Ch. 11-15 questions Business Law

All contracts include which of the following implied terms? a. A covenant of good faith and fair dealing b. A covenant of prompt action and faithful service c. A promise of prompt attention and satisfaction d. A promise for payment in American dollars

a. A covenant of good faith and fair dealing

Which of the following occurrences will NOT terminate an offer? a. Acceptance b. Rejection c. Revocation

a. Acceptance

Alonzo graduates with a 3.8 GPA in Accounting from a New York university and receives offers of employment from three of the Big Four accounting firms. While considering his options, a mid-sized firm in California calls and offers him twice the starting salary of his top offer. The only caveat is he needs to show up at the Los Angeles office within the next week to start work immediately. Alonzo excitedly decides to take the California job. He refuses the other employment offers, breaks his lease in New York, sells or gives away most of his possessions, buys a new car, and heads for L.A. the next day. When he arrives at the Los Angeles office three days later, the firm apologizes and informs Alonzo that the position is no longer available due to the loss of a major client. a. Alonzo could bring a claim against the firm on the theory of promissory estoppel. b. Alonzo could bring a claim against the firm on the theory of breach of contract. c. Alonzo could bring a claim against the firm on the theory of rescission. d. Alonzo has no potential claim.

a. Alonzo could bring a claim against the firm on the theory of promissory estoppel.

Carol Rogers, a local millionaire, promises to donate $500,000 to the Springfield Humane Society, which the society plans to use to build a new animal hospital. Based on Carol's promise, the society begins work on the hospital. Carol then backs out of her offer. a. Carol can be sued for the money under a theory of promissory estoppel. b. Carol has violated the terms of a quasi in rem contract. c. Nothing can be done. Carol's donation was to be a gift. Promised gifts do not have to be delivered. d. Carol will suffer from a bad conscience, but not from any lawsuit.

a. Carol can be sued for the money under a theory of promissory estoppel.

The requirements for a valid contract include which four of the following? a. Contractual capacity b. Consideration c. Kindness d. Fair price e. Agreement f. Legality g. Professionalism

a. Contractual capacity b. Consideration e. Agreement f. Legality

What are two typical dispute-settlement provisions that are included in online offers? Choose two. a. Forum-selection clause b. Choice-of-month clause c. Choice-of-judge clause d. Choice-of-law clause

a. Forum-selection clause d. Choice-of-law clause

Kelly tells Matthew that she will sell him one of her motorcycles at some time in the future. Matthew eagerly accepts. Do they have a valid contract? a. Probably not, because the terms are not definite b. Probably, because the parties knew what they were discussing c. Probably, because Kelly failed to communicate the offer to the offeree d. Definitely not, because the offeree did not accept the offer

a. Probably not, because the terms are not definite

Courts in a growing number of states place additional duties on the minor when the minor disaffirms. These duties include: a. The minor is responsible for damages to the property returned. b. The minor must pay a fine. c. The minor must immediately appear in court. d. The minor is responsible for ordinary wear and tear for the returned property. e. The minor is responsible for the depreciation of that returned property.

a. The minor is responsible for damages to the property returned d. The minor is responsible for ordinary wear and tear for the returned property. e. The minor is responsible for the depreciation of that returned property.

If the UETA is enacted with modification, state law governs if: (choose all that apply) a. The state's procedures or requirements are consistent with the E-SIGN Act. b. The state does not give priority to one type of technology. c. The state law was enacted after the E-SIGN Act and refers to it. d. The State law was enacted prior to the E-SIGN Act.

a. The state's procedures or requirements are consistent with the E-SIGN Act. b. The state does not give priority to one type of technology. c. The state law was enacted after the E-SIGN Act and refers to it.

What elements are required for the promissory estoppel doctrine to apply? (Choose all that apply.) a. There must be a clear and definite promise. b. The promisor should have expected that the promise would rely on the promise. c. The promisee reasonably relied on the promise. d. The promisee acted or refrained from some act. e. The promise suffered some type of harm. f. Enforcement of the promise is necessary to avoid injustice. g. The promisor intended for harm to occur

a. There must be a clear and definite promise. b. The promisor should have expected that the promise would rely on the promise. c. The promisee reasonably relied on the promise. d. The promisee acted or refrained from some act. e. The promise suffered some type of harm. f. Enforcement of the promise is necessary to avoid injustice.

