Law Exam 2

What elements are required for courts to apply the doctrine of promissory estoppel? Choose 3 answers.

-Enforcement of the promise is necessary to avoid injustice to the promisee. -There was a detrimental result from reliance on the promise -The promise must be definite and relied upon.

What evidence outside of the written contract is a party allowed to present? Choose 2 answer choices.

-Evidence showing a change to the contract after it is signed-Evidence to prove agreement on an essential element of the contract

What factors make an agreement enforceable under the principle of quasi-contract? Choose 2 answers.

-One party is being enriched at the expense of the other. -The enriched party knows about the benefit and keeps it.

What are the elements of consideration? Choose 2 answer choices.

-something of value from each party -an exchange to which the parties agree

What is the evaluation standard for a personal satisfaction contract? Choose 2 answer choices.

1) Objective, reasonable person standard 2) Subjective personal taste

What conditions must be met for an offer to be legally accepted? Choose 2 answers.

1. It may only be accepted by the intended offeree or the offeree's agent. 2. Acceptance must be unequivocal with no requests for changes in the offer.

How may a revocable offer effectively be revoked? Choose 2 answers.

1. The offeror may withdraw the offer with a clear expression. 2. The offeror may take an action that contradicts the offer and make that known to the offeree.

Tina and Leroy have a contract for the sale of a vinyl record album. Tina, the seller, breaches the contract. A court will be most likely to order specific performance if there are __________ identical copies of the record album available for sale on the market.

2

The initial term for which a financing statement will be effective isThe initial term for which a financing statement will be effective is

5 yrs

Which act or statement is a valid offer? A price quote A typical advertisement A completed auction with a reserve A detailed advertisement

A detailed advertisement

Which of the following would be considered a merchant under the UCC?

A gun dealer sells a rifle to someone who enters his shop.

Which statement is true about the ability of minors to enter into contracts?

A minor may enter into any contract an adult can, except for contracts that are expressly prohibited for minors.

In general, which of these contract terms is NOT required to meet the requirement of definiteness? The subject matter of the contract The time of payment Acceptance The parties involved

Acceptance

Which of the following is an example of an implied contract?

Alberto visits his physician to be treated for a sinus infection. They do not discuss payment, but the following week Alberto receives a bill from his physician for services rendered.

Which of the following is an equitable remedy for breach of contract?

An order for specific performance.

Which of the following are objections that a creditor may bring to bankruptcy distribution proceedings? Choose 3 answers.

An unsecured creditor may object to being excluded from the distribution if she had not been notified of the bankruptcy. A creditor may object to a distribution plan if the debtor has been fraudulent. A secured creditor may object to being excluded from the distribution if she had not been notified of the bankruptcy.

What is the term for the action of a party to a contract who notifies the other party that he or she will not perform his or her duty under a contract?

Anticipatory Repudiation

Which mistake is likely to be voidable? Mistakes of Value A prediction mistake Unilateral mistake Bilateral mistake

Bilateral mistake

What must a plaintiff prove in an express warranty case?

Buyer reliance on the seller's promises

The type of bankruptcy where an individual who is in debt makes a plan to repay some or all of his creditors is called:

Chapter 13.

The Uniform Commercial Code applies to what types of contract? Contracts for real estate Contracts for goods over $500 Contracts for services over $500 Contracts for leasing

Contracts for goods over $500

In which of these situations does an express warranty exist? Choose 2 answer choices.

Crane Outdoor Shop sells only online. The product postings include detailed descriptions of the features, but no pictures. Crane Outdoor Shop shows products on the showroom floor as examples of what they sell, but all purchases are made online and another sample of that item is delivered to the customer's home.

Derek and Abyan were discussing business over lunch when they agreed on the sale of a five-acre parcel of land. Since neither of them had any paper with them, Derek wrote the following on a napkin: "Abyan agrees to purchase from Derek a 5-acre parcel located at the local address of 123 105th Street, St. Joseph, Minnesota, U.S.A. for the price of $4,500 per acre. Transfer of title, payment, and possession to take place on May 1, 2011." Abyan signed the napkin. On May 1, 2011, Derek was ready to close the deal and transfer title but Abyan refused to pay the purchase price. If Derek sues Abyan for the price of the land, the most likely result will be

Derek will win because the writing is sufficient under the statute of frauds.

