Contracts Exam 1

The offer's intention to become bound by the offer must be subjectively clear.

false

The terms of service that a person agrees to before loading an app on a phone are not truly legally binding.

false

Utilities include whatever is reasonably needed to maintain a minor's standard of living, such as food, clothing, shelter, and medical services.

false

Voluntary consent to a contract is not lacking if one of the parties is mistaken about an important fact concerning the subject matter of the bargain.

false

When both parties to a contract are mistaken about the same material fact, a unilateral mistake has occurred.

false

Under the objective theory of contracts, a contract is not enforceable without a clearly defined objective.

fasle

Only a mistake of value or quality makes a contract voidable.

false

Shockingly inadequate consideration can indicate fraud in a contract.

true

The contracts entered into by a minor are voidable at the option of that minor.

true

The lack of a license in certain occupations bars the enforcement of work-related contracts.

true

To be legally sufficient, consideration must be something of value in the eyes of the law.

true

To enforce a contractual promise, there must be an exchange of consideration underlying the bargain.

true

With respect to consideration, a bargained-for exchange distinguishes a contract from a gift.

true

Contract law does not distinguish between moral and legal obligations.

false

Contracts entered into by mentally incompetent persons are not valid under any circumstances.

false

If contracting parties attach materially different meanings to a contract word or term subject to more than one reasonable interpretation, the contract is void.

false

If intoxication is purely voluntary, the intoxicated person's contracts are not voidable.

false

In general, courts question the adequacy of consideration.

false

Les agrees to install a new hard drive and. modem on Marilee's computer in exchange for four of her used textbooks. After he installs the hard drive. Les says he won't install the modem unless Marilee gives him two more books. What legal position are the parties in now? a. Les can receive the extra books in exchange for doing more work, as he has given good and fair consideration in exchange. b. Les will only get one more book, because two is too many more to be fair. c. Marilee must give Les the additional books, d. Marilee can sue for breach of contract, because Les had a preexisting duty to do all of the work.

Marilee can sue for breach of contract, because Les had a preexisting duty to do all of the work.

Kristoff wants to sell hig collection of shoes and offers to sell them to Marcus, who just got paid. Marcus is hesitant to accept, but Kristoff lets Marcus know that if he doesn't accept, then there may be trouble. Fearing that Kristoff means to physically harm Marcus, or rob him, Marcus accepts the offer. Will a court enforce this contract? a. No, because the consent was not voluntary. b. Yes, because all four requirements of a contract are present. c. Yes, because there is a valid offer and acceptance. d. No, because it is illegal to sell shoes

No, because the consent was not voluntary.

Alex, a 25-year-old banker, joined his friends at a "pub-hopping" trip that had participants visiting six bars in a two-hour span of time. Between the fifth and final pub stop, a highly intoxicated Alex stopped to use the bathroom at a local luxury car dealer, who was holding a special evening sales event. Seeing all the cars and thinking he was signing up for training as a race car driver, Alex mistakenly signed a contract to purchase the $188,425 emerald-green Ferrari displayed in the showroom. The next day, a sober Alex found the contract paperwork at the foot of his bed, and with no memory of the previous evening, quickly headed to the dealership. As he began to explain to the sales manager Janine about the drunken purchase mistake, he changed his mind, and decided to keep the car. Manager Janine, however, took the contract copy from Alex and ripped it up, saying "You're not responsible enough to own this car." Does Alex keep the Ferrari? a. No, because Alex lacked legal capacity at the time he signed the contract. b. Yes, because now the car is considered used and can't be returned. c. Yes, because Janine cannot void the contract. d. No, because either party is entitled to void the contract.

Yes, because Janine cannot void the contract.

Susan drops by her neighbor Dean's garage sale and buys a painting for $10 that both she and Dean think is a copy of a piece by Matisse, a well- known painter. Later, Susan is delighted to discover that the painting is actually an original Matisse worth $50,000,000. Dean hears the news and wants the painting back. Will Dean be entitled to rescind the contract? Why or why not? a. No, Dean is not entitled to rescind, because an innocent misrepresentation has occurred. b. No, Dean is not entitled to rescind. He has made a unilateral mistake because he made an important factual error. c. Yes, Dean is entitled to rescind. This is a mutual mistake, because both parties made an important factual error. d. Yes, Dean is entitled to rescind, because Susan has violated the relationship of trust between them,

Yes, Dean is entitled to rescind. This is a mutual mistake, because both parties made an important factual error.

Doris, an eighty-seven-year-old widow, collapsed while shopping at a store. She was taken to the Detroit city hospital by ambulance. She stayed there for fourteen days and was then transferred to another hospital, where she later died. She never regained consciousness. After she died, the hospitals and the ambulance company sued her estate to recover their expenses. Will Doris's estate be held liable for the medical bills? a. Yes, because there was a quasi contract. b. Yes, because there was an actual contract. c. No, because there was no quasi contract. d. No, because she could not have entered a contract while she was unconscious.

