Leg & Soc business- exam 2
What occurs when a secured party takes back collateral because the debtor has failed to make payments when due? a) repossession b) default c) authentication d) perfection
repossession
The type of bankruptcy where an individual who is in debt makes a plan to repay some or all of his creditors is called: Chapter 15. Chapter 7. Chapter 13. Chapter 11.
Chapter 13.
Debts that cannot be discharged in bankruptcy include all EXCEPT a) money owed for alimony. b) money obtained fraudulently. c) money owed to utility companies. d) income taxes for 3 years prior to filing.
money owed to utility companies.
Which of the following is the lowest priority of claims in bankruptcy? medical debts debts for injury caused by drunk driving alimony mortgage on a principal residence
medical debts
In general, which of these contract terms is NOT required to meet the requirement of definiteness? The parties involved Acceptance The subject matter of the contract The time of payment
acceptance
Abdulla hired Granite Construction to build an addition onto his home. Granite Construction dug the foundation but then abandoned the project. Granite Construction is entitled to receive the full contract price minus the value of the defects. True False
false
What elements are required for an offer to be effective under the common law? Choose 3 answers. -The offer must be communicated to the offeree. -The offer must be irrevocable for a set period of time to allow acceptance. -The offeror must intend to be bound by the offer. -The terms of the offer must be reasonably definite so that all parties understand them.
- The terms of the offer must be reasonably definite so that all parties understand them. - The offer must be communicated to the offeree. - The offeror must intend to be bound by the offer.
Tina and Leroy have a contract for the sale of a vinyl record album. Tina, the seller, breaches the contract. A court will be most likely to order specific performance if there are __________ identical copies of the record album available for sale on the market. a) 2 b) 2,000 c) 20,000 d) 200,000
2
Which act or statement is a valid offer? A price quote A completed auction with a reserve A typical advertisement A detailed advertisement
A detailed advertisement
Which statement is true about the ability of minors to enter into contracts? -A minor cannot legally enter into contracts. -A minor may enter into a contract but must ratify it within one year of the date of the contract. -A minor may enter into a contract only if the minor has an adult co-signer. -A minor may enter into any contract an adult can, except for contracts that are expressly prohibited for minors.
A minor may enter into any contract an adult can, except for contracts that are expressly prohibited for minors.
What must a plaintiff prove in an express warranty case? Buyer reliance on the seller's promises A disclaimer The seller's opinion about the product The buyer's opinion about the product
Buyer reliance on the seller's promises
Which of the following can be characterized as an exculpatory clause? a) Contractor is not liable for damage caused by its employees. b) Buyer agrees to pay $5,000 for a used cell phone. c) Creditor charges 45% interest on a loan. d) All of these are correct.
Contractor is not liable for damage caused by its employees.
Travel Lines offered to sell 10 round-trip tickets to Elaine. Travel Lines stated that the acceptance must be in writing by USPS next-day service. Which of the following acceptances will create a contract between Travel Lines and Elaine? a) Elaine calls Travel Lines and states that she will buy the tickets. b) Elaine sends a fax to Travel Lines stating she will buy the tickets. c) Elaine sends a letter by USPS next-day service to Travel Lines stating that she will buy the tickets. d) All of the these responses will create a contract between Travel Lines and Elaine since they constitute reasonable means of communication.
Elaine sends a letter by USPS next-day service to Travel Lines stating that she will buy the tickets.
What is the most common way of perfecting a security interest? Filing a financing statement. Publishing the interest in the classified section of the newspaper. Completing a purchase-money security interest. Hiring a lawyer to draft the documents.
Filing a financing statement.
What is the difference between legal remedies and equitable remedies for breach of contract? -Legal remedies are monetary while equitable remedies are non-monetary. -Legal remedies must be applied by the courts, while equitable remedies can be written into the contract. -Equitable remedies are only available in quasi-contract, while legal remedies are available in all other types of contracts. -Equitable remedies are monetary, while legal remedies are non-monetary.
Legal remedies are monetary while equitable remedies are non-monetary.
Link negligently ran his car into John, causing $50,000 in injuries. Link was intoxicated at the time of the accident. Can Link discharge this debt in bankruptcy? a) Yes, as long as he didn't intend to hit John's car. b) Yes, claims based on negligence are dischargeable. c) No, because Link breached a fiduciary duty. d) No, such claims are not dischargeable in bankruptcy.
No, such claims are not dischargeable in bankruptcy.
Which situation would be considered sufficient consideration for a contract to exist? -Bethany is remodeling a kitchen for Tonya. Bethany tells Tonya she will finish the work within a reasonable time if Tonya pays her a bonus. -Pam agrees to pay Derek $500 if he does not sit next to her in class anymore. -Alice's grandson quit smoking, so Alice promises to give him $5,000. -Alice promises to give her granddaughter $10,000. Assessment question
Pam agrees to pay Derek $500 if he does not sit next to her in class anymore.