A "record" is information that is inscribed on a tangible medium or stored in an electronic retrievable form. a. True b. False

a. True

Agreement is normally evidenced by an offer and an acceptance. a. True b. False

a. True

An acceptance sent by means not expressly or impliedly authorized normally is not effective until it is received by the offeror. a. True b. False

a. True

Carmen agrees to cook twenty dinners for Hal. In exchange, Hal will repair all of the plumbing in Carmen's house. Carmen has offered legally sufficient consideration because Carmen has promised something of value. a. True b. False

a. True

Courts generally assume the existence of contractual capacity. a. True b. False

a. True

Exculpatory clauses release a party from liability in the event of monetary or physical injury no matter who is at fault. a. True b. False

a. True

If a contract is divisible into legal and illegal portions, a court may enforce the legal portion but not the illegal one, so long as the illegal portion does not affect the essence of the bargain. a. True b. False

a. True

If a person gives out a business card with an e-mail address on it, it is reasonable to conclude that the person has consented to transact business electronically. a. True b. False

a. True

If the UETA is enacted without modifications by a state, state law will govern. a. True b. False

a. True

If the parties have agreed to a security procedure and one party does not detect an error because he or she did not follow the procedure, the conforming party can legally avoid the effect of the change or error. a. True b. False

a. True

If two parties substitute a new contract for an old one and the court finds that there was a preexisting duty, then the new contract will be invalid because there was no consideration. a. True b. False

a. True

In contract law, ratification is the act of accepting and giving legal force to an obligation that previously was not enforceable. a. True b. False

a. True

One way online sellers and buyers who frequently do business together can prevent disputes over e-contract signatures is to form a partnering agreement. a. True b. False

a. True

The common law governs all contracts except when the common law has been modified or replaced by statutory law or administrative agency regulations. a. True b. False

a. True

The requirement that an offer be properly communicated to the offeree means that the offeror must inform the offeree about the offer in some effective way. a. True b. False

a. True

When one party has no reason to know that a contract is illegal, that party can often recover any benefits conferred in a partially executed contract. a. True b. False

a. True

Alex, a 25-year-old banker, joined his friends at a "pub-hopping" trip that had participants visiting six bars in a two-hour span of time. Between the fifth and final pub stop, a highly intoxicated Alex stopped to use the bathroom at a local luxury car dealer, who was holding a special evening sales event. Seeing all the cars and thinking he was signing up for training as a race car driver, Alex mistakenly signed a contract to purchase the $188,425 emerald-green Ferrari displayed in the showroom. The next day, a sober Alex found the contract paperwork at the foot of his bed, and with no memory of the previous evening, quickly headed to the dealership. As he began to explain to the sales manager Janine about the drunken purchase mistake, he changed his mind, and decided to keep the car. Manager Janine, however, took the contract copy from Alex and ripped it up, saying "You're not responsible enough to own this car." Does Alex get to keep the Ferrari? a. Yes, because Janine cannot void the contract. b. Yes, because now the car is considered used and can't be returned. c. No, because Alex lacked legal capacity at the time he signed the contract. d. No, because either party is entitled to void the contract.

a. Yes, because Janine cannot void the contract.

Jackson offers to pay Casey $50 for his used business law textbook. Casey agrees to sell it for that amount. They agree to meet one week later to exchange the money for the book. Casey and Jackson have formed: a. a bilateral contract. b. a unilateral contract. c. a formal contract. d. no contract.

a. a bilateral contract.

Cathy promises to buy Mark's car for $2,000. Cathy is: a. a promisor. b. a promisee. c. an officer. d. an offeree.

a. a promisor.

McKenna offers to sell Lori her collection of hand-painted European tiles. Before Lori has a chance to accept, McKenna says, "Sorry, I changed my mind. I'm not going to sell the tiles." McKenna has just made: a. a revocation. b. a rejection. c. a counteroffer. d. restitution.

a. a revocation.

Carmen owns a 2009 Toyota Camry that he offers to sell to his friend Jamie for $12,000. Jamie accepts Carmen's offer. Jamie and Carmen have: a. an express contract. b. an implied contract. c. an executed contract. d. a quasi contract.

a. an express contract.

Kristin contracts with Jacob to buy a car through an online auction service. All of their negotiations and transactions are conducted electronically. None of their communications ever mention the Uniform Electronic Transactions Act (UETA), which was adopted by their state in its entirety in 2001. Their contract is: a. automatically covered by the UETA. b. covered by the UETA only if the transaction occurred after 2001. c. not covered by the UETA. d. covered by the UETA only if their contract involves computer information.

a. automatically covered by the UETA.

RexCo and Wilkinson Motors agree to contract online. Both companies agree to an encryption security procedure to verify changes in electronic documents and correct errors. RexCo sends a message to Wilkinson Motors that contains an error, because RexCo's information-processing system erroneously changed the language of the document. Wilkinson Motors will: a. be able to avoid the effect of the error. b. have to comply with the erroneous submission. c. be required to renegotiate the terms of the message. d. be able to sue RexCo for fraud.

a. be able to avoid the effect of the error.

Elise enters into a contract to purchase JD's house and then changes her mind. JD sues her for breach of contract. The lawsuit for a breach of contract will be governed by: a. common law of contracts. b. the Uniform Commercial Code (UCC). c. agency regulations. d. state statute

a. common law of contracts.

Melissa is a minor who agrees to purchase a particular car from Umberto for $10,000 one month after she turns eighteen years of age. On turning eighteen, Melissa writes to Umberto stating that she still agrees to purchase the car. Melissa's contract with Umberto is: a. enforceable, because it has been expressly ratified by Melissa. b. enforceable, because Melissa and Umberto agreed to the purchase of a car. c. unenforceable, because Melissa was a minor when she entered into the contract. d. unenforceable, because Melissa has a right to disaffirm the contract.

a. enforceable, because it has been expressly ratified by Melissa.

