GENB EXAM 2 TRUE OR FALSE

A contract may be extended and revised as needed to reflect the wishes of the parties

True

A contract must show mutual agreement, which is also referred to as "a meeting of the minds."

True

A promise to give up something of value that a person has a legal right to keep or to agree to do something that he is not legally required to do is known as consideration.

True

A written contract can be a handwritten note.

True

An enforceable contract can result from an agreement that imposes a legal obligation.

True

An incompetent party to a contract is not denied the opportunity to benefit from their legal rights.

True

As a general rule, if an offer is to be definite and certain, it should cover the same points as a good newspaper story

True

Consideration in a contract may be more than just the promises exchanged by the parties, but the actual benefit gained and the detriment suffered by them.

True

Consideration required in an enforceable contract can take various forms such as exchange of promises, forbearance, and pledges or subscriptions.

True

If the parties to a contract are legally competent and have reached mutual agreement, the law does not require that the purpose of the agreement be legal.

False

In the eyes of the law, a misrepresentation is a belief that is not in accord with the facts.

False

It is usually advisable to make a contract in oral when the transaction is important and involves a large amount of money.

False

Many contracts in which part of the consideration is forbearance involve agreements to compete.

False

Misdemeanor is the intentional misstatement or nondisclosure of a material fact made by one party with the hope of influencing the other party.

False

Persons attempting to influence the public officials are exposed and prosecuted every year, but not the public officials.

False

Silence does not indicate assent to an offer, even if both parties agree beforehand that this is to be the means of acceptance.

False

The Federal Antitrust Act, also known as the Sherman Antitrust Act, forbids agreements that result in certain kinds of product price discrimination.

False

The UCC specifies that a competent party is a person of legal age, but fails to take into account the mental state of the individual.

False

The element of proper form requires that a contract for the sale of goods over $100 or less should be in writing.

False

The exchange of money is a mandatory requirement for a consideration.

False

The law that protects minors from their contractual commitments intends to deny them the opportunity to enter into contracts for necessaries that are not provided by their parents or a guardian

False

There is no remedy for the injured party under fraud and misrepresentation.

False

To be legally enforceable, a contract must contain any three of the five elements - offer and acceptance, mutual agreement, consideration, competent parties, and legality of purpose.

False

Usury laws are applicable to transactions between corporations in all the states.

False

Disaffirmance may be implied by the acts of the person who has reached legal age and wishes to disaffirm.

True

Emancipated minors are generally liable for necessaries purchased for themselves or supplied to a spouse, just as if they were adults.

True

Genuineness, or reality of an agreement, is said to be present in a contract when there is a true meeting of the minds.

True

If goods are advertised in a newspaper at an incorrect price, and the fault is of the newspaper, the merchant may recoup his losses from the publication.

True

If there is any misunderstanding or if any force or deception is used by either party to obtain the necessary agreement of the other party, the contract is voidable, and may be disaffirmed at the option of the injured party.

True

In general, courts do not attempt to judge the adequacy of consideration

True

In many states, the usury statutes apply to retail installment credit sales and credit card transactions.

True

Mistakes relating to contracts may be concerned with the nature of the subject matter or the quality of the subject matter.

True

Monopoly power is the term used to describe a situation in which one or more people or firms control the market in a particular area or for a certain product.

True

Offer and acceptance are the essential elements of a contract.

True

Puffing is considered a mere expression of opinion that refers to generalities.

True

Some agreements are unenforceable because they are contrary to the interests of the public, such as agreements in restraint of marriage.

True

Sometimes the unequal bargaining power of parties to a contract gives one party an unfair advantage when dealing with those who lack the economic power to enter into a contract on an equal footing.

True

The exact time for disaffirmance will vary depending on the nature of the contract and current legislation.

True

The general rule of contract provides that the acceptance of an offer must be the same as the offer.

True

The law regards actions on the part of minors that result in emancipation as abandonment.

True

The legal age of majority varies from state to state.

True

The most common form of valid consideration is the promise of money by one party for the promise of an act by another.

True

The promisor may make a promise to pay a sum of money to the promisee for the performance of a certain act.

True

The requirement of offer and acceptance is usually fairly straightforward in contracts involving just two or, perhaps, a few parties.

True

The responsibility of determining whether a person is competent to contract rests on everyone who enters into a contract with such a person.

True

A minor is not liable even for the reasonable value of necessaries purchased by him or her.

False

A person can be compelled to speak or to write in order to avoid a binding agreement, and is under no obligation to reply to an offer.

False

A person who discusses the terms of a purchase with a salesperson, pays cash for it, and takes the item with him, is making an unenforceable written contract.

False

A valid contract may exist even if the consideration is a promise to perform an illegal act, or to avoid performing an act that is legally required to be performed.

False

Acceptance of a public offer by anyone, as indicated by the performance of the act, does not result in an enforceable contract.

False

All agreements are typically legal and enforceable as long as they fulfill the terms of a contract, even if it is to wrongfully use one's influence.

False

For a contract to be dissolved because of a mistake, the law usually requires that only one of the parties has to be part of the mistake.

False

Gambling on Native American reservations is universally legal in all the states.

False

Competent parties can be of any age as long as they understand the terms of a contract.

False

Contracts in which the parties have unequal bargaining power are known as unconscionable contracts.

False

Even when an offer specifies all the terms and conditions of a contract, it is not considered as definite and certain.

False

Examples of agreements that violate government statutes, and are enforceable by the courts, are gambling and wagering agreements.

False

A counteroffer, that is, a conditional, or qualified, acceptance of an offer, is generally interpreted as an acceptance and is not binding on the parties.

False

A fraud charge can be proven only if it is available in writing, but not if it is spoken, by acts or conduct.

False