Chapter6

A law forbidding the conduct of certain kinds of business on Sunday is known as which of the following? Multiple choice question. An Establishment Clause (of the United States Constitution) law A Free Exercise (of the U.S. Constitution) law A blue law A red law

A blue law

If an offeree has changed the terms of an original offer, the offeree has issued which of the following? Multiple choice question. A substitution A counteroffer A novation A rescission

A counteroffer

Which of the following is not an element of a valid offer? Multiple choice question. Reasonable definiteness in the terms of the offer Present intent to enter a contract Communication of the offer to the offeree A counteroffer equal in value to the consideration proposed in the offer

A counteroffer equal in value to the consideration proposed in the offer

Under the Uniform Commercial Code (UCC), if the owner of a customized car is a dealer and he makes a written, signed offer to sell the car to a prospective buyer indicating that his offer will remain open for seven (7) days, the owner has made which of the following? Multiple choice question. An invitation to negotiate A gratuitous offer A unilateral contract A firm offer

A firm offer

Usually, an anticipatory breach of contract is the equivalent of which of the following? Multiple choice question. A material breach of contract Substantial performance A non-material breach of contract Commercial impracticability

A material breach of contract

A counteroffer is considered which of the following? Multiple choice question. A revocation of the original offer A new offer A void offer The offeror's modification of the original offer

A new offer

dentify a true statement about compensatory damages. Multiple choice question. The measure of compensatory damages would be the sum of the contract price and the market price of the goods. A plaintiff in a breach of contract action is entitled to recover a sum equal to the actual damages suffered. Both parties in a contract make restitution to each other by returning whatever goods, property, etc. were transferred under the contract. The victim of a breach of contract is entitled to recover all indirect losses that were incurred as a consequence of that breach.

A plaintiff in a breach of contract action is entitled to recover a sum equal to the actual damages suffered.

True or false: The general rule is that an effective acceptance can be a modified version of the original offer. True false question.TrueFalse

False The general rule is that an effective acceptance must be a mirror image of the offer.

True or false: A contract is executory when both parties to the contract have completed their performance. True false question.TrueFalse

False A contract is executory until both parties fully perform their obligations.

How many states have adopted either all or part of the Uniform Commercial Code (UCC)? Multiple ChoiceTwenty-seven (27)Forty-nine (49)Thirty-eight (38)Fifty (50)

Fifty (50)

Intentional untruths in a contract constitute which of the following? Multiple choice question. Misrepresentation Fraud Undue influence An illusory promise

Fraud

If a contract is the product of undue influence or mistake, the contract may usually be rescinded by the innocent party based on which of the following? Multiple choice question. Lack of genuine assent Duress Misrepresentation or fraud Conscionability

Lack of genuine assent

Which of the following types of damages relate to contracting parties agreeing in advance about the measure of damages recoverable by the nonbreaching party in the event that the other party breaches the contract? Multiple choice question. Consequential Compensatory Punitive Liquidated

Liquidated

Normally, what is the best available substitute for actual performance of a contract? Multiple choice question. Specific performance A temporary injunction A permanent injunction Money damages

Money damages

Which of the following has predominantly determined when promises become enforceable contracts? Multiple choice question. Federal statutes State statutes The common law United States Supreme Court decisions

The common law

According to the Uniform Commercial Code (UCC), a contract for the sale of goods having which of the following values must be in writing to be enforceable? Multiple choice question. $500 $250 $15 $100

$500

When parties overtly and explicitly manifest their intention to enter an agreement, the result (if other requirements are fulfilled) is which of the following? Multiple choice question. A quasi-contract An implied contract An express contract A voidable contract

An express contract

An anticipatory breach of contract is also known as which of the following? Multiple choice question. Anticipatory repudiation Anticipatory rejection A non-material breach Anticipatory revocation of acceptance

Anticipatory repudiation

True or false: In a bilateral contract, acceptance is not effective until communicated. True false question.TrueFalse

True

When fully performed, a contract has been __________. Multiple ChoicerevokedrescindedexecutedCorrectvoided

executed

Kadija enters into a contract to build a computer for Fenil. Fenil pays Kadija $300, and the computer is to be delivered three weeks later. Until the computer is delivered, this contract is __________. Multiple ChoiceexecutoryCorrectexecutedsubject to a concurrent conditionsubject to a condition subsequent

executory

in rare situations, a court may impose an __________ or __________ contract when necessary to prevent unjust enrichment. Multiple Choiceimplied-in-law; bilateralimplied-in-fact; quasi-implied-in-fact; unilateralimplied-in-law; quasi-

implied-in-law; quasi-

A(n) __________ contract is created when an offeror promises to keep an offer open for a specified period and, in return, the offeree pays consideration. Multiple ChoiceoptionCorrectvoidvoidableunilateral

option

Contractual duties may be delegated to someone who is not a party to the contract. If the person to whom the duties are delegated does not perform them as specified, __________. Multiple Choicethe delegatee is primarily responsible and the delegator is secondarily responsible for performance of the dutiesCorrectthe delegator is solely responsible for nonperformance of the dutyIncorrectneither the delegator nor the delegatee is responsible because the delegation rendered the contract voidthe delegatee is solely responsible for nonperformance of the duty

the delegatee is primarily responsible and the delegator is secondarily responsible for performance of the duties