Janice tells Marie that she will buy Marie a new dress if she reads a book by Friday night. Marie begins reading and has only two chapters left to finish when Janice tells Marie that she has changed her mind and will not buy the dress. Under the modern approach to contracts, Janice and Marie: a. formed a unilateral contract. b. formed a bilateral contract. c. have no contract until Marie finishes reading. d. have not formed a contract, and Janice owes Marie nothing.

a. formed a unilateral contract.

Online contracts must be displayed: a. in a readable format. b. in large font. c. in black and white. d. in color.

a. in a readable format.

Marcy owns a trucking company that hauls goods all over the country. Wilson contracts with Marcy's company to transport ten tractor-trailer loads of goods from Ohio to Texas. After delivery of the goods, Marcy has reason to believe the goods are stolen, but never asks Wilson about it. The contract: a. is unenforceable, because the goods were stolen and Marcy's company cannot collect its fee. b. is enforceable, because Marcy's company was justifiably ignorant of the fact that the goods were stolen. c. is unenforceable unless Marcy's company can return the goods. d. is unenforceable, and Marcy's company is now liable for the stolen goods.

a. is unenforceable, because the goods were stolen and Marcy's company cannot collect its fee.

An electronic record is considered sent when: a. it leaves the control of the sender or comes under the control of the recipient. b. the sender has received confirmation of its arrival with the recipient.

a. it leaves the control of the sender or comes under the control of the recipient.

An agreement is composed of: a. offer and acceptance. b. age and specific terms. c. communication and mutual promises. d. a minimum value of goods or services.

a. offer and acceptance.

The UETA covers: a. only electronic records and signatures relating to transactions. b. all contracts. c. signatures produced by a stamp. d. Written signatures by an authorized agent.

a. only electronic records and signatures relating to transactions.

The doctrine that prevents an offeror from revoking an offer once the offeree has justifiably relied to his detriment or has begun performance is known as: The doctrine that prevents an offeror from revoking an offer once the offeree has justifiably relied to his detriment or has begun performance is known as: a. promissory estoppel. b. voidability of estoppel. c. an option. d. a lapse of time. b. voidability of estoppel. c. an option. d. a lapse of time.

a. promissory estoppel.

KJ Games, in Colorado, designs computer games that it markets and sells to customers via the internet. A click-on agreement accompanies every download; no game can be installed on a buyer's computer if the buyer does not click on the words "I agree" when prompted. The click-on agreement clearly states in capital letters that all disputes will be settled in Colorado's state courts. Buyers of KJ's games are most likely: a. required to file any lawsuits in Colorado. b. required to arbitrate any disputes in Colorado. c. not required to file their lawsuits in Colorado. d. not required to accept this term of the contract.

a. required to file any lawsuits in Colorado.

The intent of the parties may be determined by evaluating what the parties said, how the parties acted, and: a. the circumstances surrounding the transaction. b. the age of the parties involved in the transaction. c. the amount of money at stake in the transaction.

a. the circumstances surrounding the transaction.

When deciding questions about the enforceability of terms in shrink-wrap agreements, one important factor courts take into account is: a. whether the buyer learned of the shrink-wrap terms before or after the parties entered into the contract. b. whether the buyer read the entire agreement. c. whether the buyer could understand the language in which the terms were written.

a. whether the buyer learned of the shrink-wrap terms before or after the parties entered into the contract.

Jackie agrees to pay Ben $1,000 if Ben agrees to not go skydiving for six months. After Ben avoids skydiving for six months, he asks Jackie for payment. Jackie declines to pay Ben the $1,000. The contract between Jackie and Ben: a. will be enforced because Ben exercised forbearance, which is legally sufficient consideration. b. will be enforced because Jackie had a preexisting duty to pay Ben. c. will not be enforced due to lack of consideration. d. will not be enforced because skydiving is a dangerous activity and Ben benefits from the forbearance.

a. will be enforced because Ben exercised forbearance, which is legally sufficient consideration.

Adults who enter into contracts with minors can avoid their contractual duties just as the minors can. a. True b. False

b. False

All covenants not to compete are contrary to public policy and therefore illegal. a. True b. False

b. False

All gambling contracts in the United States are illegal. a. True b. False

b. False

An effective offer requires that a reasonable price be related to market value. a. True b. False

b. False

Because individuals rarely read the underlying language in a click-on agreement, they are always invalid. a. True b. False

b. False

Covenants not to compete are not permitted when they involve the sale of an ongoing business. a. True b. False

b. False

If the offeree can accept the offer with a return promise to perform, then the contract is unilateral. a. True b. False

b. False

Ronald suffers from dementia, which impacts his brain function, but he also has healthy periods when his mind is fully functioning. During one of these healthy periods, Ronald enters into a contract, which he later seeks to avoid. In a majority of states, the contract will not be enforced because of Ronald's dementia. a. True b. False

