L-201 Practice Quizes

Sarah is 16 years old. She left home at age 15; her parents no longer support her. Sarah entered into a contract with Best Groceries for the purchase of $100 of groceries on credit. The groceries consisted of basic, necessary items. However, their reasonable value is only $80. If Sarah discovers that she has been overcharged and refuses to pay, Best is entitled to collect:

$80

Which of the following contracts is void?

A contract made by an unemancipated minor Answer = A contract made by a person who has been adjudicated insane and institutionalized A contract made by a person under the influence of mind-altering drugs A contract made by a minor who receives no support from a parent or guardian A contract made under duress

Which of the following actions is considered to reflect a counteroffer?

A grumbling acceptance All four choices are correct Answer = A demand for additional terms A silent acceptance An inquiry regarding terms

Which of the following characterizes the effect of incapacity caused by mental impairment?

A person formerly incapacitated by mental impairment cannot ratify a contract if he/she regains his capacity If a court has found a person mentally incompetent after holding a hearing on his mental capacity and has appointed a guardian for him, the contract is considered voidable The contracts of people who are suffering from a mental defect at the time of contracting are usually considered to be void A person disaffirming on the ground of mental impairment need not return any consideration given by the other party Answer = If a contract is found to be voidable on the ground of mental impairment, the person who lacked capacity at the time the contract was made has the right to disaffirm the contract

Which of the following meets the requirements of consideration?

A promise not to engage in a crime or tort A promise without a binding obligation Answer = A promise that involves the exchange of a legal value A promise to do a preexisting duty A promise to give a gift

Normally, an illegal contract is:

A quasi-contract Implied-in-fact Answer = Unenforceable Voidable Ratified

Aaron promises to sell his boat to Matt, and Matt promises to buy it from Aaron. What type of contract is this?

A unilateral contract A quasi-contract Answer = A bilateral contract A promissory estoppel contract An implied contract

Which of the following ends the right to rescind a voidable contract?

Acquiescence Rescission Concealment Assertion Answer = Ratification

According to the Code, when there is an acceptance that contains terms that are different from the original terms of the contract, the contract will consist of _______________ and the appropriate gap-filling presumptions of the Code.

An inquiry regarding terms Notifications to prevent breach of conduct Counteroffers from either party Answer = Terms on which the parties' writings agree Standardized form terms

Calvin tells Sara that he will sell her his car for $5,000. Sara agrees. The exchange is to take place in 10 days. The contract between Calvin and Sara is now:

Answer = Bilateral, executory, and express Bilateral, executed, and voidable Bilateral, executory, and implied Unilateral, executed, and valid Unilateral, executory, and valid

Which form of damages is intended to give the victim of the breach of contract the "benefit of the bargain"?

Answer = Compensatory Punitive Nominal Liquidated Waiver

The shipment of nonconforming goods, intended as an accommodation to the buyer, is a(n) _______________.

Answer = Counteroffer Ambiguous offer Prompt shipment Inquiry regarding terms Stipulation

A contract is said to be __________ - that is, the legal part can be separated from the illegal part—if the contract consists of several promises or acts by one party, each of which corresponds with an act or a promise by the other party.

Answer = Divisible Unenforceable Voidable Implied-by-law Implied-in-fact

When the surrounding facts and circumstances indicate that an agreement has in fact been reached, a(n) _____ has been created.

Answer = Implied contract Quasi-contract Void contract Unenforceable contract Voidable contract

Guy and Boyd make an oral contract whereby Guy agrees to sell Boyd, 480 widgets (goods) at a price of $480. Later, the parties want to modify the contract so that the price would become $520. This modification:

Answer = Must be in writing Must be oral because the first contract was oral Can be oral but need not be Is unenforceable because the first contract is unenforceable Is an unenforceable modification

The general common law rule on contract modifications holds that an agreement to modify an existing contract requires:

Answer = New and independent consideration A necessary increase in the value of the exchange A writing (always) An economic exchange of substantial value Inclusion of a new party to the contract

A minor entered into a contract with GAM & Co. On attaining majority, he wishes to enforce the contract. The adult party must:

Answer = Perform the contract Rescind the contract Abandon the contract Ratify the contract Void the contract

Which of the following allows a party who has materially breached a contract to recover the reasonable value of any benefits he has conferred on the promise?

Answer = Quasi-contract Anticipatory repudiation Specific performance Accord and satisfaction Promissory estoppel

The legal remedy of __________ requires the defendant to pay the value of the benefits that the plaintiff has conferred on him.