What factors are used to judge if consideration is adequate to ensure a fair bargain? Choose 2 answers. -Consideration must be a promise to pay money. -Promises exchanged may not be a preexisting duty. -Items or promises exchanged must be of nearly equal value. -Promises must be made with voluntary consent.
Promises exchanged may not be a preexisting duty. Promises must be made with voluntary consent.
What factors make an agreement enforceable under the principle of quasi-contract? Choose 2 answers. The enriched party knows about the benefit and keeps it. The courts determine that an enforceable contract exists. The enriching party is negligent. One party is being enriched at the expense of the other.
The enriched party knows about the benefit and keeps it. One party is being enriched at the expense of the other.
Jackie hires Charles to lay new carpet in her bedroom. Charles does such a bad job, that the only way to fix the carpet is to start over and relay the carpet. Which of the following best describes this situation? a) This is a material breach. Jackie owes nothing to Charles. b) This is substantial performance. Jackie owes nothing to Charles. c) This is substantial performance. Jackie must still pay something to Charles. d) This is a material breach. Jackie must still pay something to Charles.
This is a material breach. Jackie owes nothing to Charles.
Which of the following is an equitable remedy for breach of contract? -payment of the cost of cover for items not delivered on time -punitive damages when a seller has repeatedly shipped unsafe goods -an order for specific performance -compensatory damages for having to hire extra help to correct nonconforming goods
an order for specific performance
Which type of lack of capacity is easiest to prove? Mental incompetence Minor status Intoxication Contracting for necessities
minor status
What is the principle that is applied to determine how much compensation a party receives in a quasi-contract settlement? de facto justification quasi benefit quantum meruit bona fide reliance
quantum meruit
What is the standard to which most personal satisfaction contracts must adhere? Choose 2 answers. satisfaction of an expert third party satisfaction of the performing party (seller) satisfaction of the receiving party (buyer) satisfaction of a reasonable person
satisfaction of the receiving party (buyer) satisfaction of a reasonable person
What must a plaintiff show to be awarded a quasi-contract in a lawsuit? -The defendant agreed to compensate the plaintiff for the benefit received. -The defendant expected to be paid. -The plaintiff received some benefit. -The defendant was unjustly enriched.
the defendant was unjustly enriched
In the historic case of Hamer v. Sidway, the nephew a) won, as there was a completed gift. b) won, as the Court found there was consideration. c) lost, as the uncle was dead. d) lost, as the Court found there was no consideration.
won, as the Court found there was consideration.
Which of the following is a valid offer? -Arun tells Eric he will sell one of his houses for $250,000 by the end of the summer. -Arun distributes flyers at work stating he wants to sell his house, listing the address and the asking price. -Eric offers to buy Arun's house for $290,000. Arun says, "No, but I will sell it to you for $300,000." Eric seems to be upset, so Arun says he will sell it for $290,000. -Eric offers to buy Arun's house for $775,000 with no contingencies because Eric's lease ends in two months. Arun wants to think about it and six days later has not yet responded.
Eric offers to buy Arun's house for $775,000 with no contingencies because Eric's lease ends in two months. Arun wants to think about it and six days later has not yet responded.
Neon orders one thousand 25-foot nylon ropes from Hang'em High Co. Upon inspection of the delivery, Neon learns that Hang'em sent five hundred 25-foot ropes and five hundred 20-foot ropes. Neon may a) immediately "cure" by finding a substitute product. b) demand that Hang'em send 500 additional 25-foot ropes and get to keep the 20-foot ropes as well. c) seek an installment contract. d) accept the 500 conforming ropes and reject the 500 nonconforming ropes.
accept the 500 conforming ropes and reject the 500 nonconforming ropes.
What is the result if parties agree to a contract orally, but it is a contract that must be in writing under the statute of frauds? Choose 2 answer choices. The contract is voidable. The contract is void. The contract is illegal. The parties can complete the contract.
the parties can complete the contract the contract is voidable
Alex promises to pay $100 to anyone who finds his lost watch. Kate finds and returns the watch to Alex after hearing of the reward money. Alex and Kate have an enforceable unilateral contract. True False
true
Brad was having financial difficulties and thought bankruptcy might be in his future. He transferred his sports car to his brother with the agreement that if he didn't file for bankruptcy within the next 18 months, his brother would return the car to him. Brad did file for bankruptcy in 10 months. The bankruptcy trustee can void the transfer and bring the car back into Brad's estate for the purpose of providing assets for Brad's creditors. True False
true
For a security interest to attach, there must be an agreement. True False
true
An exculpatory clause is generally unenforceable when a) the affected activity is a recreational activity. b) it is written clearly and in bold, large print. c) it attempts to release a party from liability for ordinarily negligent behavior. d) it involves public transportation.
it involves public transportation.
