Funeral Law (Chapters 9-13)

Donee beneficiary

Third-party beneficiary for whom performance is a gift

Statue of limitations

Time within which the right to sue must be exercised or lost

Delegation

Transfer of duties

Joint and several contract

Two or more people bound jointly and individually

Several contract

Two or more people individually agree to perform obligation

A(n) _____ is a person to whom the promisee owes an obligation or duty that will be discharged to the extent that the promisor performs the promise. a. creditor beneficiary b. donee beneficiary c. incidental beneficiary d. debtor beneficiary

a. creditor beneficiary

Sam and Grant contract to refinish the Sanders' driveway. The contract states that Sam and Grant both promise the entire performance and each is bound for the entire obligation of refinishing the driveway. This is an example of a(n) _____ contract. a. joint b. mutual c. several d. bilateral

a. joint

If two parties enter into an oral contract that falls under the Statute of Frauds and both parties have fully performed according to its terms then: a. neither party can set aside the transaction on the ground that there was no writing. b. either party can set aside the transaction on the ground that there was no writing. c. both parties' liabilities to each other become quasi-contractual. d. both parties must make the contract in writing for it to become enforceable

a. neither party can set aside the transaction on the ground that there was no writing.

An assignor is: a. the party who makes an assignment. b. the party to whom the rights in an assignment is transferred. c. the party to whom the duties in an assignment is transferred. d. the party who unintentionally benefits in an assignment.

a. the party who makes an assignment.

A mutual-mistake contract is a(n) _____ contract. a. unenforceable b. executory c. unilateral d. bilateral

a. unenforceable

Contracts contrary to public policy are: a. unenforceable. b. executory. c. valid. d. voidable.

a. unenforceable.

Jill contracts with James to sell a gemstone pendant for $100, believing the stone to be an attractive gemstone of modest value. After the sale, Jill realizes that the actual worth of the pendant is $1,000 and tries to void the contract with James. Jill's mistake as to the value of the gemstone is an example of a(n): a. unilateral mistake. b. anticipatory mistake. c. mutual mistake. d. illusory mistake.

a. unilateral mistake.

If a unilateral mistake as to price results from an error in typing or in misunderstanding an oral quotation of the price, the contract is: a. valid. b. void. c. unenforceable. d. unconstitutional.

a. valid.

Terry buys an antique clock from Katie for $250. The clock is actually worth $1,000. Terry is aware that Katie has a mistaken opinion as to the real value of this antique clock. In accordance with the given scenario, the contract between Katie and Terry is: a. valid. b. void. c. voidable. d. unilateral.

a. valid.

Business Equip Inc., was one of the biggest players in the heavy equipment manufacturing market. The company secretly contracted with other large companies in the equipment industry and fixed the prices of turbines. Such contracts are considered: a. void. b. valid. c. executory. d. voidable.

a. void.

If the purpose of a contract is unlawful, the contract is: a. void. b. voidable. c. executory. d. valid.

a. void.

Which of the following, as a general rule, does not constitute fraud? a. Silence in a trust-based relationship when one has a duty to speak b. A statement of opinion c. Active concealment of material facts for the purpose of preventing the other contracting party from discovering them d. An express misrepresentation of a material fact by one who knows it is false for the purpose of inducing the other contracting party to act

b. A statement of opinion

Shirley who is planning to start a boutique borrows $100,000 from Danny. Gary, Shirley's uncle, promises Danny to pay Shirley's debt to Danny if she defaults on payment. According to the Statute of Frauds, which of the following is true with regard to this scenario? a. Gary's promise is an exception to the Statute of Frauds. b. Gary's promise is void. c. Gary's promise must be in writing. d. Shirley's promise must be an oral contract.

c. Gary's promise must be in writing.

Jerry and Nancy bet $250 on a basketball game between the New York Knicks and the Boston Celtics. Both Jerry and Nancy hand over their bet money to Cameron, who will act as a stakeholder in this bet. Which of the following is true of this scenario? a. If Nancy wins and is paid the bet money, then Jerry can sue Cameron but not Nancy for reimbursement. b. If Jerry wins and is paid the bet money, then Nancy can sue Jerry but not Cameron for reimbursement. c. If Jerry breaches this contract then the courts will not allow Nancy to recover damages from Jerry. d. The courts will not interfere for Jerry or Nancy if Cameron was to keep the money even after a winner is declared.

c. If Jerry breaches this contract then the courts will not allow Nancy to recover damages from Jerry.