Answer = Restitution Waiver Compensatory damages Accord and satisfaction Punitive damages

Nina has breached a contract between Milo and her, but not materially. This means that Milo can:

Answer = Sue only for damages caused by the breach Sue for damages for a total breach of the contract Cancel the contract Withhold his performance, even if the breach is remedied Recover punitive damages

Mr. White contracts with his wife Ms. White to watch their kids, Joe and Jimmy, for $50 for night. What is the status of the contract between Mr. Smith and Ms. White?

Answer = There is no contract because Ms. White gave inadequate consideration There is a contract as long as Mr. White registers the contract with the Secretary of State There is a contract as long as $50 is a reasonable profit for watching the kids There is a contract as long as a court reviews the terms within 30 days It depends on how well-behaved the kids are

Tracy, aged 12, is named the sole inheritor of her family mansion, which is valued to be worth millions. She has disaffirmed the agreement on the advice of her uncle and guardian Pete. This automatically transfers the title to the latter. Which of the following statements is true of the case?

Answer = Tracy cannot disaffirm until she has reached majority Tracy's decision will be allowed by the family courts Pete has every right to Tracy's property and can take legal possession of it Tracy's decision is valid as long as it is in writing It depends on the value of the real estate

A contract in which one or more of the parties have the legal right to cancel their obligations under the contract is called a(n):

Answer = Voidable contract Void contract Valid contract Unenforceable contract Quasi-contract

Austen Construction, a general contractor, advertised for bids from subcontractors on the electrical work for the renovation of one of State University's parking structures. The advertisement announced that the contract will be awarded to the lowest responsible bidder. Bronte, a responsible electrical subcontractor, submitted the lowest bid to Austen for the electrical portion of the work. Austen informed Bronte that she should begin work immediately. Bronte then stated that she is "withdrawing" her bid from Austen. Which of the following statements is most accurate?

Austen should not rely on Bronte's offer to do the electrical work Austen has accepted Bronte's offer, thereby forming a contract Austen is not bound by Bronte's bid until he informs her of his intent to accept Answer = Bronte has accepted Austen's offer by submitting the lowest bid Bronte may withdraw her bid at any time prior to beginning work

Which of the following is an exception to the consideration requirement?

Bargained-for exchange Answer = Charitable subscription Adequacy of consideration Gifts Nominal consideration

The settlement of an unliquidated debt is called a(n):

Bargained-for exchange Forbearance to sue Past consideration Moral obligation Answer = Accord and satisfaction

Xena and Yoni have a contract, which obligated Xena to sell Yoni 100 boxes of screws for $100. Xena seeks to cancel the contract but instead the parties agree to orally modify the contract so that Xena will sell Yoni the same 100 boxes of screws for $75. The second agreement is:

Binding because it is due to unforeseeable situation Not binding because it isn't in writing Answer = Binding by virtue of being mutually agreed upon Not binding due to the promise of performing a preexisting legal obligation Not binding because it is an output contract

Damages that are agreed upon at the time the contract is entered into are called _____.

Compensatory damages Consequential damages Answer = Liquidated damages Mitigation of damages Bargain damages

Price signed a contract to sell Wyatt a parcel of land for $90,000. The entire sales price was payable at the closing. Price has decided to keep the land. If Wyatt commences an action against Price, what relief is Wyatt most likely to receive?

Compensatory damages Punitive damages Answer = Specific performance Rescission Compensatory damages and punitive damages

April and Brian entered into a partially integrated written contract. Before the written contract was completed, April made an oral statement to Brian regarding the terms of the contract. This statement was not contained in the written contract. Under the parol evidence rule, evidence of April's oral statement would be admissible if it were used to:

Create a completely new agreement Introduce an ambiguous term in the written contract Answer = Prove an additional term consistent with the written agreement Change the terms of the written contract None of the above

A written agreement was signed by two parties and it was intended to be their entire agreement. The parol evidence rule will prevent the admission of evidence that is offered to:

Explain the meaning of an ambiguity in the written contract Prove the existence of a subsequent oral agreement that modifies the contract Answer = Prove the existence of a contemporaneous oral agreement that modifies the contract Establish that there was a mistake of fact in the formation of the contract Establish that fraud had been committed in the formation of the contract

When the consideration given in exchange for the collateral promise is something the guarantor seeks primarily for his own benefit rather than for the benefit of the primary debtor, the contract:

Is the opposite of an original contract Is considered void Answer = Is outside the statute of frauds Needs to be in writing Must be proven by parol evidence

A bilateral contract is "taken out of the statute of frauds" when:

It cannot be completed within a year from the day of its existence Answer = It is fully performed by at least one party It is put in writing It has strict rules of performance It is proven by the parol evidence rule

When do traditional contract (common law) rules apply to a contract for the sale of goods?

