $3.00. Irene sees the ad in the paper and goes to the store to stock up on business suits for her new job. Michelle apologizes for the misprint. Irene has just finished a class in contract law and insists that the store sell her 5 suits for $15.00. Irene threatens to sue Michelle for breach of contract.

The ad in the newspaper is a solicitation seeking offers, but is not an offer to sell; therefore, Irene will not be able to successfully sue for breach of contract.

Elvis makes an offer to Miguel, but before Miguel can accept, the state supreme court decides a case that makes the offer illegal. What is the effect of the court decision on the offer?

The court decision automatically terminates the offer.

Which of the following will not be sufficient to satisfy the consideration requirement for a contract?

The offeree expends both time and money in studying and analyzing the offer.

The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000.

Jesse makes an offer to Ike, and Ike accepts; then the state legislature passes a law that makes performance of the contract illegal. What is the effect of the new statute on the contract?

The statute discharges the obligations of both parties under the contract.

A makes B an offer for the sale of land. The offer says that B "must accept by registered letter." B accepts the offer with a regular letter. Which of the following is true?

There is no acceptance and no contract.

Barbara Baker, a wealthy widow, promises the pastor of her church that she will donate $10,000 to the church to help pay off its mortgage, if the stewardship committee can obtain enough pledges for the balance of the $30,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around the world cruise instead.

There is no consideration for Barbara's promise to pay 10000,Barbara's promise is enforceable

Wayne helped Hank study all night for an important exam. After Hank got an A on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it."

There is no contract because there is no valid consideration.

A standard-form offer for the sale of goods says that all disputes under the contract must be subjected to arbitration. The standard-form acceptance rejects arbitration. Which of the following is most true? Assume that the acceptance is a definite and seasonable expression of acceptance.

There is no contract if the offeree's acceptance was expressly conditional on the offeror's rejection of arbitration, and the offeror did not agree to reject arbitration.

Alice offers to sell her computer, monitor, and printer to Bradley for $300. Bradley says he will accept provided that Alice includes her word processing software. What is the status of their discussions?

There is no contract, because Bradley has made a counteroffer.

Assume an offeree mails an acceptance on November 1. This acceptance arrives at the offeror's place of business on November 6. In the meantime, on November 4, the offeree sends the offeror a rejection which arrives on November 5. Which of the following statements correctly describes the situation?

There was a contract on November 1.

Assume an offeree mails a rejection to the offeror on November 1. This rejection arrives at the offeror's place of business on November 5. In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November 6. Which of the following statements correctly describes the situation?

There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one.

There was no contract.

Which of the following statements is most correct concerning promise to make a gift to a charity?

They are generally enforceable.

This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders.

Abe is involved in an automobile accident and is injured. While he is unconscious, the police call an ambulance which takes him to a hospital. Abe is treated at the hospital and released a day later. The hospital sends him a bill for $2,400, which Abe refuses to pay, claiming it is too high and he never consented to the treatment because he was unconscious.

This is a quasi-contractual agreement.

James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer pays James $100. Which statement describes the payment of $100?

This is an option contract.

A conditional promise is a promise the performance of which depends upon the happening or nonhappening of an event not certain to occur.

True

A contract exists when an offer has been accepted.

True

A contract that is considered to be "within" the Statute of Frauds must comply with the requirements of the Statute in order to be enforceable.

True

A few states provide by statute that the parties need to provide no new consideration when modifying any contract.

True

A modification of a preexisting contract occurs when the parties agree to change one or more of its terms.

True

A moral obligation is generally not deemed to be consideration.

True

A new promise to perform a voidable obligation that has not been avoided previously is enforceable without new consideration.

True

A noncontractual promise may be enforceable where there has been justifiable reliance on the promise.

True

A unilateral contract may consist of a promise exchanged for an act or forbearance.

True

A valid contract is one that meets all of the requirements of a binding contract.

True

A valid offer may be in the form of an act for a promise, which is an offer to enter into an inverted unilateral contract.

True

According to the UCC, only a merchant can make a firm offer to a buyer.

True

Albert breaches a contract with Bill in a state where the statute of limitations is six years. Seven years later Bill wants to sue. The contract is unenforceable, but it is neither void nor voidable.

True

Albert breaches a contract with Bill in a state where the statute of limitations is six years. Seven years later Bill wants to sue. The contract is unenforceable, rather than void or voidable.

True

Amendments to Article 2 of the UCC were promulgated in 2003 to reflect developments in the law and business practices and to accommodate electronic commerce.

True

An illusory promise has the form of a promise but imposes no real obligation.

True

An implied contract is as enforceable as is an express contract.

True

An implied in fact contract is formed by conduct.

True

An offer can be communicated by words or by conduct.

True

An offer must be communicated to the offeree in order for the offer to be effective.

True

Article 2 of the Uniform Commercial Code does not apply to the sale of services.

True

At common law a promise under a seal to authenticate it was effective without anything more.

True

Both the Code and the Restatement provide that an authorized means of accepting an offer is any reasonable means of communication.

True

Charitable subscriptions are one of the most frequently occurring applications of the doctrine of promissory estoppel.

True

Commercial reasonableness is a standard determined in terms of the business judgment of reasonable persons familiar with the practices customary in the type of transaction involved.

True

Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.

True

Contract law generally places more importance on the intent of the parties to form a contract than on the inclusion of certain terms in the contract.

True

Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.

True

Death or insanity of either the offeror or the offeree ordinarily terminates the offer.

True

Each party to a contract must intentionally exchange a legal benefit or incur a legal detriment as an inducement to the other party to make a return exchange.

True

General contract law governs all contracts outside the scope of the UCC.

True

If Sam agrees to sell to Thomas all of the tomatoes he wants at $25 a bushel, there is no contract for lack of consideration.

True

If a person who has been declared incompetent by the courts enters into an agreement, that agreement is void, because it does not meet all the requirements of a binding contract.

True

If an offeror makes an offer to an offeree by letter and it is lost in the mail, no legally sufficient offer has been made.

True

In a bilateral contract, if one party is not bound, neither party is bound.

True

In a unilateral contract, a promise is exchanged for an act or forbearance to act.

True

In general, an acceptance is effective upon dispatch.

True

In most, if not all, cases where there is a legal detriment to the promisee, there is also a legal benefit to the promisor.

True

In some states a promise under seal is binding without consideration.

True

Larry says to Jeff, "If you will mow my lawn, I will give you fifteen dollars." Under these facts, no contract is formed until Jeff finishes mowing the lawn.

True

On June 1, a civic club made an offer of $500 to a beer distributor to have ten kegs delivered to the city park for a July 4th fund-raising event. On June 30, the city passed a new law prohibiting consumption of alcohol in the city park. The civic club's offer is terminated on June 30.

True

On Tuesday morning John sends a letter to Arlene rejecting her offer, but later the same day John changes his mind and sends a letter of acceptance to Arlene. The letter of acceptance will be effective only if it is received by Arlene before she receives the rejection.

True

Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.

True

Pablo promises to sell to Candice an automobile for $12,000, for which Candice promises $12,000. A bilateral contract exists.

True

Pablo promises to sell to Candice an automobile for $20,000, for which Candice promises $20,000. A bilateral contract exists.

True

Ron says to Matt, "If you design and landscape my front lawn by the time I return from Paris next month, I will pay you $5,000." Matt does not respond but has the landscaping done by the time Ron returns. This is an example of a unilateral contract.

True

The Restatement and the UCC are both currently authoritative sources of contract law.

True

The Restatement provides that a promise following the rendering of emergency services is binding even if not supported by consideration if necessary to prevent injustice.

True

The term "past consideration" is not really consideration at all because the law will not find a contract where there is no bargained-for-exchange.

True

Under the UCC, exclusive dealing contracts are binding because sufficient consideration is deemed to be present.

True

Under the common law, in order to be enforceable, a modification of an existing contract must be supported by mutual consideration.

True

When a bid is made at an auction, it can be revoked if the auctioneer has not yet accepted the bid because the auctioneer has the power of acceptance.

True

f the offer specifies it MUST be accepted by telegram, a letter will not be a valid means of acceptance.

True

"Consideration" does not require an actual benefit to both sides of an agreement.

True.

A new promise to perform a voidable obligation that has not been avoided previously is enforceable without new consideration.

True.

A unilateral contract may consist of a promise exchanged for an act or forbearance.

True.

According to the UCC, only a merchant can make a firm offer to a buyer.

True.

An illusory promise has the form of a promise but imposes no real obligation.

True.

Charitable subscriptions are one of the most frequently occurring applications of the doctrine of promissory estoppel.

True.

Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.

True.

Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.

True.

If Sam agrees to sell to Thomas all of the tomatoes he wants at $25 a bushel, there is no contract for lack of consideration.