Julie contracts to wash Clara's car for $15. Julie later assigns the right to receive $15 to Kevin. Which of the following is true with regard to this scenario? a. Clara is the assignor. b. Julie is the obligor. c. Kevin is the assignee. d. Clara is the assignee.

c. Kevin is the assignee.

Bryce promises to sell Marcia a parcel of land for $100,000. The two specify the terms of the sale in a written contract, but only Bryce signs the agreement. Marcia subsequently decides she does not want to buy the land. Will Bryce be able to enforce the agreement? a. No, because the agreement is unconscionable. b. Yes, because the agreement is valid. c. No, because Marcia did not sign the written agreement. d. Yes, because the agreement is in writing.

c. No, because Marcia did not sign the written agreement.

A(n) _____ means that one party conveys rights in a contract to another who is not a party to the original undertaking. a. defamation b. abatement c. assignment d. delegation

c. assignment

Darwin invested $60,000 in a new investment plan provided by Life Guide Mutual. He named his wife Daisy as the beneficiary in this plan. In the given scenario, Daisy is the: a. creditor beneficiary. b. incidental beneficiary. c. donee beneficiary. d. debtor beneficiary.

c. donee beneficiary.

The law requires a contract that cannot be performed within _____ year(s) of the date of formation to be in writing. a. five b. two c. one d. ten

c. one

An agreement to _____ comes under the Statute of Frauds and must be in writing. a. sell food and beverage products b. sell tickets to a sporting event c. sell any interest in land d. sell a vehicle

c. sell any interest in land

According to the federal Electronic Signatures in Global and National Commerce Act: a. scribbled signatures are unenforceable. b. strike-through signatures needs to be on paper. c. signatures on a contract no longer have to be on paper. d. electronic signatures are unenforceable.

c. signatures on a contract no longer have to be on paper.

Betty, an 88 year-old elderly woman, is physically and emotionally weak and very dependent on her in-home nurse, Nancy. Betty cannot walk or do other tasks well, due to her age, and Nancy cares for Betty every day. Over a series of weeks, Nancy convinces Betty to sign a contract to sell a parcel of land to Nancy for a very low price. Nancy overcomes Betty's concerns with a combination of persistence and bullying. This contract would be voidable, because of: a. mutual mistakes. b. economic duress. c. undue influence. d. active fraud.

c. undue influence.

Which of the following is not an example of a type of contract that is contrary to public policy? a. A contract obstructing the administration of justice b. A contract limiting the freedom of marriage c. A contract injuring the public service. d. A contract of an unlicensed operator

d. A contract of an unlicensed operator

Which of the following is an exception to the Statute of Frauds and does not have to be in writing? a. An agreement of an executor or administrator to pay the debts of the estate from the executor's or the administrator's personal funds b. An agreement to become responsible for the debts or default of another c. An agreement with terms which cannot be performed within one year from the time it is made d. An agreement where a promise is an original promise by the promisor rather than a promise to pay the debt of another

d. An agreement where a promise is an original promise by the promisor rather than a promise to pay the debt of another

Sam and Denise enter into an oral contract whereby Sam promises to sell his one acre land to Denise for $1,000,000. Sam and Denise perform according to the terms of this oral contract. Denise pays $1,000,000 and becomes the owner of Sam's one acre of land. Which of the following is true with regard to this scenario? a. In case of a breach, the money or the value of the service cannot be recovered as it is an oral contract. b. This transaction does not come under the Statute of Frauds. c. Denise can seek to set aside the contract as the contract falls under the Statute of Frauds. d. Sam cannot seek to set aside the contract on the ground that there was no writing.

d. Sam cannot seek to set aside the contract on the ground that there was no writing.