It depends if the seller is a merchant Courts can choose to apply the UCC Article 2 or traditional contract (common law) rules at their discretion Always Answer = Where no specific UCC Article 2 rule exists Never

Why is past consideration not a consideration in a present promise?

It falls under exceptions to consideration Answer = It does not pertain to the present exchange It is not covered under the UCC codes for consideration It involves an issue of moral obligation It involves a modification

What is the legal status of an improperly dispatched acceptance that was sent by a means of communication that was nonauthorized by the offeror (traditional common law)?

It is a stipulation It leads to an immediate revocation Answer = It is effective when received It is effective upon dispatch It is valid but unenforceable

Three days before she was judicially declared mentally incompetent and institutionalized, Irma bought a $50,000 automobile by cash and took delivery of it. Which of the following is true about this contract?

It is voidable at the discretion of the seller Answer = The contract is voidable due to Irma's institutionalization The contract cannot be disaffirmed because it is fully executed Irma ratified the contract by paying the price of the car The contract is void

Kyle sent Tara a letter offering to sell Tara his car. Tara left the letter on her desk, where her roommate, Maggie, saw it. After reading the letter, Maggie wrote to Kyle and stated that she (Maggie) wanted to accept Kyle's offer. Which of the following is true?

Kyle must sell Maggie his car unless Kyle is a merchant under the UCC Answer = There is no contract between Kyle and Maggie because Kyle did not communicate the offer to Maggie Kyle and Tara have a contract for the purchase of Kyle's car Maggie's letter is a valid acceptance of Kyle's offer None of the above

Daniel owes Casey a debt, the amount of which is subject to a good faith dispute. The parties agree to settle the debt, with Daniel promising to pay Casey $15,000 and Casey promising to release Daniel on a $25,000 debt. The settlement agreement:

Lacks consideration because it is past consideration Answer = Is supported by consideration Is binding even though there is no consideration Lacks consideration because Daniel is promising to perform a preexisting legal obligation Lacks consideration because Casey is not giving Daniel any legal value

Barney is 23 years old. His aunt had promised in writing to pay him $1,000 if Barney would refrain from drinking alcohol for one year. Barney refrained from drinking alcohol for one year. However, his aunt now refuses to pay Barney as agreed-upon. The aunt claims that because Barney suffered no detriment by refraining from alcohol, his non-drinking does not constitute legal consideration and therefore no contract was formed. If Barney sues his uncle, Barney will:

Lose because refraining from an action can never be considered legal consideration Answer = Win because Barney had a legal right to drink alcohol Win because no consideration is needed in this contract Lose because his aunt just had his best interests in mind and was trying to help him make good choices Lose because consideration must have monetary value

Bing engaged Dill to perform personal services for $2,200 a month for a period of four months. The contract was entered into orally on July 1, 1984, and performance was to commence September 1, 1984. On August 10, Dill anticipatorily repudiated the contract. As a result, Bing:

May not assign his rights to damages under the contract to a third party Can obtain specific performance May not enforce the contract against Dill since the contract is oral Answer = Can immediately sue for a breach of contract Cannot withhold performance

Morton Reeves, a building subcontractor, submitted a bid for construction of a portion of a high-rise office building. The bid contained material errors in computation. Lago Corp., the general contractor, accepted the bid with the knowledge of Reeves' errors. Reeves:

Must perform the contract unless he can show that Lago acted fraudulently Must perform the contract according to the stated terms since his errors were unilateral Can avoid liability on the contract only if his errors were not due to his negligence Caused the contract to be void Answer = Can avoid liability on the contract since Lago knew of his errors

King sent Foster, a real estate developer, a signed offer to sell a specified parcel of land to Foster for $200,000. King, an engineer, had inherited the land. Foster telephoned King the same day that he received his letter and accepted the offer. Which of the following statements concerning the contract is correct under the statute of frauds?

No contract was formed because Foster did not sign the offer No contract was formed because King is not a merchant Answer = A contract was formed, although it would be enforceable only against King A contract was formed but it is unenforceable A contract was formed and it is enforceable against both parties

Where the parties to a contract wish to cancel their contract and be in the same position as they were prior to forming the contract, they should seek to obtain a(n) ___________.

Novation Accord and satisfaction Revocation Answer = Rescission Specific performance

Whose signatures are needed in order to satisfy the statute of frauds?

