Chapters 13-18, 20 Multiple Choice

A person who has legal ______ to contract is one who has the mental ability to understand his or her rights and obligations under a contract and, therefore, will presumably be able to understand how to comply with the terms of the agreement. A. Capacity B. Understanding C. Ratification D. History E. Consideration

A. Capacity

Within the statute of frauds, "land" encompasses not only the land and soil itself but anything ______ to the land. A. Relating B. Adjacent C. Contracted D. Attached E. Pertinent

D. Attached

A contractual condition of satisfaction may be judged by either a[n] ______ or ______ standard. A. Objective, express B. Subjective, express C. Objective, absolute D. Absolute, express E. Objective, subjective

E. Objective, subjective

When a party's obligations under a contract are terminated, the party is said to be ____. A. Finished B. Terminated C. Completed D. Discharged E. Recoursed

D. Discharged

What does the preexisting duty rule mean? A. Performance of a duty one is obligated to do under the law is not good consideration. B. Performance of an existing contractual duty is not good consideration. C. A bilateral contract is not binding without past consideration. D. Both A and B. E. Both B and C.

D. Both A and B.

In a unilateral contract, the consideration for a promise is ____. A. Action B. A return promise C. An acknowledgement D. Consideration E. An agreement

A. Action

When duress is at issue, the _____ needed for legal consent has been removed by the specifics of the threat. A. Free will B. Knowledge C. Specifics D. Consideration E. Realization

A. Free will

If the subject matter of an offer is destroyed, the offer _______. A. Immediately terminates B. Is extended for seven days C. Is extended for fourteen days D. Is extended for twenty-one days E. Is extended for thirty days

A. Immediately terminates

If a _____________ misunderstanding between the parties exists, and as a result of that misunderstanding the parties do not really come to a meeting of the minds, there is no contract. A. Mutual B. Unilateral C. Comprehensive D. Subjective E. Reasonable

A. Mutual

The person who makes an offer is called an ___________. A. Offeree B. Offeror C. Agreeor D. Agree E. Inquiror

B. Offeror

Which of the following requires that the breaching party fulfill the terms of the agreement? A. Specific obligation B. Specific performance C. Absolute obligation D. Specific obligation E. Absolute performance

B. Specific performance

Which of the following is a way in which an offeree can manifest intent to enter into a bilateral contract? A. By performance only. B. By a return promise only. C. By performance or by a return promise. D. By performance, by a return promise, or by a counteroffer. E. By a signed writing only.

C. By performance or by a return promise

In a bilateral contract, the consideration for each promise is ____. A. A completed act B. The beginning of action in acceptance, even if it is not complete C. An acknowledgement D. A return promise E. An agreement

D. A return promise

The obligation to use reasonable efforts to minimize damage resulting from a breach is referred as the duty to ______ one's damages. A. Reduce B. Remit C. Reform D. Mitigate E. Migrate

D. Mitigate

Which of the following is true regarding the statute of frauds requirement involving contracts that cannot be performed within one year? A. The one-year period begins to run the day after the contract is created, not when the contract is scheduled to begin. B. Even if it is highly unlikely that a contract will be completed within one year, a contract does not come within the statute of frauds if it could be completed within one year. C. If a party contracts for lifetime employment, the contract does not have to be in writing in order to be enforceable. D. Contracts whose performance, based on the terms of the contract, could not possibly occur within one year fall within the statute of frauds. E. All the above are true.

E. All the above are true.

Which of the following is true regarding the situation that occurs when a party has made a unilateral offer and another party has begun performance? A. The offeror has the right to revoke the offer at any time before performance has been completed. B. The offeror cannot revoke if at least one-third of the performance has been completed. C. The offeror cannot revoke if at least one-half of the performance has been completed. D. The offeror cannot revoke if at least three-fourths of the performance has been completed. E. The offeror must give the offeree a reasonable time in which to complete the performance.

E. The offeror must give the offeree a reasonable time in which to complete the performance.

What is a purpose of the parol evidence rule? A. To restrict oral evidence from being admitted that supports an agreement in its written form. B. To restrict written evidence from being admitted that supports an agreement in its written form. C. To restrict oral and written evidence from being admitted that supports an agreement in its written form. D. To restrict hearsay from being admitted that supports or contradicts an agreement in its written form. E. To restrict evidence from being admitted that substantially contradicts an agreement in its written form.