Yes, because there was a quasi contract.

Jackson offers to pay Casey $50 for his used business law textbook. Casey agrees to sell it for that amount. They agree to meet one week later to exchange the money for the book. Casey and Jackson have formed: a. a bilateral contract. b. a formal contract. c. no contract. d. a unilateral contract.

a bilateral contract.

To download software for his Internet connection, Nelson had to click on several boxes on the Web site that stated "I agree" or "I accept." Nelson did not read the accompanying text before clicking on the boxes. In the event of a dispute between Nelson and the service provider, the contract terms will: a. be considered the terms of a binding contract. b. not be enforced. c. become proposals for the terms of a binding contract. d. be enforced only if the service provider shows that Nelson read them.

be considered the terms of a binding contract.

Patrick agrees to pay Anna $25,000 in exchange for Anna taking Patrick's hazardous waste and surreptitiously dumping it on the property of a competitor. After Anna dumps the waste, Patrick refuses to pay. This contract will: a. be void from the outset and, thus, unenforceable. b. be unenforceable due to usury laws. c. be enforced, because both parties agreed to the contract and will be held accountable to its terms. d. be enforced because it has sufficient consideration and is a bargained-for exchange.

be void from the outset and, thus, unenforceable.

Elise enters into a contract to purchase JD's house and then changes her mind. JD sues her for breach of contract. The lawsuit for a breach of contract will be governed by: a. agency regulations. b. common law of contracts. c. state statute. d. the Uniform Commercial Code (UCC).

common law of contracts.

Patricia drives to her favorite gas station and tells the attendant to fill her tank. The attendant asks Patricia what grade she wants, and she tells him,"regular." The attendant fills the tank. At this point, the contract between the station and Patricia is: a. unenforceable. b. executory. c. executed. d. void.

executory

A contract to do something that is prohibited by statutory law is illegal but not void from the outset.

false

A request to negotiate is an offer.

false

An expression of opinion can indicate an intent to enter into a binding agreement.

false

An innocent party who does not suffer harm as a result of a misrepresentation can nevertheless collect damages,

false

An invitation to submit bids is an offer.

false

An otherwise valid contract is enforceable even if the parties have not genuinely agreed to its terms.

false

Carol Rogers, a local millionaire, promises to donate $500,000 to the Springfield Humane Society, which the society plans to use to build a new animal hospital. Based on Carol's promise, the society begins work on the hospital. Carol then backs out of her offer. a. Carol will suffer from a bad conscience, but not from any lawsuit. b. Carol has violated the terms of a quasi in rem contract. c. Nothing can be done. Carol's donation was a gift. Promised gifs do no have to be delivered. d. Carol can be sued for the money under a theory of promissory estoppel.

Carol can be sued for the money under a theory of promissory estoppel.

Peggy offers to sell Shelby a purebred Scottish terrier puppy for $800. Shelby and Peggy do not discuss the dog's ancestry, but Shelby believes that the dog came from champion lines and agrees to the price. Shelby later discovers that the puppy is worth only $200. Can Shelby rescind the contract based on her mistake? a. Yes, because Shelby had a duty to investigate. b. Yes, because the dog was clèarly not worth $800. c. Probably not, because Shelby made a mistake about the dog's value, not a mistake about a material fact. d. Probably so, because Shelby made a mistake about an immaterial fact.

Probably not, because Shelby made a mistake about the dog's value, not a mistake about a material fact.

Mark agrees to buy Dale's one-half-ton truck so that he can pull his trailer. Both Mark and Dale believe that the truck is large enough to do the job. After they complete the deal, Mark hitches the truck to the trailer and attempts to pull the trailer without success. The contract between Mark and Dale can be rescinded because of: a. a beveled mistake. b. a unilateral mistake. c. a mutual mistake. d. an allowable mistake.

a mutual mistake.

Cathy promises to buy Mark's car for $2,000. Cathy is: a. a promisor. b. a promisee. c. an offeree. d. an officer.

a promisor.

McKenna offers to sell Lori her collection of hand-painted European tiles. Before Lori has a chance to accept, McKenna says, "Sorry, I changed my mind. I'm not going to sell the tiles." McKenna has just made: a. restitution. b. a counteroffer. c. a rejection. d. a revocation.

a revocation.

Sarah tells Jake that she is thinking about buying a car. Jake replies that he would like to sell Sarah one of his cars in a few weeks for a really good price. Jake has made: a. a statement that is not a valid offer for lack of definiteness. b. a statement that is not a valid offer for lack of communication. c. a valid counteroffer to Sarah's offer. d. a valid offer to Sarah.

a statement that is not a valid offer for lack of definiteness.

