chapter 7 contact law quiz

37) R has been leasing warehouse space for 2 years under a five-year lease. Business has been good and R wants to build his own Warehouse. he also wants to be fully released from liability under the present lease agreement. This can be accomplished by? A. assignment. B. unilaterally session. C. constructual divorce. D. Mutual recession.

R's objective could be met by Novation or by Mutual recession, but not by assignment or unilateral recession

25) a contract made as a joke or in jest is precluded from becoming a valid contract because it lacks? A. contractual intent. B. acknowledgement. C. Competent parties. D. Valuable consideration.

a contract made in jest is not based on mutual agreement and does not reflect contractual intent

19) if a contract is signed under duress? A. The aggrieved party May subsequently declare the contract void. B. Either party May declare the contract voidable. C. The aggrieved party must declare the contract voidable. D. The aggrieved party must execute the contract

a contract signed under duress may be disavowed by the injured party only.

8) A lender agreed not to foreclose on a delinquent mortgage loan provided that the borrower agreed to a new repayment schedule. This agreement constitute? A. voidable contract. B. Implied contract. C. Contract for forbidding. D. Deed limitation.

the lenders agreement not to foreclose constituted an agreement not to do a certain thing, thus a contract for forbiddance and a express contract.

33) the rule that permits oral evidence to complete an otherwise incomplete within contract is the? A. uniform Commercial Code. B. rule of specific performance. C. parol evidence rule. D. statue of frauds.

the parol evidence rule permits oral evidence to fulfill an otherwise incomplete contractor

12) an attorney in fact the derives his power from? A. the State Bar Association. B. A power of attorney. C. Judicial appointment. D. Popular election.

the power of an attorney-in-fact are derived from a power of attorney.

17) and his will, P, sir. left his farm to P, jr. the farm had never been surveyed, but P, jr. had always understood that it contains 110 acres. P, jr. Sold the land to W, representing it to contain 110 acres. W had is surveyed and found that it contained only 100 acres. which of the following statements would be true? A. P's statements to W constitute fraud. B. P's statement to W constitute innocent misrepresentation. C. either W or P could declare the contract void. D. only P could declare the contract void.

the statement of the seller, P, jr., constituted innocent misrepresentation and made the contract voidable by the buyer. P, jr., did not commit fraud, and the contract could not be voided by him.

32) all of the following must be in writing in order to be enforceable except a? A. Contract to purchase real estate. B. Mortgage. C. Month-to-month rental agreement. D. Lease for 13 months.

the statue of frauds requires that all contracts for the sale of mortgage of real estate be in writing. this requirement does not apply to month to month rentals or leases for 1 year or less

42) the law was limits the time in which a wrong party May file legal action for obtaining Justice is the statue of? A. frauds. B. Limitations. C. Novation. D. Performance.

the statue of limitation limit the time it which a wronged party may bring legal actions for obtaining Justice.

36) substitution of a new contract and a new party for a previous one is known as? A. Innovation. B. Assignment. C. Subrogation. D. Novation.

the substitution of a new contract for an earlier contract, or the substitution of new parties to an old contract.

28) L agreed to purchase real estate from G, and gave him an earnest money deposit at the time the agreement was made. Which of the following constitute the consideration and this contract? A. earnest money deposit. B. Total how to be paid for the property. C. Listing price. D. Commission amount.

the total amount to be paid for the property is the consideration. Earnest money is evidence of good faith and available as liquidated damages.

18) mutual agreement is missing when a contract is made? A. With a minor. B. After business hours. C. Under duress. D. Verbally.

there cannot be mutual agreement when a contract is made under Menace, undue influence, or duress.

3) a contract based upon a promise exchanged for a promise is a? A. unilateral contract. B. Implied contract. C. Partial contract. D. Bilateral contract.

A bilateral contract is based upon a promise from one party in exchange for a promise from the other party.

5) a contract based upon one's parties promise in exchange for an egg from the other party is classified as a? A. Bilateral contract. B. Unenforceable contract. C. Executed contract. D. Unilateral contract.

A unilateral contract is based upon a promise from one party in exchange for an act from the other party

6) a unilateral contract is enforceable against? A. Both parties. B. the offeror. C. the offeree. D. neither party.