E. To restrict evidence from being admitted that substantially contradicts an agreement in its written form.

A contract is ______________ if one or both of the parties have the ability to either withdraw from the contract or enforce it. A. Voidable B. Executory C. Implied D. Executed E. Void

A. Voidable

A ______ is a false representation of a material fact that is consciously false and intended to mislead the other party. A. Negligent misrepresentation B. Fraudulent misrepresentation C. Scienter misrepresentation D. All the above E. Negligent or fraudulent misrepresentation, but not a scienter misrepresentation

B. Fraudulent misrepresentation

Under the Uniform Commercial Code, contracts for the sale of goods totaling more than ______ must be in writing. A. $200 B. $300 C. $500 D. $600 E. $1,000

C. $500

Which of the following occurs when a minor's parents or legal guardians give up their right to exercise legal control over the minor, typically when the minor moves out of the parents' house and begins supporting himself or herself? A. Ratification B. Disaffirmance C. Emancipation D. Legal release E. Reaffirmance

C. Emancipation

Which of the following references the requirement that a contract not be either illegal or against public policy? A. Consideration B. Capacity C. Legal object D. Illegal prohibition E. Ethical requirement

C. Legal object

__________ damages are specified by the parties in advance to compensate for a particular kind of breach. A. Consequential B. Punitive C. Liquidated D. Nominal E. Repugnant

C. Liquidated

An offer of performance by being ready, willing, and able to perform is known as ____. A. Offering B. Showing C. Tender D. Completer E. Implied acceptance

C. Tender

Which of the following is generally true if no means of communicating an acceptance is specified in an offer? A. The acceptance must be in writing. B. The acceptance must be made verbally either by telephone or in person. C. No valid contract may be entered into because the offer must specify a means by which to accept. D. Acceptance may be made by any reasonable means. E. Acceptance must be made orally or in writing within twenty-four hours.

D. Acceptance may be made by any reasonable means.

If a person wishes to ensure that an offer will be held open for a set period of time, the person may do so by entering into a[n] ______________ contract with the offeror. A. Clear B. Explicit C. Unrevokable D. Option E. None of the above

D. Option

Which of the following occurs when one of the parties to a contract has so much more bargaining power than the other that he or she dictates the terms of the agreement? A. Unfairness B. Cohesiveness C. Disconnection D. Unconscionability E. Unprovable

D. Unconscionability

For a court to enforce a promise, ______ must offer consideration. A. Only the offeror B. Only the offeree C. Only the acceptee D. Only the acceptor E. Both sides

E. Both sides

The person who agrees to the terms of an offer by another a party is called the _________. A. Offeree B. Offeror C. Agreeor D. Agree E. Inquiror

A. Offeree

Which of the following is an exception as to when a secondary obligation needs to be in writing? A. The primary-purpose rule B. The resulting-fact rule C. The main-purpose rule D. The delineated rule E. The personal-obligation standard

C. The main-purpose rule

Even if they would normally have to be in writing, if applicable criteria are met, oral contracts for _____ goods are enforceable. A. Retailed B. Wholesale C. Collateral D. Consumer E. Customized

E. Customized

Which of the following are foreseeable damages within the contemplation of the parties at the time the contract was made, and that result from special facts and circumstances arising outside the contract itself? A. Consequential B. Punitive C. Liquidated D. Nominal E. Repugnant

A. Consequential

In which of the following does a contract arise not from words but from the conduct of the parties? A. Implied contracts B. Express contracts C. Liquidated contracts D. Bilateral contracts E. Unilateral contracts

A. Implied Contracts

In which of the following ways may an offeree accept a unilateral contract? A. By making a counteroffer. B. By signed writing only. C. By either verbal acceptance or a signed writing. D. By performance. E. By performance, by a verbal acceptance, or by a signed writing.

D. By performance.

In the absence of a time condition in an offer, the offer will expire _________. A. In forty-eight hours B. In seven days C. In thirty days D. In forty-five days E. After a reasonable amount of time

E. After a reasonable amount of time

Which of the following occurs when a contracting party refuses to complete the contract before the actual time of performance? A. Preemptive repudiation B. Anticipatory repudiation C. Advance refusal D. Advance repudiation E. Preparatory refusal

B. Anticipatory repudiation

Why is it important to distinguish between unilateral and mutual mistakes? A. Because it determines which contracts are considered fraudulent. B. Because it determines which contracts are voidable. C. Because it determines which contracts lack consideration. D. Because it determines how much may be awarded in damages under a contract. E. Because it determines whether punitive damages may be awarded.