If someone offers $100 to anyone who returns her lost cat, the act of returning the cat is the acceptance of a(n) __________ contract. Multiple ChoiceexpressunilateralCorrectimplied-in-factbilateral

unilateral

Which of the following is necessary for a contract to be legally enforceable, requiring that the parties have the legal ability to enter the contract (i.e., they must be sane, sober, and of legal age?) Multiple ChoiceConsiderationLegalityGenuineness of assentCapacity

Capacity

Which of the following is the most common method of contractual discharge? Multiple choice question. Anticipatory repudiation Complete performance Demand for assurance of performance Substantial performance

Complete performance

Which of the following refers to the bargained-for legal value that one party agrees to pay or provide to secure the promise of another? Multiple ChoiceReformationAgreementConsiderationCorrectRestitution

Consideration

Identify a true statement about the element of consideration in contracts. Multiple choice question. A contract that includes consideration is classified as a firm offer. A contract formed with consideration is not enforceable by law and is termed a void contract. Consideration consists of a detriment to the promisee that is bargained for by the promisor. If the promisee suffers legal detriment because of consideration, then the contract is not enforceable.

Consideration consists of a detriment to the promisee that is bargained for by the promisor.

Which of the following is correct regarding the adequacy of consideration? Multiple choice question. Courts often inquire into the adequacy of consideration. Courts infrequently inquire into the adequacy of consideration. Courts usually inquire into the adequacy of consideration. Courts will not evaluate extreme inadequacy of consideration to determine whether fraud, duress, or unconscionability occurred.

Courts infrequently inquire into the adequacy of consideration.

True or false: Under the Uniform Commercial Code (UCC), a court cannot enforce a contract for the sale of goods if one (1) or more terms are missing. True false question.TrueFalse

False

Which of the following types of conditions are not explicitly stated in a contract but are derived by the court from the conduct of the parties and the circumstances surrounding the bargain. Multiple choice question. Concurrent Express Implied-in-fact Implied-in-law

Implied-in-fact

Which of the following is correct regarding the applicability of the Uniform Commercial Code (UCC) if a contract involves both goods and services? Multiple ChoiceThe UCC will apply, since Article 2 of the UCC applies to contracts for the sale of goods, and Article 2A applies to contracts for the provision of services.In determining whether the UCC applies, the court will apply the "supermajority" rule, and if over 2/3rds of the contract's purpose involves the provision of goods, the court will apply the UCC.In determining whether the UCC applies, the court will evaluate whether the dominant purpose of the contract is to provide a service or to sell a good.CorrectSince a portion of the contract involves services, the Uniform Commercial Code (UCC) will automatically not apply.Incorrect

In determining whether the UCC applies, the court will evaluate whether the dominant purpose of the contract is to provide a service or to sell a good.

Regarding the discharge of contracts, which of the following is correct regarding legal impossibility? Multiple choice question. It involves situations where the subject of an agreement was rendered illegal by a change in the law after the agreement but before its performance. It discharges a nonbreaching party's duties and permits that party to sue for damages against a breaching party. Nonperformace by a party because of legal impossibility is not excusable by law if the contract has already been established. It involves situations where duties are discharged because of unforeseen events that render performance exorbitantly expensive.

It involves situations where the subject of an agreement was rendered illegal by a change in the law after the agreement but before its performance.

Which of the following is correct regarding an option contract? Multiple choice question. It is enforceable by its terms. It is ordinarily not enforceable by its terms, since courts usually consider it a contract of adhesion. It is a quasi-contract. Its enforcement is based upon the application of equitable principles.

It is enforceable by its terms.

Which of the following is correct regarding consideration? Multiple ChoiceIn order for a contract to be enforceable, the consideration given by both parties must be equal or comparable in value.In order for a contract to be enforceable, at least one (1) of the contracting parties must give consideration.It is generally used by the courts to distinguish a contract from a gratuitous promise.CorrectIt is part of the good faith obligation implied in every contract, and requires that the parties must be considerate of (i.e., careful not to cause inconvenience or hurt to) each other.

It is generally used by the courts to distinguish a contract from a gratuitous promise

Which of the following is incorrect regarding a liquidated damages clause? Multiple choice question. It is fully enforceable if it is a good faith effort to assess in advance an accurate measure of damages. It limits the nonbreaching party to recovery of the amount provided for in the clause. It is fully enforceable if it is not designed to be a penalty. It is the measure of damages available to a homeowner if the contractor creates a home defect resulting in substantial water damage.