b. False

The basic requirements for an electronic contract are different than those for a paper contract. a. True b. False

b. False

When a minor who has entered into a contract opts to avoid that contract, she or he can choose the particular portions of the contract to disaffirm. a. True b. False

b. False

Yolanda's parents tell her that if she builds a house with her own funds on land that they own, they will give her the land. If they refuse to do so after Yolanda finishes the house, she will NOT be able to use the doctrine of promissory estoppel, because it does not apply to family disputes. a. True b. False

b. False

Les agrees to install a new hard drive and software on Marilee's computer in exchange for four of her used textbooks. After he installs the hard drive, Les says he won't install the software unless Marilee gives him two more books. What legal position are the parties in now? a. Marilee must give Les the additional books. b. Marilee can sue for breach of contract, because Les had a preexisting duty to do all of the work. c. Les can receive the extra books in exchange for doing more work, as he has given good and fair consideration in exchange. d. Les will only get one more book, because two is too many more to be fair.

b. Marilee can sue for breach of contract, because Les had a preexisting duty to do all of the work.

Sergio contracts to hire Belinda to work for him at $3,000 per month, reserving the right to cancel the contract at any time. Two days before Belinda is scheduled to start work, Sergio exercises his option-to-cancel clause. Will Belinda be successful in a lawsuit against Sergio? a. Yes, because she should have been allowed to work at least one month. b. No, because the promise was illusory and, therefore, unenforceable. c. Yes, because the promise did involve adequate consideration.

b. No, because the promise was illusory and, therefore, unenforceable.

Which of the following is not a requirement for an implied contract? a. The plaintiff furnished some service or property to the defendant. b. The defendant had no chance to reject service or property furnished by the plaintiff. c. The defendant had a chance to reject the service or property but did not do so. d. The plaintiff expected to be paid and the defendant knew, or should have known, that the plaintiff expected to be paid.

b. The defendant had no chance to reject service or property furnished by the plaintiff.

Tom and Harriet, adult siblings, are taking their parents on a weekend trip. They pick up their father, Luther, at his house where he is singing a goodbye song to each of his 20 plants and eating pancakes out of his coat pocket. Next, they drive to an assisted living facility, to collect their mother, Augusta, who has lived there since a judge declared her mentally incompetent a few years ago. When they arrive at their hotel, Luther writes postcards to his plants, Augusta knits a sweater, Harriet goes for a walk, and Tom orders a glass of scotch. When Harriet returns, she learns that a hotel guest sold Tom and her parents each a souvenir snow globe for $1,000. The snow globes are for sale in the hotel gift shop for $5. Harriet is furious. Can her family members get their money back? a. All three sales are voidable. b. The sale to Augusta is void; the sales to Luther and Tom may be voidable. c. The sales to Augusta and Luther are both void; the sale to Tom is valid. d. The sale to Tom is voidable; the sales to Luther and Augusta are both void.

b. The sale to Augusta is void; the sales to Luther and Tom may be voidable.

Shockingly inadequate consideration can indicate the existence of what exceptions? Choose three. a. Ignorance b. Undue influence c. Duress d. Unawareness e. Fraud f. Mistake of law

b. Undue influence c. Duress e. Fraud

A person enters her or his name at the bottom of an e-mail purchase order. That name would be: a. an invalid signature. b. a valid signature.

b. a valid signature.

Jim and Kathy have a contract with a term that is not clear. Kathy and Jim both have different—yet reasonable—interpretations of the term. If Kathy wrote the contract, a court will: a. evaluate both interpretations and develop a reasonable interpretation that is somewhere in between those of the contracting parties. b. accept Jim's interpretation, because Kathy wrote the contract. c. accept Kathy's interpretation, because she wrote the contract and should know what she meant. d. call in a third party to develop a reasonable interpretation.

b. accept Jim's interpretation, because Kathy wrote the contract.

Seven companies agree that they will not compete against each other, will set prices, and not hire each other's employees. Such a contract will be a. permitted as acceptable competition b. an illegal contract in restraint of trade c. an illegal contract only if it is a secondary part of the contract

b. an illegal contract in restraint of trade

A restaurant owner requires new employees to sign a covenant not to compete in the restaurant business in the entire United States for five years. Such a covenant will a. be deemed not contrary to public policy b. be deemed contrary to public policy because of excessive duration and unreasonable geographic restriction c. be deemed against public policy because the restaurant business is not competitive

b. be deemed contrary to public policy because of excessive duration and unreasonable geographic restriction

Patrick agrees to pay Anna $25,000 in exchange for Anna taking Patrick's hazardous waste and surreptitiously dumping it on the property of a competitor. After Anna dumps the waste, Patrick refuses to pay. This contract will: a. be enforced because it has sufficient consideration and is a bargained-for exchange. b. be void from the outset and, thus, unenforceable. c. be unenforceable due to usury laws. d. be enforced, because both parties agreed to the contract and will be held accountable to its terms.

b. be void from the outset and, thus, unenforceable.

