Business Law Review Ch 11-14

A case of bankruptcy is enforceable without consideration according to common law. Select one: True False

False

A legal consideration always has to be certain. Select one: True False

False

A term is substantively unconscionable if it is imposed upon the weaker party because of fine print. Select one: True False

False

An agreement signed by Lowry, the president of an automobile company, not to work for any competitors during the term of his employment in the company is unlawful according to restraint of trade. Select one: True False

False

Contract rights are always assignable. Select one: True False

False

A delegation is the transfer to a third party of the duty to perform under a contract. Select one: True False

True

An obligee is one who has the right to receive a contract benefit. Select one: True False

True

An unforeseen difficulty arising after a contract is made may be resolved by an accord and satisfaction. Select one: True False

True

If an oral agreement is made to be performed within one year and if there is even a slight chance of carrying out the agreement completely within one year, the oral agreement would be enforceable. Select one: True False

True

Restitution will be allowed if party has to pay a penalty which is disproportionate in relation to the contravention of public policy involved. Select one: True False

True

Suppose Tom and Harry bet on the FIFA world and Harry loses. Harry has the right to recover his money before it is paid out to Tom. Select one: True False

True

The UCC permits one party to discharge, without consideration, a claim arising out of an alleged breach of contract by the other party. Select one: True False

True

Which of the following is true in oral rescission? Select one: a. Insufficiently written contracts governed by the Statute of Frauds are unenforceable. b. For a fully performed contract unenforceable under the Statute of Frauds, some restitution will be available. c. If a title has already passed to the buyer under a written agreement that satisfies the statute, the contract cannot be rescinded. d. If there has been a material change of position in reliance on the contract, oral agreements to rescind are enforceable. e. Contracts governed by the Statute of Frauds cannot be modified orally if the resulting contract, taken as a whole, falls outside the statute

a. Insufficiently written contracts governed by the Statute of Frauds are unenforceable.

According to the main purpose doctrine, _____. Select one: a. a promise to pay the debt of another need not be writing to be enforceable if the promisor was motivated by a desire for advantage or benefit b. there should be a pattern of behavior between parties showing how they intend their relationship to work c. there should be a systematic and uniform conduct in which parties engage after they enter into a contract d. the Statute of Frauds dispenses with a writing requirement when one party performs his or her part of the contract e. if at its making, a contract could have been performed in one year, no writing is required

a. a promise to pay the debt of another need not be writing to be enforceable if the promisor was motivated by a desire for advantage or benefit

A creditor beneficiary is _____. Select one: a. one to whom the promisor agrees to pay a debt of the promisee b. one who has no rights c. an intended beneficiary d. the recipient of a gift promise e. one who is not the intended beneficiary

a. one to whom the promisor agrees to pay a debt of the promisee

The "shoe rule" does not apply when _____ Select one: a. there is a sale of a negotiable instrument to a holder in due course. b. doing so would maintain the obligation of the obligor. c. statute or public policy forbids the assignment. d. the contract itself precludes assignment. e. the assignor must make known his intention to transfer the rights to the third person.

a. there is a sale of a negotiable instrument to a holder in due course.

Which of the following is true about unconscionable contracts? Select one: a. A term is substantially unconscionable if it is imposed upon the weaker party because of inconspicuous print. b. "Unconscionable" is not defined in the Restatement or the UCC. c. Procedural unconscionability arises where the affected terms deprive a party of any real remedy for breach. d. Courts find unconscionable contracts in the context of commercial transactions rather than consumer transactions. e. In the case of consumer transactions, the assumption is that the parties tend to be sophisticated businesspeople, able to look out for their own contract interests.

b. "Unconscionable" is not defined in the Restatement or the UCC.

Which of the following bargains is illegal? Select one: a. Alice and Max agree to bet on a soccer game and deliver their money to Ross. However, before the payout, Alice decides she wants out. She can recover her money. b. Dipp pays Fynn, an agent statutorily required to have a license, $100,000 for a plot but later got to know that Fynn was unlicensed. The contractor is entitled to the payment. c. Max hires Rosy for $1,000 to arrange a bribe for the company's security. However, Max has a change of heart. He can recover the money. d. A physician forbidden by federal law from working overtime nevertheless does so. He is entitled to payment for overtime.

b. Dipp pays Fynn, an agent statutorily required to have a license, $100,000 for a plot but later got to know that Fynn was unlicensed. The contractor is entitled to the payment.

According to the statute, which of the following is an exception to the Statute of Frauds written requirement? Select one: a. The ten-day-reply doctrine b. Specially manufactured goods c. Main purpose exception d. The admission exception e. The payment or delivery and acceptance exception

c. Main purpose exception

An incidental beneficiary is: Select one: a. the intended beneficiary. b. the donee beneficiary. c. one who has no rights. d. the creditor beneficiary e. one who promises to pay the debt.

c. one who has no rights.

Which of the following promises is enforceable without consideration according to the common law? Select one: a. Alleged breach of contract b. Bankruptcy c. International contracts d. Promissory estoppel e. Convention on contracts

d. Promissory estoppel

An unforeseen difficulty arising after a contract is made may be resolved by a(n) _____. Select one: a. composition agreement b. promissory estoppel with detrimental reliance c. needs contract d. accord and satisfaction e. reservation of rights

d. accord and satisfaction

A judicial order directing someone to stop doing what he or she should not do is a(n) _____. Select one: a. restitution b. restraint c. exculpatory clause d. injunction e. novation

d. injunction

A factor is a person: Select one: a. not a party to a contract who is intended, as a gift, to benefit from its performance. b. to whom an obligation is owed. c. not a party to a contact who was intended to benefit from it and who may sue to enforce its terms. d. not a party to a contract who benefits from its performance but was not intended to specifically. e. who purchases the right to receive income from another.

e. who purchases the right to receive income from another.

On May 1, 1999; Alex promises to sell his bike to Jerry for $400 on May 20, 1999. On May 10, due to an emergency, Jerry offers to pay $900, if Alex can sell his bike on May 11. Alex sells his bike on May 11, but Jerry refuses to pay $900 in return, to which Alex files suit in the court on May 15, 2005. The court dismisses the case due to which of the following reasons? Select one: a. Running of statute of limitations b. Voidable duties c. Promissory estoppels d. Alleged breach of contract e. Moral obligation

a. Running of statute of limitations

Which of the following is an exception to the UCC's Statute of Frauds requirement? Select one: a. Main purpose exception b. Part performance doctrine c. Possibility test d. Agreements of executor or administrator e. The admission exception

e. The admission exception

Property settlements before, during, or upon the breakup of a marriage are generally enforceable, since property is considered to be an essential incident of marriage. Select one: True False

False

A clause that is separately negotiated and added to a contract will be counted as more significant than a standard term in a form contract. Select one: True False

True

A contract that remains wholly executory, even though enforceable because in writing, may be rescinded orally in most states. Select one: True False

True

According to the blue pencil rule, _____. Select one: a. courts can delete from the non-compete agreement only that part that is unreasonable and enforce the remainder. b. every contract by which anyone is restrained from engaging in a lawful profession is to that extent void. c. an order directing a person to stop what he should not do would be issued. d. courts may refuse unconscionable contracts. e. a court may find the contract divisible and enforce only the parts that are not unconscionable.

a. courts can delete from the non-compete agreement only that part that is unreasonable and enforce the remainder.