True.

In a unilateral contract, a promise is exchanged for an act or forbearance to act.

True.

In most, if not all, cases where there is a legal detriment to the promisee, there is also a legal benefit to the promisor.

True.

In some states a promise under seal is binding without consideration.

True.

Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.

True.

Pablo promises to sell to Candice an automobile for $20,000, for which Candice promises $20,000. A bilateral contract exists.

True.

The Restatement provides that a promise following the rendering of emergency services is binding even if not supported by consideration if necessary to prevent injustice.

True.

The element of exchange is absent where a promise is given for an act that has already been done.

True.

The parties to a contract may modify the agreement with no additional consideration by simply substituting a new contract.

True.

The term "past consideration" is not really consideration at all because the law will not find a contract where there is no bargained-for-exchange.

True.

Under the UCC, exclusive dealing contracts are binding because sufficient consideration is deemed to be present.

True.

Under the common law, in order to be enforceable, a modification of an existing contract must be supported by mutual consideration.

True.

A friend of Larry T. sent in Larry's name in response to an advertisement for "10 records for one cent and a promise to buy 6 more over the year." When Larry T. received the records he opened and used them. He knew he hadn't ordered the records.

Under quasi-contract, Larry T. must pay since he knew it was a mistake.

Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if quits smoking for a month. If Robbie does, is there a binding contract?

Yes, because Robbie gave up a legal right.

Yes, because the early payment of the loan is consideration that makes the bank's promise binding

Gary mails an offer to Brian on June 15. Brian receives the offer on June 16. Gary mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18 and Gary receives the acceptance on June 20. Brian receives the revocation on June 19. Was a contract formed?

Yes, on June 18

Arthur mails an offer to Brian on June 15. Brian receives the offer on June 16. Arthur mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18. Brian receives the revocation on June 19. Was a contract formed?

Yes, on June 18.

Wes, who is an art collector, offered to buy a print from Le Monde Gallery. Le Monde balked at the price, sending Wes a letter of rejection. That day it discovered that the print was not as highly valued as originally thought. Le Monde immediately telephoned Wes to accept his offer. Is there a contract?

Yes, since the acceptance was received before the rejection

Wes, who is an art collector, offered to buy a Miro original from Le Monde Gallery. Le Monde balked at the price, sending Wes a letter of rejection. The same day it was discovered that the print was not as highly valued as originally thought. Le Monde immediately telephoned Wes to accept his offer. Is there a contract?

Yes, since the acceptance was received before the rejection.

Yes, there is consideration for the modified amount

A contract wherein the obligation to perform that contract is based upon the happening of a specified event, even if the specified event may never occur, is an example of

a conditional contract.

The following conversation took place between Mary and Ed: "Ed, if you wanted to sell your table, what would you ask for it?" Ed: "I suppose $400 would be a fair price." Mary: "I'll take it, if you will have it refinished." Ed: "Sold." Thus, for that price

a contract was formed when Ed said: "Sold."

An option is

a contract.

Lynn offers to sell his house to Dennis for $95,000. Dennis responds, "I will pay you $95,000 if you will paint the second floor." This response could best be described as:

a counteroffer.

An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as:

a requirements contract.

Which of the following is NOT always necessary in order for a valid contract to be formed?

a writing

Which of the following is correct with regard to counteroffers?

a. A counteroffer operates as a rejection of the original offer. b. A conditional acceptance is a common type of counteroffer. c. The receipt of a counteroffer terminates the original offer. d. All of the above are correct.

Which of the following gratuitous promises are enforceable by statute?

a. A good-faith contract modification in a contract for the sale of goods b. A written offer signed by a merchant to buy or sell goods that assures it will be kept open for one month c. A renunciation of a claim in a written waiver that is signed and delivered by the aggrieved party when the contract involves a sale of goods d. All of the above are enforceable by statute.

A, a wholesale distributor, sells to B, a retail dealer, a set of defective tires manufactured by X, a reputable manufacturer. Both A and B believed the tires to be in perfect condition, although neither party has inspected the tires. C purchases the tires from B and is injured because the defective tires blew out. Who, if anyone, is liable to C in strict liability?

a. A, B, and X share liability to C under strict liability.

Doug obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years.

a. Acme is obligated to use its best efforts to supply the goods even if no such clause appears in the written franchise agreement. b. According to the UCC, unless otherwise agreed, Doug must use his best efforts to promote the sale of the widgets in his territory. d. Both (a) and (b).

Which of the following would most likely be a merchant with respect to the goods in question under the UCC definition?

a. Amy is an authorized IBM computer dealer. b. Brian employs two salesmen to sell his homemade furniture. c. Clarence has a store in which he sells used lawn mowers. d. All of the above would be merchants.

Which of the following is true with regard to an exculpatory clause?

a. An exculpatory clause excuses one party from liability for her own tortious conduct. b. Where one party has a superior bargaining position that has enabled him to impose an exculpatory clause upon the other, the courts are inclined to nullify the provision. c. An exculpatory clause may be unenforceable for unconscionability. d. All of the above are true.

Which of the following remedies are available to either a buyer or seller following a breach by the other party?

a. Canceling the contract and recovering incidental damages

Which of the following is correct with respect to consequential damages under the Code?

a. Consequential damages include damages for destruction of a warehouse caused by the explosion of nonconforming goods.b. Consequential damages include damages for lost profits from a contract to resell goods which the seller never delivers.c. Particular needs of the buyer need to be made known to the seller before the seller can be held responsible for consequential damages relating to those needs.d. All of the above are correct.

Which of the following is generally NOT a defense to a claim against a manufacturer under 402A?

a. Contributory negligence on the part of the plaintiff

Leonard offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer."

a. Diane cannot accept the offer, because it wasn't made to her.

Donald, a minor, makes a contract with Albert, an adult, to buy a computer. One week later, Donald has his eighteenth birthday and shortly thereafter tells Albert he will pick up the computer next week.

a. Donald has expressly ratified the contract.

A valid contract may be unenforceable for which reason(s)?

a. Failure to satisfy the Statute of Frauds b. Running of the Statute of Limitations c. Both (a) and (b)

Growingreen, a gourmet fresh food store, orders 100 lbs. of peaches from Western Fruits "on approval." Growingreen has never dealt with Western before this transaction. Since it only sells the highest quality fruits, Growingreen asked for and received these special terms. The peaches arrived on Saturday, but the owners of Growingreen were too busy to open the crates. Sunday they are closed. Monday at 4 p.m., they opened the boxes and inspected the peaches. They did not meet the high standards of Growingreen, so they nailed the crates shut and ordered a truck to return them the next day. They arrived at Western on Thursday, totally spoiled, a week after they were sent. This is the first time Western knew they were not being accepted. Who is responsible for the damages to the peaches?

a. Growingreen, since it did not, within a reasonable time, notify Western of its election to return the peaches

In which of the following situations will a court grant specific performance?

a. In a case involving breach of contract for the sale of real property.c. Where goods are unique or rare.d. Both (a) and (c).

If Jana, a minor, transfers property to Scott and Scott sells the property to a good faith purchaser for value before Jana avoids the transfer:

a. Jana loses the right to recover the property if the transfer involved goods.

Ken promises not to foreclose on a mortgage that he holds on an office complex that Christopher owns. In reliance on this promise, Christopher expends $200,000 to remodel the complex. Which of the following is correct with regard to Ken's promise?

a. Ken's promise not to foreclose is unsupported by consideration. b. Ken's promise is noncontractual. c. Ken's promise will be enforced against him based upon the doctrine of promissory estoppel. d. All of the above.

a. Maxine has revoked her offer to Tom.

Mr. Homayer hired Blake Painters to paint his house. Blake decides it has too many jobs and delegates the duties to the Andrews Company. Andrews does a poor job, and drips paint on the Homayers' flowers and windows.

a. Mr. Homayer can sue both Blake and Andrews.

Richard owns and operates a small business at an outdoor market where he sells fruits and vegetables. What does the UCC specifically require of Richard with respect to his customers?

a. Observance of reasonable commercial standards of fair dealingb. Honesty in factc. Both (a) and (b).

Alice is browsing in a commercial art gallery when she sees a painting that she likes. Roger, who is the manager of the gallery, tells her that the painting is a genuine Leroy Neiman work. Based upon that representation, Alice buys the work for $5,000. She later discovers that the painting is only a cheap copy of the original that is worth no more than $50

a. Roger has breached an express warranty to Alice that the painting is a Neiman work.

Which of the following is correct with respect to election of remedies?

a. The Code rejects any doctrine of election of remedies; its remedies are cumulative.b. The remedy of specific performance is inconsistent with that of restitution.c. A person who seeks an injunction may also seek incidental damages for the breach.d. All of the above are correct.

