ACCT324 Quizzes Exam 1

_____ are best described as damages parties to a contract specify in advance in order to prevent a difficult court battle if there is a particular kind of breach. A. Liquidated damages B. Punitive damages C. Nominal damages D. Special damages

A

_____ occurs when a party gives a loan at an interest rate exceeding the legal maximum. A. Usury B. Libel C. Arson D. Duress

A

A(n) _____ occurs when, after reaching the age of majority, a person states orally or in writing that he or she intends to be bound by the contract entered into as a minor. A. emancipation B. juvenile adjudication C. express ratification D. recognizance

C

_____ are best described as foreseeable damages that result from special facts and circumstances arising outside a contract itself. A. Compensatory damages B. Nominal damages C. Equitable damages D. Consequential damages

D

A counteroffer occurs when: A. the offeror makes the same offer to multiple offerees. B. an offer is made by an offeree to his or her offeror relating to the same matter as the original offer made by the offeror. C. a new condition or term is attached by the offeror to his or her original offer. D. an offeree gives the offeror a piece of consideration in exchange for holding the offer open for the specified period of time.

B

Amy offers to paint Louis's house for $1,000. The offer stated that acceptance in person was required. Within a reasonable time, Louis e-mailed Amy his acceptance. Which of the following statements is true about this situation? A. Louis has not accepted the offer as required by the offeror, and there is no contract. B. Louis has accepted the offer because an e-mail is a reasonable means of acceptance. C. The agreement between Louis and Amy will be valid but unenforceable. D. The acceptance by Louis will be presumed as an implied contract.

A

Jason agrees to buy Sara's car for $10,000. However, Sara tells Jason that she will only sell the car to him if he pays $12,000. In this scenario, Sara makes a(n): A. counteroffer. B. collective bargain. C. addendum. D. reverse bid.

A

Lucas is planning to buy a house owned by Janet. He gives her an initial amount of $10,000 to hold the offer open for a 45-day period. Janet will deduct the $10,000 from the purchase price if Lucas purchases the property within those 45 days. If he does not, Janet can keep the $10,000 and offer the house to another party. Which of the following contracts does this scenario best illustrate? A. Option contract B. Void contract C. Implied contract D. Executed contract

A

Restitution, as a primary equitable remedy for a breach of contract, is best described as: A. the return of any property given up under the contract. B. an order requiring the breaching party to pay some predetermined amount of money to the injured party. C. the replacement of one of the parties to a contract. D. an order for the breaching party to perform a new duty as a substitution to an old duty.

A

The legal principle of _____ means that both parties to a contract are equally responsible for an illegal agreement. A. in pari delicto B. caveat emptor C. pro hominem D. res ipsa loquitur

A

When is a contract voidable? A. When the contract is entered into by a minor B. When the contract is entered into by a person adjudicated insane C. When the contract is entered into by a person adjudicated as a habitual drunkard D. When the contract is entered into by an intoxicated person who understands his or her contractual obligations

A

Which of the following statements best defines a concurrent condition? A. It occurs when the parties to a contract are required to perform their obligations for each other simultaneously. B. It is a particular event that must occur in order for a party's contractual duty to arise. C. It is a future event that terminates the obligations of the parties to a contract when it occurs. D. It refers to a condition an assignee to a contract must fulfill in order to claim his or her rights to the contract.

A

A contract is referred to as a(n) _____ when a court can void the illegal part of the contract and enforce the rest as long as they represent the main purpose of the original agreement. A. adhesion contract B. severable contract C. constructive contract D. executory contract

B

Which of the following terms refers to a future event that terminates the obligations of the parties to a contract when it occurs? A. Constructive condition B. Concurrent condition C. Condition precedent D. Condition subsequent

D

Felipe, Adam, and Shirley are neighbors. Felipe overhears Adam's offer to sell an antique clock to Shirley for $3,000. Under these circumstances, _____. A. Shirley cannot make a counteroffer to Adam to buy the clock for $2,500 B. Felipe makes a new offer to Adam when he offers to buy the clock for $3,000 C. Felipe accepts the original offer made to Shirley when he accepts to buy the clock from Adam for $3,000 D. Adam cannot make a new offer to sell the clock for $3,500 to Felipe

B

If a person discharges his or her duty by making an offer to perform and being ready, willing, and able to perform, the offer of performance is known as a(n): A. assignment. B. tender. C. delegation. D. illusory promise.

