BLAW Exam 3 Practice Q's (chpt. 9, 10,12,13,14,16)
In DiLorenzo v. Valve and Primer Corporation, the court held: a. DiLorenzo gave consideration for the stock option. b.Valve & Primer conditioned the alleged stock option on DiLorenzo's promise to remain in its employment. c. promissory estoppel applied because there was detrimental reliance on DiLorenzo's part. d. there was no consideration for the stock option, and promissory estoppel did not apply because detrimental reliance was not proven.
D
In which of the following situations is there a third party incidental beneficiary who would be unable to enforce the agreement? a. Wholesalers, when the buyer of a business promises the seller that he will pay outstanding debts to wholesalers who have supplied inventory for the business. b. Workers, where a contractor agrees to post a performance bond to assure payment of workers and material men. c. A debtor, where a new partner enters an accounting firm and agrees to pay a share of debts incurred prior to his admission to the firm. d. A doctor, when an automobile accident policy states that the insurance company will reimburse the insured for medical expenses incurred as a result of an automobile accident.
D
James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer pays James $100. Which statement describes the payment of $100? a. An implied in fact contract has been formed. b. A unilateral contract has been formed. c. This created a formal contract. d. This created an option contract.
D
Which of the following is true with regard to an exculpatory clause? a. An exculpatory clause excuses one party from liability for her own tortious conduct. b. Where one party has a superior bargaining position that has enabled him to impose an exculpatory clause upon the other, the courts are inclined to nullify the provision. c. An exculpatory clause may be unenforceable for unconscionability. d. All of the above are true.
D
Which of the following would be considered a valid and legally enforceable agreement? a. An agreement to pay a legislator to vote for a particular bill. b. An agreement under which Arthur agrees to pay Barbara $3,000 to disparage the product of Arthur's competitor. c. An agreement by the seller of a service station not to enter the service station business in Ohio for a period of thirty years after the sale of his business. d. An agreement by a fund-raising director not to operate a fund-raising business in Marin County for a period of one year after terminating his employment.
D
Which of the following would not be enforceable without additional consideration? a. A promise to pay a debt barred by the statute of limitations. b. A promise to pay a debt discharged in bankruptcy where the promise meets the requirements of the Bankruptcy Code. c. A promise which falls within the doctrine of promissory estoppel. d. The settlement of an undisputed debt.
D
A person who makes a promise is a(n): a. promisor. b. promisee. c. offeror. d. executor.
A
A(n) __________ contract is one in which the terms have been definitely and specifically stated and agreed upon. a. express b. implied c. written d. formal
A
George has been declared incompetent by the court and is under the care of his sister. Unknown to his sister, George rents the 30,000-seat civic center for his birthday party. George's contract to rent the civic center is best described as: a. a void contract. b. a quasi contract. c. a voidable contract. d. an enforceable contract.
A
Which of the following is enforceable without new consideration? a. Beth, after reaching the age of majority, promises to pay off a debt she incurred while a minor. b. Cheyenne entered a contract to buy a car based on a fraudulent misrepresentation. A new promise to pay is made without knowledge of the original fraud. c. Val entered a contract voidable because of mistake. A new promise to fulfill the contractual obligations that had not previously been avoided and without knowledge of the mistake is enforceable without new consideration. d. None of the above. New promises to perform voidable obligations that have not previously been avoided must always have new consideration.
A
Which of the following is least likely to be classified as a necessary for which a minor will be held liable on a contract? a. A television. b. School supplies. c. Clothing. d. An automobile.
A
Archie bets his friend Jerry $100 that the Packers will win the next Super Bowl. This is an: a. unconscionable contract and therefore illegal. b. illegal wagering agreement. c. agreement to obstruct justice and therefore illegal. d. illegal restraint of trade.
B
Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by: a. Article 2 of the UCC. b. state common law. c. federal statute. d. the law of quasi contract.
B
Lyle offers to sell his house to Dennis for $75,000. Dennis responds, "I will pay you $75,000 for the house if you first paint the second floor." This response could best be described as: a. an acceptance. b. a counteroffer. c. a rejection. d. an invitation.
B
Steven makes a material misrepresentation of fact regarding his motorcycle to Thelma who agrees to buy the motorcycle based upon the misrepresentation. This contract is: a. void. b. voidable. c. executed. d. unenforceable.
B
The exercise of the power to avoid a contract is known as: a. ratification. b. disaffirmance. c. ab initio. d. restitution.
B
Which of the following is not an element necessary for recovery in quasi contract a. A benefit conferred on the defendant by the plaintiff. b. An implied or express promise. c. The defendant's knowledge or appreciation of a benefit. d. The defendant's acceptance or retention of a benefit.
B
"B2C" transactions on the Internet: a. are transactions between two businesses b. cannot contain warranty disclaimers. c. are more complex for services than for goods. d. are enforceable only if the buyer has had an opportunity to review the proposed terms by way of an automatic screen, but are unenforceable if the buyer had to review the proposed terms by way of a link.
C
"B2C" transactions on the Internet: a. are transactions between two businesses. b. cannot contain warranty disclaimers. c. are more complex for services than for goods. d. are enforceable only if the buyer has had an opportunity to review the proposed terms by way of an automatic screen, but are unenforceable if the buyer had to review the proposed terms by way of a link.
C
An undisputed debt is: a. a contested amount of debt. b. an obligation that is not contested as to existence but is contested as to the exact amount of the debt. c. an obligation that is not contested as to its existence or amount. d. a debt action that the court will not hear because it is not definite and certain.
C
Andrew agrees to paint Rosalene's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job, unless Rosalene agrees to pay him $100 more. What principle applies to this fact situation? a. The acceptance of additional money to settle a disputed claim is supported by consideration. b. A past obligation is sufficient consideration for a new promise. c. Andrew was already obligated to paint the house. He gives no additional consideration in return for Rosalene's promise to pay more money. d. Rosalene has made a promise in exchange for a forbearance.
C
Anna by mistake delivers to Bob a plain, unaddressed envelope containing $50 intended for Cora. Bob: a. can keep the money. b. is under a contractual obligation to return the money. c. has a quasi-contractual obligation to return the money. d. has an implied in fact obligation to return the money.
C
Barbara, a wealthy widow, promises the pastor of her church that she will donate $10,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $30,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around-the-world cruise instead. Barbara's promise to pay $10,000: a. is enforceable because it is a new promise to perform a voidable obligation. b. is a promise to give a gift and is therefore not enforceable. c. is enforceable under the Restatement of Contracts. d. was made to satisfy a preexisting moral obligation and is therefore enforceable.
C
Before granting an injunction enjoining a former employee from competing in a described territory, the courts insist that the employer demonstrate that the restriction is __________ to protect the employer's legitimate interest. a. exculpatory b. unconscionable c. necessary d. usurious
C
John operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of: a. in para delicto. b. partial illegality. c. substantive unconscionability. d. procedural unconscionability.
C
therefore, Alice will not be able to successfully sue for breach of contract. d. None of the above.
C
An obligation imposed by law where there has been no agreement or expression of assent by word or act on the part of either party involved is a(n): a. implied in fact contract. b. express contract. c. void contract. d. quasi contract.
D
An offer need not take any particular form to have legal validity. To be effective, however, it must: a. be spoken directly to the offeree. b. always contain the price of the product or service offered. c. always contain the place of delivery. d. be communicated to the offeree.
D
Contract law is significant in that it is basic to other fields of law such as: a. sales of personal property. b. commercial paper. c. secured transactions. d. All of the above.
D
In which of the following situations would a minor be unable to disaffirm a contract which he had made? a. Upon restoring the consideration received in a situation involving a fully executed contract. b. Where real property is involved, upon reaching the age of majority. c. During the time of his minority or for a reasonable time thereafter. d. Where the minor wishes to perform part of a contract and disaffirm another part of the same contract.
D
James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer pays James $100. Which statement describes the payment of $100? a. An implied in fact contract has been formed. b. A unilateral contract has been formed. c. This created a formal contract. d. This created an option contract.
D
Jack has been in the business of selling carpeting for 20 years. He calls Bob, who is opening another branch of his furniture stores, and offers to sell him 100 yards of carpet at $20 per yard. Bob agrees and sends back the following letter confirming the deal: Dear Jack: As we discussed on the phone January 3, we accept your offer of 100 yards of Saxony "heather blue" carpeting at the rate of $20 per yard. We also reserve the right to purchase any additional yardage we need to carpet our other showroom facilities at the same rate for one year from that date. Very truly yours, Bob Which of the following is true? a. There is a contract for only 100 yards of carpeting. b. There is a contract for 100 yards PLUS the additional yardage. c. There is no contract since Bob made a counteroffer. d. There is no contract because the additional term is too uncertain to become a contract term.
A
Wes, who is an art collector, offered to buy a print from Le Monde Gallery. Le Monde balked at the price, sending Wes a letter of rejection. That day it discovered that the print was not as highly valued as originally thought. Le Monde immediately telephoned Wes to accept his offer. Is there a contract? a. Yes, since the acceptance was received before the rejection. b. No, because the rejection was effective upon dispatch. c. No, because the rejection terminated the offer. d. Yes, because the acceptance is always effective upon dispatch.
A
A __________ is a law establishing a maximum rate of permissible interest for which a lender and borrower of money may contract. a. wager b. usury statute c. Sunday statute d. None of the above.
B
A contract in which both parties exchange promises is a: a. voidable contract. b. bilateral contract. c. unilateral contract. d. quasi contract.
B
A contract that binds the offeror to keep an offer open for a specified period of time is known as: a. a offer with reserve. b. an option. c. promissory estoppel. d. a unilateral contract.
B
An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as: a. an output contract. b. a requirements contract. c. a firm offer. d. promissory estoppel.
B
Howard ordered an aluminum storm door for $249.99. Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door for $179.99. Howard called the store and demanded the advertised price. They say okay. a. Howard must pay $179.99. b. Howard must pay $249.99. c. There is no contract. d. There is a contract for the reasonable value of the door.
A
In order to form a contract, the parties must: a. manifest their agreement subjectively. b. manifest their agreement objectively. c. indicate solely through the written word their intent. d. create a formal document.
B
Lyle offers to sell his house to Dennis for $75,000. Dennis responds, "I will pay you $75,000 for the house if you first paint the second floor." This response could best be described as: a. an acceptance. b. a counteroffer. c. a rejection. d. an invitation.
B
Remedies for breach of contract include all but which of the following? a. Compensatory damages. b. Punitive damages. c. Restitution. d. Equitable remedies.