B. Because it determines which contracts are voidable.

When a contract is voidable, it may be ______. A. Chargeable B. Rescinded C. Deassented D. Reassented E. Uncharged

B. Rescinded

A _____ occurs whenever a party fails to perform his or her obligations under the contract. A. Mishap B. Misoccurrence C. Breach D. Misdeed E. Mistake

C. Breach

When must a disaffirmance of a contract based on minority occur? A. Before or within a reasonable time of the minor's reaching the age of majority. B. Within 30 days of the minor's reaching the age of majority. C. Within 60 days of the minor's reaching the age of majority. D. Within 90 days of the minor's reaching the age of majority. E. Within one year of the minor's reaching the age of majority.

A. Before or within a reasonable time of the minor's reaching the age of majority.

Which of the following is the reason the Uniform Commercial Code was drafted? A. Different states had different laws governing contracts which did not result in a smooth flow of interstate commerce. B. Some states had no law governing contracts. C. Federal law governing contracts was difficult to apply. D. The Uniform State Act on laws was not working. E. The Restatement of the Law Second, Contracts was not being evenly and fairly applied.

A. Different states had different laws governing contracts which did not result in a smooth flow of interstate commerce.

Which of the following is true if a contract is disaffirmed on the basis of intoxication? A. Each party to the contract must return the other to the condition he or she was in at the time the contract was entered into. B. The intoxicated person must be returned to the condition he or she was in at the time the contract was entered into, but that is not true for any other party. C. Any party other than the intoxicated person must be returned to the condition he or she was in at the time the contract was entered into. D. So long as the contract was objectively fair, neither party must be returned to the condition he or she was in prior to the time the contract was entered into. E. So long as the contract was subjectively fair in the opinion of the intoxicated party, neither party must be returned to the condition he or she was in prior to the time the contract was entered into.

A. Each party to the contract must return the other to the condition he or she was in at the time the contract was entered into.

Which of the following is true regarding illusory promises? A. Illusory promises are not consideration. B. Illusory promises are consideration. C. Illusory promises qualify as consideration only when past consideration is at issue. D. Illusory promises qualify as consideration only when promissory estoppel is at issue. E. Illusory promises are consideration only when a sale of goods is involved.

A. Illusory promises are not consideration.

A[n] ______ occurs when a former minor does not specifically state that he affirms a contract entered into as a minor but takes some action that is consistent with intent to ratify the contract. A. Implied ratification B. Express ratification C. Express novation D. Implied novation E. Disaffirmance

A. Implied ratification

Which of the following is true regarding the effect of an innocent misrepresentation on a contract? A. It permits the party that was misled by the false statement to rescind the contract. B. It permits the party who made the false statement to rescind the contract. C. It permits either the party that was misled by the false statement or the party who made the false statement to rescind the contract. D. The contract is automatically void and of no effect, and the party who was mislead may recover damages. E. It permits either the party that was misled by the false statement or the party who made the false statement to rescind the contract, and it also makes the contract void and of no effect.

A. It permits the party that was misled by the false statement to rescind the contract.

Which of the following is true regarding the termination of an offer based on a rejection? A. Regardless of how long an offeror states that an offer will be held open, once the offeree rejects it, the offer is terminated. B. Even on rejection, an offer is not terminated until the expiration of the time period for which it was originally to remain open. C. An offer must remain open for at least two days before it is terminated following a rejection by an offeree. D. An offer must remain open for at least three days before it is terminated following a rejection by an offeree. E. An offer must remain open for at least four days before it is terminated following a rejection by an offeree.

A. Regardless of how long an offeror states that an offer will be held open, once the offeree rejects it, the offer is terminated.

______ is the termination of the contract, and ______ is the return of any property given up under the contract. A. Rescission, restitution B. Rescission, reformation C. Reformation, restitution D. Reformation, rescission E. Rescission, compensation

A. Rescission, restitution

Which of the following parties must sign a document coming within the statute of frauds? A. The party against whom action is sought B. The offeror only C. The offeree only D. Only a person who has agreed to pay the debt of another E. Any party to the contract

A. The party against whom action is sought

Why did equitable remedies come into being? A. To fashion remedies when the existing laws did not provide any adequate ones. B. To supplement compensatory damages with punitive damages. C. To provide a way to award nominal damages. D. To provide a way to award consequential damages. E. To provide a way to award certain parties liquidated damages.

A. To fashion remedies when the existing laws did not provide any adequate ones.

Guardians may be appointed for which of the following? A. Those who are adjudicated insane. B. Those who are adjudicated habitual drunkards. C. Those whose judgment has been impaired because of a condition such as Alzheimer's. D. All of the above. E. Those who are adjudicated insane and those whose judgment has been impaired because of a condition such as Alzheimer's, but not those who are adjudicated habitual drunkards.