Pascal's new Mercedes won't start one morning and he screams to his passenger, "For a thousand bucks, I'd get rid of this car." The passenger normally cannot buy the car for $1,000: a. because Pascal did not write anything down. b. because a reasonable person would know that a serious offer was not being made. c. because Pascal's subjective intent can't be known.

b. because a reasonable person would know that a serious offer was not being made.

Patricia drives to her favorite gas station and tells the attendant to fill her tank. The attendant asks Patricia what grade she wants, and she tells him, "regular." The attendant fills the tank. At this point, the contract between the station and Patricia is: a. executed. b. executory. c. void. d. unenforceable.

b. executory.

Exilware designs software, which it frequently sells to Avertron, the maker of hardware systems. Exilware is in New Hampshire, and Avertron is in Arizona. Because the companies often conduct business via the internet, they have formed a partnering agreement. When a dispute arises over a delivery date, the court will probably: a. disregard the terms of their partnering agreement. b. look to the terms of the partnering agreement to determine the parties' intent. c. consider the partnering agreement only if its terms are in strict compliance with the Uniform Electronic Transactions Act (UETA). d. consider only those portions of the partnering agreement that are fair to both parties.

b. look to the terms of the partnering agreement to determine the parties' intent.

Daniel enters into a contract that requires him to pay interest at a rate greater than the legal state maximum. The contract might be enforceable if: a. Daniel is a minor. b. the loan is for a small amount and Daniel would not be able to obtain a loan otherwise. c. Daniel's guardian entered into the contract for him. d. the contract is reasonable.

b. the loan is for a small amount and Daniel would not be able to obtain a loan otherwise.

Expect Big Things Company and ABC Data are in a state that has enacted a modified version of the Uniform Electronic Transaction Act (UETA). The act passed by their state contains a procedure for the acceptance of electronic signatures that differs slightly from the one provided by the federal Electronic Signatures in Global and National Commerce (E-SIGN) Act. If the two companies form an e-contract using an e-signature procedure that complies with the state's version of UETA, their signatures will be a. valid only under state law. b. valid only if the state's procedures are consistent with the E-SIGN Act, and the state's law does not give greater legal effect to one type of technology. c. valid, because states are allowed to preempt the E-SIGN Act if they wish. d. invalid under the E-SIGN Act, because any modification is preemption of federal law, which is unconstitutional.

b. valid only if the state's procedures are consistent with the E-SIGN Act, and the state's law does not give greater legal effect to one type of technology.

Amy, a baker, has found her dream home but cannot afford the down payment. Amy's brother agrees to loan her $30,000 for the down payment, and Amy agrees to pay him back in one year. Next year, Amy offers to bake her brother's wedding cake for his wedding next month instead of paying back the loan, so that she can buy new equipment for her bakery. Amy's brother agrees. How much money does Amy owe her brother? a. $30,000, because agreements to accept less than full payment of liquidated debt are non-binding. b. $30,000 less the cost of the wedding cake, because agreements to accept less than full payment of liquidated debt are non-binding. c. $0, because an agreement to accept different performance in lieu of full payment of liquidated debt is binding. d. $0, because there has been accord and satisfaction.

c. $0, because an agreement to accept different performance in lieu of full payment of liquidated debt is binding.

Which of the following is NOT among the types of contracts and clauses that are often held to be contrary to public policy? a. A contract in restraint of trade b. An exculpatory clause c. A divisible, or severable, contract

c. A divisible, or severable, contract

Melnick built a house for Gintzler, but the foundation was defective. Gintzler agreed to accept the foundation if Melnick guaranteed to repair any damage that was caused by the defects in the future. Melnick agreed, but when Gintzler called Melnick two years later to repair water damage resulting from the foundation defects, Melnick refused to make any repairs. Gintzler sued, and Melnick argued that his promise to make future repairs was unsupported by consideration. Who will win the suit? a. Melnick will win, because the deal was not supported by consideration. b. Melnick will win, because his promise was illusory. c. Gintzler will win, because he gave consideration. d. Gintzler will win, because the foundation was defective.

c. Gintzler will win, because he gave consideration.

Constance tells Jill, her best employee, "Your work is so good, if I like what you do over the next six months, I'll give you a $1,000 bonus." Constance does not give Jill the bonus, so Jill sues. Most likely: a. Jill will win, because this an accord and satisfaction. b. Jill will not win, because Jill didn't prove that her work was satisfactory. c. Jill will not win, because this is an illusory promise without consideration.

c. Jill will not win, because this is an illusory promise without consideration.

Just before turning 18 years old, Caitlynn goes to the local Driver Examination Office to test for her driving license. When she passes with a perfect score, her parents allow her to go alone to the local car dealership and purchase her first car. She signs a contract to buy a used lemon-yellow Volkswagen Beetle with payments of $225 per month for 3 years. Unbeknownst to Caitlynn and her parents, the car was a trade-in, and the dealer was still waiting to receive the title. In fact, the title never arrived. It is illegal for a car dealer to sell a car without a title. Caitlynn drives the car until six months after she turns 18, making the payments each month, but then decides she hates the yellow color, and returns it to the dealer. The dealer refuses to take the car back. Is Caitlynn obligated to the car purchase contract? a. No, because she was a minor at the time of purchase. b. No, because she disaffirmed the contract. c. No, because the original contract was void. d. Yes, because the contract is voidable only by the dealer.

c. No, because the original contract was void.

