Business Law Chapter 6 Smartbook

According to the UCC, within what period of time must a merchant buyer object to written confirmation of a contract sent by a merchant seller in order to retain the statute of frauds defense?

10 days

Which of the following would meet E-SIGN's definition of a digital signature? (Check all that apply.)

A password used to enter a website A PIN number used to access an ATM

Which of the following is true regarding the statute of frauds and what kind of writing is required?

Although the statutes of frauds of all the states are not the same, most states require only a memorandum of the parties' agreement.

Which of the following is true regarding the rights an assignee has under an assigned contract?

An assignee is entitled to all the rights the assignor had under the assigned contract.

Which of the following is correct regarding the assignment of contracts?

Contracts involving personal rights are generally nonassignable.

Which of the following is true regarding donee beneficiaries contracts?

Either the promisee or the donee beneficiary can sue the promisor for not performing the promise.

The statutes of frauds adopted by states across the United States are patterned after the original statute of frauds adopted in ______ in ______.

England; 1677

Which of the following is correct regarding third parties and contracts?

Generally, those who are not parties to a contract have no rights in the contract even though they may benefit from its performance.

Which type of contract generally gives the insured the right to change the beneficiary without the beneficiary's consent?

Life insurance

Which of the following types of contracts must be in writing because the length of the contract increases the risk of faulty or willfully inaccurate recollection of the parties' terms in subsequent disputes?

Long-term bilateral

Which of the following are rules that businesses must follow under E-Sign when seeking consumer consent to electronic contracts? (Check all that apply.)

Making clear when consumer consent is for more than a single transaction Gaining a consumer's affirmative consent to receive contractual information electronically

Which of the following is true regarding a delegation?

Not all duties are delegable.

Which of the following is correct regarding an assignment?

Rights can be given away or sold.

Which section of the UCC serves as a statute of frauds for contracts for the sale of goods?

Section 2-201

Suppose that in an assignment, the assignor purports to transfer "all my rights under the contract" to the assignee. Which of the following is correct?

The Uniform Commercial Code would interpret this as creating both an assignment and a delegation.

Which of the following is an implied guarantee that an assigned claim is valid?

The contract is not voidable for any reason known to the assignor

Which of the following is correct regarding creditor beneficiary contracts?

The duty owed can be any kind of legal duty.

In addition to specially manufactured goods, the UCC recognizes which of the following exceptions to the statute of frauds writing requirement? (Check all that apply.)

The party being sued admits the existence of a contract in court The party seeking recovery has partially performed by making a significant payment

Which of the following is correct regarding incidental beneficiaries?

They acquire no rights under the contract and cannot sue for performance.

Which of the following is correct regarding whether subsequent oral modifications of contracts are enforceable?

They may sometimes be unenforceable due to lack of consideration or failure to comply with the statute of frauds.

Why does the statute of frauds require that an executor's promise to personally pay a decedent's debts be in writing to be enforceable?

To prevent fraud

True or false: A party is allowed to introduce oral testimony that a contract is illegal.

True

True or false: Long-term bilateral contracts that call for performance over a long period of time must be in writing to be enforceable.

True

Which of the following is true regarding the Uniform Electronic Transactions Act (UETA) and the Electronic Signatures in Global and National Commerce Act (E-Sign)?

Unlike E-Sign, UETA does not offer specific rules governing when consent has been given electronically.

In terms of a writing that complies with the statute of frauds, most states require only ______ of the parties' agreement.

a memorandum

If one of the parties drafted the contract, ambiguities are resolved

against the party who drafted the contract

A party can Blank______ introduce proof of an oral agreement made after the writing was created.

always

If the terms of the writing are unclear or Blank______, Blank______ testimony can be introduced to aid the court in interpreting the writing.

ambiguous; oral

If the terms of the writing are unclear or ______, ______ testimony can be introduced to aid the court in interpreting the writing.

ambiguous; oral

Mirabella owes Christina $5,000. Christina transfers her right to receive the $5,000 to Jonathan. Christina has ______ her right to Jonathan.

assigned

The person who makes an assignment is the

assignor

Parties who put their contracts in writing should try to make the writing as ______ and ______ as possible.

complete; unambiguous

The basic idea behind the parol evidence rule is that when the parties to an agreement have expressed their agreement in a(n) ______, ______ writing, the writing is the best evidence of their intent.

complete; unambiguous

A collateral contract consists of three parties and two promises, one of which is a(n) ______ promise by the guarantor to the obligee which must be in writing to be enforceable.

conditional

Under E-Sign, an e-business must refrain from imposing ______ fees if the consumer can no longer receive electronic information because the business has upgraded its electronic delivery system.

consent withdrawal

If the writing is obviously incomplete, a party can introduce proof of ______ oral terms that ______ the writing.

consistent; fill the gaps in

The "one-year rule" of the statute of frauds means that a writing is not required if ______.

contract performance is possible within one year

The Uniform Commercial Code has its own statute of frauds section that applies to

contracts for the sale of goods for $500 or more

If the promisor's performance will satisfy a legal duty that the promisee owes a third party, the third party is a(n) ______ beneficiary.

creditor

When a promisor appoints another person to perform the promisor's duties under a contract, this called a(n)

delegation

When duties are transferred under a contract, this is called a(n)

delegation

The distinction between an original contract and a guaranty contract is important because original contracts ______.