Promissory estoppel is a contractual doctrine that includes the following considerations:

a. The courts use the doctrine of promissory estoppel to enforce noncontractual promises. b. Under this doctrine the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the nature of the promise to take action or refrain from taking action and the promisee does so. d. Both (a) and (b).

Promissory estoppel is a contractual doctrine that includes the following considerations:

Anita owes Brad $75,000. Brad signs a written statement granting Glen a gratuitous assignment of his rights from Anita. Brad delivers the signed statement to Glen before Brad dies.

a. The delivery of the statement makes the assignment irrevocable.

a. The doctrine of promissory estoppel can be applied to this case. c. Under the Restatement, Barbara's promise is enforceable. d. Both (a) and (c).

a. The geographic restraint is reasonable.

a. The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000.

Which of the following is correct with regard to an enforceable restraint of trade?

a. The restraint should be no more extensive than is required to protect a specified property interest. b. Restraints typically arise in connection with the sale of a business. c. A typical restraint is a covenant not to compete. d. All of the above.

a. There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one.

In which of the following situations does the seller have the right to cure?

a. Where the time for performance under the contract has not yet expiredb. After the time for performance has expired if the seller had reasonable grounds for believing the buyer would accept a nonconforming tender with or without monetary adjustmentd. Both (a) and (b)

a. Yes, since the acceptance was received before the rejection

An obligation of the merchant-seller that the goods are reasonably fit for general purposes for which they are manufactured and sold, and the goods are of fair average quality is known as:

a. a warranty of merchantability.

A(n) ____ is a contract between a promisee and a promisor by which the promisee agrees to accept and the promisor agrees to render a substituted performance in satisfaction of an existing contractual duty.

a. accord

The way parties usually show mutual assent is by:

a. an offer by words or conduct and an acceptance by words or conduct.

Contracts that are implied in law:

a. are obligations imposed by law on grounds of justice and equity. b. are intended to prevent unjust enrichment. c. do not rest upon the assent of the contracting parties. d. All of the above.

Contracts that are implied in law:

a. are obligations imposed by law on grounds of justice and equity. b. are intended to prevent unjust enrichment. c. do not rest upon the assent of the contracting parties. d. All of the above.

A buyer in Atlanta enters into a sales contract with a seller in Chicago. If the contract does not mention the place for delivery of the goods, the place of delivery will be:

a. at the seller's business or residence in Chicago.

The seller and buyer of goods agree that identification will be made by the seller when it manufactures and separates those particular goods out for the buyer. Identification will actually occur:

a. at the time and in the manner agreed upon by the parties.

Refusal of a tender of performance by one party to a bilateral contract will:

a. be treated as a repudiation, excusing the tendering party from further duty of performance under the contract.

Express contracts and implied contracts are:

a. both genuine contracts b. equally enforceable. Both (a) and (b).

Express contracts and implied contracts are:

a. both genuine contracts. b. equally enforceable. d. Both (a) and (b).

Seth and Maricela enter into a contract for a sale of goods for a contract price of $1,200 and Maricela has made a down payment of $200. Seth delivers nonconforming goods to Maricela who rightfully rejects them. The best remedy available to Maricela is to:

a. cancel the contract and recover her $200 plus whatever other damages she can prove.

The UCC Battle of the Forms rule:

a. changes the mirror image rule. b. may yield different results depending on whether the parties are merchants. c. may result in formation of a contract different from the terms of the offer. d. All of the above.

Contract damages that put the injured party in as good a position as if the other party had performed are:

a. compensatory damages.

175. A buyer's right to purchase, in good faith and without unreasonable delay, substituted goods from Seller B when Seller A breaches a sales contract is:

a. cover.

A(n) ____ contract is one in which the parties have manifested their agreement by oral or written language, or both.

a. express

Any action for breach of a sales contract must be begun within:

a. four years after the cause of action accrued.

According to the Code, a good faith purchaser for value obtains valid title from one possessing voidable title even if that person obtained voidable title by:

a. fraud as to her identity.b. criminal fraud.c.an agreement that the transaction was to be a cash sale, and the price has not been paid.d. All of the above

Tom breached a contract he had with Jim. In addition to other remedies available, Jim may be able to recover commercially reasonable expenses incurred as a result of the breach. These expenses are

a. incidental damages.

A misrepresentation is material if:

a. it would likely induce a reasonable person to enter into a transaction. b. the maker knows it would likely induce the other party to enter into the transaction. d. Both (a) and (b).

Henry hires Ace Roofing to put a new roof on his house. When Ace comes, Henry refuses to let them on the roof, saying that he has a headache and doesn't want to listen to pounding. The next day, Henry still has a headache and he refuses to allow them on the roof. The day after, the baby is sleeping and Henry refuses to allow them to work. After four weeks of this, Ace:

a. may be discharged, but Henry is not.

If Mary allows the seller, Baymore Co., four weeks to repair the defects in her kitchen set. They have tried, but have not done a good job at it. She may revoke her acceptance as long as she:

a. notifies Baymore of the revocation.

In a sale on approval:

a. possession but not title is transferred to the buyer for a stated period of time.

A person who makes a promise is a(n):

a. promisor.

Contract law is significant in that it is basic to other fields of law such as:

a. sales of personal property. b. commercial paper. c. secured transactions. d. All of the above.

The seller may recover the full contract price when:

a. there is no ready market available for the resale of the goods identified to the contract.b. the buyer has accepted the goods.c. conforming goods have been lost or damaged after the risk of loss passed to the buyer.d. Any of the above occurs.

Sarah offers to pay Allison $150 if Allison will paint her apartment while she is out of town on vacation for two weeks. Allison makes no promise but tells Sarah that she will think about it. While Sarah is out of town, Allison paints the apartment. This is best described as a(n):

a. unilateral contract.

Which of the following is enforceable without consideration? a.A new promise to pay a debt barred by the statute of limitations. b.An illusory promise. c.Under the common law, a promise made to satisfy a preexisting moral obligation. d.A promise by a father to pay someone for rendering emergency services to his injured son before the father had arrived at the accident scene.

a.A new promise to pay a debt barred by the statute of limitations.

Al has a tax service and accounting business in Redwood City. He decides to move to Center City, which is 150 miles away and sells his accounting practice to Able and Baker, a CPA firm. In the sales contract, he agrees that he will refrain from practicing accounting anywhere within a 20-mile radius of Redwood City for a period of two years. However, on weekends he returns to his house in Redwood City, and when clients call him, he meets with them in his home. a.Al is in violation of the sales agreement. b.The agreement is invalid, because it is an illegal restraint of trade. c.The agreement is illegal, because it is a violation of public policy. d.The two-year provision is likely to be held invalid, because it is too long a period of time.

a.Al is in violation of the sales agreement.

Which of the following are the two basic elements to consideration? a.Bargained-for exchange and legal sufficiency b.Legal detriment and legal benefit c.Legal sufficiency and legal adequacy d.Promise and forbearance

a.Bargained-for exchange and legal sufficiency

Carlos ordered an aluminum storm door for $249.99. Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door at $179.99. Carlos calls the store and demands the advertised price. They say okay. a.Carlos must pay $179.99. b.Carlos must pay $249.99. c.There is no contract. d.There is a contract for the reasonable value of the door.

a.Carlos must pay $179.99.

Rob repairs a door for Howard. In return, Howard is supposed to pay Rob $75 on November 1 at Howard's house. Which of the following would constitute legally sufficient consideration? a.Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment to Rob's house. b.Rob comes to Howard's house to collect the $75 on November 1, but Howard only has $50. Rob tells Howard to forget the other $25. c.Since this is an unliquidated debt, the only legally sufficient consideration is Howard's payment of $75 to Rob on November 1 at Howard's house. d.Since this is a liquidated debt, the only legally sufficient consideration is Howard's payment of $75 to Rob on November 1 at Howard's house.

a.Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment to Rob's house.

Stan purchased 400 pairs of gloves from Isaac at a contract price of $800. Fifty of the gloves were defective, and a dispute arose as to the amount due and owing under the contract. Stan refuses to pay the $800, and Isaac is threatening to sue. Which of the following is correct with regard to this transaction? a.If Isaac agrees to accept $600 to settle the dispute and Stan agrees to pay that amount, the substitute agreement is enforceable. b.If Isaac agrees to accept $600 to settle the dispute and Stan pays that amount, Isaac can still sue for the balance of $200 and will win the lawsuit. c.Stan is under a pre-existing legal obligation to pay the $800. d.Both (b) and (c).

a.If Isaac agrees to accept $600 to settle the dispute and Stan agrees to pay that amount, the substitute agreement is enforceable.

Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere in River City for a period of five years. a.The geographic restraint is reasonable. b.This agreement is unreasonable. c.The agreement unduly interferes with the interest of the public. d.Both (b) and (c).

a.The geographic restraint is reasonable.