Which of the following is a valid offer? Eric offers to buy Arun's house for $775,000 with no contingencies because Eric's lease ends in two months. Arun wants to think about it and six days later has not yet responded. Arun tells Eric he will sell one of his houses for $250,000 by the end of the summer. Arun distributes flyers at work stating he wants to sell his house, listing the address and the asking price. Eric offers to buy Arun's house for $290,000. Arun says, "No, but I will sell it to you for $300,000." Eric seems to be upset, so Arun says he will sell it for $290,000.

Eric offers to buy Arun's house for $775,000 with no contingencies because Eric's lease ends in two months. Arun wants to think about it and six days later has not yet responded.

Article 9 of the UCC only applies to goods and does not include intangibles such as stocks, bonds or bills of lading.

F

Wimble ordered 1,000 pro-quality luminescent orange tennis balls from Sports Unlimited at a cost of $800. On June 1, Sports Unlimited shipped standard white tennis balls, but Wimble rejected them. Wimble bought the same number of pro-quality luminescent orange balls from another supplier the same day for $650. In a suit against Sports Unlimited, Wimble may recover $800.

F

Abdulla hired Granite Construction to build an addition onto his home. Granite Construction dug the foundation but then abandoned the project. Granite Construction is entitled to receive the full contract price minus the value of the defects.

False

What is the most common way of perfecting a security interest?

Filing a financing statement.

The concept that expectation interest is designed to put the injured party in the position he or she would have been in had both sides fully performed their obligations is found in

Hawkins v. McGee.

Which of these statements are true about involuntary bankruptcy proceedings? Choose 2 answers.

If a court dismisses an involuntary bankruptcy case, the filing creditors may be required to pay court and filing costs for the defendant. If an involuntary bankruptcy case is filed frivolously, the petitioner may be liable to the debtor for damages to his reputation.

Which is NOT an exception to the parol evidence rule?

Jayden wants to present evidence that Jignesh verbally promised he would include the trailer with the boat he sold to Jayden.

Which of the following oral contracts may be enforceable? Question 2 options:

Kenny orally agrees to purchase 5,000 pencils that the ABC Pencil Company stamps with the words "Kenny is the Greatest!"

What is the difference between legal remedies and equitable remedies for breach of contract?

Legal remedies are monetary while equitable remedies are non-monetary.

Linda wants to buy some equipment and needs computer software to use the equipment. Linda asks the salesperson if the software is Mac-compatible because she owns only one computer and it is a Macbook. The salesperson states that the computer software is Mac-compatible and many of his customers use the software on their Apple computers. The software box offers no information regarding operating system requirements. When Linda arrives home and opens the package, she discovers the software is not Mac-compatible. The store states it will not accept returns of opened software, and the salesperson says he was relying on what other customers told him. What will be the result if Linda files a lawsuit?

Linda wins under implied warranty of fitness for a particular purpose

Which type of lack of capacity is easiest to prove?

Minor status

What is the primary purpose of the Statute of Frauds?

NOT ensuring that all details of a contract are well defined

Link negligently ran his car into John, causing $50,000 in injuries. Link was intoxicated at the time of the accident. Can Link discharge this debt in bankruptcy?

No, such claims are not dischargeable in bankruptcy.

Which situation would be considered sufficient consideration for a contract to exist?

Pam agrees to pay Derek $500 if he does not sit next to her in class anymore

What factors are used to judge if consideration is adequate to ensure a fair bargain? Choose 2 answers.

Promises exchanged may not be a preexisting duty. Promises must be made with voluntary consent.

What is an exception to the statute of frauds?

Promissory Estoppel

Fred and Wilma enter into a contract for horse riding lessons. Fred accidentally types the price for lessons to be $4.00 each instead of $44.00 each. Wilma wishes to enforce the contract at $4.00 per lesson. Which remedy would be most effective?

Reformation

In general, certain terms must be included in contracts to satisfy the requirement of definiteness. What are the exceptions to this rule? Choose 2 answer choices. If the contract is in writing, not all terms are required to be included. Sales contracts under the UCC Courts can rewrite contracts even if the intent is vague. Courts can complete a contract to supply some missing items.