Only the signatures of witnesses to the agreement are required Only the signature of the party, attempting to enforce the contract, is required Answer = Only the signature of the party against whom enforcement is being sought Only the signature of the third party to the contract, the beneficiary, is required All parties to the contract

A bilateral contract is accepted by when the offeree:

Performs the requested act Answer = Makes the promise requested by the offer Accepts the offer in silence without prior indication Makes additional inquiries regarding the terms Makes a counteroffer

On May 1, Dix and Wilk entered into an oral agreement by which Dix agreed to purchase a small parcel of land from Wilk for $450. Dix paid Wilk $100 as a deposit. The following day, Wilk received another offer to purchase the land for $650, the fair market value. Wilk immediately notified Dix that Wilk would not sell the land for $450. If Dix sues Wilk for specific performance, Dix will:

Prevail, because there was part performance. Lose, because the fair market value of the land is over $500 Prevail, because of promissory estoppel Answer = Lose, because the agreement was not in writing and signed by Wilk Prevail, because the amount of the contract was less than $500

A memorandum on the sale of goods that does not indicate the _________ of goods to be sold will not satisfy the UCC's writing requirement.

Quality Answer = Quantity Delivery Cost None of the above

Contracts in which one party to the agreement agrees to buy all of the other party's production of a particular commodity is called a(n):

Requirements contract Composition agreement Answer = Output contract Nominal consideration Exclusive dealing contract

The "confirmatory memorandum" exception to the UCC's statute of frauds provision:

Requires that the memorandum be signed by the party to be bound Requires that the memorandum be sent within ten days after the contract is made Applies even though the memorandum does not satisfy the UCC's writing requirement Answer = Requires that both parties to the contract be merchants None of the above

When a promisee who has an existing claim agrees with the promisor that he will accept some performance different from that which was originally agreed on, both parties can use the remedy of:

Specific performance Answer = Accord and satisfaction Waiver Rescission Injunction

Todd is a licensed real estate broker in Ohio. One of Todd's largest clients, Sun Corp., contracted in writing with Todd to find a purchaser for its plant in New York and agreed to pay him a 6% commission if he was successful. Todd located a buyer who purchased the plant. Unknown to Todd, New York has a real estate broker's licensing statute, which is regulatory in nature, intended to protect the public against unqualified persons. Todd violated the licensing statute by failing to obtain a New York license. If Sun refuses to pay Todd any commission and Todd brings an action against Sun, he will be entitled to recover:

The commission agreed upon Answer = Nothing Out of pocket expenses only A reasonable fee A fee based on the actual hours spent

In deciding whether consideration necessary to form a contract exists, a court must determine whether:

The consideration given by each party is of roughly equal value The consideration conforms to the subjective intent of the parties The consideration has sufficient monetary value Answer = There is mutuality of consideration

In order for the consideration requirement in contracts to be met:

The consideration given by each party must be of roughly equal value Answer = Each party must give consideration The consideration must have monetary value The consideration must consist of some form of property The consideration must be illusory

Mr. White enters into a contract to sell a car to Joe Jr. who is 15 years old and is considered a minor in the state where he lives. What is the status of the contract that Mr. White and Joe Jr. entered into?

The contract is void and unenforceable If the contract is registered with the Secretary of State's office it will become enforceable The contract is enforceable and valid Answer = The contract is voidable and is enforceable unless and until Joe Jr. cancels it The contract is only valid if its in writing

James goes to a dentist to have a tooth extracted. James never signs a written contract for this service, and he and the dentist never made an oral agreement either. Later, the dentist bills James who refuses to pay. The dentist sues James. Which of the following is true?

The dentist cannot recover because there was no express contract here It depends on the application of Article of the UCC The dentist can recover under the doctrine of promissory estoppel Answer = The dentist can recover under quasi-contract The dentist can recover under the preexisting duty theory

Which of the following is true of necessaries?

The liability for necessaries is based on promissory estoppel Answer = The liability for necessaries is quasi-contractual A minor is liable for the necessaries that he/she did not receive In case of a disaffirmance, the minor need not pay for any necessary An item is considered a necessary even if the minor already possesses it

Which of the following is true of a revocation?

The power of revocation of an offer lies with the offeree Death or insanity cannot be reasons for revocation Answer = Promissory estoppels are used to prevent revocations Offers that fail to state a specified time period are considered invalid Revocations are never valid

On May 1, 1985, Mint, a 16-year-old, purchased a sailboat from Sly Boats. Mint used the boat for six months, at which time he advertised it for sale. Which of the following statements is correct?