It is the measure of damages available to a homeowner if the contractor creates a home defect resulting in substantial water damage.

Which of the following is correct regarding the communication of an offer? Multiple choice question. It prevents the offeror from setting an expiration date for the offer. It provides the offeree with an opportunity to create a contract by accepting the offer. It creates a binding contract regardless of whether the offeree accepts the offer. It establishes an offer that cannot be revoked by the offeror any time prior to acceptance.

It provides the offeree with an opportunity to create a contract by accepting the offer.

Identify a remedy used to illustrate the wrongfulness of a breach when the breaching party has sustained no actual damages. Multiple choice question. Incidental damages Rescission Nominal damages Mitigation

Nominal damages

At a philosophical level, the fundamental point of a contract is which of the following? Multiple choice question. Equitable remedy Equal consideration Constitutional protection Personal freedom

Personal freedom

Suppose that a party enters a contract while intoxicated but them affirms the contract after becoming sober. The party's affirmation of the contract is known as which of the following? Multiple choice question. Rescission Ratification Renunciation Revocation

Ratification

Which of the following is an equitable remedy that permits the court to rewrite a contract because it did not express the parties' true intentions? Multiple ChoiceReformationCorrectRestitutionRescissionInjunction

Reformation

If the objective evidence indicates that a party did not understand the contract due to his intoxication, which of the following is correct? Multiple choice question. The contract would be considered void. The contract would be enforced through the doctrine of commercial impracticability. The contract would be enforced through the doctrine of substantial performance. The contract would be considered voidable.

The contract would be considered voidable.

Identify a true statement about remedies in law for a breach of contract. Multiple choice question. The total costs incurred by a nonbreaching party because of a breach is recovered through nominal damages. The law requires a nonbreaching party to take reasonable steps toward mitigation. Rescission cannot be awarded in breach of contract cases except when the contract is illegal. The direct losses incurred by a nonbreaching party is recovered as punitive damages.

The law requires a nonbreaching party to take reasonable steps toward mitigation.

Communication of an offer expresses which of the following? Multiple choice question. The third party beneficiary's intent to accept her benefits under the contract The offeror's intent to make the offer The incidental beneficiary's intent to accept his benefits under the contract The offeree's intent to make the offer

The offeror's intent to make the offer

Which of the following is correct regarding the elements of fraud? Multiple choice question. The injured party need not have relied on the misrepresentation. There must be a misrepresentation of a material fact. The untruth may be unintentional. The untruth need not cause injury to any party.

There must be a misrepresentation of a material fact.

Which of the following is true regarding implied-in-law conditions? Multiple ChoiceThey are also called constructive conditions.CorrectThey are derived by the court from the conduct of the parties and the circumstances surrounding the bargain.IncorrectThey are also known as implied-in-fact conditions.They impose no binding duties on the parties until a contractually-specified event occurs.

They are also called constructive conditions.

If one party to a contract so dominated the other party that the dominated party did not act independently, this is known as which of the following? Multiple choice question. Undue influence Mistake Promissory estoppel Duress

Undue influence

The legal sufficiency of consideration depends predominantly on which of the following? Multiple choice question. The type of consideration Whether the promisee suffered detriment The value of the consideration Whether the consideration is in the form of goods or services

Whether the promisee suffered detriment

In a contract with a __________, contracting parties have bound themselves to perform unless a specified event occurs. Multiple Choicecondition subsequentCorrectconcurrent conditioncondition precedentcommensurate condition

condition subsequent

A free-market system cannot operate effectively and fairly without a reliable foundation in __________. Multiple Choice equality of consideration equity government regulation contract law

contract law

If one of the parties to a contract is forced to agree out of fear of harm, genuineness of assent has not been achieved. The legal defense of __________ is available in such a situation, and the contract may be rescinded. Multiple Choiceunconscionabilityundue influenceduressCorrectfraud

duress

Often, a third party receives a benefit from a contract even though conferring that benefit was not the contracting parties' primary purpose or intent. In this situation, the third party is known as a(n) __________ beneficiary. Multiple Choicecontingentincrementalthird-partyincidental

incidental

A __________ breach of contract discharges the nonbreaching party's duties and permits that party to sue for damages or __________ the contract and seek __________. Multiple Choicematerial; rescind; restitutionCorrectnon-material; rescind; restitutionnon-material; revoke; a permanent injunctionmaterial; revoke; a temporary injunction

material; rescind; restitution

Article 2 of the Uniform Commercial Code (UCC) governs transactions involving __________. Multiple Choicethe provision of servicesthe sale of goodsCorrectsecurities (i.e., stocks and bonds)real estate

the sale of goods

Agreements that are so thoroughly one-sided that fairness precludes enforcing them are known as __________ contracts. Multiple ChoiceunconscionableCorrectvoidablevoidquasi-

unconscionable