Default

Breach of contractual obligation other than money

Maximum contract rate

Highest legal rate of interest

Fraud

Inducing another to contract as a result of an intentionally or recklessly false statement of a material fact

Legal rate

Interest rate applied when no rate is specified

Reformation

Judicial correction of a contract

Statue of Frauds

Law requiring certain contracts to be in writing

Assignment

1. Conveyance of rights in a contract to a person not a party; 2. Transfer to another of tenant's rights

Legal tender

Any form of lawful money

Gambling contract

Agreement in which parties win or lose by chance

Usury

Charging higher rate of interest than the law allows

Parol evidence rule

Complete, written contract may not be modified by oral testimony unless evidence of fraud, accident, or mistake exists

Joint contract

Contract obligating or entitling two or more people together to performance

Force majeure clause

Contract provision excusing performance when extraordinary event occurs

Fraud in the execution

Defrauded party did not intend to enter into a contract Indication by adult that a contract made by a minor is binding

Fraud in the inducement

Defrauded party intended to make a contract

Innocent misrepresentation

False statement made in belief it is true

Misrepresentation

False statement of a material fact

Passive fraud

Failure to disclose information when there is duty to do so

Mutual mistake

Mistake by both parties to a contract

Unilateral mistake

Mistake by one party to a contract

Debt

Obligation to pay money

Duress

Obtaining consent by means of a threat

Tender of payment

Offer and ability to pay money owed

Tender of performance

Offer to perform in satisfaction of terms of contract

Anticipatory breach

One party announces intention not to perform prior to time to perform

Parol evidence

Oral testimony

Active fraud

Party engages in action that causes the fraud

Undue influence

Person in special relationship causes another's action contrary to free will

Assignor

Person making an assignment

Third-party beneficiary

Person not party to contract but whom parties intended to benefit

Assignee

Person to whom a contract right is assigned

Creditor beneficiary

Person to whom promisee owes obligation, which is discharged if promisor performs

Incidental beneficiaries

Person who unintentionally benefits from performance of contract

Rescind

Set aside or cancel something

Novation

Termination of a contract and substitution of a new one with same terms but a new party

Breach

When one of the parties fails or refuses to perform the obligations assumed under the contract

Which of the following substitutes a new party for one of the original parties in an existing contract at the mutual agreement of the original parties, such that the prior contract terminates, and a new one substitutes for it? a. A novation b. A ratification c. A delegation d. A defalcation

a. A novation

_____ is a means of destroying another's free will by one party obtaining consent to a contract as a result of a wrongful threat to do the other person some harm. a. Duress b. Undue influence c. Mutual mistake d. Fraud

a. Duress

Arnold contracts with Joseph to mow Arnold's lawn for $50. Joseph later assigns the right to receive $50 to Hillary. Which of the following is true with regard to this scenario? a. Joseph is the assignor. b. The contract is unenforceable. c. The contract is void. d. Arnold is the assignee.

a. Joseph is the assignor.

Claire assigned to Michael the right to receive payment of $1000 that she had earned in sales commissions, in exchange for Michael painting her house. In reality, Claire was only entitled to $250 in commissions, and her company only paid $250 to Michael. Which course of action is available to Michael to recover the balance of the assignment? a. Michael can recover the $750 from Claire. b. Michael is unable to recover the loss. c. Michael can recover the $750 from customers of Claire's company. d. Michael can recover the $750 from Claire's company.

a. Michael can recover the $750 from Claire.

Sara contracts with Grover to remove a dead stump in her yard. They settle on a flat fee of $100 for the service, because they both believe it to be a small stump. Their contract provides that if the project turns out to be more difficult than anticipated, the fee paid will still only be $100. If it ends up taking Grover 4 days to remove the stump, should the contract be void? a. No, because the contract terms govern the situation. b. Yes, because Sara fraudulently misled Grover about the time involved. c. No, because it was a unilateral mistake on Grover's part. d. Yes, because the two were mutually mistaken as to the time required.

a. No, because the contract terms govern the situation.

Ashley leases a house for a three-year term from Joey for $300,000. The contract clearly stipulates that the Ashley must have the house treated for pests on an annual basis. Ashley fails to read the terms of the document closely and does not have the house treated for pest control. What effect does this failure to read the terms of the document have on the contract? a. The contract is valid. b. The contract is void. c. The contract is impugned. d. The contract is unenforceable.

a. The contract is valid.