Helena shares with her family her two goals for her senior year in college: join a synchronized swim team and shoot a bald eagle. Helena's cousin Anika is concerned about the utility of both of these goals and urges Helena to spend the year looking for a job, promising, "If, upon graduation, you have secured a job, have refrained from synchronized swimming and shooting bald eagles, I will give you $10,000." Helena immediately accepts the terms of the agreement and at graduation has met all three criteria, but Anika refuses to pay. What argument will be most helpful for Anika in court? a. Helena gave no consideration, so the agreement is not binding on Anika. b. The entire agreement is invalid, because Anika did not benefit from it, only Helena benefitted. c. The element of the agreement about the bald eagle is not enforceable because shooting bald eagles is illegal. d. There was no way for Anika to know whether Helena would actually go through with the deal, because Helena made an illusory promise; therefore, the agreement is invalid.

c. The element of the agreement about the bald eagle is not enforceable because shooting bald eagles is illegal.

Ryan sends Michael a letter of intent for the purchase of a tract of land. The letter of intent outlines the purchase price, the legal description, and the financing terms. A paragraph is included that states that the letter of intent is a non-binding agreement and that it is an offer to enter into negotiations. a. The letter of intent is an offer that may be accepted by Michael. b. The letter of intent is a statement of a future intent, which is not an offer. c. The letter of intent is an invitation to negotiate, which is not an offer. d. The letter of intent is an expression of opinion and does not indicate an intention to enter into a binding agreement.

c. The letter of intent is an invitation to negotiate, which is not an offer.

What will a court generally not review to determine whether a contract's terms are definite? a. The identification of the parties. b. The identification of consideration. c. The value of the consideration. d. The time of payment, delivery, or performance.

c. The value of the consideration.

To what type of transaction does the UETA NOT apply? a. Transactions that have been negotiated for a contract via e-mail b. The electronic records and signatures relating to a transaction c. Transactions in which one party has revoked their consent to conducting business electronically d. Transactions in which one party refuses to conduct business electronically

c. Transactions in which one party has revoked their consent to conducting business electronically d. Transactions in which one party refuses to conduct business electronically

Which three terms are typically presented in a shrink-wrap agreement? a. Price of product or service b. Age of buyer c. Warranties d. Date by when the box should be opened e. Remedies f. Issues associated with the use of the product

c. Warranties e. Remedies f. Issues associated with the use of the product

Maybelline falls down a well and is saved when her neighbor Ruben makes a very daring rescue. Ruben hoists her to safety, and Maybelline hugs him and promises him a check for $100,000 for his kindness. Ruben is delighted and when Maybelline visits him the next day and again mentions the $100,000, he tells her that he is going to quit his job as a preschool music teacher and use the money to start a business. Two days later he resigns from his job and calls Maybelline to ask when he can expect his money. He is startled when she replies that she is not going to give him a cent. Will a court enforce Maybelline's promise? a. No, because the promise is supported by past consideration. b. No, because Ruben did not know about the $100,000 before he rescued Maybelline. c. Yes, because Ruben relied on the promise. d. Yes, because Ruben provided moral consideration.

c. Yes, because Ruben relied on the promise.

Bradley is sitting on his porch, enjoying his very large front yard and drinking a lemonade when Chris, a kid from down the street, shows up and starts mowing Bradley's yard. Bradley waives and smiles. Chris is mowing the lawn mistakenly expecting payment because of a joke his brother played upon him, but Bradley doesn't know it (and shouldn't know it because their two families often do nice things for each other without pay). Chris may be able to recover money in court on the basis of: a. an implied contract. b. an express contract. c. a quasi contract. d. a bilateral contract.

c. a quasi contract.

Olivia says to Jim, "I think I'll sell my new digital camera for $100 because I'm never going to use it." This statement constitutes: a. a valid offer. b. an agreement to agree. c. a statement of future intent.

c. a statement of future intent.

Sarah tells Jake that she is thinking about buying a car. Jake replies that he would like to sell Sarah one of his cars in a few weeks for a really good price. Jake has made: a. a valid offer to Sarah. b. a valid counteroffer to Sarah's offer. c. a statement that is not a valid offer for lack of definiteness. d. a statement that is not a valid offer for lack of communication.

c. a statement that is not a valid offer for lack of definiteness.

When a debtor offers to pay for a disputed debt a lesser amount than the creditor originally claimed was owed, and a creditor accepts, the agreement is called: a. an accord. b. a satisfaction. c. an accord and satisfaction.

c. an accord and satisfaction.