Sales contracts under the UCC Courts can complete a contract to supply some missing items.

Alimony and child support obligations are considered priority claims.

T

Shoe Sunshine, Inc. filed for bankruptcy protection under Chapter 11 and submitted a plan of reorganization within 120 days after filing for relief. Two of the classes of creditors voted against the plan. However, the bankruptcy judge considered the plan to be feasible, fair, and in the best interests of the creditors; the judge approved it in spite of these creditors' objections. This action by the judge is called a "cramdown."

T

E-mation entered into a contract with a consumer, Ezra, a recent immigrant to the United States who spoke very little English and had no formal education. The contract provided for Ezra to pay $2,500 for a computer system. The system was worth $400. If E-mation sued Ezra for enforcement of the contract, what is the most likely result?

The contract is unenforceable because it is unconscionable.

Samuel has mental competency issues. Samuel entered into a contract with Beth, but now Samuel is petitioning the court to terminate the contract. What options does the court have in ruling in the case? Choose 2 answer choices.

The contract is voidable if Samuel was incompetent at the time the contract was formed. The contract is void if Samuel has been previously determined to be mentally incompetent.

Which of the following has the highest priority in the distribution of assets when two or more creditors have an interest in the same collateral?

The creditor whose interest was perfected first.

What must a plaintiff show to be awarded a quasi-contract in a lawsuit? The defendant expected to be paid. The defendant agreed to compensate the plaintiff for the benefit received. The defendant was unjustly enriched. The plaintiff received some benefit.

The defendant was unjustly enriched.

Breeze Manufacturing agrees to purchase goods from Hawkins Inc. In what situation could Breeze reject a shipment of goods from Hawkins under the perfect tender rule?

The goods do not meet the specifications detailed in the contract.

Which of the following statements is true about assets in the bankruptcy estate?

The majority of states require debtors to follow state exemption guidelines instead of federal guidelines.

What elements are required for an offer to be effective under the common law? Choose 3 answers.

The offeror must intend to be bound by the offer. The offer must be communicated to the offeree. The terms of the offer must be reasonably definite so that all parties understand them.

What does the law require for a personal service contract?

The personal service requirement must be stated.

What rights does the perfect tender rule give buyers of goods? Choose 2 answer choices.

The right to accept delivery of all of the goods The right to reject the seller's goods if the goods are not exactly as described in the contract

Which of the following must a plaintiff prove when suing based on an express warranty for a defective product? Choose 3 answers.

The seller made a statement of fact to the buyer about the quality or uses of the product. The seller breached the warranty.

The following are true for Chapter 7 Bankruptcies: (Choose 2 answer choices)

They are for individuals. The debtor must pass the means test.

A promise to do (or not do) something in the future counts as consideration.

True

Brad was having financial difficulties and thought bankruptcy might be in his future. He transferred his sports car to his brother with the agreement that if he didn't file for bankruptcy within the next 18 months, his brother would return the car to him. Brad did file for bankruptcy in 10 months. The bankruptcy trustee can void the transfer and bring the car back into Brad's estate for the purpose of providing assets for Brad's creditors.

True

If the offer does not specify a type of acceptance, the offeree may accept in any reasonable manner and method.

True

Revocation is the withdrawal of an offer by the offeror.

True

The original Statute of Frauds is the English law that began the practice of requiring written evidence of certain kinds of contracts

True

What type of acceptance requires an affirmative action for the offeree to accept that offer? Browsewrap Agreements Offeree's silence in response to an offer Unilateral contracts The typical type of acceptance to an offer

Unilateral contracts

Madison purchases several 50-pound bags of mulch at the local gardening store. An employee carries the bags of mulch to Madison's truck and loads them into the back for her. Will Article 2 of the UCC govern the contract in this situation?

Yes, because the primary purpose of this contract is the sale of goods.

Manuel contracts to sell a painting that was painted by his deceased grandmother, then has a change of heart and decides to hang it in his own bedroom. He notifies Nadine, the person who had planned to buy it. Can Nadine have the contract enforced?

Yes, it can be enforced under the equitable remedy of specific performance.