Which of the following must a plaintiff prove when suing based on an express warranty for a defective product? Choose 3 answers. The seller breached the warranty. The seller knew the buyer would use the product in the manner in which it was used. One of the buyer's reasons for the purchase is the product warranty. The seller made a statement of fact to the buyer about the quality or uses of the product.
-The seller made a statement of fact to the buyer about the quality or uses of the product. -One of the buyer's reasons for the purchase is the product warranty. -The seller breached the warranty.
Barb has been a children's day care provider for several years in the small town of Sallton. She has decided to give it all up and move to the big city for excitement and adventure. She sells her business to Ken, agreeing not to open a competing business within five miles of Sallton for a period of nine months. After five months of the big city life, Barb is broke and moves back to Sallton. She opens a small day care business. Ken sues on the non-compete clause. What is the most likely result? a) Barb wins. The agreement is not reasonable as to time. b) Barb wins. The agreement is not enforceable because it is not ancillary to a legitimate bargain. c) Barb wins. The agreement is denying her the right to do the only thing she knows how to do. d) Ken wins. The agreement is enforceable.
Ken wins. The agreement is enforceable.
Which of the following statements concerning liquidated damages is NOT TRUE? a) Liquidated damages are enforceable even if the amount is considered to be a penalty on the breaching party. b) A liquidated damages clause will be enforced, if, when the contract was made, it was difficult to estimate actual damages. c) The amount of liquidated damages must be a reasonable estimation of the actual harm resulting from a breach. d) Nominal damages are not the same thing as liquidated damages.
Liquidated damages are enforceable even if the amount is considered to be a penalty on the breaching party.
How is substantial performance involved with the classification of material breaches versus immaterial breaches? -Substantial performance can occur with either a material or an immaterial breach. -Substantial performance involves an immaterial breach. -Substantial performance involves a material breach. -Anticipatory repudiation determines the status of substantial performance.
Substantial performance involves an immaterial breach.
A business filing for a Chapter 11 Bankruptcy must: submit a payment plan for approval by creditors and the court. make all payments to creditors through a trustee. have at least $1,000,000 in debt. pay all secured and priority claims.
submit a payment plan for approval by creditors and the court.
Ernest operates an ice cream stand during the months of May, June, July, and August. Ernest's ice cream machine is broken and needs a new part to run. He contracts to have the part shipped to him by special carrier. Ernest emphasizes that the part needs to be delivered by April 25 and the carrier agrees, knowing that Ernest intends to open his stand May 1. If the shipper fails to deliver the part on April 25, Ernest will be able to recover consequential damages caused by the delay. True False
true
What must a party show to win a substantial performance lawsuit? Choose 2 answer choices. The breach caused no monetary damages. He or she acted in good faith. There were no deviations from the contractual requirements. The breach was not intentional.
He or she acted in good faith. The breach was not intentional.
Candy, Inc. signed an agreement with Sweet Plantation. Under the contract, Candy, Inc. agreed to purchase all the sugar cane Sweet Plantation grew during the coming season for $0.16 per pound. This contract will be unenforceable due to its vagueness. True False
false
Tess, a tenant, moves from her apartment in breach of the lease agreement. The landlord, Lenny, may not attempt to rent the apartment until the date of the lease expiration, and so has no recourse to minimize damages. True False
false
If a consumer falls when a step on a new ladder breaks, what warranty could apply? implied warranty of merchantability express warranty implied warranty of fitness for a particular purpose implied warranties implied from prior dealings or trade custom
implied warranty of merchantability
A buyer's material breach gives the seller the right to refuse to deliver the goods. True False
true
What type of contract is created by an agreement that is oral when it is required by the Statute of Frauds to be in writing? voidable fraudulent void quasi
voidable
What rights does the perfect tender rule give buyers of goods? Choose 2 answer choices. The right to reject goods if they are not delivered as agreed The right to reject the seller's goods if the goods are not exactly as described in the contract The right to reject goods that conform to the contract specifications The right to accept delivery of all of the goods
-The right to reject the seller's goods if the goods are not exactly as described in the contract -The right to accept delivery of all of the goods
How may an offer be terminated? Choose 3 answers. A reasonable amount of time has passed. A competitor to the offeror can issue a better offer for the same product or service. An offeror may terminate an offer by revocation. The offeree may make a counteroffer.
A reasonable amount of time has passed. An offeror may terminate an offer by revocation. The offeree may make a counteroffer.