B
The Uniform Commercial Code provides that a court may scrutinize every contract for the sale of goods to determine whether, in its commercial setting, purpose, and effect, the contract is: a. exculpatory. b. unconscionable. c. usurious. d. None of the above.
B
The requirement that each party to a contract must intentionally exchange something of value as an inducement to the other party to make a return exchange is known as: a. mutual assent. b. consideration. c. legality of object. d. contractual capacity.
B
Wayne helped Hank study all night for an important exam. After Hank got an "A" on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it." a. There is no contract because there is no mutual assent. b. There is no contract because there is no valid consideration. c. There is no contract because $10 is reasonably inadequate consideration. d. There is a contract with sufficient consideration.
B
Wayne helped Hank study all night for an important exam. After Hank got an "A" on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it." a. There is no contract because there is no mutual assent. b. There is no contract because there is no valid consideration. c. There is no contract because $10 is reasonably inadequate consideration. d. There is a contract with sufficient consideration.
B
Will wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10.00 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n): a. incidental beneficiary. b. creditor beneficiary. c. donee beneficiary. d. assignee.
B
A standard determined in terms of the business judgment of reasonable persons familiar with the practices customary in the type of transaction involved and in terms of the facts and circumstances of the case is: a. good faith. b. a subjective standard. c. commercial reasonableness. d. None of the above.
C
A __________ is an obligation imposed by law to avoid injustice. a. contract implied in law b. bilateral contract. c. quasi contract. d. Both (a) and (c) are correct.
D
A(n) __________ is an intended beneficiary of a contract who receives the benefits of the contract as a gift. a. incidental beneficiary b. intended beneficiary c. assignor d. donee beneficiary
D
Albert read ElectroCorp's ad in the local newspaper advertising a flat-screen TV for $89. Albert rushed to the store to buy the TV only to be told by the salesperson that the ad was a misprint and the price should have been $389. Albert gave the salesperson $89 plus sales tax and demanded the TV. a. The ad is a firm offer by the merchant and the TV must be sold for $89. b. The ad is a contract and the store must abide by terms stated in the contract. c. The store must accept the price stated in the ad, but only if Albert has a copy of the ad with him. d. Albert is merely making an offer to ElectroCorp to buy the TV for $89 plus sales tax.
D
Albert read ElectroCorp's ad in the local newspaper advertising a flat-screen TV for $89. Albert rushed to the store to buy the TV only to be told by the salesperson that the ad was a misprint and the price should have been $389. Albert gave the salesperson $89 plus sales tax and demanded the TV. a. The ad is a firm offer by the merchant and the TV must be sold for $89. b. The ad is a contract and the store must abide by terms stated in the contract. c. The store must accept the price stated in the ad, but only if Albert has a copy of the ad with him. d. Albert is merely making an offer to ElectroCorp to buy the TV for $89 plus sales tax.
D
An ad in a newspaper or a circular describing goods and stating prices would generally be considered: a. a firm offer if made by a merchant. b. an offer if made by a merchant, but not a firm offer. c. an offer irrespective of who made the offer. d. an invitation to buyers to make an offer to buy goods.
D
Carlos owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Virginia and, as part of the transaction, agrees not to engage in the same business anywhere within the state for a period of three years. The agreement: a. is reasonable. b. is unreasonable. c. unduly interferes with the interests of the public. d. Two of the above, (b) and (c).
D
Contracts that are implied in law: a. are obligations imposed by law on grounds of justice and equity. b. are intended to prevent unjust enrichment. c. do not rest upon the assent of the contracting parties. d. All of the above.
D
Darrell owns a parcel of land that is encumbered by a mortgage held by the First National Bank. Darrell agrees to sell the land to Paul for $50,000. Darrell and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Darrell, Paul, and the banker sign an agreement stating that Paul will assume the mortgage and that Darrell will be discharged from all further liability on the mortgage. In this case: a. the bank is a third party donee beneficiary. b. the bank can collect from Darrell if Paul defaults. c. Darrell is a third party beneficiary of the agreement between Paul and the bank. d. the agreement among the three is a novation.
D
Divided Parcel (DP) includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through the intentional or reckless fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to the manufacturer to be repaired anyway. The watch is destroyed when the DP driver uses the package for a ball and tosses it to his buddy. Mary is: a. out of luck because the clause was communicated to her. b. out of luck because she should have insured the package. c. likely to collect from DP since exculpatory clauses always violate public policy. d. likely to collect from DP because it attempted to excuse intentional and reckless behavior.
D
Mary, age 17, sold Mark, age 22, the briefcase she got for graduation. Mark's father liked it and bought it from him. If Mary decides to disaffirm the contract, will Mark's father have to return the briefcase to her? a. Yes, the briefcase is not a necessary. b. Yes, if Mark's father still has it. c. No, her contract was with Mark and he cannot return goods he does not have. d. No, if Mark's father bought it without knowing that Mary was a minor.
D
Which of the following will often not constitute valid consideration? a. Forbearance to do an act. b. Performance of services. c. A promise to perform. d. An illusory promise.
D
The party to whom a contractual duty of performance is owed is known as the: a. obligee. b. obligor. c. assignee. d. assignor.
A
In the First State Bank of Sinai v. Hyland case, the Supreme Court of South Dakota held: a. Mervin's obligation on a promissory note was void due to his alcohol-related incapacity. b. Mervin ratified his voidable contract by conduct, making it a fully valid legal obligation. c. the alcohol intoxication of a party to a contract does not affect the contract's enforceability. d. Mervin could only use express language to ratify a contract formed while he was incapacitated by alcohol use.
B
8. A(n) __________ is a measure designed to protect the public from unqualified practitioners. a. exculpatory clause. b. revenue license. c. regulatory license. d. usury statute.
C
A __________ is the refusal to accept an offer. a. revocation. b. counteroffer. c. rejection. d. statutory irrevocability.
C
A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of them is eligible? a. The employees of the bank. b. An on-duty sheriff's deputy in the county where the arrest occurred. c. An off-duty deputy sheriff from a county other than the one where the arrest occurred. d. None of the above are eligible.
C
Andrew agrees to paint Rosalene's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job, unless Rosalene agrees to pay him $100 more. What principle applies to this fact situation? a. The acceptance of additional money to settle a disputed claim is supported by consideration. b. A past obligation is sufficient consideration for a new promise. c. Andrew was already obligated to paint the house. He gives no additional consideration in return for Rosalene's promise to pay more money. d. Rosalene has made a promise in exchange for a forbearance.
C
The Rogers family has always wanted to buy the beautiful house at the top of the hill. The owners of the house, the Thompsons, decided to sell and called Mr. Rogers. Before he could get back in touch with Mr. Thompson, Mr. Rogers suffered a heart attack and died. Mr. Rogers' adult daughter, to whom the Thompsons had not spoken, still wants the house. She may: a. not accept, since the offer is terminated. b. not accept, because she does not have the capacity. c. accept, since the contract offer is assignable. d. accept, since the offer cannot be revoked without notice.
A
The way parties usually show mutual assent is by: a. an offer by words or conduct and an acceptance by words or conduct. b. a proposal in words and an acceptance in words. c. an act exchanged for an act. d. an offer and a counteroffer.
A
Mary agrees to sew Georgia's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay: a. $50, since that is the original agreement. b. $50, since a modification must be in writing. c. $60, since the modified agreement is supported by additional consideration. d. $60, since any subsequent agreement is enforceable.
C
Which of the following would NOT be a merchant under Article 2 of the UCC? a. The owner of a hardware store which sells paint. b. A car mechanic who fixes used cars and sells them in his spare time. c. A person who inherits three speedboats and wants to sell them to buy a car. d. Two of the above, (b) and (c).
C
Will offers to sell his bike to Stan. Will has seemingly offered to sell his motorcycle, but he intend to and believes he is offering his 10-speed bike. If Stan accepts the offer, reasonably believing it wa for the motorcycle: a. no contract has been formed because there is no mutual assent. b. subjectively Will and Stan are in agreement, so a contract has been formed. c. objectively Will and Stan are in agreement, so a contract has been formed. d. no contract can be formed because the offer was not sufficiently definite.
C
If there is no time specified for the acceptance of an offer, when does the offer terminate? a. After 24 hours. b. After 48 hours. c. After two weeks. d. After a reasonable period of time.
D
The Uniform Commercial Code does not apply to: a. employment contracts. b. service contracts. c. insurance contracts. d. contracts involving real property. e. All of the above.
E
A standard determined in terms of the business judgment of reasonable persons familiar with the practices customary in the type of transaction involved and in terms of the facts and circumstances of the case is: a. good faith. b. a subjective standard. c. commercial reasonableness. d. None of the above.
C
Steve purchases a four-wheel drive truck from Belk Auto Sales. Steve is only 17 years of age. He wrecks the vehicle and attempts to disaffirm the contract and have Belk repay him all that he has paid. In the majority of jurisdictions, what would happen? a. Steve would be out of luck. b. Steve must have the truck repaired. c. Steve will receive his money less the depreciation in value of the vehicle. d. Steve may simply return the vehicle and get his money.
D
Marilyn read an ad in the school newspaper offering a $1,000 swimming scholarship to anyone who could swim 500 laps in the school pool. Marilyn called the advertiser and began swimming. She has reached lap number 460;she feels great and is sure she can make it all the way. The advertiser: a. may revoke the offer since there has not yet been an acceptance. b. may not revoke the offer since Marilyn has already accepted it. c. must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or pay damages if he interferes with the completion of the laps. d. must pay Marilyn $920, because she has performed 92% of the offer.
C
Able is involved in an automobile accident and is injured. While he is unconscious, the police call an ambulance which takes him to a hospital. Able is treated at the hospital and released a day later. The hospital sends him a bill for $6,500, which Able refuses to pay, claiming it is too high and he never consented to the treatment because he was unconscious. Able a. has entered into a unilateral contract with the hospital and therefore will have to pay the bill. b. will have to pay the bill, because this is a quasi-contractual agreement. c. has entered into an implied in fact contract with the hospital. d. and the hospital have entered into a bilateral contract, the terms of which require that he pay the bill.