do not need to be evidenced by a writing to be enforceable

A third person is a(n) ______ beneficiary if the promisee's primary reason for contracting was to make a gift of the contracted performance to the third party.

donee

There are two classes of third-party beneficiaries: ______ beneficiaries and ______ beneficiaries

donee; creditor

There are two classes of third-party beneficiaries: ______ beneficiaries and ______ beneficiaries.

donee; creditor

A party is always allowed to introduce oral proof that the contract the writing represents was entered into as a result of Blank______. (Check all that apply)

duress fraud mistake

Statutes of frauds generally apply exclusively to ______, ______ contracts that are "not capable of being performed within one year."

executory; bilateral

If one of the parties to an ______ oral contract files suit to enforce the contract and the other party does not raise the statute of frauds as a defense, the court will ______ the agreement.

executory; enforce

In a collateral contract, a third person known as the ______ agrees to perform contractual duties that the ______ owes under another contract, and they are both contractually liable to the ______.

guarantor; obligor; obligee

A collateral contract is also known as a(n) ______ contract.

guaranty

Assignors who are paid for making an assignment are potentially liable to assignees for certain

implied guarantees

Occasionally, the performance of a contract intended solely for the benefit of the promisee will also incidentally benefit a third person. In this situation, the third party is known as a(n) ______ beneficiary.

incidental

Unless an assignment agreement clearly indicates to the contrary, courts generally interpret it to implicitly

include a delegation of the assignor's duties under the contract

When a contract states a(n) ______ time for performance, the contract need not be in writing if it is ______ to perform the contract within one year.

indefinite; possible

Regarding third-party beneficiary contracts, one factor that is often considered in determining ______ to benefit is whether the person making the promise to perform was to render performance ______ to the third party

intent; directly

The Electronic Signatures in Global and National Commerce Act (E-Sign) pertains to agreements affecting ______ commerce.

interstate

Our legal system has historically treated ______ as being more important than other forms of property.

land

If a merchant buyer receives written confirmation of a contract and does not object in writing within the time specified by the UCC after receiving it, the merchant buyer

loses the statute of frauds defense

Under the "fill in the gaps" exception to the parol evidence rule, a party is

never allowed to contradict or vary the written terms of the contract

An assignee can sue for

no greater rights than the assignor had

What formalities are needed to create an assignment?

none

A(n) ______ is a new, separate agreement by the promisee to release the original promisor from liability in exchange for a third party's agreement to assume the promisor's duties.

novation

The basic standard of interpretation for ambiguous terms or language in a contract is ______ and is a question for a ______ to decide.

objective; jury

If the written agreement is silent about any conditions that must occur before it becomes effective, ______ be introduced to prove such conditions.

oral testimony can

If the written agreement is silent about the date it is to take effect, ______ be introduced to prove the date.

oral testimony can

When interpreting a contract, courts give ______ words their usual meaning and ______ words their industry meaning unless a different meaning was clearly intended.

ordinary; technical

The major difference between a(n) ______ contract and a guaranty contract is that in the former, the promisor is ______ liable under the terms of the contract, whereas a guarantor is _______ liable.

original; primarily; secondarily

evidence rule, neither party can change the meaning of a written contract by introducing notes and conversations that existed prior to the signing of the contract.

parol

If the terms of the writing are unclear, oral testimony can be introduced to aid the court in interpreting the writing. This is an exception to the

parol evidence rule

An oral contract for the sale of goods under the UCC is generally enforceable if the buyer partially performs by

paying for the goods accepting the goods

Contracts involving ______ rights are generally ______. These are contracts in which some element of individual skill, credit, character, or judgment is an essential part of the agreement.

personal; nonassignable

The courts attempt to give uncertain or ambiguous terms in the the contract the meaning a

reasonable

The Uniform Electronic Transactions Act (UETA) is a proposed uniform state law that, like E-Sign, is intended to ______ by giving effect to electronic records and signatures.

remove barriers to e-commerce

When a lawsuit is filed asking a court to interpret an ambiguous agreement, the court will rely on

rules of construction

According to the Blank______, contracts transferring ownership rights in real estate Blank______ be evidenced by a writing to be enforceable.

statute of frauds; must

An executor or administrator of a decedent's estate essentially pays all outstanding claims against the estate and then distributes any remaining monies or properties to

the decedent's heirs

The original statute of frauds was adopted because at the time (the 17th century), when parties were involved in a breach of contract case,

the parties could not testify in their own cases

The first thing a court does when it is attempting to interpret an ambiguous contractual term is to determine

the principal objective of the parties

The Electronic Signatures in Global and National Commerce Act (E-Sign) gives a digital signature

the same legal effect as one written in ink on paper

If both seller and buyer are members of the same trade, courts will presume that the parties intended their contract language to reflect the ______ meaning.

trade usage

Words that are given a particular meaning in a certain trade, profession, or community are known as

trade usage

In most states, the statute of frauds makes oral contracts to which it applies ________, not ______ or ______.

unenforceable; void; voidable

After an assignment, the assignee is entitled to

whatever performance the assignor had a right to under the original contract

For statute of frauds purposes, the one-year period begins

when the contract comes into existence

If the parties use a form contract, or the contract is partly printed and partly written, the ______ terms control the ______ terms if the two conflict.

written; printed

Which of the following essentially says that in some cases the law will require a signed writing to prove a contract existed?

✓ A statute of frauds