B

If a person has been adjudicated insane and has a guardian appointed, any contract the person attempts to enter into is: A. voidable. B. void. C. valid. D. unilateral.

B

In discharge of a contract by novation, the: A. parties to the contract mutually agree to discharge each other from the contract. B. original parties to the contract and a third party all agree that the third party will replace one of the original parties and that the original party will then be discharged. C. original parties to the contract mutually agree to discharge each other from the contract by substituting a new agreement. D. parties to the contract agree that one party will perform her or his duty differently from the performance specified in the original agreement.

B

Section 16 of the Restatement of Contracts provides that contracts of an intoxicated person are _____ if the other party had reason to know that intoxication rendered the person unable to understand the nature and consequences of the transaction. A. enforceable B. voidable C. illegal D. void

B

Tracy offers Liam a job as a store manager at a liquor store, which she plans to open in a small property owned by her husband. The property is located near a school. Before Liam accepts the offer, the state passes a rule that liquor stores cannot be located within a five-mile radius of a school. In this scenario, the employment offer terminates due to: A. expiration of the option contract. B. subsequent illegality of the subject matter. C. lack of contractual capacity of the offeree. D. lack of genuine assent.

B

When a counteroffer is made by an offeree, the original offer: A. is deemed accepted. B. is terminated. C. becomes a quasi-contract. D. becomes part of the counteroffer.

B

Which of the following conditions must be present for an offer to have a legal effect? A. Invitation to negotiate B. Definite and certain terms C. Neutral third parties D. Expression of interest in an exchange

B

Which of the following conditions would terminate an offer, even if the offeree does not know of the terminating event? A. When the offeror and the offeree are in an option contract that is still valid B. When the offeror loses the legal capacity to enter into a contract C. When the offeree has begun performance of the action necessary to accept a unilateral offer D. When the offeror decides to revoke the offer made to the offeree

B

Which of the following is true of the intent of an offeror to be bound by an agreement? A. An offeror expresses a willingness to be bound by an acceptance when he or she makes an invitation to negotiate. B. The courts interpret intent to contract only by the offeror's outward manifestations. C. In determining the offeror's intent to enter into a contract, the court does not consider whether the offeror has the legal capacity or not. D. The courts interpret intent to contract by the party's internal thought processes.

B

Which of the following refers to agreements in which parties pay consideration for the chance, or opportunity, to obtain an amount of money or property? A. Predatory lending B. Gambling C. Defalcation D. Usury

B

If a buyer decides to terminate a contract because the seller changes the price of the contract without the knowledge of the buyer, then the contract is discharged by: A. novation. B. mutual rescission. C. operation of law. D. condition precedent.

C

In a contract between Sophia and Carl, Sophia had agreed to pay Carl $30,000 to paint her house and redo her garden. Carl agreed to theterms. After painting the house, Carl decided and convinced Sophia that it would be a better deal for her if he could redo her swimming pool rather than the garden for the original price. Carl's duty under the original contract was discharged only after he performed the new duty. Whichof the following methods to discharge a contract does this scenario best illustrate? A. Discharge by anticipatory repudiation B. Discharge by material breach C. Discharge by accord and satisfaction D. Discharge by novation

C

In employment contracts, what is the purpose of covenants not to compete? A. It restricts an employee from quitting her current job for a designated period of time. B. It restricts an employee from competing against his or her coworkers in the workplace. C. It restrains an employee from competing with her boss for a designated period of time after she quits her current job. D. It makes it legal for competitors of a business to involve in corporate espionage.