To download software for his internet connection, Nelson had to click on several boxes on the Web site that stated "I agree" or "I accept." Nelson did not read the accompanying text before clicking on the boxes. In the event of a dispute between Nelson and the service provider, the contract terms will: a. not be enforced. b. be enforced only if the service provider shows that Nelson read them. c. be considered the terms of a binding contract. d. become proposals for the terms of a binding contract

c. be considered the terms of a binding contract.

Espinoza is sixteen but looks much older. She purchases a diamond bracelet, but decides nine months later that it was unwise to spend the money, so she: a. can disaffirm this contract only if she has turned eighteen b. can return the bracelet, but will only receive fifty percent of what she paid for it c. can return the bracelet and get all of her money back

c. can return the bracelet and get all of her money back

Julius asks Rachel if she would like to sell her boat. Rachel privately has no interest in selling her boat and believes that Julius can't afford her boat anyway. Rachel says, "I'd sell my boat to you for $400." To Rachel's surprise, Julius responds "Ok, it's a deal." Rachel does not want to sell the boat to Julius for any price. Julius and Rachel have: a. not formed a valid contract, because of lack of definiteness in the contract terms. b. not formed a valid contract, because Rachel did not want to sell the boat for any price. c. formed a valid contract, because Rachel's outward expressions showed the formation of a contract. d. formed a valid contract, because Julius expressed outward interest in the boat

c. formed a valid contract, because Rachel's outward expressions showed the formation of a contract.

Sven goes to a bar, drinks eight shots of bourbon, and then goes to an electronics store, where he buys a large flat-screen TV for $2,500. If he later wants to void the contract based on his intoxication when he bought it, he will need to prove that a. his capacity to act would be classified as "legally unstable" b. the store clerk knew that he was intoxicated c. he lacked the mental capacity to enter into the contract

c. he lacked the mental capacity to enter into the contract

If a promise is made without consideration: a. it can never be enforced. b. it will always be enforced. c. it can sometimes be enforced.

c. it can sometimes be enforced.

Donald buys a subscription to a national magazine that gives him two years for the price of one year. After the two years expire, Donald continues to receive the magazine for six more months, although he has not subscribed again. The magazine then sends Donald a bill for the magazines he received after the expiration of his subscription. Donald: a. owes the full amount. b. owes half of the bill. c. owes nothing. d. can be fined for failing to return the magazines.

c. owes nothing.

Kenneth's parents own a cattle ranch. When they become too elderly to run the ranch by themselves, Kenneth moves back to the ranch to help them. With his parents' help and permission Kenneth builds a house on the ranch. After he builds it, his parents refuse to deed him the land. Kenneth can sue his parents under the doctrine of: a. unfair accord. b. satisfaction. c. promissory estoppel. d. covenant not to sue.

c. promissory estoppel.

The Latin phrase meaning "as much as he or she deserves" is: a. caveat emptor. b. quid pro quo. c. quantum meruit. d. respondeat superior.

c. quantum meruit.

Philip receives a mail-order catalogue featuring a new style of water shoes that look perfect for river kayaking. He calls to order a pair and is told that the shoes are sold out. Philip can now: a. sue for breach of contract. b. sue because the catalogue listing constituted a valid offer. c. try somewhere else; the catalogue did not make an effective offer. d. sue because the catalogue company improperly revoked its offer

c. try somewhere else; the catalogue did not make an effective offer.

Bryan tells his friend Jane, "I don't think it's fair that you don't have a cell phone and the rest of our friends do. In consideration of that unfairness, I will pay you $400 for you to buy a new phone." This contract is: a. enforceable, because it is a bargained-for exchange. b. enforceable, because it corrects an unfairness. c. unenforceable, because it is not a bargained-for exchange. d. unenforceable, because the contract involved a purchase of goods for less than $500.

c. unenforceable, because it is not a bargained-for exchange.

Kandis offers to pay Tim's way through college if he will kill her ex-boyfriend. He accepts Kandis's offer, signing a contract. Their contract is: a. voidable. b. executed. c. void. d. formal.

c. void.

Chloe buys a product from Good Times, Inc., which includes a shrink-wrap agreement. After using the product, she decides it is defective and sues Good Times. If the court determines that Chloe learned of the shrink-wrap terms after the contract was finalized, it may conclude that the terms were proposals for additional terms, which then: a. automatically became part of the contract. b. automatically made the contract void. c. were not a part of the contract unless Chloe expressly agreed to them. d. were not a part of the contract because Good Times had not expressly agreed to them.

c. were not a part of the contract unless Chloe expressly agreed to them.

Which of the following would NOT be considered an exculpatory clause that a court would hold as contrary to public policy and therefore unenforceable? a. Exculpatory clauses found in rental agreements for commercial property b. Exculpatory clauses in residential property leases c. Exculpatory clauses in contracts with employees d. Exculpatory clauses in bungee-jumping contracts

d. Exculpatory clauses in bungee-jumping contracts

Kristoff wants to sell his collection of shoes and offers to sell them to Marcus, who just got paid. Marcus is hesitant to accept, but Kristoff lets Marcus know that if he doesn't accept, then there may be trouble. Fearing that Kristoff means to physically harm Marcus, or rob him, Marcus accepts the offer. Will a court enforce this contract? a. Yes, because there is a valid offer and acceptance. b. Yes, because all four requirements of a contract are present. c. No, because it is illegal to sell shoes without a license. d. No, because the consent was not voluntary.

d. No, because the consent was not voluntary.