Can the parties to a contract agree to change the time limit for commencing an action for breach of contract under the Uniform Commercial Code (UCC)?

Yes, they may set the time limit to any time between one year and four years.

Many states will not accept an e-signature on

a) a will. b) a foreclosure notice. c) a court order.

Which of the following events would have the best chance of excusing performance of a contract based on commercial impracticability?

b. An unforeseeable trade embargo causes prices to triple.

Quon and Bert have signed a contract for Bert to mow Quon's grass every week in June, July, and August for a price of $40 per week. They have agreed to all the necessary terms, but Bert has not yet mowed because it is still May. What type of contract do they have?

executory

What is the time limit for commencing an action for breach of contract under the Uniform Commercial Code (UCC)?

four years

An unconscionable contract is one that a court refuses to enforce because of

fundamental unfairness.

A security interest has attached when the creditor:

has possession or control of the collateral.

A contract for a purpose that causes the parties to violate a law is:

illegal and void.

If a consumer falls when a step on a new ladder breaks, what warranty could apply?

implied warranty of merchantability

Sal has ordered 100 pounds of shrimp for his restaurant from Sam every Friday for 5 years and has always paid that week's market price. One Friday, Sal decides to take a vacation but doesn't tell Sam. Sam claims they have a contract, even though it was never written down. What kind of contract do they have?

implied-in-fact

An exculpatory clause is generally unenforceable when

it involves public transportation.

The Bankruptcy Code exempts (limited to a certain dollar amount) which type of property?

jewelry

A buyer who is unable to obtain cover

may be allowed the remedy of specific performance.

Which of the following is the lowest priority of claims in bankruptcy?

medical debts

A debtor who wishes to file a voluntary petition must: (Choose 3 answer choices)

meet eligibility requirements for the Chapter under which they wish to file. file the petition and required schedules. undergo credit counseling.

Debts that cannot be discharged in bankruptcy include all EXCEPT

money owed to utility companies.

John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky Derby. Prince Charming came in last, much to John's frustration and embarrassment. John exclaims in a loud voice, "I'm selling that horse to the first person who hands me $100!" John has

not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer.

Contracts that cannot be performed within __________ are unenforceable unless they are in writing.

one year

What is the principle that is applied to determine how much compensation a party receives in a quasi-contract settlement?

quantum meruit

Farmer Elvin is holding 200 pounds of potatoes in storage for Chef Noble but Chef Noble has breached the contract by failing to pay for the potatoes. If Farmer Elvin sells the potatoes to a local diner to make potato soup and salad, then this action would be considered a(n)

reasonable mitigation of damages.

In 2005, bankruptcy reform laws:

required debtors to pay more of their debts in bankruptcy.

What is the standard to which most personal satisfaction contracts must adhere? Choose 2 answers.

satisfaction of the receiving party (buyer)

The correct order of payment of claims from the debtor's estate would be

secured claims, priority claims, unsecured claims.

A business filing for a Chapter 11 Bankruptcy must:

submit a payment plan for approval by creditors and the court.

Capacity

the legal ability of the principal to make contracts based on age and mental state

Specific performance is available when the subject matter of the contract is unique.

true

The legal right to sue for a breach of contract is subject to a statute of limitations.

true

When a contract falls within the Statute of Frauds but is not in writing, the contract is

unenforceable.

What is the term for a contract agreement in which an offeror promises to pay after the occurrence of a specified act, and the offeree is not required to respond in words?

unilateral contract

A contract for an illegal purpose is:

void.

What type of contract is created by an agreement that is oral when it is required by the Statute of Frauds to be in writing?

voidable

Ramona has received a discharge in bankruptcy, but wants to reaffirm a debt to her sister. To be valid, the reaffirmation

will be scrutinized by the court to make sure her sister has not unfairly pressured Ramona.

In the historic case of Hamer v. Sidway, the nephew

won, as the Court found there was consideration.

Donna defaulted on her loan owed to Second State Savings and Loan. The loan was secured with Donna's car. Donna used the car for personal and family reasons. Which statement is correct?

) Second State may take Donna's car without a court order if this can be done without a breach of the peace.

Which of these types of contracts must be in writing under the requirements of the Statute of Frauds? Choose 3 answers.

