Ch. 12 & 13 Quizzes

The requirements for a valid offer are a. transferred intent, reasonably definite terms and communication. b. serious intent, reasonably definite terms and acceptance. c. serious intent, reasonably definite terms and communication d. serious intent, finite terms and communication.

c. serious intent, reasonably definite terms and communication

Rafi offers a tour of Bay Harbor aboard his sailboat, Sea Siren, to Tiara's Travel Group for $500. Referring to the prices for similar tours, Tiara's says, "We'll pay no more than $400." Rafi's offer is a. terminated. b. still open. c. revoked. d. rejected and subject to a counteroffer.

d. rejected and subject to a counteroffer

Which of the following is a unilateral mistake of fact and states the impact of that mistake on the validity of the contract. a. Fred thinks he paid too much for his new computer. The court will not rescind the contract and Fred is bound to the terms of the agreement. b. Fred thinks he paid too much for his new computer. The court can rescind the contract. c. Fred believes his new computer system was made in the U.S.A. even though the sales person did not make that claim and the written specifications clearly state otherwise. The court can rescind the contract. d. Fred believes his new computer system was made in the U.S.A., even though the sales person did not make that claim and written specifications clearly state otherwise. Fred is bound to the terms of the agreement.

a. Fred believes his new computer system was made in the U.S.A., even though the sales person did not make that claim and written specifications clearly state otherwise. Fred is bound to the terms of the agreement

Natasha and Melanie have a contract requiring Natasha repair Melanie's refrigerator for $100. Which of the following is an example of a contract lacking consideration based on a pre-existing duty? a. They now agree that Melanie must pay an additional $50 for Natasha to complete the repair on the refrigerator. b. They now agree that Natasha will repair Melanie's stove for $150. c. They now agree that Natasha has completed the repair on the refrigerator and Melanie has paid the $100 under the terms of their contract. d. Natasha fails to complete the repair of the refrigerator.

a. They now agree that Melanie must pay an additional $50 for Natasha to complete the repair on the refrigerator

Digital Enterprise, Inc., promises to pay its employees a year-end bonus "if profits continue to be high and management agrees at the time." This is​ a. ​an illusory promise. ​b. an option-to-cancel clause. ​c. an enforceable contract. ​d. promissory estoppel.

a. an illusory promise

Home Construction LLC enters into a contract with Irene to build a house. Before Home starts to work, the market price for its services increases—in effect, Home will lose money if it fulfills its contract with Irene. Home notifies her that it will not perform. Home's obligation to perform is a. breached. b. suspended. c. rescinded. d. discharged.

a. breached

Alice and Bart enter into a contract for the sale of Canyon Ranch. To be enforceable, this contract must be​ a. ​in writing or evidenced by a written memorandum. ​b. substantiated by reliable, external evidence. ​c. all of the choices. ​d. signed in a sufficient manner by both parties.

a. in writing or evidenced by a written memorandum

Consideration is best defined as a. something of legally sufficient value given in a bargained for exchange. b. something given in a bargained for exchange. c. placing another party's interest before your own interests. d. something of legally sufficient value.

a. something of legally sufficient value given in a bargained for exchange

Tile & Grout (T&G) contracts to resurface the insides of the pools at Water Park. T&G knows that without the resurfacing, Water Park will have to delay its seasonal opening. T&G does not perform as promised. As consequential damages, Water Park can recover a. ​the loss of profit from the delayed opening. ​b. nothing. ​c. the cost of new pools. ​d. the difference between T&G's price and the eventual cost of resurfacing.

a. the loss of profit from the delayed opening

Oceans Inc., a seafood distributor, agrees to buy from Paul, a commercial fisherman, any "overstock" of fish that Paul catches in excess of his legal limit. This agreement is most likely​ a. ​void. ​b. enforceable. c. ​valid. ​d. voidable.

a. void

Fresh Gro, Inc., offers to deliver produce to the customers of Grocer's Mart for a certain price. Fresh's intent to extend a serious offer to Grocer's Mart is determined by reference to Fresh's​ a. ​words and action. ​b. assumptions. ​c. intentions. ​d. beliefs.

a. words and actions

Copper Circuit, Inc., and Direct Electric LLC sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to estimate but approximately $1,000." This is​ ​a. a penalty clause. b. ​a liquidated damages clause. ​c. a waiver-of-breach clause. ​d. a nominal-damages clause.

b. a liquidated damages clause

Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan knowingly misrepresents a number of material features about the restaurant and the business. When Beth discovers the truth, she can rescind the contract on the basis of​ ​a. mistake. b. ​fraud. ​c. none of the choices. ​d. undue influence.

b. fraud

Isaac holds one ton of perishable fruit in storage for Juice Smoothies Corporation. Juice Smoothies does not pay for the storage. Isaac sells the fruit to Kayo Beverage Company. This sale represents​ ​a. a breach of contract. b. ​a mitigation of damages. ​c. restitution. ​d. liquidated damages.

b. mitigation of damages

Moe threatens physical harm to force Norel to contract to pay him for protecting her store against vandalism and destruction. Norel may​ ​a. recover from the local police for their failure to protect her store. b. ​rescind the contract or refuse to comply with its terms. ​c. do nothing once she has agreed to pay. ​d. recover from her insurer for the cost.