B
A(n) __________ is a third party who obtains possible benefits but no rights under a contract. a. incidental beneficiary b. intended beneficiary c. assignor d. donee beneficiary
A
Harold purchased 400 pairs of gloves from Isaac at a contract price of $800. Fifty of the gloves were defective and a dispute arose as to the amount due and owing under the contract. Harold refuses to pay the $800 and Isaac is threatening to sue. Which of the following is correct with regard to this transaction? a. If Isaac agrees to accept $600 to settle the dispute and Harold agrees to pay that amount, the agreement is enforceable. b. If Isaac agrees to accept $600 to settle the dispute and Harold pays that amount, Isaac can still sue for the balance of $200 and will win the lawsuit. c. Harold is under a pre-existing legal obligation to pay the $800. d. Two of the above, (b) and (c).
A
Harold purchased 400 pairs of gloves from Isaac at a contract price of $800. Fifty of the gloves were defective and a dispute arose as to the amount due and owing under the contract. Harold refuses to pay the $800 and Isaac is threatening to sue. Which of the following is correct with regard to this transaction? a. If Isaac agrees to accept $600 to settle the dispute and Harold agrees to pay that amount, the agreement is enforceable. b. If Isaac agrees to accept $600 to settle the dispute and Harold pays that amount, Isaac can still sue for the balance of $200 and will win the lawsuit. c. Harold is under a pre-existing legal obligation to pay the $800. d. Two of the above, (b) and (c).
A
Howard ordered an aluminum storm door for $249.99. Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door for $179.99. Howard called the store and demanded the advertised price. They say okay. a. Howard must pay $179.99. b. Howard must pay $249.99. c. There is no contract. d. There is a contract for the reasonable value of the door.
A
Which of the following is true about the vesting of an intended beneficiary's rights? a. The promisor and promisee may provide that the benefits will never vest. b. States are consistent in their rules as to when vesting occurs. c. Vesting cannot require the third party to change position in reliance on the promise made for his benefit. d. Regardless of whether an intended beneficiary's rights have vested, the promisor and promisee may, by later agreement, vary those rights.
A
The court in the Weichert Co. Realtors v. Ryan case held that the performing party was entitled to recoup the reasonable value of the services rendered under: a. an express contract. b. quantum meruit. c. promissory estoppel. d. Article 2 of the UCC.
B
Wendell owes Liz $75,000. Liz signs a written statement granting Troy a gratuitous assignment of her rights from Wendell. If Liz dies prior to delivering the statement to Troy: a. Liz's death has no effect on the assignment. b. the assignment is terminated upon Liz's death. c. the signing of the statement makes the assignment irrevocable. d. the assignment is invalid, because it is gratuitous.
B
Which of the following would not be a promise statutorily made enforceable without consideration? a. Hawkins, in good faith, changes the quantity of square yards of carpet ordered from Grant Mills. b. Jones promises to pay his cousin's past-due cell phone bill. c. Dodds signs and delivers a waiver of a claim arising out of a breach of contract by Keys. d. A signed, written offer by Marcum Jewelers to sell four dozen 18" gold chains to the Alpha Sorority for $480 within the next 30 days.
B
Permissible lender's expenses, which would not be considered in determining the rate of interest under usury statutes, include all but which of the following? a. Cost of title examination. b. Reasonable cost of drawing up the necessary documents. c. A charge to the borrower of $500 to investigate the borrower's credit, when it actually cost the lender $75. d. All of the above charges would be considered in determining the rate of interest under usury statutes.
C
Rorzex, Inc. entered into a contract with Denzil under the terms of which Denzil would receive $20,000 if he stole trade secrets from the leading competitor of Rorzex. Denzil performed his end of the agreement by delivering the trade secrets. Rorzex now refuses to pay Denzil for his services. Denzil: a. may recover based upon the express contract of the parties. b. may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of Rorzex. c. will be unable to recover, because this is an illegal contract. d. will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by Rorzex.
C
Sam owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. He has been offered a two-year graduate fellowship, but he will not be able to pay the loan back if he accepts the fellowship. The bank manager tells Sam that if he pays $3,000 now, they will forgive the loan. Should Sam accept the offer? a. No, because the bank can still sue for the remaining $2,000. b. No, because the manager's promise is not binding on the bank. c. Yes, because the early payment of the loan is consideration that makes the bank's promise binding. d. Yes, because the bank must do whatever the manager says.
C
Stan sends for a law school catalog from Ivory Towers University. According to the catalog, the law school applications are evaluated on the basis of undergraduate grades, standardized test scores, and references. Stan, who is a straight-A student, has high test scores and excellent references, applies and pays the $100 application fee. His application is rejected. Later he finds out that others with low grades and test scores were accepted based on their family connections and donations made to the University. If Stan followed all of the guidelines in the college catalog and paid the required application fee, then according to the court in Steinberg v. Chicago Medical School: a. there is not a contract. b. there is a quasi contract. c. there is a valid contract; the school bound itself to honor the obligations set forth in the college catalog. d. There is a voidable contract
C
Will offers to sell his bike to Stan. Will has seemingly offered to sell his motorcycle, but he intended to and believes he is offering his 10-speed bike. If Stan accepts the offer, reasonably believing it was for the motorcycle: a. no contract has been formed because there is no mutual assent. b. subjectively Will and Stan are in agreement, so a contract has been formed. c. objectively Will and Stan are in agreement, so a contract has been formed. d. no contract can be formed because the offer was not sufficiently definite.
C
The transfer of a contract duty to a third party is known as a(n): a. implied warranty. b. assignment. c. delegation. d. novation.
C A(n) __________ is a method of discharging a contract in which a third party becomes bound upon a promise to the obligee. a. assignment b. delegation c. partial assignment d. novation ANS: D
Hal promises not to foreclose on a mortgage that he holds on an office complex that Christopher owns. In reliance on this promise, Christopher spends $200,000 to remodel the complex. Which of the following is correct with regard to Hal's promise? a. Hal's promise not to foreclose is unsupported by consideration. b. Hal's promise is noncontractual. c. Hal's promise may be enforced against him based upon the doctrine of promissory estoppel. d. All of the above.
D
Which of the following would most likely be a merchant with respect to the goods in question under the UCC definition? a. Arthur is an authorized IBM computer dealer. b. Brian employs two salesmen to sell his homemade furniture. c. Clarence has a store in which he sells used lawn mowers. d. All of the above would be merchants. e. None of the above would be merchants.
D
Brian makes a material misrepresentation of fact regarding his horse to Rosalind while out riding one day. Later that day, Rosalind makes an offer to buy the horse which Brian accepts, without correcting his earlier misrepresentation of fact. a. Brian may avoid the contract. b. Rosalind may avoid the contract. c. Either or both Brian or Rosalind may avoid the contract. d. Neither Brian nor Rosalind may avoid the contract.
B
Tim mails an offer to Brian on June 15. Brian receives the offer on June 16. Tim mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18. Brian receives the revocation on June 19. Tim receives the letter of acceptance on June 20. Was a contract formed? a. Yes, on June 16. b. Yes, on June 18. c. Yes, on June 20. d. No, the offer was revoked before acceptance.
B
Tim mails an offer to Brian on June 15. Brian receives the offer on June 16. Tim mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18. Brian receives the revocation on June 19. Tim receives the letter of acceptance on June 20. Was a contract formed? a. Yes, on June 16. b. Yes, on June 18. c. Yes, on June 20. d. No, the offer was revoked before acceptance.
B
Which of the following would not be a promise statutorily made enforceable without consideration? a. Hawkins, in good faith, changes the quantity of square yards of carpet ordered from Grant Mills. b. Jones promises to pay his cousin's past-due cell phone bill. c. Dodds signs and delivers a waiver of a claim arising out of a breach of contract by Keys. d. A signed, written offer by Marcum Jewelers to sell four dozen 18" gold chains to the Alpha Sorority for $480 within the next 30 days.
B
Under the common law, the __________ must be the mirror image of the __________. a. acceptance, offer. b. offer, acceptance. c. contract, offer. d. contract, consideration.
A
Vi offers to pay Allison $150 if Allison will paint her apartment while she is out of town on vacation for two weeks. Allison makes no promise but tells Vi that she will think about it. While Vi is out of town, Allison paints the apartment. This is best described as: a. a unilateral contract. b. a quasi contract. c. an implied in fact contract. d. a bilateral contract.
A
Percy, age 17, purchased a used mobile home from a mobile home dealer for $20,000. This price, however, is twice the reasonable value of that mobile home. One month later, Percy wishes to disaffirm the contract. If the mobile home is considered a necessary, then: a. Percy can disaffirm the contract based on the wrongful act of the dealer. b. Percy can disaffirm the contract because the minor can live in an apartment rather than a mobile home. c. Percy must keep the mobile home but is only liable for the reasonable value of the mobile home. d. Percy must keep the mobile home and abide by the original terms of the contract.
C
Professor Doright has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds. Professor Doright's mother is a(n): a. incidental beneficiary. b. creditor beneficiary. c. donee beneficiary. d. assignee.
C
Mary agrees to sew Georgia's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay: a. $50, since that is the original agreement. b. $50, since a modification must be in writing. c. $60, since the modified agreement is supported by additional consideration. d. $60, since any subsequent agreement is enforceable.
C
Sam owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. He has been offered a two-year graduate fellowship, but he will not be able to pay the loan back if he accepts the fellowship. The bank manager tells Sam that if he pays $3,000 now, they will forgive the loan. Should Sam accept the offer? a. No, because the bank can still sue for the remaining $2,000. b. No, because the manager's promise is not binding on the bank. c. Yes, because the early payment of the loan is consideration that makes the bank's promise binding. d. Yes, because the bank must do whatever the manager says.
C
Stan sends for a law school catalog from Ivory Towers University. According to the catalog, the law school applications are evaluated on the basis of undergraduate grades, standardized test scores, and references. Stan, who is a straight-A student, has high test scores and excellent references, applies and pays the $100 application fee. His application is rejected. Later he finds out that others with low grades and test scores were accepted based on their family connections and donations made to the University. If Stan followed all of the guidelines in the college catalog and paid the required application fee, then according to the court in Steinberg v. Chicago Medical School: a. there is not a contract. b. there is a quasi contract. c. there is a valid contract;the school bound itself to honor the obligations set forth in the college catalog. d. there is a voidable contract.
C
The UCC provides that a merchant is bound to keep a written offer open for the stated period, but no longer than: a. ten days. b. two months. c. three months. d. a reasonable time.
C
If there is no time specified for the acceptance of an offer, when does the offer terminate? a. After 24 hours. b. After 48 hours. c. After two weeks. d. After a reasonable period of time.