Jeremy is arrested for stealing a computer from a local business. The computer has valuable data saved to the hard drive and, in an attempt to recover the computer, the district attorney contracts with Jeremy not to prosecute him if the computer is returned to its rightful owner. Which of the following is true of the given scenario? a. The contract is void, because it has a tendency to obstruct the administration of justice. b. The contract is valid, because it is not contrary to public policy. c. The contract is valid, because the district attorney is trying to help the local business. d. The contract is void, because it is an unreasonable restraint of trade.

a. The contract is void, because it has a tendency to obstruct the administration of justice.

Sarah's elderly aunt promises to give Sarah her entire collection of valuable jewelry in exchange for Sarah's promise to never marry her friend Ben. In this scenario, which of the following is true? a. This contract is void, because it limits the freedom of marriage. b. This contract is voidable, because Sarah may accept the agreement and later disaffirm her acceptance. c. This contract is valid, because the aunt is acting in Sarah's best interest. d. This contract is valid, because contract terms govern a mutual mistake made by the parties.

a. This contract is void, because it limits the freedom of marriage.

Contracts not to compete are normally void, except when: a. buying a business or making an employment contract. b. operating as a licensed operator. c. doing business on Sunday. d. fixing the resale price of goods.

a. buying a business or making an employment contract.

Dexter contracted with the Roberts to mow their yard once a week during the summer in exchange for $50 per week. The contract was clearly drafted and signed by both parties. Halfway through the summer, Dexter sued the Roberts over the weekly pay. He claimed the Roberts had sent an email to him two weeks before signing the contract and had promised to pay $75 per week. Will Dexter be able to present the email as evidence to modify the written contract? a. Yes, because it helps the court determine the parties' intent. b. No, because the admission of the email would violate the parol evidence rule. c. Yes, because it would be unfair to Dexter to exclude the Roberts' email. d. No, because the contract is voidable.

b. No, because the admission of the email would violate the parol evidence rule.

Lacy bought a car from Jack for $ 30,000, to be paid in three installments, within a year from the date stated in the contract. Six months later, Lacy and Jack, together with Monica, agreed that Monica would take Lacy's place in the contract and would pay the remaining amount. This discharged Lacy from the contract, and bound Jack and Monica in a new contract. Which of the following occurred when Monica replaced Lacy in the contract? a. Defalcation b. Novation c. Delegation d. Ratification

b. Novation

While notice of an assignment need not be given to the other party in order to make the assignment effective as between the assignor and the assignee, why is it recommended that notice be given to the other party? a. The contract may become one of joint liability. b. The assignee may not receive payment if notification of the assignment is not given to the original promisor. c. The original promisor may revoke some of the rights and interests that were assigned d. Giving notice of the assignment satisfies the Statute of Frauds.

b. The assignee may not receive payment if notification of the assignment is not given to the original promisor.

Amy, a licensed pharmacist, sells Edmund a narcotic painkiller without a prescription. If Edmund refuses to pay for the narcotic, which of the following is true? a. Amy is guilty of a unilateral mistake. b. The court will refrain from protecting either Edmund or Amy. c. Amy's act is legal as she is a licensed pharmacist. d. The court will consider Amy's act as voidable.

b. The court will refrain from protecting either Edmund or Amy.

Which of the following demonstrates an advantage of a written contract over an oral contact? a. It is impossible to have mutual mistakes in a written contract. b. The existence of a contract cannot be denied if it is in writing. c. Written contracts can include more than two parties, whereas oral contracts cannot. d. Written contracts are generally more enforceable.

b. The existence of a contract cannot be denied if it is in writing.

Percy owns an apartment in Maryland. She leases this property to Sandy for a four-year term. Which of the following is true with regard to this scenario? a. This contract is void as properties cannot be leased for more than a year under the Statute of Frauds. b. This contract must be in writing in order to be binding. c. This contract must be partly ratified in order to be binding. d. This contract can be an oral contract as it does not fall under the Statute of Frauds.

b. This contract must be in writing in order to be binding.

Peter borrows $100,000 from his Aunt Mary to pay back his student loan. Peter's father contracts with Peter to pay Peter's debt to Mary. In the given scenario, Mary is the _____ of the contract between Peter and his father. a. incidental beneficiary b. creditor beneficiary c. donee beneficiary d. debtor beneficiary

b. creditor beneficiary

Abel holds Nina at gunpoint and gets her to sign a contract agreeing to sell her yacht to him for a very low price. This is an example of: a. fraud. b. duress. c. embezzlement. d. arson.

b. duress.