A unilateral contract is enforceable against the offeror, but not against the offeree

16) S listed his home for sale through broker w. Purchaser P agree to all the terms of the listing and sign a purchase agreement. This agreement constituted a contract when? A. P signed the purchase agreement. B. W accepted the sign offer from P. C. W handed the offer to S. D. S signed the purchase agreement.

a contract existed as soon as s, the sellers, sign the purchase agreement. The purchaser, P, had previously signed the offer but no contract existed until it was signed by the seller.

7) and agreement and a contract in which one or both parties agreed not to act in a certain manner is known as? A. Forbiddance. B. forbearance. C. forgiveness. D. forfeiture.

a contract for forbiddance is an agreement not to do a certain thing

27) L borrow money from M at a rate of interest which exceeded the usury ceiling and their state. After making only two payments, L stop making any more payments on the loan. Could M bring legal action to collect a loan balance? A. no, because I am completed partial payments performance by making two payments. B. no, because a contract that requires the breaking of a law cannot be enforced. C. no, because the principal balance on the loan is an uncontrollable debt. D. no, because the charging of usurious interest rates constitute fraud.

a contract which requires a violation of the law is not enforceable, even though partial performance has taken place.

29) all of the following are examples of valuable consideration except? A. Barter of goods for service. B. Gift a property to a friend. C. Even trade of one property for another. D. sell of property for less than market value.

a gift of property to a friend is based on a good consideration. Barter, trade or sale constitute a valuable consideration.

35) when a lessee in a rental property of Sciences lease to another party, he assumes the role of? A. assignor. B. assignee. C. sublessee. D. Mortgagor.

a lessee who assigns his lease becomes both the assignor and the sublessor

23) a real estate licensee who committed a fraudulent act in order to make a sale? A. may be subject to criminal penalties. B. May be subject to suit for civil damages. C. May have his slash her license revoked. D. May be subject to all of the above.

a licensee who commits fraud may be subject to criminal prosecution, civil action for damages, and license revocation.

30) in contract law, a "mistake" refers to? A. Ignorance of the law. B. Innocent misrepresentation. C. Poor judgement. D. ambiguity in negotiation.

a mistake in a contract results from ambiguity in negotiations. It is not the result of ignorance, innocent misrepresentation, or poor judgement

11) D and M are going to Europe for a month and want to give someone at home the authority to sign certain real estate settlement papers for them while they are gone. They would do this by appointing a? A. Attorney in fact. B. Power of attorney. C. Attorney. D. lessee

a power of attorney is a legal instrument which appoints a person as the attorney-in-fact for another person.

13) W, who is moving to another city, wants to give his agent, broker Z, the power to sign a sale contract and deed to real estate which he wants to sell. which of the following statements would be correct? A. W could not give Z a written power of attorney to act for him in this matter. B. W. could a point Z by means of an oral power of attorney. C. Z can sign the contract and deed as a result of the listing agreement. D. the power of attorney would have to be written, acknowledge, and recorded.

a power of attorney may not be granted orally. It must be in writing, acknowledged and recorded.

44) a seller changes his mind about selling his property before a buyer is found. What must he do with the listing contract? A. Ratify the contract. B. Resend the contract. C. renounce the listing. D. Revoke the listing.

a seller may revoke his offer of employment while a broker could renounce the listing

10) a contract which is legally insufficient is classified as? A. Voidable. B. Void. C. Unavoidable. D. Illegal.

any contract which does not meet the requirements of law would be classified as void

34) an assignment? A. Released the original contract parties from further liability to contract. B. Is a specific form of power of attorney. C. Can be used to transfer a right of Interest. D. Is used when an estate sale is necessary.

an assignment is a contract that transfers a right or interest. It does not release the parties from further liability under that contract. It is not a special form of power of attorney.

31) a contract which is in the process of being carried out is? A. Executed. B. Executing. C. Excretory. D. Exectrix

an executory contract is one in which something Still Remains to be done.