D
Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will greatly benefit from this contract since his convenience store is adjacent to the mall. Donner in this instance is: a. an implied beneficiary. b. a partial beneficiary. c. a donee beneficiary. d. an incidental beneficiary.
D
The UCC battle of the forms rule: a. changes the mirror image rule. b. may yield different results depending on whether the parties are merchants. c. may result in formation of a contract quite different from the terms of the offer. d. All of the above.
D
The doctrine of promissory estoppel: a. is a doctrine enforcing noncontractual promises. b. includes as a requirement within the doctrine that there has been justifiable reliance on the promise. c. a doctrine relying on justice and not contractual rights. d. All of the above
D
The sole nursing home in the county offers a long-term care agreement. The contract is prepared on a standard form and offers terms on a take-it-or-leave-it basis. Such a contract is called: a. exculpatory. b. a usurious contract. c. an illegal restraint of trade. d. an adhesion contract.
D
To be effective, an offer must: a. be sufficiently definite and certain. b. be communicated to the offeree. c. manifest an intent to enter into a contract. d. All of the above. e. None of the above.
D
When does acceptance of an offer to enter into a unilateral contract generally occur? a. Upon notice of intent to accept by the offeree. b. Upon full performance by the offeror. c. Upon commencement of performance by the offeree. d. Upon full performance by the offeree.
D
Heather owes Joe $2,000. On July 1, Joe assigns the debt to Noah. Thereafter on July 15, Joe assigns the same right to Deb, who in good faith gives value for it and knows nothing about the first assignee. Deb immediately notifies Heather of the assignment. Under: a. the majority rule, Deb has priority. b. the English Rule, a second assignment of the same claim can never be effective. c. the English Rule, Deb has priority. d. all of the rules, Noah has priority since he was the first assignee in time.
C
If Anna Laura, in return for the payment of $200 to her by Catherine, gives Catherine an option to buy Jesse, a prime Arabian mare, at any time within the next 14 days at a price of $50,000, Anna Laura's offer to Catherine is: a. a revocable option contract. b. an irrevocable output contract. c. irrevocable for the 14 days covered by the option. d. a requirements contract.
C
If Anna Laura, in return for the payment of $200 to her by Catherine, gives Catherine an option to buy Jesse, a prime Arabian mare, at any time within the next 14 days at a price of $50,000, Anna Laura's offer to Catherine is: a. a revocable option contract. b. an irrevocable output contract. c. irrevocable for the 14 days covered by the option. d. a requirements contract.
C
In Berg v. Traylor, the court stated that: a. Craig was not entitled to disaffirm the agreement in question. b. while no specific language is required to communicate an intent to disaffirm, express notice to the other party is necessary. c. disaffirmance of an agreement by a minor does not operate to terminate the contractual obligations of the parent who signed the agreement. d. None of the above.
C
In addition to the four basic requirements of a contract, which of the following must also occur in order to have a valid contract? a. The agreement must always be in writing. b. There must be evidence of undue influence. c. There must be an absence of invalidating conduct, such as duress. d. A legal remedy must be available for there to be a breach.
C
In the Osprey L.L.C. v. Kelly-Moore Paint Co.,Inc. case, the Supreme Court of Oklahoma held that: a. the lease was ambiguous. b. the plain language of the lease required that it be renewed by delivering notice either personally or by mail, and Kelly-Moore had done neither. c. a faxed delivery of the written notice to renew the commercial lease was sufficient to exercise the renewal option of the lease. d. a lease is a specialized contract, and therefore the usual rules for the interpretation of contractual writings do not necessarily apply.
C
In the Osprey L.L.C. v. Kelly-Moore Paint Co.,Inc. case, the Supreme Court of Oklahoma held that: a. the lease was ambiguous b. the plain language of the lease required that it be renewed by delivering notice either personally or by mail, and Kelly-Moore had done neither. c. a faxed delivery of the written notice to renew the commercial lease was sufficient to exercise the renewal option of the lease. d. a lease is a specialized contract, and therefore the usual rules for the interpretation of contractual writings do not necessarily apply.
C
Arnold has offered to take Bob into his accounting firm as a partner upon payment of $5,000 cash. In response, Bob says, "I'll give you $3,000 cash now and I will pay you the remainder in two months after I see whether things are working out as a partnership." a. Bob has made a counteroffer and hence there is no contract. b. Bob has rejected the terms of the original offer, but there is still a contract. c. Under Article 2 of the UCC, Arnold is a merchant making a firm offer. Hence there is a contract. d. Any indefinite provisions in the contract between Arnold and Bob will be supplied by Article 2 of the UCC.
A
Assume an offeree mails a rejection to the offeror on November 1. This rejection arrives at the offeror's place of business on November 5. In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November 6. Which of the following statements correctly describes the situation? a. There was no contract. b. There was a contract since the acceptance was mailed prior to the time the rejection was received. c. There was no contract because the rejection was mailed first. d. There was no contract because the acceptance was mailed more than three days subsequent to the rejection.
A
Assume an offeree mails a rejection to the offeror on November 1. This rejection arrives at the offeror's place of business on November 5. In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November 6. Which of the following statements correctly describes the situation? a. There was no contract. b. There was a contract since the acceptance was mailed prior to the time the rejection was received. c. There was no contract because the rejection was mailed first. d. There was no contract because the acceptance was mailed more than three days subsequent to the rejection.
A
Destruction of the subject matter has what effect on the offer? a. The offer is terminated. b. The offer is delayed until additional subject matter can be located. c. This creates an impossibility of fact that does not terminate the offer. d. The offer is merely delayed under the "Hardship Rule."
A
Don offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer." a. Diane cannot accept the offer, because it wasn't made to her. b. This is a valid acceptance. c. The offer has not been communicated to the offeree. d. This is an invitation seeking offers and not an offer.
A
Donald, a minor, makes a contract with Albert, an adult, to buy a motorcycle. One week later, Donald has his eighteenth birthday and shortly thereafter tells Albert he will pick up the motorcycle the next week. In this case: a. Donald has expressly ratified the contract. b. the contract must be renegotiated, because Donald was a minor when it was made. c. Donald can change his mind and avoid the contract, because it was made when he was a minor. d. the contract is void ab initio, because Donald was a minor at the time it was made.
A
Elvis makes an offer to Fred, but before Fred can accept, the state supreme court decides a case that makes Elvis's offer illegal. What is the effect of the court's decision on the offer? a. The court's decision automatically terminates the offer. b. The court's decision has no effect on the offer. c. The court's decision acts as a condition on the offer. d. The court's decision acts as a rejection of the offer by the offeree.
A
Elvis makes an offer to Fred, but before Fred can accept, the state supreme court decides a case that makes Elvis's offer illegal. What is the effect of the court's decision on the offer? a. The court's decision automatically terminates the offer. b. The court's decision has no effect on the offer. c. The court's decision acts as a condition on the offer. d. The court's decision acts as a rejection of the offer by the offeree.
A
Harold hired Blake Painters to paint his house. Blake decides he has too many jobs and delegates the duties to the Andrews Company. Andrews does a poor job, and drips paint on Harold's flowers and windows. Harold: a. can sue both Blake and Andrews. b. can sue Blake, but he cannot sue Andrews. c. can sue Andrews, but he cannot sue Blake. d. cannot sue, because he has accepted the benefits of the assignment.
A
Jack has been in the business of selling carpeting for 20 years. He calls Bob, who is opening another branch of his furniture stores, and offers to sell him 100 yards of carpet at $20 per yard. Bob agrees and sends back the following letter confirming the deal: Dear Jack: As we discussed on the phone January 3, we accept your offer of 100 yards of Saxony "heather blue" carpeting at the rate of $20 per yard. We also reserve the right to purchase any additional yardage we need to carpet our other showroom facilities at the same rate for one year from that date. Very truly yours, Bob Which of the following is true? a. There is a contract for only 100 yards of carpeting. b. There is a contract for 100 yards PLUS the additional yardage. c. There is no contract since Bob made a counteroffer. d. There is no contract because the additional term is too uncertain to become a contract term.
A
Kellie owes a duty to Grant. Kellie delegates the duty to Hank. Hank: a. is not obligated to either Kellie or Grant to perform the duty unless Hank agrees to do so. b. becomes liable for nonperformance to both Kellie and Grant only if Hank promises both Kellie and Grant that he will perform Kellie's duty. c. cannot create contractual rights in Grant. d. All of the above
A
Mary goes to her stockbroker, purchases 50 shares of stock, and instructs the broker to register the shares in her husband Warren's name. If this stock is intended as a Valentine's gift, Warren becomes: a. a donee beneficiary. b. a transferee. c. a delegatee. d. an assignee.
A
Maureen is taking a prescribed medication which makes her drowsy and inattentive. Any contracts she makes: a. would be voidable if, when she makes them, she is unable to comprehend the subject, nature, and consequences of the contracts. b. would be void. c. would be void only if the medication impaired her ability to act in a reasonable and rational way. d. would be unaffected as long as she took the medication exactly as prescribed by her doctor.
A
Maxine offered to sell her video camera to Tom for $200 and also stated to Tom, "I will give you two weeks to accept my offer." One week later Tom learned that Maxine had sold the video camera to Cindy. a. Maxine has revoked her offer to Tom. b. Maxine's offer is a firm offer and she must sell Tom a video camera for $200. c. Maxine must get the camera back from Cindy if Tom accepts within two weeks. d. An option contract was created, so Maxine is liable to Tom if she sells the camera to someone else within the two-week period.
A
Maxine offered to sell her video camera to Tom for $200 and also stated to Tom, "I will give you two weeks to accept my offer." One week later Tom learned that Maxine had sold the video camera to Cindy. a. Maxine has revoked her offer to Tom. b. Maxine's offer is a firm offer and she must sell Tom a video camera for $200. c. Maxine must get the camera back from Cindy if Tom accepts within two weeks. d. An option contract was created, so Maxine is liable to Tom if she sells the camera to someone else within the two-week period.
A
Nanette wanted to purchase a new car and found one she liked at Minson Motors. Several important contractual terms were buried in the written agreement and some of the meaning of the contract was obscured by legal jargon. These practices involved: a. procedural unconscionability. b. substantive unconscionability. c. adhesion. d. exculpatory clauses.
A
Quasi contracts are used to provide a remedy when the parties enter into a(n): a. void contract. b. implied in fact contract. c. situation in which promissory estoppel applies. d. All of the above.