One who intends to and does induce another to enter into a contract as a result of an intentional or reckless false statement of a material fact commits: a. blackmail. b. fraud. c. duress. d. extortion.

b. fraud.

A(n) _____ contract is a transaction wherein the parties stand to win or to lose based on pure chance. a. usurious b. gambling c. Sunday d. loan-sharking

b. gambling

A(n) _____ is a contract in which two or more parties have all promised the entire performance, which is the subject of the contract. a. unenforceable contract b. joint contract c. bilateral contract d. several contract

b. joint contract

A complete, written contract may not be modified by oral testimony unless evidence of fraud, accident, or mistake exists. This rule is known as the: a. mirror image rule. b. parol evidence rule. c. illusory promise rule. d. rule against perpetuities.

b. parol evidence rule.

When during contract negotiations a party makes an innocent misrepresentation upon which it is reasonable for the other party to have relied, the contract is: a. unilateral. b. voidable. c. fraudulent. d. enforceable.

b. voidable.

Which of the following agreements must be in writing in accordance with the Statute of Frauds? a. A mutual promise of Mike and Nancy to marry each other. b. Peter's agreement to sell a pack of candies for $10. c. Ben's agreement to become responsible for Darwin's debt. d. Charlie's agreement with Ron to take care of Ron as long as he lives.

c. Ben's agreement to become responsible for Darwin's debt.

Ben and Judy Sims purchase West Palm Dry Cleaning, a well-known dry cleaning business, from Sam. As part of the purchase agreement, the Sims include a provision prohibiting Sam from entering the dry cleaning business in the same town for the next year. Is such a contract valid? a. No, because this is an illegal contract not to compete. b. No, because this is a contract injuring the public service. c. Yes, because this contract is for the sale of prohibited articles and the court will not interfere. d. Yes, because this contract reasonably restricts Sam's ability to operate as to both the time and place.

d. Yes, because this contract reasonably restricts Sam's ability to operate as to both the time and place.

The breach of contractual obligation is called: a. damage. b. deuce. c. usury. d. default.

d. default.

William made a contract with Kevin to build a boat for $800. William's failure in building the boat led to a breach of contractual obligation. This is an example of: a. debt. b. deuce. c. damage. d. default.

d. default.

Damien wants to buy a new truck, and after completing a credit application with the dealer, realizes that his credit score requires someone else to co-sign for the loan. He presents the financing agreement to his father to cosign. However, his father doesn't read well and Damien tells him the paperwork is a job application instead of a loan. His father signs. Later, Damien defaults on the loan, and the car dealership seeks to recover the loss from Damien's father. Damien's father claims the contract is void, due to: a. a unilateral mistake. b. undue influence. c. innocent misrepresentation. d. fraud in the execution.

d. fraud in the execution.

An agreement to pay a prospective witness a large sum of money to leave the state until a trial is over is null and void, because: a. it is an unreasonable restraint of trade. b. it is a gambling contract. c. it is a usurious contract. d. it obstructs the administration of justice.

d. it obstructs the administration of justice.

A(n) _____ arises when two or more people individually agree to perform the same obligation, even though the individual agreements are contained in the same document. a. voidable contract b. novation c. assignment d. several contract

d. several contract

A(n) _____ mistake occurs when only one party makes a mistake regarding the contract. a. mutual b. illusory c. anticipatory d. unilateral

d. unilateral

A contract that sets an illegally high interest rate for the use of money is called a(n): a. Sunday contract. b. gambling contract. c. unilateral contract. d. usurious contract.

d. usurious contract.

Car Title Loan Co. lends money to Bob at an interest rate of 25%, well above the maximum contract rate. This is an example of a(n): a. contract obstructing the administration of justice. b. contract for the sale of prohibited articles. c. contract with an unlicensed operator. d. usurious contract.

d. usurious contract.

A contract with a mistake that results from failure to understand the contract's meaning or significance or from failure to read the contract is: a. unenforceable. b. constitutional. c. void. d. valid.

d. valid.

Contracts made by an unlicensed person operating in one of the fields or businesses covered by licensing laws are normally held: a. void. b. unenforceable. c. voidable. d. valid.

d. valid.