D. All of the above.

Which of the following are examples of people who do not have the capacity to enter into legally binding contracts? A. Those under the age of majority. B. People suffering from mental illness. C. Intoxicated persons. D. All of the above. E. None of the above. Anyone can enter into a legally binding contract.

D. All of the above.

By which of the following may a party's contractual obligations be terminated? A. Performance B. The failure of a condition to occur C. Operation of law D. All the above E. Performance and the failure of a condition to occur, but not operation of law

D. All the above

Which of the following are exceptions to when the statute of frauds would apply although under normal circumstances it would apply? A. Admission B. Partial performance C. Promissory estoppel D. All the above E. Admission and partial performance, but not promissory estoppel

D. All the above

Which of the following is true regarding writings created at the same time as a written agreement? A. The parol evidence rule applies to writings created at the same time as the written agreement. B. Writings created at the same time as a written agreement are more readily admitted as part of the written agreement than is oral evidence regarding conditions or terms in the final agreement. C. As long as contemporaneous written documents do not substantially contradict what is in the final writing, judges can deem these other writings to be part of the final written agreement. D. All the above. E. The parol evidence rule applies to writings created at the same time as the written agreement, and contemporaneous writings are no more likely to be allowed into evidence than oral evidence regarding conditions or terms in the final agreement.

D. All the above.

When no actual damages result from the breach of a contract, the court may award the plaintiff ______ damages. A. Consequential B. Punitive C. Liquidated D. Nominal E. Repugnant

D. Nominal

Which of the following is true regarding the ability of persons suffering from a mental illness to enter into a binding contract? A. Persons suffering from a mental illness never have capacity to enter into a binding contract. B. Persons suffering from a mental illness have full capacity to enter into a binding contract so long as they do not present a danger to themselves or others. C. Persons suffering from a mental illness have full capacity to enter into a binding contract so long as they inform the other party that they are in treatment. D. Persons suffering from a mental illness may have full, limited, or no legal capacity to enter into a binding contract depending on the nature and extent of their mental deficiency. E. Persons who suffer from a mental illness always have full capacity to enter into a binding contract.

D. Persons suffering from a mental illness may have full, limited, or no legal capacity to enter into a binding contract depending on the nature and extent of their mental deficiency.

Which of the following are exceptions to the preexisting duty rule? A. Unforeseen circumstances only. B. Additional work only. C. Past consideration only. D. Unforeseen circumstances and additional work, but not past consideration. E. Unforeseen circumstances, additional work, and past consideration.

D. Unforeseen circumstances and additional work, but not past consideration.

Which of the following is used as a basis for discharge by operation of law when performance is still objectively possible but would be extraordinarily injurious or expensive to one party? A. Frustration of purpose B. Commercial impracticability C. Alteration of the contract D. Anticipatory repudiation E. Anticipatory renunciation

B. Commercial impracticability

Which of the following damages are designed to put the plaintiff in the position he or she would have been in had the contract been fully performed? A. Equitable B. Compensatory C. Public D. Legal E. Punitive

B. Compensatory

The parties' discharge of their obligations by doing what they respectively agreed to do under the terms of the contract is called ____. A. Discharge by tender B. Discharge by performance C. Discharge by finishing D. Discharge by absolution E. Discharge by reason

B. Discharge by performance

Which of the following occurs when a person reaches the age of majority and states either orally or in writing that he or she intends to be bound by the contact entered in to as a minor? A. Implied ratification B. Express ratification C. Express novation D. Implied novation E. Disaffirmance

B. Express ratification

Which of the following is false regarding the statute of frauds and promises made in consideration of marriage? A. Agreements regarding marriage in which one party is gaining something other than a return on his or her promise to marry are within the statute of frauds and must be in writing. B. Mutual promises to marry fall within the statute of frauds. C. Prenuptial agreements fall within the statute of frauds. D. A prenuptial agreement is not automatically enforceable just because it is in writing. E. When one party promises something to the other as part of an offer of marriage, the contract must be in writing to be enforceable.