1. contracts for the sales of land2. promises made in consideration of marriage3. collateral promises to pay the debt of another person

Andy's business is not able to pay its debts, and the prospects for its finances to improve are slim. Andy decides not to continue the business. In this case, Andy should file a voluntary petition for which type of bankruptcy?

Chapter 7

Creditors wishing to file an involuntary petition for a debtor may do so under:

Chapter 7 or Chapter 11.

The type of bankruptcy where a trustee takes the nonexempt property, sells it, and uses the proceeds to pay the debtor's general unsecured creditors is called:

Chapter 7.

Which of these contracts would be enforceable, despite the existence of a mistake? Choose 2 answer choices.

Christopher agrees to sell his washer and dryer to Ella. Ella thinks the dryer uses gas instead of electricity, but she is incorrect. Christopher agrees to sell his washer and dryer to Ella in "as is" condition. Ella thinks the set is in excellent condition and is willing to take a chance on buying it. Neither works after a few weeks of use.

How do parties determine which is the appropriate law for a mixed contract? Choose 2 answer choices.

Common law is appropriate for some mixed contracts. The predominant-factor test dictates the proper choice of law.

Generally, filing bankruptcy stops the collection activity of creditors.

T

If a seller includes an express warranty in the written sales contract, any disclaimer is invalid.

T

What is the test for whether a contract is governed by the Statute of Frauds because of the one-year rule?

The contract must be objectively impossible to perform within one year.

To be valid, an agreement not to compete must be ancillary to a legitimate bargain.

True

Under a contract, Danielle is required to paint a room with paint chosen by the homeowners, the Flynns. After Danielle paints the room according to the contract requirements, her duties under the contract are discharged.

True

An example of unsecured credit is a:

private student loan.

Carswell, a contractor, enters into a contract with Helen, a homeowner, to remodel her bathroom. The contract provides a specific completion date. The contract provides that if Carswell does not have the job finished by the date, Helen may deduct $200 per day from the contract price until the job is finished. This is an example of liquidated damages.

true

What is the implied duty in every contract that each party will deal fairly with the other?

What is the implied duty in every contract that each party will deal fairly with the other?

What remedies are available to a buyer when a seller refuses to deliver the goods that are the subject of a contract? Choose 3 answers.

- The buyer may buy other goods and recover damages from the seller. - The buyer may cancel the contract. - The buyer may sue to obtain specific performance if the goods are unique or if damages are an inadequate remedy.

What are the differences between legal and equitable remedies? Choose 2 answer choices.

1) One is monetary. 2) One requires actions instead of damages.

What remedies are available after an anticipatory repudiation? Choose 3 answers.

1) Requiring assurance 2) Suspending performance 3) Cover

What must a party show to win a substantial performance lawsuit? Choose 2 answer choices.

1) The breach was not intentional. 2) He or she acted in good faith.

What are the legal differences between a material breach and an immaterial breach of contract? Choose 2 answer choices.

1) The level of the performance of the contractual obligations. 2) Whether the court will discharge the contract.

In what situation could a party enforce strict performance? Choose 2 answer choices.

1) When the parties specifically agree to it in the contract.2) When the requirement is reasonable.

Lilly hired Harris Lawn Service to cut her grass one summer, and paid through automatic charges to her credit card. After taking three months off for winter weather, Harris staff cut Lilly's grass for four weeks in a row before charging the fees on Lilly's credit card. Lilly protested the charges, stating she did not hire the company to cut grass for the second summer. Harris sues Lilly. What law applies? Choose 2 answer choices.

1. Lilly's silence is acceptance because the offeree accepted the benefit offered.2. Lilly's silence is acceptance because of the parties' past dealings.

What types of contracts violate public policy? Choose 3 answers.

1. employment contracts that forbid membership in a union2. a candidate for public office paying his competitor to retire3. conducting trade with a country that is an enemy to the United States

The two elements of consideration are:

Value - A legal benefit or detriment of sufficient, measurable value promised by each party. A promise to do something that one has no prior duty to do. The performance of an action that one is otherwise not obligated to do. Forbearance is the refraining from an action that one has a legal right to do. If a parent pays his adult child to quit smoking, that is forbearance and is consideration. The adult child has a right to smoke, and giving up that right is valid consideration for the contract. Bargained-For Exchange - Each party negotiates and agrees to give and take something of comparable value.