43) if no fraud is presume, which is the statues of a contract signed by illiterate person? A. valid. B. void. C. Voidable. D. Unenforceable.

an illiterate person may enter into a contract and it is valid

2) an implied contract may arise from? A. Unilateral contract. B. implied contract. C. Partial contract. D. Bilateral contract.

an implied contract arises from the actions of the parties, and not their stated intent, as would occur with a written or oral agreement

15) H install a built-in microwave oven and his home. When he saw the home to R, he did not mention that the oven was not included in the sale. R expected it to be included. this contract of sale is a legally valid contract because? A. Once installed, the oven becomes a fixture and therefore part of the property. B. H had agreed to the conclusion of the oven. C. H's actions constituted fraud. D. a meeting of the minds was present.

built-in appliances become fixtures and a part of the Realty unless excluded from the sale or removed prior to the offer to sell

26) a contract based upon an unlawful objective would be? A. Binding. B. Enforceable. C. Void. D. Voidable.

contracts with an unlawful objective are traded as void

40) the failure of one party to a contract to perform as agree without a valid excuse constitutes? A. A form of consideration. B. A breach of contract. C. partial performance. D. duress.

failure to live up to one's constructional obligation constitutes a breach of contract

38) if the objective of a contract becomes legally impossible to accomplish? A. The law will consider the contract just charged. B. A lawsuit for specific performance is appropriate. C. A lawsuit for money damages is appropriate. D. Liquidated damages would be appropriate.

if a constructual objective should become legally impossible to accomplish, the law will consider the contract to be discharged. Lawsuit for specific performance, monetary damages, and liquidated damages would be inappropriate because the court will not enforce them.

41) legal action to force the breaching party to carry out the remainder of a contract is called a suit for? A. liquidated damages. B. Specific performance. C. Partial performance. D. Breach of contract.

legal action to compel a breaching party to carry out the remainder of the contract is known as an action for specific performance

21) an act intended to deceive the other party in a contract is? A. Duress. B. Menace. C. Mistake. D. Fraud.

occurs when one party deliberately deceives the other party to a contract

22) a contract based on fraud is? A. Void. B. Voidable by the injured party. C. Voidable by either party. D. Unenforceable.

only the injured party may disavow a contract based on fraud.

1) M agreed orally to purchase a used car from C provided M could get a bank loan for a part of the purchase price. M gave C money as an earnest money deposit. Was this agreement and express contract? A. yes, because it results from the started intent of the parties. B. yes, because C accepted earnest money deposit. C. no, because the agreement was not in writing. D. no, because it was based upon a continuously

the agreement to buy and sell the car results from the started intent of the parties. it was not necessary for the contract to be in writing, nor was an earnest money deposit required. The inclusion of a contingency did not affect his status as an express contract.

14) a person who executes a contract for a corporation must derive The Authority from? A. the corporation registered agent. B. the state Corporation Commission. C. The corporate board of directors. D. A court of competent jurisdiction

the authority to execute a contract in the name of a corporation's board of directors.

24) broker N listed a home for sale wherein the seller started that the existing loan was assumable by the buyer. N told this to prospective buyers, and in time a sales contract was executed. However, the lender refused to allow the Assumption to take place. As a result of this, the? A. Seller can resend the sale contract. B. Buyer can resend the sale contract. C. Broker will lose his license. D. Broker can be sued for fraud.

the broker statement to the purchaser constituted innocent misrepresentation, and the contract would be voidable by the purchaser only. fraud was not presented, and the broker would not be subject to license revocation.

4) F listed his home for sale with broker H. H agreed to advertise the property and to hold an open house weekly until a buyer was found. F agree to pay a commission 7% if a purchase was found. This agreement constituted as a? A. Bilateral contract based on good consideration. B. unilateral contract based on good consideration. C. Bilateral contract based on valuable consideration. D. Unilateral contract based on valuable consideration

the contract was based upon a valuable consideration in the form the exchange of promise.

39) in a state which had enacted the uniform vendor and purchaser risk Act, G sold his home to M, who took position prior to settlement. after moving in but before settlement took place, the house was destroyed by a tornado. Which of the following statements is true? A. The Lost will be borne by G. B. The Lost will be borne by M. C. M is entitled to a refund of the money already paid. D. M is relieved of his duty to pay the purchase price

under the uniform vendor and purchaser risk act, the risk of loss to the property from casualty remains with the seller until title passes to the purchaser or possession is given to the purchase, whichever occurs first

20) a real estate agent who takes advantage of an elderly properly owners ignorance of the value of his own property in order to include him to sell below market value would have committed? A. undue influence B. duress C. menace D. A mistake

undue influence is the taking of an unfair advantage. duress is the use or threat of force to complete the signing of a contract against one's well.

9) a contract with spines one party but not the other is? A. Unenforceable. B. void. C. Voidable. D. Illegal.

when one party to a contract is not bound by the contract, the contract is voidable by the party who is not bound by it