B. Mutual promises to marry fall within the statute of frauds.

Which of the following occurs when the parties to the agreement wish to replace one of the parties with a third party? A. Accord and satisfaction B. Novation C. Substituted contract D. Mutual recission E. Alteration

B. Novation

Contract law is said to be based on a[n] ___________ theory, meaning that the existence and interpretation of the contract is based on the outward manifestations of intent by the parties. A. Subjective B. Objective C. Interpretive D. Appearing E. Unilateral

B. Objective

As discussed in the text, a main purpose of the statute of frauds is to prevent unreliable _____ evidence from interfering with a contractual relationship. A. Hearsay B. Oral C. Irrelevant D. Immaterial E. Hearsay and irrelevant

B. Oral

Which of the following occurs when three conditions are met: one party makes a promise knowing the other party will rely on it; the other party does rely on it; the only way to avoid injustice is to enforce the promise? A. Promissory agreement B. Promissory estoppel C. Quasi estoppel D. Quasi agreement E. Promissory performance

B. Promissory estoppel

Which of the following types of damages are designed to punish the defendant and deter him and others from engaging in similar behavior in the future? A. Consequential B. Punitive C. Liquidated D. Nominal E. Repugnant

B. Punitive

Which of the following refers to special relationships in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person? A. Fraudulent misrepresentation B. Undue influence C. Pressing dominance D. Pressing persuasion E. Relationship dominance

B. Undue influence

When may a court rule that parol evidence may be admissible to further the court's understanding of an agreement? A. When a court determines that there is significant disagreement regarding the complete and final version of the agreement. B. When a court determines that a written agreement does not represent a complete and final version of the agreement. C. When a court determines that there is disagreement between the parties over performance of the agreement once performance has actually started. D. When a court determines that the plaintiff failed to do sufficient research to determine if signing the agreement was advisable. E. When a court determines that either party failed to do sufficient research to determine if signing the agreement was advisable.

B. When a court determines that a written agreement does not represent a complete and final version of the agreement.

As a general rule, when is revocation effective? A. When it is mailed by the offeror. B. When it is received by the offeree. C. One day after it is made. D. Two days after it is made. E. Three days after it is made.

B. When it is received by the offeree.

Which of the following conditions occur when each party's performance is conditioned on the performance of the other? A. Precedent B. Subsequent C. Concurrent D. At large E. Certain

C. Concurrent

In a _____________ contract, the offeror wants a performance to form the contract. A. Trilateral B. Bilateral C. Unilateral D. Complete E. Anticipatory

C. Unilateral

Because their contracts are ____, minors have the right, until a reasonable time after reaching the age of majority, to _____ their contracts. A. Void, disaffirm B. Void, affirm C. Void, resist D. Voidable, disaffirm E. Voidable, affirm

D. Voidable, disaffirm

Which of the following are exceptions to the parol evidence rule? A. Contracts that have been subsequently modified B. Contracts conditioned on orally agreed-on terms C. Contracts that are not final as they are part written and part oral D. Contracts with ambiguous terms E. All the above

E. All the above

Which of the following is true regarding the adequacy of consideration? A. Courts generally consider the adequacy of consideration in determining whether to enforce a contract. B. Courts consider the adequacy of consideration only if something is sold for less than 90% of its market value. C. Courts consider the adequacy of consideration only if something is sold for less than 80% of its market value. D. Courts consider the adequacy of consideration only if something is sold for less than 70% of its market value. E. Courts seldom consider the adequacy of consideration but will do so if fraud is involved.

E. Courts seldom consider the adequacy of consideration but will do so if fraud is involved.

Which of the following is an order either forcing a person to do something or prohibiting a person from doing something? A. Specification B. Directive C. Instructional edict D. Demand E. Injunction

E. Injunction

Which of the following is true of an output contract under the UCC? A. It is valid so long as the output is made in good faith. B. It is valid so long as there is a writing setting forth the terms signed by the offeree. C. It is valid so long as there is a writing setting forth the terms signed by the offeror and the offeree. D. It is valid so long as more than nominal consideration is provided. E. It is not valid because of the lack of consideration.

E. It is not valid because of the lack of consideration.

A promise to do something that you are already obligated to do is ____. A. Valid consideration because it is illusory consideration B. Valid consideration only in the employment context C. Valid consideration because it is past consideration D. Valid consideration only if a sale of goods is involved E. Not valid consideration

E. Not valid consideration

Because ______ does not favor intoxication, the courts tend to be unsympathetic to intoxicated parties and will fairly liberally interpret behavior that seems like ratification as ratifying the contract. A. Morality B. Popular opinion C. Medical literature D. Religion E. Public policy

E. Public policy

Which of the following terms would be considered material terms? A. Subject matter B. Price C. Quantity D. Subject matter and price but not quantity E. Subject matter, price, and quantity

E. Subject matter, price, and quantity