b. rescind the contract or refuse to comply with its terms

Contractors LLC agrees to build a store for Discount Retail, Inc., at a specific location. Before construction begins, the local zoning law is changed to prohibit commercial buildings at that location. In this situation​ ​a. Discount must compensate Contractors for its lost profit. b. ​the contract is discharged. ​c. Contractors is in breach of contract. ​d. the local zoning authority is in breach of contract.

b. the contract is discharged

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OptiBank through Newt's investment firm. Unknown to Mona, Newt realizes a commission from the investment. Most likely, Mona may rescind the contract on the basis of​ ​a. fraud. b. ​undue influence. ​c. duress. ​d. mistake

b. undue influence

Ron offers to pay Sara to pick up and deliver certain business documents within thirty minutes. Sara can accept the offer only by completing the task within the deadline. If she does, Ron and Sara will have​ ​a. a void contract. b. ​a unilateral contract. ​c. an executive contract. ​d. a bilateral contract.

b. unilateral contract

Guido and Hal want to rescind their contract under which Guido sold Hal a mountain bike for $100. To rescind the contract​ ​a. the parties can keep the "benefits" of their bargain. ​b. Guido must return the $100 only. c. ​Guido must return the $100 and Hal must return the bike. ​d. Hal must return the bike only.

c. Guido must return the $100 and Hal must return the bike

Which of the following is an example of past consideration? a. Mario agrees to pay $500 for Millie's old bicycle. b. Millie and Mario have an agreement for the purchase of her bicycle for $500. Millie then convinces Mario to pay $600 instead. c. Millie promises to give Mario her bicycle because he did landscaping work for her last week. d. Mario agrees to perform landscaping work for Millie in exchange for her bicycle.

c. Millie promises to give Mario her bicycle because he did landscaping work for her last week

Which of the following is most likely an example of undue influence. a. George persuades Matt to reduce the cost of his services by threatening to give Matt a bad Yelp review if he doesn't get a discount. b. George tells Matt he's a bad actor. As a result, Matt loses confidence in himself and breaches his contract with the movie studio by failing to show up to work. c. George threatens Matt that he will burn his house down with his family inside if he doesn't sign a contract with George's movie studio. d. George is Matt's attorney and has gained Matt's trust over the years. George convinces Matt to sign a new contract with a movie studio which gives George an usually high percentage of Matt's acting income.

d. George is Matt's attorney and has gained Matt's trust over the years. George convinces Matt to sign a new contract with a movie studio which gives George an usually high percentage of Matt's acting income

Ann offers to buy Beth's land only if an appraiser estimates that its current value is more than a certain price. Later, the appraiser deems the worth of the land to be less than Beth's price. Ann and Beth's obligations ​a. must now be renegotiated. ​b. are on "hold." ​c. must still be performed. d. ​are discharged.

d. are discharged

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is​ ​a. liable to Niki under the concept of rescission and new contract. ​b. not liable to Niki. ​c. liable to Niki under the preexisting duty rule. d. ​liable to Niki under the doctrine of promissory estoppel.

d. liable to Niki under the doctrine of promissory estoppel

Juan and Isidro enter into a contract to buy, restore and reopen the Coastal Park Carousel. Before either party begins to perform, they agree to cancel their deal. This is​ ​a. specific performance. ​b. novation. ​c. accord and satisfaction. d. ​mutual rescission.

d. mutual recession

Dry Gulch Farms hires Elliot to repair its irrigation system on site on a certain date for $2,500, but Elliot does not show up as agreed. Dry Gulch hires Fernando to do the job for $2,000. Dry Gulch may recover from Elliot​ ​a. consequential damages. ​b. compensatory damages. ​c. nothing. d. ​nominal damages.

d. nominal damages

Carlos and David contract for the sale of five hundred head of Carlos's cattle for $95 per head. Unknown to either party, an unforeseen storm has struck the herd and many of the cattle have died. David is​ ​a. entitled to recover the value of the lost cattle. ​b. not required to pay due to the unilateral mistake. ​c. required to pay because he assumed the risk the cattle might die. d. ​not required to pay due to the bilateral mistake.

d. not required to pay due to the bilateral mistake

A contract for a sale of land from Bayside Properties, Inc., to City Development Corporation contains an erroneous legal description. The most appropriate remedy for these parties is​ ​a. specific performance. ​b. restitution. ​c. rescission. d. ​reformation.

d. reformation

Porches & Verandas, Inc., agrees to build a screen porch for Quinn, but fails to complete the job. Quinn hires Ramadas, Inc., to finish the project. Quinn may recover from Porches & Verandas​ ​a. the contract price less costs of materials and labor. ​b. the contract price. ​c. profits plus the costs incurred up to the time of the breach. d. ​the costs needed to complete construction.

d. the costs needed to complete construction

Industrial Engineering, Inc., promises to give stock options to Jasmine for processes she has already designed for the firm. This promise is enforceable​ ​a. because it is an illusory promise. ​b. because it is a new contract. ​c. because it is supported by past consideration. d. ​under no circumstances.

d. under no circumstances

In which of the following circumstances would a contract be VOID? a. a minor was a party to the contract. b. all of these. c. a person was intoxicated to the point of being unable to understand the consequences of his actions at the time of signing the contract. d. a person was intoxicated at the time of signing the contract. e. a person had been declared incompetent by a court of law prior to signing the contract.

e. a person had been declared incompetent by a court of law