Carmen owns a 2009 Toyota Camry that he offers to sell to his friend Jamie for $12,000. Jamie accepts Carmen's offer. Jamie and Carmen have: a. an executed contract. b. a quasi contract. c. an implied contract. d. an express contract.

an express contract.

Blake is seeking to buy a mare that he can breed. Levi tells Blake about a horse that Levi wants to sell, stating that he (Levi) believes that the horse is extremely healthy and will be able to foal within eighteen months. After two years, the horse still has not foaled. The veterinarian informs Blake that the horse is physically incapable of breeding. In Blake's lawsuit to rescind the contract, it is: a. unlikely that a court will allow rescission, because Blake made a mistake about market value only b. unlikely that a court will allow rescission based on a mistake of fact. c.likely that a court will allow the rescission based on a mistake of fact d. likely that a court will allow the rescission based on a unilateral mistake.

likely that a court will allow the rescission based on a mistake of fact

The doctrine that prevents an offeror from revoking an offer once the offeror has justifiably of has begun performance known as: a. an option. b. a lapse of time c. promissory estoppel. d. violability of estoppel

promissory estoppel.

KJ Games, in Colorado, designs computer games that it markets and sells to customers via the Internet. A click-on agreement accompanies every download; no game can be installed on a buyer's computer if the buyer does not click on the words "I agree" when prompted. The click-on agreement clearly states in capital letters that all disputes will be settled in Colorado's state courts. Buyers of KJ's games are most likely: a. not required to accept this term of the contract. b. not required to file their lawsuits in Colorado. c. required to file any lawsuits in Colorado. d. required to arbitrate any disputes in Colorado.

required to file any lawsuits in Colorado.

A declaration that binds the person who makes it to do a certain act is a promise.

true

A fact that is important and central to the subject matter of a contract is a material fact.

true

A lender who makes a loan at an interest rate above the lawful maximum commits usury.

true

A minor can ratify a contract and thus make it enforceable

true

A preexisting duty may arise out of a previous contract.

true

A preexisting duty may be imposed by law.

true

Adequacy of consideration refers to "how much" consideration is given.

true

Consideration is the value given in return for a promise or in return or a performance.

true

Contests and lotteries are unilateral contracts.

true

Contracts entered into by mentally incompetent persons may be disaffirmed.

true

Generally, a unilateral mistake does not give the mistaken party any right to relief from the contract.

true

Philip receives a mail-order catalogue featuring a new style of water shoes that look perfect for river kayaking. He calls to order a pair and is told that the shoes are sold out. Philip can now: a. sue because the catalogue listing constituted a valid offer. b. sue for breach of contract. c. sue because the catalogue company improperly revoked its offer. d. try somewhere else; the catalogue did not make an effective offer.

try somewhere else; the catalogue did not make an effective offer.

Bryan tells his friend Jane, "I don't think it's fair that you don't have a cell phone and the rest of our friends do. In consideration of that unfairness, I will pay you $400 for you to buy a new phone." This contract is: a. unenforceable, because it is not a bargained-for exchange. b. enforceable, because it is a bargained-for exchange. c. enforceable, because it corrects an unfairness. d. unenforceable, because the contract involved a purchase of goods for less than $500.

unenforceable, because it is not a bargained-for exchange.

Kandis offers to pay Tim's way through college if he will kill her ex-boyfriend. He accepts Kandis's offer, signing a contract. Their contract is: a. executed. b. voidable. c. void. d. formal.

void

Chloe buys a product from Good Times, Inc., that includes a shrink-wrap agreement. After using the product, she decides it is defective and sues Good Times. If the court determines that Chloe learned of the shrink-wrap terms after the contract was finalized, it may conclude that the terms were proposals for additional terms, which then: a. automatically made the contract void. b. automatically became part of the contract. c. were not a part of the contract unless Chloe expressly agreed to them. d. were not a part of the contract because Good Times had not expressly agreed to them.

were not a part of the contract unless Chloe expressly agreed to them.

Jackie agrees to pay Ben $1,000 if Ben agrees to not go skydiving for six months. After Ben avoids skydiving for six months, he asks Jackie for payment. Jackie declines to pay Ben the $1.000. The contract between Jackie and Ben: a. will be enforced because Jackie had a preexisting duty to pay Ben. b. will be enforced because Ben exercised forbearance, which is legally sufficient consideration. c. will not be enforced because skydiving is a dangerous activity and Ben benefits from the forbearance. d. will not be enforced due to lack of consideration.

will be enforced because Ben exercised forbearance, which is legally sufficient consideration.