In what situations would a court be likely to award a quasi-contract? Choose 2 answer choices. When the party provided the services for unwilling recipients When the unjust enrichment is a relatively insignificant amount of money If the defendant was unjustly enriched and played a part in deceiving the plaintiff If the defendant did not know the plaintiff would expect to be paid for the services

When the unjust enrichment is a relatively insignificant amount of money If the defendant was unjustly enriched and played a part in deceiving the plaintiff

Which of the following are the three basic purposes of bankruptcy laws? Choose 3 answers.

allowing a struggling business to become more stable relief of the burden of debt on a debtor fair treatment of creditors

A form stating the name of an unsecured creditor and the amount of the claim against the debtor is called a(n)

proof of claim.

What is the result if parties agree to a contract orally, but it is a contract that must be in writing under the statute of frauds? Choose 2 answer choices.

-The contract is voidable.-The parties can complete the contract.

In what situations does the UCC overrule common law? The UCC governs situations in which common law is silent. The UCC applies to mixed contracts if the predominant purpose of the deal is to sell services. The UCC applies to contracts that sell services. The UCC applies to contracts that sell goods.

The UCC applies to contracts that sell goods.

Which of the following is the proper order for the payment of bankruptcy claims by class from highest priority to lowest priority?

Secured claims, priority claims, unsecured claims

In many states, a person must be in what position to have standing to sue for the breach of a product's implied warranty?

The buyer must be in privity of contract with the defendant

LaVon contracts with Nathan for Nathan to sing at her comedy club every Friday night in July. The first Friday, the crowd loved Nathan. The second Friday, they booed him. The next week, Nathan got a better offer, so he hired his twin brother Ethan to fill in for him at LaVon's club. Can LaVon compel Nathan to perform?

Yes, she can compel him under the equitable remedy of specific performance.

Neon orders one thousand 25-foot nylon ropes from Hang'em High Co. Upon inspection of the delivery, Neon learns that Hang'em sent five hundred 25-foot ropes and five hundred 20-foot ropes. Neon may

accept the 500 conforming ropes and reject the 500 nonconforming ropes.

Eduardo is starting a floral shop and owns a 10-year-old delivery van. He borrows $50,000 from First National Bank, which takes a security interest in the van. When Eduardo purchases a greenhouse in which to grow plants and a large cooler to keep them fresh, the bank's security interest attaches to these items, which are referred to as

after-acquired property.

The basic distinction between an executory contract and an executed contract is that

all parties have fulfilled their obligations in an executed contract.

Assuming there are not enough assets to pay the debts of an entire class of creditors, creditors must:

be paid at a pro rata share.

Which of the following debts is non-dischargeable in bankruptcy?

claims for amounts borrowed by the debtor to pay federal taxes

If repossessed collateral is sold or otherwise disposed of by the creditor, then the time, place, manner, and method of disposal must be

commercially reasonable.

Which of the following types of property would be considered "goods" under the Uniform Commercial Code? a) a stock b) a promissory note c) a computer d) a patent

computer

What is the term for the legal ability to enter into a binding contract?

contractual capacity

Carlos is hired to paint a house for $700. Before he starts, the woman who hired Carlos tells him she does not want the job done after all. Carlos finds another house-painting job that afternoon, but it pays only $500. If Carlos sues the woman for damages and is awarded $200, that amount is an example of

direct damages.

Tess, a tenant, moves from her apartment in breach of the lease agreement. The landlord, Lenny, may not attempt to rent the apartment until the date of the lease expiration, and so has no recourse to minimize damages.

false

What is the term for when a party to a contract performs his duties exactly according to the terms of the contract?

substantial performance

What factors may cause a person to lack contractual capacity? Choose 3 answers.

1. mental incompetence2. being under the age of majority (usually 18) 3. severe intoxication

How may an offer be terminated? Choose 3 answers.

1. The offeree may make a counteroffer.2. A reasonable amount of time has passed.3. An offeror may terminate an offer by revocation.

How is substantial performance involved with the classification of material breaches versus immaterial breaches?

Substantial performance involves an immaterial breach.