The sale of the boat to Mint was void, thereby requiring Mint to return the boat and Sly to return the money received Sly Boats has the power to recover the boat from Mint because he has advertised it for sale Mint's use of the boat for six months after the sale on May 1 constituted a ratification of that contract Answer = Mint may disaffirm the May 1 contract at any time prior to reaching majority The contract is illegal

Mr. Yellow delivers a stack of newspapers to Mr. Green's store to see if he wants them. A note attached indicates the stack of papers is $50. Mr. Green without communicating an acceptance sold the entire stack of papers to his customers. What is the status of the agreement between Mr. Yellow and Mr. Green?

There is no contract because Mr. Green did not expressly accept the offer Answer = There is a contract because Mr. Green accepted by implied action There is no contract because the goods are treated as gifts to Mr. Green There is no contract because the Secretary of State was not notified There is no contract because silence cannot constitute acceptance

Which of the following contracts are agreements that create no legal obligations and for which no remedy is given?

Valid contracts Unenforceable contracts Answer = Void contracts Voidable contracts Quasi-contracts

An otherwise valid contract whose enforcement is barred by the applicable contract statute of limitations is an example of a(n):

Void contract Bilateral contract Quasi-contract Voidable contract Answer = Unenforceable contract

Payne entered into a written agreement to sell a parcel of land to Stevens. At the time the agreement was executed, Payne had consumed alcoholic beverages. Payne's ability to understand the nature and terms of the contract was not impaired. Stevens did not believe that Payne was intoxicated. The contract is:

Voidable at Payne's option Answer = Legally binding on both parties Illegal Voidable at Stevens' option Void as a matter of law

Helen worked for ABC Motors for 25 years. The president of ABC said to her: "In consideration of your past service for 25 years, I promise to give you a new car next week." However, he did not give the car. Is this promise legally enforceable?

Yes, a contract was formed Yes, promissory estoppel requires enforcement of the promise Answer = No, legal consideration is absent No, legal capacity is absent Yes, quasi-contract requires enforcement of this promise

Can a local businessman pay a police officer $50 a week to watch the business more closely?

Yes, as long as the contract is registered with the Secretary of State Answer = No, Public Officials cannot give consideration on duties they are already supposed to perform Yes, as long as $50 is reasonable amount to watch the business Yes, as long as a court reviews the contract within 30 days No, unless a court approves the agreement

Sara tells Kate that she will give her $50 to clean her garage. When Kate is halfway done, Sara decides to revoke her offer. Is this a valid revocation?

Yes, because Sara is the master of the offer here Yes, because Sara can revoke the offer any time she feels like No, because this is a valid contract that cannot be revoked Yes, because you can't force someone to do something they don't want to do Answer = No, because this is now a bilateral contract

Sue offers to buy a house from John and they were negotiating the price of the house. In the meantime, Sue confides in John's girlfriend that she is willing to pay an amount of $50,000 for the house. Delighted to hear this, John's girlfriend tells him the good news. John immediately calls up Sue and accepts her offer. Is there a binding contract?

Yes, because there is valid consideration Yes, because a third party has communicated the terms of Sue's offer to John and that John had accepted the same Answer = No, because the offeror had not communicated the terms of the offer to the offeree No, because the contract is still not signed by both the parties Yes, because of the doctrine of implied contract Yes, because of the doctrine of implied contract

Milner Developers proposed an offer to Henry Wright, an independent contractor, offering to hire him for their next project. They offered him a certain rate and specified the contract details along with describing the stipulated mode of acceptance but received no response. Wright responded to the offer after a delay of two months with a quote for a higher amount than that mentioned by Milner Developers. Do the two parties have a binding contract?

Yes, because they agreed on the material terms Answer = No, because Wright's letter was a counteroffer to the original offer No, because the offer made by Milner Developers was ambiguous Yes, because Milner Developers did receive a response from Wright Yes, because Wright's silent signaled his acceptance of the offer

Betty, age 16, buys a car and wrecks it one week later. She takes it back to the seller and demands all her money back. According to the traditional rule, is she entitled to get all her money back?

Yes, regardless of the condition of the car, because this was a void contract Answer = Yes, regardless of the condition of the car, because this was a voidable contract No, she is entitled to no remedy in this situation No, she is entitled to get some money back but less the value of the damage to the car It depends if the car can be fixed

Reggie went to the Napa Valley Harvest Festival, when he stopped at Tracy's booth where she was selling paintings of vineyards. Reggie admired a painting of vineyards, which did not appear to be for sale. Reggie said to Tracy, "I will give you $200 if you give me that painting right now." Tracy said nothing in response, but she gave Reggie the painting, and Reggie gave her $200 in cash. This is an example of a contract that is now:

unilateral and executed