C

Nominal damages are primarily: A. designed to compensate the plaintiff for the loss he or she suffered due to a breach of contract. B. granted when parties to a contract need any remedy other than money damages. C. designed to signify that the plaintiff has been wronged by the defendant. D. foreseeable damages that result from special facts and circumstances arising outside a contract itself.

C

When is a contract deemed void? A. When the contract is entered into by a person under the age of majority B. When the contract is entered into by a person suffering from mental deficiencies, but he or she has the ability to understand the legal obligations under the contract C. When the contract is entered into by an intoxicated person who has been adjudicated a habitual drunkard D. When a contract is entered into by a person who, under the influence of alcohol, exercises poor judgment

C

Which of the following elements of a contract refers to the mental ability of a person to understand his or her rights and obligations under a contract and comply with the terms? A. Fair consideration B. Recognizance C. Legal capacity D. Agreement

C

Which of the following indicates that the terms of an acceptance must reflect the terms of an offer? A. The mailbox rule B. The near-privity rule C. The mirror-image rule D. The Ultramares rule

C

Which of the following is true of authorized means of acceptance of an offer? A. The means by which an offeree can communicate acceptance to an offeror cannot be implied from the facts and circumstances surrounding the communication. B. A reasonable means of communication is acceptable, even if the offer specifies that acceptance must be communicated by a specific mode. C. The means by which an offeree can communicate acceptance to an offeror can be expressly stated in the offer. D. If no mode of communication is specified in the offer, the offer is deemed void.

C

Which of the following occurs when a party to a contract unjustifiably fails to substantially perform his obligations under the contract? A. Anticipatory repudiation B. Substantial performance C. Material breach D. Objective impossibility

C

Which of the following statements is true of Sabbath laws? A. These laws limit the types of business activities in which parties can legally engage on Saturdays. B. These laws limit the performance of charity work to Sundays. C. These laws do not apply to contracts for obtaining necessities and anything related to health or survival. D. These laws require parties to enter into contracts only on Sundays for certain business activities.

C

A(n) _____ is best described as an agreement presented on a take-it-or-leave-it basis or as the only chance the presented party will have to enter into it. A. aleatory contract B. unilateral contract C. executory contract D. adhesion contract

D

A(n) _____ is best described as an order either forcing a person to do something or prohibiting a person from doing something. A. delegation B. assignment C. novation D. injunction

D

Harry had agreed to hire 17-year-old Nathan as a production worker in his factory. However, before Nathan could start working for Harry, the law in the country made it illegal to employ minors in production units. In this scenario, the parties to the contract are discharged from their duties on the grounds of _____. A. alteration of the contract B. material breach C. novation D. objective impossibility

D

If an offer merely authorizes certain modes of acceptance but does not condition acceptance on the use of those modes, use of an unauthorized means of acceptance: A. makes the acceptance void and unenforceable. B. makes the acceptance valid even if it reaches a wrong address. C. results in a contract immediately upon the dispatch of the acceptance. D. results in a contract only after the acceptance is received by the offeror.

D

Maya, a wedding planner, had agreed to use purple orchids for Janet's wedding. However, due to an embargo against the country from where the flowers were to be imported, Maya could not fulfill her promise. In this scenario, the contract between Maya and Janet may be discharged on the basis of _____. A. novation B. condition subsequent C. objective impossibility D. commercial impracticability

D

To justify recovery based on a quasi-contract, a plaintiff must prove that: A. the defendant lacks legal capacity. B. the contract lacks legal assent. C. he or she suffered consequential damages. D. he or she conferred a benefit on the defendant.

D

Which of the following can be considered an offer? A. An invitation to negotiate B. An expression of possible interest in an exchange C. A request for bids D. An auction without reserve

D

Which of the following is true of the mailbox rule? A. It prohibits the formation or drafting of contracts over e-mails. B. It applies to offers accepted or rejected through instantaneous communication, such as over the phone, in person, or by telex. C. It provides that a revocation of an offer is valid as soon as the offeror places it in the mailbox. D. It provides that the acceptance of an offer is valid when the offeree places it in the mailbox.

D