William agrees to drill a well up to 200 feet deep for John's rural cabin. The contract price is $3,000. After drilling 100 feet, William strikes solid granite rock. He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract. He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price. Because John is anxious to have the well, he agrees to pay William an additional $1,000 to complete the job. However, once the well is finished, he changes his mind and now says he will pay only the originally agreed-upon amount. a.The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000. b.Under the UCC, the substitute contract is binding, because there is the payment of additional money. c.William is in breach of contract. John need not pay any additional money. d.William is under a pre-existing moral duty to perform at the originally agreed-upon price.

a.The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000.

Under which of the following circumstances would a court be likely to enforce an illegal contract? a.Under certain circumstances in which the aggrieved party was unaware of the illegality b.Where, although the contract is unconscionable, there is only procedural unconscionability c.Where the agreement is with an unlicensed attorney d.A court will never enforce an illegal contract.

a.Under certain circumstances in which the aggrieved party was unaware of the illegality

Alice says to Brian, "If I decide to buy a word processor next year, I will buy it from you." This is an example of: a.an illusory promise. b.past consideration. c.the pre-existing duty rule. d.good consideration.

a.an illusory promise.

The requirement of legally sufficient consideration: a.is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor. b.has nothing to do with the value of what is exchanged. c.means the subject matter that the parties agree to exchange has to have the same value. d.is the same as the requirement of adequacy of consideration.

a.is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor.

Custom Sales and Rentals uses a four-page contract with important contract terms buried in the fine print. This is an example of: a.procedural unconscionability. b.a reasonable, legal business practice. c.a "Blue law." d.substantive unconscionability.

a.procedural unconscionability.

Under the common law, the ____ must be the mirror image of the ____.

acceptance, offer

Which is an irrevocable offer

all of the above

All of the following are essentials of an offer to contract except

all terms of the contract must be included in the offer.

The elements of a contract include all of the following except:

an illegal purpose.

Alice says to Brian, "If I decide to buy a word processor next year, I will buy it from you." This is an example of:

an illusory promise

Alice says to Brian, "If I decide to buy a word processor next year, I will buy it from you." This is an example of:

an illusory promise.

Bob picks up a bag of pretzels off the counter at the hot dog stand, opens it up and begins eating pretzels. He has made:

an implied contract to pay for the pretzels.

When a client accepts the services of an accountant without an agreement concerning payment, the result is

an implied-in-fact contract.

All of the following EXCEPT which one will terminate a contract offer?

an inquiry by the offeree as to size

The way parties usually show mutual assent is by:

an offer by words or conduct and an acceptance by words or conduct.

A definite proposal requesting a forbearance and made by one person to another is

an offer.

At an auction sale, each bid is:

an offer.

Gail sent a letter of acceptance to an offer that has expired. Gail has made:

an offer.

A contract that binds the offeror to keep an offer open for a specified period of time is known as:

an option.

A promise by the Rive Gauche restaurant to buy all the oil it wants this winter to heat its business from Ollie's Oil Corp. would be:

an unenforceable, illusory promise.

Where the amount of the debt to be paid has not been agreed upon by the parties, there is

an unliquidated debt.

For $100 each, Helen agrees with Troy Tech to knit 14 sweaters for the soccer team in their school colors with their names on the front and "Go Tech" on the back. After Helen has almost finished the last sweater, Troy Tech decides it should spend the money on repairs to the locker room instead of on the sweaters. Does Helen's contract have to be in writing for her to enforce it?

b. No, because they are specially manufactured sweaters

Article 2 of the Uniform Commercial Code deals with what type of property?

b. Personal

Randy, a minor, buys a new four-wheel drive truck from the Jones Dealership. Randy sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to Arthur Smith. Arthur does not personally know Steve or Randy. Which of the following expresses the status of this situation?

b. Randy may not recover the vehicle from Mr. Smith.

b. Rosalind may avoid the contract.

A valid contract may be unenforceable for which reason(s)?

b. Running of the Statute of Limitations

Which of the following is untrue with regard to the interpretation of contracts?

b. Technical terms will always be given technical meaning even where a different intent is manifested by the parties.

If destruction or casualty to goods, total or partial, occurs after risk of loss has passed to the buyer, who is responsible for losses?

b. The buyer, who must pay the entire contract price of the goods

b. The consideration moving from Darla to Edward is the promise of $6,000 subject to a condition. c. Darla's conditional promise is sufficient consideration unless Darla knows she cannot receive at least $6,000 from her uncle's estate. d. Both (b) and (c).

Shannon orally agrees to buy 500 telephone answering machines from Thomas for $25,000. Thomas delivers 300 answering machines to Shannon, who receives and accepts them. Which of the following is correct with regard to this transaction?

b. The contract is enforceable to the extent of the 300 machines that have been received and accepted.

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code?

b. The sale of a new car

b. There is no contract, because Bradley has made a counteroffer.

b. This agreement is unenforceable and opposed to public policy.

b. Tyler has given no additional consideration, and under the common law must perform at the agreed upon original price.

Brett contracts to purchase a particular Chevrolet from Johnson's car lot. At what point does Brett obtain a special property interest that enables him to insure the car?

b. When the contract is made

In which of the following situations would a minor be unable to disaffirm a contract which he had made?

b. Where the minor wishes to affirm part of a contract and disaffirm another part of the same contract

Alex tells Mona that he thinks her ring is very valuable and that he would like to take it to be appraised. She gives him the ring, and he quickly sells it to unsuspecting Hanna's Antique Jewelry Shop for $2,000. A week later, Mona discovers her ring on sale at Hanna's and uncovers the story. Can Mona get the ring back?

b. Yes, since Alex had no title to the ring

Lynn offers to sell his house to Dennis for $95,000. Dennis responds, "I will pay you $95,000 if you will paint the second floor." This response could best be described as:

b. a counteroffer.

A sequence of previous conduct between a buyer and a seller, which may be regarded as establishing an understanding for interpreting an agreement between the two parties, is known as:

b. a course of dealing.

An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as:

b. a requirements contract.

Willingness by the buyer to become the owner of the goods tendered or delivered to him by the seller is:

b. acceptance.

On November 1, Paula and Roberta enter into a contract where both parties are obligated to perform on December 31. On December 1, Paula tells Roberta, "I can, in no way, perform my duties in our contract." This statement is a(n):

b. anticipatory repudiation.

A contract in which both parties exchange promises is a:

b. bilateral contract.

On June 1, Supertread Tire Company entered into a contract to provide 100 tires per month to ZYX Cycle Company at $30 per tire for the next two years. The October shipment consisted of 100 badly defective tires. ZYX Cycle Company:

b. can reject the October shipment if it cannot be cured in a timely manner by Supertread.

A contract contains the provision, "Walter Hamilton promises to pay Faye Weeks $1,200 for a 2003 V-6 motor provided that Phelps' Garage approves the quality of the motor." This provision:

b. creates an express condition which must be met before Walter's duty to pay arises.

Bill wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10.00 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n):

b. creditor beneficiary.

Notice of an assignment:

b. cuts off any defenses based on subsequent agreements between the obligor and assignor. c. precludes subsequent setoffs and counterclaims of the obligor that arise out of entirely separate matters. e. Only (b) and (c).

An offer under Article 2 of the UCC that is irrevocable even though no consideration is given to keep it open is known as a(n):

b. firm offer.

Unless one of the parties contractually assumes the risk, the ____ discharges a contract if supervening circumstances make fulfillment of the purpose which both parties had in mind impossible.

b. frustration of purpose doctrine

After a breach by the seller, buyer may replevy the goods that have been identified to the contract if:

b. he cannot, after a reasonable effort, buy replacement goods.

No implied warranty exists:

b. if it applies to defects that are apparent upon examination and the buyer inspects the goods before entering into the contract.`c. as to defects that an examination ought to have revealed, where the buyer examined the goods as fully as he desired or where the buyer refused to examine the goods.`e. Both (b) and (c).

In the case of Hadley v. Baxendale, the plaintiff was seeking damages for:

b. lost profits.

Under the ____, a buyer may reject goods for even the slightest defect.

b. perfect tender rule

A fiduciary is a:

b. person who owes a duty of trust, confidence, and loyalty to another.

Any property other than an interest in real property is:

b. personal property.

Under Section 2-210 of the Code, unless circumstances indicate to the contrary, a contract that prohibits an assignment:

b. prohibits only a delegation of the delegator's duty of performance and not the assignment of rights.

The process whereby a court "rewrites" or "corrects" a written contract to make it conform to the true intentions of the parties is:

b. reformation.