A
Robert Briscoe is 17 years old. He lies to Bouyers Auto in order to induce them to sell him a new pickup truck. Bouyers falls for this lie and sells him the pickup. Under the prevailing view, which of the following is correct? a. Robert may disaffirm and get his money back. b. Robert may not disaffirm since he lied. c. Robert may only receive a portion of his money. d. Robert will receive his money less depreciation.
A
The Rogers family has always wanted to buy the beautiful house at the top of the hill. The owners of the house, the Thompsons, decided to sell and called Mr. Rogers. Before he could get back in touch with Mr. Thompson, Mr. Rogers suffered a heart attack and died. Mr. Rogers' adult daughter, to whom the Thompsons had not spoken, still wants the house. She may: a. not accept, since the offer is terminated. b. not accept, because she does not have the capacity. c. accept, since the contract offer is assignable. d. accept, since the offer cannot be revoked without notice.
A
Tim, who is a minor, enters into a contract with Violet, who is an adult. Which of the following is correct? a. Violet may not disaffirm the contract. b. Violet may disaffirm the contract at any time. c. Violet may disaffirm the contract when Tim becomes an adult. d. Tim may ratify the contract at any time during his minority.
A
Wes, who is an art collector, offered to buy a print from Le Monde Gallery. Le Monde balked at the price, sending Wes a letter of rejection. That day it discovered that the print was not as highly valued as originally thought. Le Monde immediately telephoned Wes to accept his offer. Is there a contract? a. Yes, since the acceptance was received before the rejection. b. No, because the rejection was effective upon dispatch. c. No, because the rejection terminated the offer. d. Yes, because the acceptance is always effective upon dispatch.
A
Which of the following are the two basic elements to consideration? a. Bargained-for exchange and legal sufficiency. b. Legal detriment and legal benefit. c. Legal sufficiency and legal adequacy. d. Promise and forbearance.
A
Which of the following involves a creditor beneficiary relationship? a. A contract where the insured names a bank with which he has a loan as the beneficiary of a life insurance policy. b. A contract between an employer and a union representing the employees which contract is made for the benefit of the employees. c. A contract between the owner of a building and the contractor stating that the contractor will pay the contractor's employees at a specified rate. d. A contract between a governmental unit and business for services to be rendered to area citizens.
A
Which of the following is enforceable without consideration? a. A new promise to pay a debt barred by the statute of limitations. b. An illusory promise. c. A promise to supply all of the materials a manufacturer will need for the production of a certain item for a specified period of time. d. In the majority of states, a promise by a father to pay someone who rendered emergency services to his injured son before the father had arrived at the accident scene.
A
Which of the following is enforceable without new consideration? a. Beth, after reaching the age of majority, promises to pay off a debt she incurred while a minor. b. Cheyenne entered a contract to buy a car based on a fraudulent misrepresentation. A new promise to pay is made without knowledge of the original fraud. c. Val entered a contract voidable because of mistake. A new promise to fulfill the contractual obligations that had not previously been avoided and without knowledge of the mistake is enforceable without new consideration. d. None of the above. New promises to perform voidable obligations that have not previously been avoided must always have new consideration.
A
Which one of the following assignments would probably be prohibited by a court? a. Mary is in debt. A credit card company calls and threatens to sue. Mary orally assigns her next bimonthly paycheck to her creditor. b. John is a house painter. He is scheduled to paint Molly's home on Monday. John wakes up Monday morning with a stiff neck. He calls Ed, who is also a painter, to begin the job at Molly's. c. Ron has a contract with Bonett Bank to service their coffee machines. He assigns the remainder of his contract with Bonett to Michelle, who also owns a coffee service. d. All of the above.
A
William agrees to drill a well up to 200-feet deep for John's rural cabin. The contract price is $3,000. After drilling 100 feet, William strikes solid granite rock. He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract. He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price. Because John is anxious to have the well, he agrees to pay William an additional $1,000 to complete the job. However, once the well is finished, he changes his mind and now says he will pay only the originally agreed-upon amount. a. The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000. b. Under the UCC, the substitute contract is binding, because there is the payment of additional money. c. William is in breach of contract. John need not pay any additional money. d. William is under a pre-existing moral duty to perform at the originally agreed-upon price.
A
William agrees to drill a well up to 200-feet deep for John's rural cabin. The contract price is $3,000. After drilling 100 feet, William strikes solid granite rock. He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract. He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price. Because John is anxious to have the well, he agrees to pay William an additional $1,000 to complete the job. However, once the well is finished, he changes his mind and now says he will pay only the originally agreed-upon amount. a. The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000. b. Under the UCC, the substitute contract is binding, because there is the payment of additional money. c. William is in breach of contract. John need not pay any additional money. d. William is under a pre-existing moral duty to perform at the originally agreed-upon price.
A
The privilege to play tennis and socialize at the Capital City Country Club (CCCC) is obtained through application, references, resumes, and fees. Steven and Chanel want to assign the remaining 4 years of their 5-year membership to Charles and Prissy so that Steven and Chanel may join the posh Silver Hawk Tennis and Polo Club. CCCC sues to enjoin Steven and Chanel from assigning their membership. CCCC will probably: a. not prevail because all contract rights are assignable. b. prevail because the parties intended the contract to be personal and non-assignable. c. not prevail because the membership contract constitutes a lease. d. None of the above.
B
Fay, age 17, ordered a pair of skis on the installment plan. She paid $20 every month until she turned 18, the age of majority. The next day, she sold them to Sharon and disaffirmed the contract. What result? a. Fay is still liable since she had to disaffirm before her 18th birthday. b. Fay is still liable because selling the skis amounted to a ratification. c. Fay is still liable because she used the skis. d. Fay is not liable because skis are not necessaries.
B
In the Catamount Slate Products, Inc. v. Sheldon case, the court found that: a. the moment of contract formation is to be determined by the intent of the parties, which is a question of law. b. the intent of the parties to be bound to a contract is determined by an objective standard of what a reasonable person would have believed based on the words and conduct of the parties. c. the intent of the parties to be bound to a contract is determined by a subjective standard of what the parties actually believed. d. an oral agreement reached at mediation cannot constitute a binding, enforceable settlement agreement
B
In the Catamount Slate Products, Inc. v. Sheldon case, the court found that: a. the moment of contract formation is to be determined by the intent of the parties, which is a question of law. b. the intent of the parties to be bound to a contract is determined by an objective standard of what a reasonable person would have believed based on the words and conduct of the parties. c. the intent of the parties to be bound to a contract is determined by a subjective standard of what the parties actually believed. d. an oral agreement reached at mediation cannot constitute a binding, enforceable settlement agreement.
B
Under the Code, an offer for the purchase or sale of goods: a. must not leave open particulars of performance to be specified by one of the parties. b. may have missing terms supplied by inference. c. may leave quantity and quality terms open to be supplied later. d. need not provide a basis for remedies for breach, since remedies will be provided by the courts if needed.
B
Which of the following contracts is covered by Article 2 of the Uniform Commercial Code? a. The sale of a house. b. The sale of a new car. c. An employment agreement. d. A sale of automobile insurance.
B
Which of the following is NOT true concerning the requirements for an effective assignment? a. The assignment must be voluntary. b. Consideration is required. c. There must be an intention to make the assignee the owner of the right. d. The assignment may be either written or oral.
B
Which of the following is untrue regarding the contracts of incompetent persons? a. An incompetent person is liable for necessaries. b. Unlike a minor, an incompetent person can never ratify a contract. c. To avoid a contract, a person need not be permanently incompetent. d. Under the cognitive ability test, a person is incompetent if he is unable to understand the nature and effect of his act.
B
Which of the following would generally be considered to be a revenue-raising licensing law? a. A statute requiring that doctors be licensed. b. A statute requiring that salespeople be licensed, but not establishing any educational or training requirements. c. A statute requiring public school teachers to be licensed. d. A statute that requires insurance agents to pass a test before selling insurance in a state.
B
Which of the following would most likely be enforceable? a. An agreement supported by past consideration. b. A substitute agreement to settle an undisputed debt. c. A debt agreed to seven years ago in a state where the statute of limitations is six years. d. A promise following the rendering of emergency services that is not supported by new consideration.
B
__________ is a provision excusing one party from liability. a. Procedural unconscionability b. An exculpatory clause c. Substantive unconscionability d. Tortious conduct
B
__________ is/are any property other than an interest in real property. a. Goods b. Personal property c. Tangible property d. None of the above.
B
Shane contracts to build a garage for Bob for a price of $6,000. Because of an increase in the cost of labor and materials, Shane refuses to perform. Bob wants the garage, so he agrees to pay an additional $500. In this case: a. Bob must pay the additional $500. b. Shane has given no additional consideration, and under the common law he must perform at the agreed-upon original price. c. the substitute agreement is an illusory contract. d. the debt is a disputed one, and therefore Bob is obligated to pay the additional money.
B
Shane contracts to build a garage for Bob for a price of $6,000. Because of an increase in the cost of labor and materials, Shane refuses to perform. Bob wants the garage, so he agrees to pay an additional $500. In this case: a. Bob must pay the additional $500. b. Shane has given no additional consideration, and under the common law he must perform at the agreed-upon original price. c. the substitute agreement is an illusory contract. d. the debt is a disputed one, and therefore Bob is obligated to pay the additional money.
B
The Speelman v. Pascal case held that: a. a gratuitous assignment is terminated by the assignor's death, even if the assignor made an effective delivery of the assignment prior to his death. b. assignments of rights to sums that are expected to become due to the assignor are enforceable. c. assignments cannot be made of sums that are not presently due but are expected to become due in the future. d. personal contracts are not assignable.
B
The concept of consideration in contract law includes: a. that each party to a contract must unintentionally exchange a legal benefit. b. an inducement to each party to make a return exchange. c. that each party takes out an insurance bond if the possibility of damages is above $500. d. All of the above.
B
The definition of commercial reasonableness as used in contract law includes: a. the business judgment of expert business managers. b. that the practices customary in the type of transaction involved be used as a standard. c. the requirements to develop creative and innovative solutions never before used in a particular industry. d. None of the above.
B
Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct? a. Marilyn will have to pay $20,000. b. This is a contract under seal which is enforceable. c. This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders. d.This is the settlement of a disputed debt that requires no additional consideration on the part of Bravo Builders.
C
Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct? a. Marilyn will have to pay $20,000. b. This is a contract under seal which is enforceable. c. This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders. d. This is the settlement of a disputed debt that requires no additional consideration on the part of Bravo Builders.
