Business Law Exam 2

If a minor contracts for necessaries, the minor's liability is quasi-contractual in nature

This means that: the minor is required to pay the reasonable value not the contract price

A check is not a proper tender

True

A minor has the legal right to disaffirm a voidable contract at any time during minority

True

A minor must ratify none or all parts of a contract

True

A person found guilty of a major criminal offense is called a convict

True

After a discharge in bankruptcy, creditors' rights of action to enforce most of the contracts of a debtor are barred

True

All contracts must be for a lawful purpose otherwise they would be considered void

True

An advantage that written contracts have over oral contracts is that they can be ascertained

True

An attorney may contract to appear before a Senate committee meeting to encourage or oppose the passage of a bill

True

Consideration distinguishes mere agreements from legally enforceable obligations

True

If a party intentionally and without the consent of the other party alters a written contract, the other innocent party is discharged

True

If an act is legal at the time of entering a contract but is subsequently made illegal, the contract is discharged

True

If the supposed consideration consists merely of a promise to do what one is already legally obligated to do, consideration is invalid

True

The contract and the memorandum required by the Statute of Frauds must set forth all the material terms of the transaction

True

The legal rate applies when parties are silent as to the rate

True

The parol evidence rule assumes that a written contract represents the complete agreement

True

The rescission of a contract releases an aggrieved party from all obligations that are yet to be performed

True

The safest way to contract with minors is to have the minor's guardian join in the contract as a cosigner

True

When a court orders for specific performance, it is exercising its equity powers

True

Patrick and Ken entered into a contract in which Ken sells his farm to Patrick

According to the contract, Patrick needs to pay $500 to Ken every month for the next ten years in order to settle the purchase. Later, it is found that Ken purposely caused Patrick to become drunk so that he would enter into the contract. Which of the following is most likely to be a consequences of this case? Patrick will not need to pay Ken because the contract will held invalid

A contract is indivisible if it can be performed in ways other than as an entity

False

A valid offer is one that is indefinite

False

An agreement not to marry certain named individuals is valid

False

If a merchant displays a coat at a particular price, he has a binding requirement to sell at that price

False

If an adult purchases personal property from a minor, the minor has only a voidable title to the property

False

When an offeree is not aware of the insanity of the offeror and communicates assent to an offer, it is considered as accepted

False

When charitable enterprises are financed by voluntary subscriptions of many people, the promise of each person is generally not held to be enforceable

False

If a written contract appears complete, the parol evidence rule will permit modification

False

If performance in a contract becomes extremely difficult after the contract is formed, it automatically discharges the contract

False

The Statue of Frauds states that the memorandum must contain more essential terms than the written contract

False

Which of the following is true of the doctrine of promissory estoppel?

it requires the promisor to reasonably expect the promise to induce action by the promisee

Damages fixed by a contract

liquidated

An offer to provide money in satisfaction of a debt when one has the ability to pay is a(n):

tender of payment

Which of the following is true of revocation of an offer?

the offer is terminated by the lapse of the time specified in the offer

An offer expresses the willingness of the offeror to enter into a contractual agreement

True

If the intended acceptance varies or qualifies an offer, the counteroffer rejects the original offer

True

Failure to perform with ability and care normally exercised by people in a profession

malpractice

A small amount of damages awarded when there is a technical breach but no injury

nominal

A debt that has been outlawed by a statute of limitations cannot be revived

False

A dentist who performs services without a license is entitled to sue to collect for the services

False

Contracts which are designed to limit competition are acceptable by law

False

Electronic signatures are legally unenforceable

False

Performing or promising to perform what one is already obligated to do is a valid consideration

False

Pledges made by people to charitable associations have no binding power by law

False

Ratification to a contract can be made any time before reaching majority

False

The "mailbox rule" does not apply in situations where the offeror does not receive the acceptance

False

The Statute of Frauds does not apply when the promisor promises the debtor that the promisor will pay the debt owed to the third person

False

Maya, an elderly lady, wanted to sell her house

She offered the house to Lily, a friend. However before the house deeds were transferred, Maya passed away. Which of the following scenarios is legally acceptable in such a case? Lily must consider the offer automatically revoked and void

Mark owes $2,000 each to his business partners, Ryan, Bryan, and Karen

Since Mark is facing financial difficulties, his business partners agree to accept a total amount of $4,800 from Mark as a cancellation of the unpaid balance due to them. This type of an agreement is known as: composition of creditors

In a written contract, Sheldon agreed to tutor the children of Mrs

Smith for a certain period of time. However Sheldon, prior to starting classes, announced that he would not be able to tutor the children due to other commitments. In this case, there has been a(n): anticipatory breach

As a general rule, the adequacy of the consideration is irrelevant because the law allows bargains

True

Contracts made by people who were intoxicated to such an extent that they would not have entered into it if they were sober, makes the contract voidable

True

Contracts obstructing the administration of justice are unenforceable

True

Courts find that justice requires enforcement in a promissory estoppel case

True

Even if a minor does not have possession of property received under a contract, the contract can be disaffirmed

True

AB Developers sign a contact with CL Corp

, agreeing to build a $20 million office for the corporation. The construction contract was substantially performed. There were, however, a few minor breaches of the contract by AB Developers that made CL Corp. incur damages worth $10,000. Which of the following is mostlikely to be true in this scenario? CL needs to pay the full price under the contract less the damages suffered by CL

Which of the following is an example of valid consideration?

C promises to sell paint to B when the shipment arrives

Ryan, a college student, intends to sell his car

He contacts his friend Luiz and enquires whether he is interested in buying the car. Luiz finds the quoted price reasonable and buys the car from Ryan. In this scenario, Ryan is the ____ offeror

Blake has subscribed to a local charitable association where he needs to make a monthly payment of $100

However, a few months later, Blake stops paying this amount. Which of the following exceptions to the requirement of consideration will enforce that Blake pays the amount? voluntary subscriptions

Kenneth, aged sixteen, sells his car to Robin, aged 49

Later, Robin sells the car to Sarah, an innocent third party, before Kenneth can disaffirm the contract. In this case, which of the following will hold true? Sarah can obtain good title to the car

Sam and Martha sign a contract in which Sam agrees to pay a certain price and buy Martha's house

Later, Sam's brother states that Sam often has intervals of delusions and hence the contract is invalid because it has been made by an incompetent person. Sam has not been declared by the court as insane. In such a scenario, according to law, which of the following will entitle Martha to the price agreed upon in the contract? Sam was in a sane frame of mind and understood the contract when he signed it

Many state statutes made Sunday contracts illegal

Most states have repealed those laws. True

Under the ____, it is unlawful to discriminate in price between competing buyers if thegoods are of like grade, quantity, and quality

Robinson-Patman Act

A lease of real property for less than one year must be in writing in order to be binding

False

According to the Statute of Frauds, an agreement of an executor to pay the debts of the estate from the executor's personal funds, needs to be an oral contract

False

Amount of damages that are equal to the loss sustained

compensatory