A purchaser's agreement to buy from a particular seller all the materials of a particular kind he needs is a(n) ____ contract.

b. requirements

The warranty of fitness for a particular purpose:

b. requires that the seller know that the buyer is relying on the seller's expertise in selecting a product for the buyer's specific purpose.

The return to the aggrieved party of the consideration, or its value, which he gave to the other party is:

b. restitution.

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by:

b. state common law.

In bringing a warranty action, the buyer must prove:

b. that breach of the warranty proximately caused the loss suffered.

William rents a backhoe for six months from Hunter Leasing but fails to make timely payment of the rent. Hunter Leasing may recover:

b. the difference between the present values of the rent due under the original lease and the market rent.

If an offer requires acceptance by mail and the offeree faxes acceptance:

b. there is a contract if the acceptance is actually received within the time the authorized means would have arrived. c. under the Restatement, if the acceptance is received within the time the authorized means would have arrived, the acceptance is effective when sent. Both (b) and (c) are correct.

Under the UCC, a(n) ____ is a practice or method of dealing, regularly observed and followed in a place or vocation or trade

b. usage of trade

Steven intentionally makes a material misrepresentation of fact regarding his motorcycle to Thelma who agrees to buy the motorcycle based upon the misrepresentation. This contract is:

b. voidable.

Which of the following would generally be considered to be a revenue-raising licensing law? a.A statute requiring that doctors be licensed b.A statute requiring that salespeople be licensed, but not establishing any educational or training requirements c.A statute requiring public school teachers to be licensed d.A statute that requires insurance agents to pass a test before selling insurance in a state

b.A statute requiring that salespeople be licensed, but not establishing any educational or training requirements

Which of the following would most likely be enforceable? a.An agreement supported by past consideration b.A substitute agreement to settle an undisputed debt c.A debt agreed to seven years ago in a state where the statute of limitations is six years d.A promise following the rendering of emergency services that is not supported by new consideration

b.A substitute agreement to settle an undisputed debt

Janet promises Eli $4,000 for one of his original paintings on the condition that she receive $1 million from her mother's will. a.Janet has made an illusory promise. b.Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million. c.Janet has made a conditional promise which is not sufficient to form consideration. d.Janet's promise is legally inadequate and the courts will therefore not enforce it.

b.Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million.

Wayne helped Hank study all night for an important exam. After Hank got an A on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it." a.There is no contract because there is no mutual assent. b.There is no contract because there is no valid consideration. c.There is no contract because $10 is reasonably inadequate consideration. d.There is a contract with sufficient consideration.

b.There is no contract because there is no valid consideration.

Tyler contracts to build a garage for Wilbur for a price of $6,000. Because of an increase in the cost of labor and materials, Tyler refuses to perform. Wilbur wants the garage, so he agrees to pay an additional $500. a.Wilbur must pay the additional $500. b.Tyler has given no additional consideration, and under the common law must perform at the agreed upon original price. c.The substitute agreement is an illusory contract. d.The debt is a disputed one, and therefore Wilbur is obligated to pay the additional money.

b.Tyler has given no additional consideration, and under the common law must perform at the agreed upon original price.

Don has an employment contract with Dunkirk Ice Cream. He sells ice cream and novelty ice cream products. He has nine children and doesn't make enough money, so he decides to see if another dairy will hire him, too. "After all," he reasons, "most stores carry four or five different brands." His employment contract prohibits him from competing. If Don sells for another dairy in addition to Dunkirk, will he be in trouble under his contract? a.No, it is unenforceable as against public policy. b.Yes, it is likely to be enforceable during employment. c.No, the prohibition against competing is enforceable only after he quits Dunkirk. d.A court would have to rule on the enforceability of the covenant not to compete since courts are reluctant to enforce such covenants during a period of employment.

b.Yes, it is likely to be enforceable during employment.

Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable? a.Yes, there is no way for the dealer to get the extra money anyway b.Yes, there is consideration for the modified amount c.No, there is no consideration and the dealer can sue for the extra $300 d.No, there is an implied contract to pay the dealer whatever he billed Jack

b.Yes, there is consideration for the modified amount

Theresa is a travel agent at the Fly Away Travel Agency. She has signed an agreement with her employer which prohibits her from working in any similar business in any town within a 100-mile radius of where she works. If she wants to quit her job and go to work for another travel agency, it is likely that: a.a court would uphold these restrictions. b.if no trade secrets are involved, and she has no dominion over customers, a court would rule the restrictions to be invalid. c.if the period of time of the agreement is under five years, it will be upheld by the court. d.Both (a) and (c).

b.if no trade secrets are involved, and she has no dominion over customers, a court would rule the restrictions to be invalid.

A purchaser's agreement to buy from a particular seller all the materials of a particular kind he needs is a(n) ____ contract. a.illusory b.requirements c.output d.exclusive dealing

b.requirements

c. An off-duty deputy sheriff from a county other than the one where the arrest occurred

Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia agrees never to open a hair salon in the state. Which of the following best describes this contract clause?

c. An unenforceable restraint of trade contrary to public policy

Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress is too expensive and now wishes to cancel the order.

c. Cheryl may disaffirm this executory contract.

A seller's incidental damages for a buyer's breach would include all but which one of the following?

c. Cost to initially ship the widgets to buyer

Eric bought a new snowmobile from the North Pole Manufacturing Company. After buying the machine, Eric then modified the spark plugs and a few other things in order to soup it up. In February, just after a snowfall, Eric was driving the snowmobile, when it tipped over, trapping him beneath it. His leg was severely burned when it lodged against one of the spark plugs. Eric now wants to sue North Pole for strict liability in tort. Which of the following is correct?

c. Eric has assumed the risk of using the snowmobile.

Which of the following is not generally required in order to have a valid contract?

c. Fairness of the bargain

Courts will enforce contracts for the benefit of all but which of the following?

c. Incidental beneficiaries

Howard stole a word processor and then sold it to his friend Ivan for $100.

c. Ivan has a void title to the word processor.

c. Ken's promise will be enforced against him based upon the doctrine of promissory estoppel.

Phil, the tax accountant, promises to do Marge's individual federal, state, local, and gift taxes for the year. He completes all but the gift taxes. Under the substantial performance doctrine:

c. Marge will have to pay Phil for all but the gift taxes.

Miller has a contract to sell 1,000 bushels of wheat to a bakery. The wheat is stored in a grain elevator and has become infested with insects. What is the consequence?

c. Miller is not discharged, but must substitute wheat or pay damages to the bakery for breach of contract.

Matt tells Ron that the snow boots he is selling offer protection for temperatures of 20° below zero. Ron orders a pair for his trip to Greenland. Upon delivery, Ron sees that the box states "will protect your feet in temperatures down to 30° below zero." The first night's temperature goes down to 27 below. Ron suffers frostbite on all of his toes. Ron then sues for breach of warranty. What is the result?

c. No breach, because Matt said 20° below zero.

Although he knows the ring is really valuable, Alex tells Mona her ring contains artificial gems, but he would be willing to buy it for $50. Mona agrees. Alex quickly takes the ring to Hanna's Antique Jewelry Shop and sells it for $1,000. A month later, Mona sees her ring on sale for $2,000 at the shop. Is Mona entitled to get the ring back?

c. No, since Alex had voidable title to the ring and Hanna was a good faith purchaser.

Eliza was an antique expert. She went to a tea party at Grandma Jones' house and saw a magnificent Queen Anne table out on the back porch. She asked Grandma about it and was told it was in the way so they were going to store it in the barn. Eliza offered to buy it from her for $200. The next week, Grandma saw it in Eliza's store on sale for $3,000. Which of the following is true?

c. She cannot rescind the contract because Eliza did not have a duty to tell her the value of the table.

Which of the following is not true regarding the contracts of intoxicated persons?

c. Slight intoxication will destroy one's contractual capacity.

Fred contracts to sell a certain tract of land to Maria for $20,000, but the contract is silent as to the time of delivery of the deed and payment of the price.

c. The payment of the $20,000 and the delivery of the deed are mutually dependent and, in the absence of an agreement to the contrary, are concurrent conditions.

Fred is a concert violinist who is scheduled to perform at Carnegie Hall for the first time. He buys what he is told is a Stradivarius violin from a well-known, reputable dealer in quality violins, and he pays the going rate for a Stradivarius. He later learns the violin is an imitation, although it is such a good imitation that even the dealer thought it was authentic.

c. The sale is voidable by the purchaser for mutual mistake.

Which of the following need NOT be contained in a memorandum, which satisfies the general statute of frauds writing requirement?

c. The signature of the party suing

A contract contains a provision that states it will be effective for a "year." The plaintiff in a lawsuit claims that a "year" is obviously 12 months. The defendant claims that the contract meant a 10-month school year.

c. The term "year" in the contract is ambiguous, and the parties can bring in parol evidence to clarify their intent.

c. There is no contract since Bob made a counteroffer.