By which of the following methods can a party not terminate an offer? a. Revocation b. Rejection c. Counteroffer d. Repudiation

d. Repudiation

Which of the following contracts and documents are NOT exempt from the Electronic Signatures in Global and National Commerce Act? a. Court papers b. Divorce decrees c. Evictions d. Sales contracts e. Foreclosures f. Wills

d. Sales contracts

U.S. Bank enters into a new contract with Risk Management Services, Inc. (RMS), to conduct UCC searches. They have never employed an outside vendor to conduct these types of searches, though other banks frequently do. RMS adds a provision to the contract that states: "RMS's liability is limited to the amount of fee paid for each service provided under this contract." RMS generally charges $25 per UCC search conducted. The first search conducted by RMS for U.S. Bank does not find a UCC lien, which causes U.S. Bank a $1,000,000 loss. U.S. Bank claims that the provision added by RMS is ambiguous. In this scenario, a court would look at which of the following to interpret the terms of the contract? a. The express terms of the contract alone b. The parties' course of performance c. The parties' course of dealing d. The custom usage and trade

d. The custom usage and trade

Which of the following is not a necessary element for an offer to be effective? a. The offeror must have a serious intention to be bound by the offer. b. The offer must be communicated to the offeree. c. The terms of the officer must be reasonably certain. d. The offer must be fair.

d. The offer must be fair.

Doris, an eighty-seven-year-old widow, collapsed while shopping at a store. She was taken to the Detroit city hospital by ambulance. She stayed there for fourteen days and was then transferred to another hospital, where she later died. She never regained consciousness. After she died, the hospitals and the ambulance company sued her estate to recover their expenses. Will Doris's estate be held liable for the medical bills? a. No, because she could not have entered a contract while she was unconscious. b. No, because there was no quasi contract. c. Yes, because there was an actual contract. d. Yes, because there was a quasi contract.

d. Yes, because there was a quasi contract.

Diana tells Crystal, "I think I'll sell that camping gear I bought for hiking the Pacific Trail for $250. I'm never going to make that trip." This constitutes: a. a valid offer. b. a counteroffer. c. an agreement to agree. d. a statement of future intent.

d. a statement of future intent.

GavelCo Insurance sells an insurance policy over the phone to Barry, who lives in the state of Colorado. GavelCo violates a Colorado state statute when doing so, because it is not licensed to sell in the state. Later Barry gets into a dispute with GavelCo over coverage of the insurance policy and wants to enforce the insurance contract. The insurance contract will be: a. unenforceable. b. enforceable, but only if a court finds the contract unconscionable. c. enforceable by both parties, like any other contract. d. enforceable by Barry, the purchaser, and he can recover from the insurer if applicable.

d. enforceable by Barry, the purchaser, and he can recover from the insurer if applicable.

GavelCo Insurance sells an insurance policy to Barry in the state of Colorado. GavelCo violates a Colorado state statute when doing so. Later, Barry gets into a dispute with GavelCo over coverage under the insurance policy and wants to enforce the contract. The insurance contract will be: a. unenforceable. b. enforceable, but only if a court finds the contract unconscionable. c. enforceable by both parties just as any other contract. d. enforceable by Barry, the purchaser, and he can recover from the insurer if applicable.

d. enforceable by Barry, the purchaser, and he can recover from the insurer if applicable.

Carol's car was hit while it was parked. Carol calls A-1 Towing, tells the dispatcher the car needs to be towed, and gives her location. A-1 never mentions a price, and Carol leaves before the tow truck arrives. A-1 tows the car. Carol: a. does not owe the company for towing her car, because she did not know that she would have to pay. b. does not owe the company for towing her car, because she did not have a chance to reject its services. c. owes the company for towing her car under an express contract. d. owes the company for towing her car under an implied contract.

d. owes the company for towing her car under an implied contract.

Amjed sues Larry, a landowner on whose property Amjed was injured. Larry believes that Craig is a lawyer and hires Craig to defend him in the lawsuit. Craig is not a lawyer, so the contract between Larry and Craig: a. will be enforced unless Craig loses the case. b. will be enforced despite Craig's winning or losing. c. will be enforced only if Craig wins. d. will not be enforced.

d. will not be enforced.

Which of the following statements could be a valid offer? a. An expression of opinion b. A statement of an intention to do something in the future c. An invitation to negotiate d. Advertisements e. An auction without reserve

e. An auction without reserve

Francisca collides with Wyatt's car. Francisca writes Wyatt a letter offering to pay Wyatt $10,000 if he agrees to forfeit all of his rights to pursue a lawsuit. If Wyatt agrees and signs the letter, Wyatt will have agreed to a(n): a. accord and satisfaction. b. covenant not to sue. c. specified accord. d. preliminary accord. e. release.

e. release.