C
Marilyn read an ad in the school newspaper offering a $1,000 swimming scholarship to anyone who could swim 500 laps in the school pool. Marilyn called the advertiser and beganswimming. She has reached lap number 460; she feels great and is sure she can make it all the way. The advertiser: a. may revoke the offer since there has not yet been an acceptance. b. may not revoke the offer since Marilyn has already accepted it. c. must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or pay damages if he interferes with the completion of the laps. d. must pay Marilyn $920, because she has performed 92% of the offer.
C
Michelle's Boutique places an ad in the Sunday paper for beautiful, top-of-the-line designer suits for $3.00. Alice sees the ad in the paper and goes to the store to stock up on business suits for her new job. Michelle apologizes for the misprint. Alice has just finished a class in contract law and insists that the store sell her five suits for $15.00. Alice threatens to sue Michelle for breach of contract. a. This is a valid contract, and Alice will win if she sues. b. The ad in the newspaper is an offer to sell, Alice accepted the offer, and there is an enforceable contract. c. The ad in the newspaper is a solicitation seeking offers, but is not an offer to sell; therefore Alice will not be able to successfully sue for breach of contract d. none of the above
C
Morris interviewed for a job as plant manager at Northland Bearings and was offered a two-year contract if she could relocate and start the new job within three weeks. Morris agreed. Northland promised to follow up the oral agreement with a written contract setting forth all the agreed terms, but the contract had not arrived within several days. Morris wanted to give two-weeks' notice to her present employer, so she called Northland to check on the written contract and was told it was ready to be sent to her and assured her the job was hers. She gave notice of her intention to quit her present job and moved two states away to the Northland location. When Morris arrived for her first day of work, she was told someone else with better qualifications had been found and hired for the position. Morris: a. has no recourse since she never received a written contract, as required by the statute of frauds for a contract that cannot be performed within one year of its making. b. has no recourse because promises are not enforceable if they do not meet all the requirements of a contract, and here Morris lacked capacity. c. may be entitled to good-faith reliance damages under the doctrine of promissory estoppel to avoid injustice. d. cannot enforce the contract since she had not actually started working at Northland.
C
Nell gives Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true? a. Nell can get the money back from Al through litigation. b. Nell can get the money back and force Al to do as he promised. c. Legally, Nell can neither get the money back nor force Al to do as he promised. d. Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50.
C
Non-compete agreements drafted for employees of Internet companies: a. are no different in enforceability than non-compete agreements for other types of companies. b. are subject to smaller geographic restrictions than for other types of companies c. have been held subject to larger geographic restrictions than for other types of companies. d. have not yet been the subject of litigation.
C
The UCC provides that a merchant is bound to keep a written offer open for the stated period, but no longer than: a. ten days. b. two months. c. three months. d. a reasonable time.
C
The case of In Re The Score Board, Inc. involved the issue of: a. a minor's liability for misrepresentation of age. b. whether an incompetent person's contracts are void or voidable. c. ratification of a contract upon attaining majority. d. liability for necessaries.
C
Under the Restatement, if there are successive assignments of the same right: a. the first assignee to notify the obligor prevails. b. the latest assignee is usually entitled to the assigned right. c. a prior assignee is entitled to the assigned right to the exclusion of a subsequent assignee in most circumstances. d. a subsequent assignee is entitled to the assigned right unless a prior assignee gave value and obtains either a judgment against the obligor or a new contract with the obligor.
C
Under the Uniform Commercial Code, when the minor has sold goods and the buyer has resold them to a good faith purchaser for value: a. the minor can disaffirm and recover the property. b. both the purchaser from the minor and the good faith purchaser for value acquire legal title. c. the good faith purchaser for value acquires valid legal title. d. the good faith purchaser for value receives a voidable title.
C
Under which of the following circumstances would a court be unlikely to enforce the illegal contract? a. Where the aggrieved party was unaware of an illegality created by circumstances of which he was unaware but the agreement appeared permissible on its face. b. Where a party withdraws from an illegal agreement prior to performance. c. Where the agreement is with an unlicensed attorney. d. Where one of the parties is less at fault than the other.
C
Which of the following contracts is generally held to be unenforceable? a. A divisible agreement that is partly lawful and partly unlawful. b. Allison enters an illegal agreement but, before performance, withdraws from the transaction. c. An exculpatory clause on the back of a parking lot claim check, attempting to relieve the parking lot operator for negligence. d. Merle enters a contract and is ignorant of minor legislation that makes the contract illegal.
C
Which of the following involves an invalid assignment that a court would not enforce? a. An assignment of a savings account accompanied by the delivery of the passbook. b. An assignment lacking consideration. c. An assignment of an automobile liability insurance policy accompanied by the delivery of the policy. d. An assignment in writing signed by the assignor and delivered to the assignee.
C
Which of the following is NOT always necessary in order for a valid contract to be formed? a. Mutual assent. b. Legality of purpose. c. A writing. d. Competent parties.
C
Which of the following is not generally required in order to have a valid contract? a. Mutual assent. b. A lawful purpose. c. Fairness of the bargain. d. Parties who have contractual capacity.
C
Which of the following is untrue regarding the contracts of intoxicated persons? a. If an intoxicated person is unable to understand the nature and consequences of his act, then the contract is voidable. b. The effect of intoxication is generally the same as that given to contracts that are voidable because of incompetency. c. Slight intoxication will destroy one's contractual capacity. d. To make a contract voidable, a person need not be so drunk that he is totally without reason or understanding.
C
Which of the following statements best describes charitable subscription promises? a. They are generally not enforceable. b. They are equated with gifts. c. They are generally enforceable if there is reliance or a probability of reliance by the charity. d. Courts generally find that it would be unjust to enforce them because persons who promise charitable subscriptions do not expect to be held accountable for them.
C
Which of the following statements best describes charitable subscription promises? a. They are generally not enforceable. b. They are equated with gifts. c. They are generally enforceable if there is reliance or a probability of reliance by the charity. d. Courts generally find that it would be unjust to enforce them because persons who promise charitable subscriptions do not expect to be held accountable for them.
C
Which of the following would always be considered to be contrary to public policy? a. A contract which contains a covenant not to compete. b. A contract offered on a take-it-or-leave-it basis. c. An agreement to pay someone to make false statements about a competitor's product. d. An agreement which contains an exculpatory clause.
C
Michelle's Boutique places an ad in the Sunday paper for beautiful, top-of-the-line designer suits for $3.00. Alice sees the ad in the paper and goes to the store to stock up on business suits for her new job. Michelle apologizes for the misprint. Alice has just finished a class in contract law and insists that the store sell her five suits for $15.00. Alice threatens to sue Michelle for breach of contract. a. This is a valid contract, and Alice will win if she sues. b. The ad in the newspaper is an offer to sell, Alice accepted the offer, and there is an enforceable contract. c. The ad in the newspaper is a solicitation seeking offers, but is not an offer to sell d. none of the above
c
An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as: a. an output contract. b. a requirements contract. c. a firm offer. d. promissory estoppel.
B
The mirror image rule applies to: a. an offer. b. a rejection. c. an acceptance. d. a revocation.
C
Material terms in a contract include all but which of the following? a. The parties. b. Shipping method. c. Quality. d. Time of performance.
B
Wanda at age 17 purchased an expensive sound system from Music World. If Wanda wishes to ratify this contract, Wanda: a. must reach the age of majority and ratify the contract as a whole. b. may do so by express notification at any time before reaching the age of majority. c. may at any time keep the stereo but avoid any remaining debt owed on the stereo. d. may do so at any time by express or implied action before or after reaching the age of majority.
A
James offers to sell his fishing boat to Brenda for $3,000. Brenda says she will apply for a loan and will buy the boat within a week. A contract is formed: a. when Brenda tells James she will buy the boat. b. when Brenda gets the money from the credit union. c. when Brenda applies for the loan at the credit union. d. only when James gets the $3,000.
A
A transfer to a third party of a contractual obligation is known as a(n): a. assignment of rights. b. delegation of duties. c. revocability of assignment. d. partial assignment.
B
An offer that is made by a merchant under the UCC and is irrevocable even though no consideration is given to keep it open is known as a(n) a. option. b. firm offer. c. requirements contract. d. output contract.
B
An offer that is made by a merchant under the UCC and is irrevocable even though no consideration is given to keep it open is known as a(n) a. option. b. firm offer. c. requirements contract. d. output contract.
B
Bart sends Carla an offer by express mail. Carla receives it at 10 a.m. on Tuesday. At 11 a.m. on Tuesday, Carla delivers an acceptance to Speedy Mail-to-You Express, Inc., but due to their error, the letter is not sent out by the company until Wednesday at 8 a.m. At what time does the law consider the acceptance to be effective? a. At 10 a.m. on Tuesday. b. At 11 a.m. on Tuesday. c. At 8 a.m. on Wednesday. as permitted in a licese distributed with a certain product or service or otherwise on a password-protected website for classroom use. d. At the time Bart receives the letter.
B
Bart sends Carla an offer by express mail. Carla receives it at 10 a.m. on Tuesday. At 11 a.m. on Tuesday, Carla delivers an acceptance to Speedy Mail-to-You Express, Inc., but due to their error, the letter is not sent out by the company until Wednesday at 8 a.m. At what time does the law consider the acceptance to be effective? a. At 10 a.m. on Tuesday. b. At 11 a.m. on Tuesday. c. At 8 a.m. on Wednesday. d. At the time Bart receives the letter.
B
A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of them is eligible? a. The employees of the bank. b. An on-duty sheriff's deputy in the county where the arrest occurred. c. An off-duty deputy sheriff from a county other than the one where the arrest occurred. d. None of the above are eligible.
C
All but which of the following is true about a delegation of duties? a. When the delegatee assumes the delegated duty, both the delegator and the delegatee are liable for performance of the contractual duty to the obligee. b. Contractual duties are generally delegable. c. The courts will examine an assignment more closely than a delegation. d. A delegation will not be permitted if the nature of the duties are personal in that the oblige has a substantial interest in having the delegator perform the contract.
C
Action Play Equipment ordered 200 feet of chain, 400 clasps, and 50 swing seats from Brace Company for $1,600 to be delivered within three weeks of the order. Brace sent back an acceptance form which stated payment was due within 30 days of delivery or a finance charge of 2% per month would be added to the balance. What is the status of the interaction between Action and Brace? a. There is a valid contract under the UCC, and the additional payment terms become part of the contract unless Action objects within a reasonable period of time. b. There is a valid contract for the goods, but the payment terms will not become part of the contract. c. There is no contract, because Brace has made a counteroffer by adding payment terms. d. There is no contract, because the method of transportation has not been decided.