Albert found a stone in his yard and took it to Bob, a jeweler, for evaluation. Although Bob knew what the stone was, he told Albert that he wasn't sure as to the nature of the stone, but that he thought it was a topaz. Bob then offered to buy the stone for $25 and Albert agreed. Later Albert found out the stone was an uncut diamond worth about $700.

c. This contract can be voided based upon fraud in the inducement.

Tom tries to sell his classic car to Victoria for $12,000. Tom tells Victoria, "I paid $12,000 for the car in 1978 and it's worth twice that today." Tom really paid $8,000 for the car in 1978. If Victoria buys the car, basing her decision on Tom's statement, which of the following correctly states the situation?

c. Tom's statements are actionable only if intentional.

With regard to uncertainty in a contract that falls within the scope of Article 2, which of the following is true?

c. Uncertainty as to incidental matters will seldom be fatal as long as the parties intend to form a contract.

On March 1, Sara, a student, received a telephone call from ComputerChip, Inc. offering her a job for one year beginning on June 15, after completion of the school year. According to the personnel manager, she will have to move to California and be ready to start work at 8:00 a.m. on June 15. Should Sara ask for a letter confirming the telephone conversation if she accepts the offer immediately?

c. Yes, because the job offer is for longer than one year from March 1

Mark tells Leslie that his stereo has quadraphonic speakers because he was told that when he bought it. Leslie buys the stereo, but it does not have quadraphonic speakers. Is Mark liable for breach of warranty?

c. Yes, because the statement was false

Under the UCC, ____ refers to the manner and extent to which the respective parties to a contract have accepted successive tenders of performance by the other party without objection.

c. course of performance

Professor Dought has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds. Professor Dought's mother is a(n):

c. donee beneficiary.

A(n) ____ is a substituted contract that involves an agreement among three parties to substitute a new promisee in place of an existing promisee, or to replace an existing promisor with a new one.

c. novation

Damages for reliance include expenses for:

c. preparing to perform.

A(n) ____ is a measure designed to protect the public from unqualified practitioners.

c. regulatory license

A ____ is an offeree's refusal to accept an offer.

c. rejection

Miller made a contract to sell his condominium to Jefferson for $80,000. Two days later Miller changed his mind after discovering that he could have sold the property to another buyer for an additional $20,000. Jefferson sues and asks the court to have the property conveyed to him at the price of $80,000. Jefferson is seeking:

c. specific performance.

John operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of:

c. substantive unconscionability.

In most states, whether the time within which a minor disaffirms a contract constitutes a reasonable time is determined by:

c. the facts and circumstances of the case.

Product liability exists if:

c. the product reaches the consumer without substantial change in the condition in which it is sold.

The UCC provides that a merchant is bound to keep a written offer open for a stated period but no longer than:

c. three months.

Contract law:

c. today usually recognizes contractual obligations whenever the parties manifest an intent to be bound.

c. void contract.

Mary agrees to sew Georgia's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay: a.$50, since that is the original agreement. b.$50, since a modification must be in writing. c.$60, since the modified agreement is supported by additional consideration. d.$60, since any subsequent agreement is enforceable.

c.$60, since the modified agreement is supported by additional consideration.

Which of the following would always be considered to be contrary to public policy? a.A contract which contains a covenant not to compete b.A contract offered on a take-it-or-leave-it basis c.An agreement to pay someone to make false, negative statements about a competitor's product d.An agreement which contains an exculpatory clause

c.An agreement to pay someone to make false, negative statements about a competitor's product

A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of them is eligible? a.The employees of the bank b.An on-duty sheriff's deputy in the county where the arrest occurred c.An off-duty deputy sheriff from a county other than the one where the arrest occurred d.None of the above are eligible.

c.An off-duty deputy sheriff from a county other than the one where the arrest occurred

Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia agrees never to open a hair salon in the state. Which of the following best describes this contract clause? a.Void as an illegal primary restraint b.Valid as a reasonable restraint on trade c.An unenforceable restraint of trade contrary to public policy d.Binding as fair protection

c.An unenforceable restraint of trade contrary to public policy

Andrew agrees to paint Betty's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job unless Betty agrees to pay him $100 more. What law applies to this fact situation? a.The acceptance of additional money to settle a disputed claim is supported by consideration. b.A past obligation is sufficient consideration for a new promise. c.Andrew gives no additional consideration in return for modification of a preexisting contract. d.Betty has made a promise in exchange for a forbearance.

c.Andrew gives no additional consideration in return for modification of a preexisting contract.

Which of the following will support a contract? a.An illusory promise b.Past consideration c.Forbearance to do an act d.A pre-existing public obligation

c.Forbearance to do an act

In which of the following situations will a smaller sum be unable to discharge a larger debt? a.If the smaller sum is paid before the due date of the larger debt. b.If an additional article or service is given together with the payment of the smaller sum. c.If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency. d.A smaller sum is never able to discharge a larger debt.

c.If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency.

Nell gives Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true? a.Nell can get the money back from Al through litigation. b.Nell can get the money back and force Al to do as he promised. c.Legally, Nell can neither get the money back nor force Al to do as he promised. d.Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50.

c.Legally, Nell can neither get the money back nor force Al to do as he promised.

Which of the following requires consideration in order to be binding upon the parties? a.A written promise by a merchant to keep an offer to buy goods open for 14 days b.Material modification of a sale of goods contract under Article 2 of the UCC c.Material alteration of a personal service contract d.Settlement of a disputed debt

c.Material alteration of a personal service contract

R&R, Inc. entered into a contract with Scott, an agent, under the terms of which Scott would receive $20,000 if he stole trade secrets from the leading competitor of R&R. Scott performed his end of the agreement by delivering the trade secrets. R&R now refuses to pay Scott for his services. a.Scott may recover based upon the express contract of the parties. b.Scott may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of R&R. c.Scott will be unable to recover, because this is an illegal contract. d.Scott will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by R&R.

c.Scott will be unable to recover, because this is an illegal contract.

Which of the following statements is most accurate concerning charitable subscription promises? a.They are generally not enforceable. b.The courts equate them with gifts. c.They are generally enforceable if there is reliance by the charity. d.The Restatement uses a strict reliance requirement in relation to charitable subscriptions.

c.They are generally enforceable if there is reliance by the charity.

Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct? a.Marilyn will have to pay $20,000. b.This is a contract under seal which is enforceable. c.This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders. d.This is the settlement of a disputed debt that requires no additional consideration on the part of Bravo Builders.

c.This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders.

Sue owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. She has been offered a two-year graduate fellowship, but she will not be able to pay the loan back if she accepts the fellowship. The bank manager tells Sue that if she pays $3,000 now, they will forgive the loan. Should Sue accept the offer? a.No, because the bank can still sue for the remaining $2,000 b.No, because the manager's promise is not binding on the bank c.Yes, because the early payment of the loan is consideration that makes the bank's promise binding d.Yes, because the bank must do whatever the manager says

c.Yes, because the early payment of the loan is consideration that makes the bank's promise binding

A(n) ____ is a measure designed to protect the public from unqualified practitioners. a.exculpatory clause b.revenue license c.regulatory license d.usury statute

c.regulatory license

c.substantive unconscionability.

A newspaper advertisement made to the general public:

can be revoked by using a similar newspaper advertisement.

The UCC Battle of the Forms rule:

changes the mirror image rule..may yield different results depending on whether the parties are merchants.,may result in formation of a contract quite different from the terms of the offer.

The requirement that each party to a contract must intentionally exchange something of value as an inducement to the other party to make a return exchange is known as:

consideration.

A ___________ is an obligation imposed by law to avoid injustice.

contract implied in law,quasi contract

Acceptance of an offer by the offeree after the time for acceptance has expired:

could be a new offer

The Uniform Commercial Code would be applied in which of the following situations?

d. A contract to buy living room furniture

Which of the following transactions is governed by Article 2 of the UCC?

d. A contract to receive medical services in a hospital

A contract which does not satisfy the writing requirement of the Article 2 statute of frauds, but which is otherwise valid, is enforceable in which of the following situations?

d. All of the above are situations where the contract would be enforceable.

Which of the following is not a remedy of the buyer?

d. All of the above may be remedies of the buyer.

Which of the following would be considered a valid and legally enforceable agreement?

d. An agreement by a car salesman not to sell automobiles or automobile parts in Marin County for a period of one year after terminating his employment

Which of the following duties would not be delegable?

d. Arthur has a duty to teach an accounting class at a community college during the fall semester.

In determining the meaning of a contract under the UCC, which of the following will have first priority?

d. Express terms

Andrews Manufacturing Company has repudiated its contract to sell 500 computers to a retailer. What recourse does the retailer have under the circumstances?

d. It can "cover" by procuring goods elsewhere and then sue Andrews for incidental and consequential damages.

