Chapter 20: Practical Contracts and the Lawyer Practice Test

A contract should have a descriptive title, which is generally in all capital letters, underlined and centered at the top of the page. (T/F)

True

An agreement should definitely be in writing if you do not have an ongoing relationship with the other party. (T/F)

True

Any ambiguity in a contract is interpreted against the party who drafted the contract. (T/F)

True

Ricardo has agreed to sell his family farm to Walter for a price of $450,000. Even though both sides agree on the terms, it is still worth the money for Ricardo to hire a lawyer to write the contract. (T/F)

True

Some contracting parties are intentionally vague in contract terms. (T/F)

True

Ralph is a professional football player. He signs a valid contract with the Miami Dolphins. Later, he claims that he was also promised free use of the Dolphins' private jet, but this was not in the contract. What type of clause in his contract would prevent him from flying away with this claim?

an integration clause

Severability provision

asks the court simply to delete the offending clause and enforce the rest of the contract

Ambiguities in contracts are always interpreted in favor of the party who wrote the contract, since he or she is the one who knows what the provision is supposed to mean. (T/F)

false

Contracts must use formal terminology such as "whereas" and "heretofore" in order to be legal. (T/F)

false

Emily runs a children's clothing boutique that takes in local homemade items on a consignment basis. Her standard form contract indicates that Emily has the right to put items on sale without prior approval, but does not specify what effect the sale has on the consignor's payment percentage. Her intent is to keep the same profit she would have had without the sale. She is using ambiguity in her contract to increase her sales and profit. (T/F)

false

Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days. The parties negotiated and meant to say in the written agreement, delivery in 50 days. If the evidence is clear that the two parties intended to agree to 50 days, the courts will probably

reform the contract

What is a force majeure event?

a disruptive, unexpected occurrence for which neither party is to blame that prevents one or both parties from complying with a contract

Which of the following is a standard provision frequently found in contracts?

choice of forum

Bob, a house painter, contracts with Ollie to paint a rental house that Ollie owns. Bob hires Rob to take his place as the painter on this contract. What has Bob done?

delegated his duties

Two parties are debating whether or not to put their contract into writing. In making their determination, which of the following factors would normally NOT be considered?

the length of time covered by the agreement

In a contract modification, the phrase "charged with such amendment" refers to

the party who will be adversely affected by the change

"Scrivener's error" is another (fancier) name for a typo. (T/F)

true

In the case of a typo, a court will reform a contract if there is clear and convincing evidence that the alleged mistake does not actually reflect the true intent of the parties. (T/F)

true

A+ Modeling Agency signs a contract with Sandi to do a photo shoot for the local used car dealer's advertising. The contract was most likely written by

A+ Modeling AGency's lawyer

Lawyers prefer to negotiate touchy subjects as they arise rather than address them at the beginning of a relationship. (T/F)

False

The legal term for a promise in a contract is "provision." (T/F)

False

When a provision to a contract is accidentally unclear, it is called

ambiguity

Standard provisions in a contract that are often listed under the heading "Miscellaneous" are called

boilerplate

Which of the following is NOT one of the three ways to amend a written contract?

by verbally agreeing to the changes and shaking hands on the deal

Provisions that a party agrees to perform only if the other side also does what it promised are called

conditional promises

In business law, a lawyer's primary job is to represent the client in contract litigation. (T/F)

false

It is unethical to use your lawyer as an excuse for a provision of a contract, such as, "My lawyer insists that I have a liquidated damages clause." (T/F)

false

You should hire a lawyer to review any legal papers you have to sign, especially such papers as lease agreements or car purchases. (T/F)

false

Farmer's Fortune Insurance has a contract with Farmer Fran to insure her crops against insect damage. The contract does not specify which insects are covered or how much damage is necessary to make a claim. The contract will probably be enforced in favor of

farmer fran

An honest effort to meet both the spirit and letter of the contract is termed

good faith

Which of the following generally is NOT in the introductory paragraph of a contract?

the covenants of the contract

Which of the following is one of the four steps in reading a contract?

what-ifs