A
Action Play Equipment ordered 200 feet of chain, 400 clasps, and 50 swing seats from Brace Company for $1,600 to be delivered within three weeks of the order. Brace sent back an acceptance form which stated payment was due within 30 days of delivery or a finance charge of 2% per month would be added to the balance. What is the status of the interaction between Action and Brace? a. There is a valid contract under the UCC, and the additional payment terms become part of the contract unless Action objects within a reasonable period of time. b. There is a valid contract for the goods, but the payment terms will not become part of the contract. c. There is no contract, because Brace has made a counteroffer by adding payment terms. d. There is no contract, because the method of transportation has not been decided.
A
Al, an accountant, has a tax service and accounting business in Redwood City. He decides to move to Center City, which is 150 miles away and sells his accounting practice to Able and Baker, a CPA firm. In the sale contract, he agrees that he will refrain from practicing accounting anywhere within a 100-mile radius of Redwood City for a period of two years. However, on weekends he returns to his house in Redwood City, and when clients call him, he meets with them in his home. In this situation: a. Al is in violation of the sale agreement. b. the agreement is invalid, because it is an illegal restraint on trade. c. the agreement is illegal, because it is a violation of public policy. d. the two-year provision is likely to be held invalid, because it is too long a period of time.
A
Alice says to Brian, "If I decide to buy a word processor next year, I will buy it from you." This is an example of: a. an illusory promise. b. past consideration. c. the pre-existing duty rule. d. good consideration.
A
Alice says to Brian, "If I decide to buy a word processor next year, I will buy it from you." This is an example of: a. an illusory promise. b. past consideration. c. the pre-existing duty rule. d. good consideration.
A
Anita owes Brad $75,000. Brad signs a written statement granting Carl a gratuitous assignment of his rights from Anita. If Brad delivers the signed statement to Carl before he dies: a. the delivery of the statement makes the assignment irrevocable. b. the assignment is terminated upon Brad's death. c. the signing of the statement makes the assignment irrevocable. d. the assignment is invalid, because it is revocable.
A
Arnold has offered to take Bob into his accounting firm as a partner upon payment of $5,000 cash. In response, Bob says, "I'll give you $3,000 cash now and I will pay you the remainder in two months after I see whether things are working out as a partnership." a. Bob has made a counteroffer and hence there is no contract b. Bob has rejected the terms of the original offer, but there is still a contract. c. Under Article 2 of the UCC, Arnold is a merchant making a firm offer. Hence there is a contract. d. Any indefinite provisions in the contract between Arnold and Bob will be supplied by Article 2 of the UCC.
A
Charlene hears about a reward being offered by the local television station for information leading to the arrest and conviction of a local rapist. She supplies the requested information and the suspect is then arrested and convicted. a. Charlene cannot collect the money unless the offer was specifically made to her by the station. b. The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Charlene has accepted. c. Because Charlene failed to notify the station of her intention to supply the information before actually doing so, she has not accepted their offer. d. Charlene was just doing her duty as a citizen and has no right to the payment of any money.
B
Charlene hears about a reward being offered by the local television station for information leading to the arrest and conviction of a local rapist. She supplies the requested information and the suspect is then arrested and convicted. a. Charlene cannot collect the money unless the offer was specifically made to her by the station. b. The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Charlene has accepted. c. Because Charlene failed to notify the station of her intention to supply the information before actually doing so, she has not accepted their offer. d. Charlene was just doing her duty as a citizen and has no right to the payment of any money.
B
Don has an employment contract with Dunkirk Ice Cream. He sells ice cream and novelty ice cream products. He has nine children and doesn't make enough money, so he decides to see if another dairy will hire him, too. "After all," he reasons, "most stores carry four or five different brands." His employment contract prohibits him from competing. If Don sells for another dairy in addition to Dunkirk, will he be in trouble under his contract? a. No, it is unenforceable as against public policy. b. Yes, it is likely to be enforceable during employment. c. No, the prohibition against competing is enforceable only after he quits Dunkirk. d. A court would have to rule on the enforceability of the covenant not to compete since courts are reluctant to enforce such covenants during a period of employment.
B
Elmer promises to pay Fred $100 if Fred will register and vote in the next election as a Democrat. This is: a. a valid contract. b. an illegal agreement. c. an adhesion contract. d. a usurious agreement.
B
Elmer wrote a letter to his friend Fred offering to sell Fred an 80-acre farm for $200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000 and changes his mind about selling. Elmer: a. has made a firm offer to Fred which cannot be revoked. b. can revoke his offer at any time before Fred accepts it, because there is no consideration to keep it open. c. must keep the offer open, because this is an option contract. d. is promissorily estopped from revoking his offer to Fred.
B
Elmer wrote a letter to his friend Fred offering to sell Fred an 80-acre farm for $200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000 and changes his mind about selling. Elmer: a. has made a firm offer to Fred which cannot be revoked. b. can revoke his offer at any time before Fred accepts it, because there is no consideration to keep it open. c. must keep the offer open, because this is an option contract. d. is promissorily estopped from revoking his offer to Fred.
B
In the Pacific Custom Pools, Inc. v. Turner Construction Company case, the court found that: a. the trial court erred in granting a motion for summary judgment on the basis that PCP had not been licensed in California and thus could not bring suit. b. the purpose of the relevant licensing law was to protect the public from incompetence and dishonesty in those who provide building and construction services. c. under the facts, PCP acted reasonably and in good faith to maintain its license. d. PCP met an exception to the California statute providing that a contractor may not maintain an action for the recovery of compensation for work requiring a license unless it had a license at all times during performance of the work.
B
In the Zelnick v. Adams case, the Supreme Court of Virginia found: a. the trial court correctly granted summary judgment, ruling the contingency fee agreement was not binding because Jonathan was a minor when the contract was executed. b. the case must be remanded for further proceedings, including the taking of evidence on the issue of the factual determination of necessity under all of the circumstances. c. when faced with a defense of infancy, a court has an initial duty to determine, as a matter of fact, whether the things supplied to the infant under a contract were in the general class of "necessaries." d. Both (b) and (c).
B
Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable? a. Yes, there is no way for the dealer to get the extra money anyway. b. Yes, there is consideration for the modified amount. c. No, there is no consideration and the dealer can sue for the extra $300. d. No, there is an implied contract to pay the dealer whatever he billed Jack.
B
Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable? a. Yes, there is no way for the dealer to get the extra money anyway. b. Yes, there is consideration for the modified amount. c. No, there is no consideration and the dealer can sue for the extra $300. d. No, there is an implied contract to pay the dealer whatever he billed Jack.
B
Jan promises Eli $4,000 for one of his original paintings on the condition that she receives $1 million from her mother's will. In this case: a. Jan has made an illusory promise. b. Jan's promise is legally sufficient unless Jan knows she cannot inherit the $1 million. c. Jan has made a conditional promise which is not sufficient to form consideration. d. Jan's promise is legally inadequate and the courts will therefore not enforce it.
B
Jan promises Eli $4,000 for one of his original paintings on the condition that she receives $1 million from her mother's will. In this case: a. Jan has made an illusory promise. b. Jan's promise is legally sufficient unless Jan knows she cannot inherit the $1 million. c. Jan has made a conditional promise which is not sufficient to form consideration. d. Jan's promise is legally inadequate and the courts will therefore not enforce it.
B
Janice has wagered $200, which William is holding, on a horse race. If, before the race starts, Janice wants to take back her money and withdraw from the transaction: a. William can successfully sue for breach. b. Janice may withdraw from the transaction. c. William cannot sue fur breach because he and Janice are in pari delicto. d. Janice cannot recover any money because the contract to wager is illegal and unenforceable.
B
Jeb submits a bid to construct a student union building for the local community college. He realizes after submitting the final bid that he forgot to include the cost of the window casings for the entire building. He may: a. revoke his bid at any time. b. not revoke his bid due to the statutory irrevocability of the bid. c. reject the offer of the college to build the student union when the college chooses his bid because it is the lowest. d. refuse, based on the windfall theory, to put in the window casings even if they were part of the bid specifications put out by the college.
B
Jeb submits a bid to construct a student union building for the local community college. He realizes after submitting the final bid that he forgot to include the cost of the window casings for the entire building. He may: a. revoke his bid at any time. b. not revoke his bid due to the statutory irrevocability of the bid. as permitted in a licese distributed with a certain product or service or otherwise on a password-protected website for classroom use. c. reject the offer of the college to build the student union when the college chooses his bid because it is the lowest. d. refuse, based on the windfall theory, to put in the window casings even if they were part of the bid specifications put out by the college.
B
Joanne, a minor, sold her laptop computer to Bruce, an adult. Bruce then sold the laptop to Anna, also an adult, who had no knowledge of the fact that the original owner was a minor. Under the Uniform Commercial Code, Joanne may: a. avoid her contract with Bruce and recover her laptop. b. not avoid her contract with Bruce and may not recover her laptop. c. register with the UCC filing department and require that if Anna sells the laptop she must give Joanne the rights of first refusal. d. None of the above
B
Randy, a minor, buys a new four-wheel drive truck from the Jones Dealership. Randy sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to Arthur Smith. Arthur does not personally know Steve or Randy. Which of the following expresses the status of this situation? a. Randy may recover the vehicle from Mr. Smith. b. Randy may not recover the vehicle from Mr. Smith. c. Randy may hold Steve liable in tort. d. Randy may recover the reasonable value of the vehicle but not the vehicle itself.
B
Rose is working hard on Arlin's mayoral campaign. She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 if she will register and vote for Arlin. Violet does so, but Arlin loses the election, and Rose now refuses to pay. This: a. agreement is enforceable. b. agreement is unenforceable and opposed to public policy. c. is an agreement to obstruct the administration of justice. d. is an unconscionable contract covered by the UCC.
B
Which is not a revocable offer? a. A bid to construct a bridge for the city. b. An offer to buy stock in the ABC Corporation once it is formed. c. A unilateral offer to pay John $30 to mow your lawn after he has completed half the job and indicates he wishes to finish. d. None of the above are revocable offers.
D
An undisputed debt is: a. a contested amount of debt. b. an obligation that is not contested as to existence but is contested as to the exact amount of the debt. c. an obligation that is not contested as to its existence or amount. d. a debt action that the court will not hear because it is not definite and certain.