Which of the following promises does not have to be evidenced by writing in order to be enforceable?

d. Mindy's agreement with Susan to buy her bike for $400

Greg has been in the business of selling encyclopedias for twenty years. Margaret agreed to buy a set if Greg would also bring her a bookcase for them. Greg bought one and sold it to Margaret along with the books. While shelving the books, she ran her hand over the back edge of the shelves and cut herself severely. The wood was not finished on that side and nails were protruding through the shelf. Can Margaret sue Greg under strict liability?

d. No, because Greg is not a seller under Section 402A.

Todd, a minor, rents an automobile from Rosa, an adult. Todd damages the vehicle when he negligently backs into a pole. Under the majority view, can Rosa recover damages from Todd?

d. No, his contractual immunity protects him from legal action by Rosa.

On January 3, Cara wrote to SunTime Mfg. asking for shipment of 100 swimsuits on 90-day credit. In the letter, she gave references that indicated that her store was financially sound. Actually she had bills that she could not pay and hoped to turn the business around with the summer swimsuit sales. SunTime ships the suits on March 1; they are received March 15. Cara immediately puts them on display and seven are sold by March 20 when SunTime discovers that Cara has lied. SunTime may:

d. Recover 93 suits.

Which of the following is not a requirement of the statute of frauds provision of Article 2 of the UCC?

d. Terms specifying price

Brice owns a parcel of land that is encumbered by a mortgage held by the First National Bank. Brice agrees to sell the land to Paul for $50,000. Brice and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Brice, Paul, and the banker sign an agreement stating that Paul will assume the mortgage and that Brice will be discharged from all further liability on the mortgage.

d. The agreement among the three is a novation.

Odessa owes Kevin $2,000. On July 1, Kevin assigns the right to the $2,000 to Troy. Thereafter, on July 15, Kevin assigns the same right to Donna, who in good faith gives value for it and knows nothing about the first assignee.

d. The rule differs in different states. Depending on which rule a state follows, the answer will vary.

Which of the following is not an express warranty?

d. The seller's opinion of the value of goods

Wayne helped Hank study all night for an important exam. After Hank got an A on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it."

d. There is a contract with sufficient consideration.

Which of the following would NOT require a writing under the statute of frauds?

d. Where a landscaper agrees to landscape the lot surrounding an office building

Jack is a guest in Harry's home. While there, he goes into the library and picks up a music box that is part of Harry's collection. Jack overwinds the stem and it breaks. Hoping Harry won't notice, Jack takes the music box for repair to a jeweler who sells similar ones. The jeweler fixes it, but forgets to tag it and an unsuspecting clerk sells it to Robert. Jack is frantic. Can Harry get the music box from Robert?

d. Yes, Robert has assumed only Jack's title, which is no title at all

Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract?

d. Yes, because Robbie gave up a legal right

A(n) ____ is an intended beneficiary of a contract who receives the benefits of the contract as a gift.

d. donee beneficiary

Leslie purchased 100 flower pots from a local merchant. Warranties which are not included in her sales contract, but exist by "operation of the law," are the:

d. implied warranties.

Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will benefit from this contract since his restaurant is adjacent to the planned mall. Donner in this instance is a(n):

d. incidental beneficiary.

The most important element in determining whether a sales contract has been made is the:

d. intention of the parties to make a contract.

An ad in a newspaper or a circular describing goods and stating prices would generally be considered a(n):

d. invitation to buyers to make an offer to buy goods.

The requirement of legally sufficient consideration:

d. is the same as the requirement of adequacy of consideration.

When both parties misunderstand the same set of facts relating to a basic assumption on which a contract is made, it is termed:

d. mutual mistake.

According to the UCC, an enforceable agreement involving the transfer of title of goods from a seller to a buyer for a price is called a(n):

d. sale.

Bill recently borrowed $50 from Ricardo for a couple of weeks. Bill, still short of cash, tells Ricardo, "I will wash and wax your car in exchange for the $50 I owe you." Ricardo tells Bill, "OK, that's great!" Ricardo's performance of his new duty will be a(n):

d. satisfaction.

Equitable remedies will not be granted where:

d. the contract is tainted with fraud, duress, undue influence, mistake, or unfair practices.

The warranty of title for the sale of goods found in Article 2 of the Code:

d. will apply regardless of whether it is provided for in the contract unless the parties have specifically excluded it.

Which of the following is true with regard to an exculpatory clause? a.An exculpatory clause excuses one party from liability for her own tortious conduct. b.Where one party has a superior bargaining position that has enabled him to impose an exculpatory clause upon the other, the courts are inclined to nullify the provision. c.An exculpatory clause may be unenforceable for unconscionability. d.All of the above are true.

d.All of the above are true.

Numerous states impose no limit on the rate of interest that may be charged on: a.loans to corporations. b.credit card transactions. c.loans made by certain designated types of lenders. d.All of the above.

d.All of the above.

The UCC provides that if a court as a matter of law finds a contract for the sale of goods or a clause of such a contract to have been unconscionable at the time it was made, the court may: a.refuse to enforce the contract. b.enforce the part of the contract that is not unconscionable. c.limit the application of any unconscionable clause in order to avoid an unconscionable result. d.All of the above.

d.All of the above.

Which of the following is correct with regard to an enforceable restraint of trade? a.The restraint should be no more extensive than is required to protect a specified property interest. b.Restraints typically arise in connection with the sale of a business. c.A typical restraint is a covenant not to compete. d.All of the above.

d.All of the above.

Which of the following would be considered a valid and legally enforceable agreement? a.An agreement to pay a legislator to vote for a particular bill b.An agreement under which Arthur agrees to pay Barbara $3,000 to disparage the product of Arthur's competitor c.An agreement by the seller of a service station not to enter the service station business in Ohio for a period of 30 years after the sale of his business d.An agreement by a car salesman not to sell automobiles or automobile parts in Marin County for a period of one year after terminating his employment

d.An agreement by a car salesman not to sell automobiles or automobile parts in Marin County for a period of one year after terminating his employment

Doug obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years. a.Acme is obligated to use its best efforts to supply the goods even if no such clause appears in the written franchise agreement. b.According to the UCC, unless otherwise agreed, Doug must use his best efforts to promote the sale of the widgets in his territory. c.Under the UCC, such an agreement lacks consideration. d.Both (a) and (b).

d.Both (a) and (b).

Barbara, a wealthy widow, promises the pastor of her church that she will donate $20,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $80,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around-the-world cruise instead. a.The doctrine of promissory estoppel can be applied to this case. b.The promise to pay $20,000 is a promise to give a gift and is therefore not enforceable. c.Under the Restatement, Barbara's promise is enforceable. d.Both (a) and (c).

d.Both (a) and (c).

Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere within the state for a period of three years. a.The agreement is reasonable. b.The agreement is unreasonable. c.The agreement unduly interferes with the interests of the public. d.Both (b) and (c).

d.Both (b) and (c).

Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so. a.This is an illusory contract, because Darla doesn't know whether she will receive the money for sure. b.The consideration moving from Darla to Edward is the promise of $6,000 subject to a condition. c.Darla's conditional promise is sufficient consideration unless Darla knows she cannot receive at least $6,000 from her uncle's estate. d.Both (b) and (c).

d.Both (b) and (c).

Jason's mother would like him to go to college, so in June he enrolls at State University. He also quits his job and tells his mother his plans to continue taking classes. His mother says, "I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485. Which of the following is true regarding his mother's promise? a.It is enforceable, because Jason returned to college. b.It is enforceable, because Jason is giving up the right to do something else. c.It is unenforceable, because it is a unilateral contract. d.It is unenforceable, because Jason had already enrolled in school and there is no consideration.

d.It is unenforceable, because Jason had already enrolled in school and there is no consideration.

Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed, only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement is most accurate? a.McHenry is not liable to Nancy since there is no consideration. b.McHenry is not liable to Nancy since there is past consideration. c.McHenry is liable to Nancy since adequate consideration is given by both parties. d.McHenry is liable to Nancy based on the concept of promissory estoppel.

d.McHenry is liable to Nancy based on the concept of promissory estoppel.

Patrick agrees to sell two different goods to his friend Ron, a retailer. One item is legal, and one item is illegal. The contract price is $2,000. a.Patrick may not recover payment for either of the goods if delivered. b.Patrick may recover for the legal item, but he may not recover for the illegal item. c.This is an unconscionable contract under the UCC. d.The court may view the contract as in (a) or (b).

d.The court may view the contract as in (a) or (b).

The parol evidence rule does not apply to:

d.The parol evidence rule applies to both (a) and (b).

A contract prepared on a standard form and offering terms on a take-it-or-leave-it basis is called: a.exculpatory. b.a usurious contract. c.an illegal restraint of trade. d.an adhesion contract.

d.an adhesion contract.

Divided Parcel (DP) includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through the fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to its manufacturer to be repaired anyway. The watch is destroyed when the DP driver uses the package for a ball and tosses it to his buddy. Mary is: a.out of luck because the clause was communicated to her. b.out of luck because she should have insured the package. c.likely to collect from DP since exculpatory clauses always violate public policy. d.likely to collect from DP because it is a common carrier.

d.likely to collect from DP because it is a common carrier.

If a restriction in an employment contract is found to be too harsh, a court may do any of the following EXCEPT: a.change the terms of the contract. b.refuse to enforce the whole contract. c.refuse to enforce that part of the contract. d.refuse to void the restriction.

d.refuse to void the restriction.

Unless the offer states otherwise or a rejection has been previously sent, acceptance is generally effective when

dispatched by the offeree.

The effect of the making of a partial payment to satisfy a debt which is certain in amount and which is past due is an example of the rule that:

doing what one is bound to do is not consideration.

William recently sold his successful business to Janice. The contract for the sale contained an unreasonable restriction that did not allow William to open a similar business for fifteen years. The courts would, in this instance, a.reform the contract to make it reasonable and enforceable. b.require the parties to draft a new contract. c.enforce the contract as it is written. d.refuse to enforce the unreasonable restriction. e.Either (a) or (d).

e.Either (a) or (d).

A telephoned acceptance is:

effective when and where acceptance is spoken into the phone.

The Uniform Commercial Code does not apply to:

employment contracts.service contracts.insurance contracts.contracts involving real property.

A written promise by a shipbuilder to an iron ore producer "to purchase all the iron ore I may need during the next year" is

enforceable if the producer had agreed to sell.

A(n) ___________ contract is one in which the terms have been definitely and specifically stated and agreed upon.

express

A liquidated debt is an obligation the existence or amount of which is in dispute.

false

An auctioneer is free to withdraw the goods from sale if the sale is advertised or announced in explicit terms to be without reserve.

false

An auctioneer is the offeror and each bid is a counteroffer until a final bid is accepted.

false

An exclusive dealing contract is one type of contract which is illusory because it lacks consideration.

false

Consideration has only one basic element, which is a bargained-for exchange.

false

If a contract is not clearly unilateral or bilateral, the courts presume that the parties intended a unilateral contract.

false

In most states, a contract under seal is binding without consideration.

false

An offer under Article 2 of the UCC that is irrevocable even though no consideration is given to keep it open is known as a(n):

firm offer.

An offer under Article 2 of the UCC that is irrevocable even though no consideration is given to keep it open is known as a/an:

firm offer.

The Uniform Commercial Code makes certain offers irrevocable even though no consideration is given to keep the offer open. Such offers are known as:

firm offers.

Acceptance of a unilateral offer occurs upon:

full performance by the offeree.

An implied contract is a contract that:

is inferred or deduced from the conduct of the parties.

A and B have a written contract whereby A agrees to sell B a plot of land for $100,000. Later, without terminating the first contract, the parties modify the deal so that A sells B the same plot of land for $125,000. The second agreement:

is not a contract because there is no consideration for B's promise.

Smith states, "I am getting tired of trying to keep my collection of Playboys and National Geographics in order, and if I get a good offer to sell them, I will take it immediately." Bright, overhearing the statement immediately responds, "I make you a good offer of $400." This transaction

is not a contract because there was no offer and acceptance.

An acceptance that materially deviates from the terms of the offer:

is not an acceptance but a rejection.

A person who is a member of a group to whom an offer is made and finds the lost item

is not entitled to the reward, unless she knew of the reward before finding the item.

The statute of limitations

limits the time period for a creditor to sue a debtor on a debt.

A large grocery store advertised a gourmet type of ham for $5.00 a pound. It usually sold for $9.00. P went to the store and demanded 500 pounds of the particular ham. The store refused to sell P any, and P sues. P would

lose; there was no offer; hence, he could not accept.

A scheme for the distribution of property by chance among persons who have paid or agreed to pay a valuable consideration for the chance is a

lottery.

An option differs from the ordinary offer in that

offers need not be. options do not terminate upon death of the offeree; offers do.,options do not terminate upon insanity; offers do.,options can't be terminated by revocation; offers can.

Arthur offers to sell some land to Bill and says that he will keep the offer open for two weeks if Bill will pay him for the privilege. Bill pays $10. A/An ____________ contract has been formed.

option

A binding promise to keep an offer open for a stated period of time or until a specified date is called a(n):

option contract.

A promise to pay a contractor a bonus to complete construction of the building according to the contract is:

ordinarily not binding on the promisor.

(Refers to question above.) If, instead of making her offer while dodging sharks, Jane said nothing until after she was rescued by a jogger, and only then promised to pay the million dollars, the court would rule that:

past consideration is not legally sufficient to support a contract.

Article 2 of the UCC does not apply to a sale of:

real estate.

Which of the following does not terminate an offer?

refusal to respond by offeree

A statute which prescribes standards for those who seek to practice a profession would be what type measure?

regulatory

A ____ is an offeree's refusal to accept an offer.

rejection

A counteroffer is a(n):

rejection of the original offer.

The manifestation of an unwillingness to accept an offer is called a

rejection.

An offer may terminate by

rejection.,rovocation,death of either party.

A purchaser's agreement to buy from a particular seller all the materials of a particular kind he needs is a(n) ____ contract.

requirements

An agreement is an essential element of a contract. Ordinarily, the required mutual assent is achieved by means of an offer and an acceptance. Acceptance

requires manifestation of an intent to accept.

Smith stated to Burns that he, Smith, would sell a certain typewriter to Burns for $300. In fact, Smith never intended to sell the typewriter, and this can be proven. Burns agreed to buy it for the $300 price. With regard to these facts

there is a contract if a reasonable person would think that Smith was making an offer, and if Burns thought so.

A orders 100 19-inch color television sets from B, and requests prompt shipment of the goods. B promptly ships A 100 21-inch color TVs. B did not tell A that the shipment of nonconforming TVs was in accommodation. In this case:

there is a good acceptance, but B has breached the contract by shipping nonconforming TVs.

A contract will not come into existence, unless:

there is a valid offer and acceptance.

The UCC provides that a merchant is bound to keep a written offer open for a stated period but no longer than:

three months

The Code provides that a merchant is bound to keep an offer open for a stated period not in excess of

three months.

The UCC provides that a merchant is bound to keep a written offer open for a stated period but no longer than:

three months.

Adolf Anderssen performed accounting services for Carla Jung and sent her a bill for $500. She responded in good faith that the value of the services was $300 but that she was willing to pay $375 to avoid litigation. Accordingly, she sent Anderssen a check for that amount marked "payment in full." Anderssen received the check, crossed out the notation "payment in full," cashed it, and filed suit in small claims court for $125 and costs. If he desired to recover the full $500, Anderssen's best course of action was

to return the check.

Contract law:

today usually recognizes contractual obligations whenever the parties manifest an intent to be bound.

A few states provide by statute that the parties need to provide no new consideration when modifying any contract.

true

An offer can be communicated by words or by conduct.

true

Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.

true

Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.

true

Fran negligently drove her truck through Nick's fence, causing damage. If she promises to pay Nick $1,500 if he does not bring a lawsuit against her, Nick accepts and forms a unilateral contract by not filing suit. His forbearance is consideration.

true

If Sam agrees to sell to Thomas all of the tomatoes he wants at $25 a bushel, there is no contract because of a lack of consideration.

true

If an offeror makes an offer to an offeree by letter and it is lost in the mail, no legally sufficient offer has been made.

true

Tim Carlton was swimming at the beach when he happened to see Fay Hudson struggling in the water. Carlton saved Hudson's life. Hudson was so grateful that she promised Carlton a job for the rest of his life. Carlton went to work for Hudson, but a few months later Hudson found that she did not get along with Carlton and demanded Carlton's resignation. The contract is

unenforceable because Carlton did not give consideration.

An oral contract that is covered by the statute of frauds is:

unenforceable.

A contract that requires a performance from only one of its parties is called a(n):

unilateral contract.

A contract which requires an offeree to perform an "act" instead of a promise is a(n)

unilateral contract.

Ted offers to pay Dennis one million dollars, plus one of his television stations, if Dennis can better Ted's record-setting time in the Newport to Bermuda yacht race. Dennis accepts the challenge. This would be an example of:

unilateral contract.

At an ABC University Alumni meeting, Carl and the others at his table signed a subscription form, on which he agreed to donate $5,000 to ABC University. In most states, Carl's promise:

BUSLAW 3rd Midterm

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