C
Anna is 88 years old and under the legal guardianship of her daughter. One day Anna receives a telephone call from a health insurance salesman and purchases a $400-a-month Medigap insurance policy. The contract is: a. valid. b. voidable. c. void. d. unenforceable.
C
Barbara, a wealthy widow, promises the pastor of her church that she will donate $10,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $30,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around-the-world cruise instead. Barbara's promise to pay $10,000: a. is enforceable because it is a new promise to perform a voidable obligation. b. is a promise to give a gift and is therefore not enforceable. c. is enforceable under the Restatement of Contracts. d. was made to satisfy a preexisting moral obligation and is therefore enforceable.
C
Carl and Ron are both engaged in road construction work. They know that several jobs are going to be up for public bids, and agree between themselves that Carl will bid on one job and Ron will bid on the other, so that they both have work for the summer. When the bids are opened, Carl realizes that Ron has bid on both jobs. Ron is awarded both contracts. Carl now wants to sue Ron for breach of contract. a. Carl would probably win on the basis of promissory estoppel since he has detrimentally relied upon Ron's representation that he would not bid. b. Since Carl is less at fault than Ron, the court will likely award Carl damages. c. This is an agreement in violation of public policy that will not be enforced by the courts. d. This is an agreement obstructing the administration of justice that will not be enforced by the courts.
C
Carlos, a contractor, and Lyle, a landowner, have a contract whereby Carlos is to perform routine construction services according to the blueprints that Lyle has provided. Carlos assigns the contract to David, a developer. As a result of this assignment: a. Lyle can bring suit based upon detrimental reliance. b. Carlos has no more rights or responsibilities with regard to the contract. c. Carlos no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform. d. Carlos has all of his rights under the contract, but he has no responsibility for the performance of the duties.
C
Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress is too expensive, and she now wishes to cancel the order. Cheryl: a. must pay $500 for the dress because the dress was specially ordered for Cheryl. b. must pay $500 for the dress because clothing is classified as a necessary. c. may disaffirm this executory contract because, while clothing in general is classified as a necessary, a new prom formal would probably not be classified as a necessary. d. must accept the dress and pay the reasonable value of the dress.
C
Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia agrees never to open a hair salon in the state. Which of the following best describes this contract clause? a. Void as an illegal violation of a statute. b. Valid as a reasonable restraint on trade. c. Unenforceable as a violation of public policy. d. Binding as fair protection.
C
Courts will enforce contracts for the benefit of all but which of the following? a. Donee beneficiaries. b. Creditor beneficiaries. c. Incidental beneficiaries. d. Intended beneficiaries.
C
Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so. Edward agrees. a. This is an illusory contract, because Darla is not certain she will receive the money. b. There is no consideration present in this example. c. The consideration from Darla to Edward is the promise of $6,000 subject to a condition. d. Two of the above.
C
Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so. Edward agrees. a. This is an illusory contract, because Darla is not certain she will receive the money. b. There is no consideration present in this example. c. The consideration from Darla to Edward is the promise of $6,000 subject to a condition. d. Two of the above.
C
Fourteen-year-old Marsha bought $120 worth of video games and DVDs at a local store, using her own money. Her parents insisted that she return the items and get her money back. Which of the following is true? a. If there is a conflict, the store's return policy will override Marsha's right of disaffirmation. b. In most jurisdictions, Marsha may get her money back only if she has not opened or damaged the merchandise in any way. c. In a majority of jurisdictions, Marsha may get her money back even if she cannot return the merchandise. d. In most jurisdictions, Marsha may get some of her money back but she must pay the reasonable value of the goods if that differs from the contract price.
C
According to the UCC, an enforceable agreement involving the transfer of title of goods from a seller to a buyer for a price is called a(n) a. commercial contract. b. express contract. c. formal contract. d. sale.
D
An ad in a newspaper or a circular describing goods and stating prices would generally be considered: a. a firm offer if made by a merchant. b. an offer if made by a merchant, but not a firm offer. c. an offer irrespective of who made the offer. d. an invitation to buyers to make an offer to buy goods.
D
An agreement to refrain from a particular trade, profession, or business is enforceable if: a. the purpose of the restraint is to protect a property interest of the promisee. b. the agreement is for no longer than two years. c. the restraint is no more extensive than is reasonably necessary to protect the promisee's property interest. d. Both (a) and (c) are correct.
D
An offer need not take any particular form to have legal validity. To be effective, however, it must: a. be spoken directly to the offeree. b. always contain the price of the product or service offered. c. always contain the place of delivery. d. be communicated to the offeree.
D
Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract? a. No, because Robbie gave no benefit to Aunt Ellie. b. No, because Robbie did not suffer any detriment. c. Yes, because stopping smoking will benefit Robbie's health. d. Yes, because Robbie gave up a legal right.
D
Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract? a. No, because Robbie gave no benefit to Aunt Ellie. b. No, because Robbie did not suffer any detriment. c. Yes, because stopping smoking will benefit Robbie's health. d. Yes, because Robbie gave up a legal right.
D
Barbara owes Arthur $2,000. On July 1, Arthur assigns the right to the $2,000 to Maud. Thereafter, on July 15, Arthur assigns the same right to Derek, who in good faith gives value for it and knows nothing about the first assignee. In this case: a. Maud has the right to the payment of $2,000. b. Derek has the right to the $2,000. c. neither Maud nor Derek can claim the $2,000. d. the rule differs in different states. Depending on which rule a state follows, the answer will vary.
D
In DiLorenzo v. Valve and Primer Corporation, the court held: a. DiLorenzo gave consideration for the stock option. b. Valve & Primer conditioned the alleged stock option on DiLorenzo's promise to remain in its employment. c. promissory estoppel applied because there was detrimental reliance on DiLorenzo's part. d. there was no consideration for the stock option, and promissory estoppel did not apply because detrimental reliance was not proven.
D
Which of the following duties would not be delegable? a. John has a contractual duty to pay Isaac $50. b. Karl has a contractual duty to deliver 50 bushels of corn to Michael by October 1. c. Jeffrey has a duty to mow Georgia's lawn at least once a week. d. Arthur has a duty to teach an accounting class at a community college during the fall semester.
D
Jason's mother would like him to go to college, so in June he enrolls at the local university. He also quits his job and tells his mother his plans to take classes. His mother says, "I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485. Which of the following is true regarding his mother's promise? a. It is enforceable, because Jason returned to college. b. It is enforceable, because Jason is giving up the right to do something else. c. It is unenforceable, because it is a unilateral contract. d. It is unenforceable, because Jason had already enrolled in school when she made the statement that she wanted to pay for his books, and there is no consideration.
D
Jason's mother would like him to go to college, so in June he enrolls at the local university. He also quits his job and tells his mother his plans to take classes. His mother says, "I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485. Which of the following is true regarding his mother's promise? a. It is enforceable, because Jason returned to college. b. It is enforceable, because Jason is giving up the right to do something else. c. It is unenforceable, because it is a unilateral contract. d. It is unenforceable, because Jason had already enrolled in school when she made the statement that she wanted to pay for his books, and there is no consideration.
D
Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement best describes the situation? a. McHenry is not liable to Nancy since there was no consideration. b. McHenry is not liable to Nancy since there was past consideration. c. McHenry is liable to Nancy since adequate consideration was given by both parties. d. McHenry is liable to Nancy based on the concept of promissory estoppel.
D
Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement best describes the situation? a. McHenry is not liable to Nancy since there was no consideration. b. McHenry is not liable to Nancy since there was past consideration. c. McHenry is liable to Nancy since adequate consideration was given by both parties. d. McHenry is liable to Nancy based on the concept of promissory estoppel.
D
Promissory estoppel is a contractual doctrine that includes which of the following considerations? a. The courts use the doctrine of promissory estoppel to enforce noncontractual promises. b. Under this doctrine, the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the promise to take action or refrain from taking action and the promisee does so. c. The courts will not, under any circumstance, enforce promises that do not include all four of the elements of contract. d. Both (a) and (b).
D
Roberto obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years. a. The manufacturer is obligated to use his best efforts to supply the goods even if no such clause appears in the written franchise agreement. b. Roberto has an implied obligation to use his best efforts to promote the sale of the widgets. c. Under the UCC, such an agreement lacks consideration. d. Two of the above, (a) and (b).
D
Roberto obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years. a. The manufacturer is obligated to use his best efforts to supply the goods even if no such clause appears in the written franchise agreement. b. Roberto has an implied obligation to use his best efforts to promote the sale of the widgets. c. Under the UCC, such an agreement lacks consideration. d. Two of the above, (a) and (b).
D
Samuel Tate enters into a contract with Bill Smith under the terms of which Smith is to pay Tate $7,000 and Tate is to build a garage, repair a boat, and build a doghouse. If the doghouse has not yet been built, which term describes the type of contract in existence? a. Quasi contract. b. Executed contract. c. Illusory contract. d. Executory contract.
D
There are certain transactions that are enforceable without consideration. These include: a. promises to pay a debt barred by the statute of limitations. b. a promise to pay a debt that has been discharged in bankruptcy if certain requirements are met. c. a new promise to perform a voidable obligation that has not previously been avoided. d. All of the above.
D
There are certain transactions that are enforceable without consideration. These include: a. promises to pay a debt barred by the statute of limitations. b. a promise to pay a debt that has been discharged in bankruptcy if certain requirements are met. c. a new promise to perform a voidable obligation that has not previously been avoided. d. All of the above.
D
Theresa has a contract to teach eighth grade at Washington Middle School. She decided she could make more money writing a book, so she assigns her teaching contract to her friend, Stephanie, who is also a licensed teacher. a. This is both an assignment and a delegation. b. The duties, which Theresa has delegated, are personal in nature c. If the school district agrees to accept Stephanie's services, a novation would occur, which would relieve Theresa of her obligation to the school district. d. All of the above are correct.
D
When a minor falsely advises the other party that he is of the age of majority and based upon that misrepresentation, the other party acting in good faith enters into a contract with the minor: a. the minor has lost his right to disaffirm the contract because of the misrepresentation. b. the adult party can recover damages from the minor in tort. c. the minor is required to restore the other party to the position occupied before the making of the contract. d. There is no uniform rule. States differ, and depending upon the state, any of the above could be correct.
D
When contract terms prohibiting the assignment of rights exist, most courts will: a. strictly construe them. b. interpret a general term prohibiting assignments as a mere promise not to assign. c. award the obligor a right to damages for the breach of the terms forbidding the assignment. d. All of the above.
D