What conditions must be met for an offer to be legally accepted? Choose 2 answers. -The offer must be accepted within 24 hours of communication. -Acceptance must be communicated in words, either written or oral. -Acceptance must be unequivocal with no requests for changes in the offer. -It may only be accepted by the intended offeree or the offeree's agent.
Acceptance must be unequivocal with no requests for changes in the offer. It may only be accepted by the intended offeree or the offeree's agent.
In what situations would a court be likely to award a quasi-contract? Choose 2 answer choices. -If the defendant was unjustly enriched and played a part in deceiving the plaintiff -If the defendant did not know the plaintiff would expect to be paid for the services -When the unjust enrichment is a relatively insignificant amount of money -When the party provided the services for unwilling recipients
If the defendant was unjustly enriched and played a part in deceiving the plaintiff When the unjust enrichment is a relatively insignificant amount of money
Which of the following is the proper order for the payment of bankruptcy claims by class from highest priority to lowest priority? -Priority claims, secured claims, unsecured claims -Secured claims, priority claims, unsecured claims -Unsecured claims, secured claims, priority claim -Secured claims, unsecured claims, priority claims
Secured claims, priority claims, unsecured claims
In what situations does the UCC overrule common law? The UCC applies to contracts that sell goods. The UCC applies to contracts that sell services. The UCC applies to mixed contracts if the predominant purpose of the deal is to sell services. The UCC governs situations in which common law is silent.
The UCC applies to contracts that sell goods.
Under what circumstances might the court reject a debtor's Chapter 13 plan? a) The plan requires future earnings to pay off debts. b) The plan promises to pay all secured and priority claims. c) The plan treats all unsecured classes equally. d) The plan anticipates paying the unsecured creditors less than what they would get under Chapter 7.
The plan anticipates paying the unsecured creditors less than what they would get under Chapter 7.
Assuming there are not enough assets to pay the debts of an entire class of creditors, creditors must: be paid in equal amounts. be paid based on whoever was first to file their claim. forfeit their claim. be paid at a pro rata share.
be paid at a pro rata share
What factors may cause a person to lack contractual capacity? Choose 3 answers. being under the age of majority (usually 18) mental incompetence being an emancipated minor severe intoxication
being under the age of majority (usually 18) mental incompetence severe intoxication
Carlos is hired to paint a house for $700. Before he starts, the woman who hired Carlos tells him she does not want the job done after all. Carlos finds another house-painting job that afternoon, but it pays only $500. If Carlos sues the woman for damages and is awarded $200, that amount is an example of a) nominal damages. b) direct damages. c) incidental damages. d) consequential damages.
direct damages
When a debtor no longer has an obligation to pay a debt, that debt has been a) discharged. b) terminated. c) revoked. d) completed.
discharged.
Bob signed an agreement with Joe under which Bob agreed to purchase all the hay that Joe grew during the coming growing season. This contract will be a) unenforceable due to its vagueness. b) unenforceable due to the difficulty of devising an appropriate remedy for a breach. c) enforceable as long as both parties act in good faith and Bob doesn't suddenly demand more hay than what was reasonably estimated. d) unenforceable unless state real estate law makes an exception.
enforceable as long as both parties act in good faith and Bob doesn't suddenly demand more hay than what was reasonably estimated.
The UCC does not apply to a contract for the sale of goods if the value of the goods is less than $500. True False
false
A contract for a purpose that causes the parties to violate a law is: enforceable as a quasi-contract. illegal and voidable. illegal and dischargeable. illegal and void.
illegal and void
Which of the following implied warranties means the warranty arose from practices used in the industry for the product? implied warranty of fitness for a particular purpose implied warranty of title implied warranty of merchantability implied warranty from prior dealings or trade custom
implied warranty from prior dealings or trade custom
What is an exception to the statute of frauds? Contracts dealing with land Collateral Promises Promissory Estoppel Contracts under the UCC
promissory estoppel
Implied warranties are created by a) the buyer's intentions. b) both the seller and the buyer. c) the UCC itself. d) the seller's words or actions.
the UCC itself.
In which of these situations does an express warranty exist? Choose 2 answer choices. -Crane Outdoor Shop advertises they have the best outdoor furniture in the state. -An employee at Crane Outdoor Shop promises Korinne that their outdoor furniture does not fade in the sun. Korrine states she wants to buy the furniture for indoor use, and it will not be in the sun. -Crane Outdoor Shop shows products on the showroom floor as examples of what they sell, but all purchases are made online and another sample of that item is delivered to the customer's home. -Crane Outdoor Shop sells only online. The product postings include detailed descriptions of the features, but no pictures.
-Crane Outdoor Shop shows products on the showroom floor as examples of what they sell, but all purchases are made online and another sample of that item is delivered to the customer's home. -Crane Outdoor Shop sells only online. The product postings include detailed descriptions of the features, but no pictures.
What is the primary purpose of the Statute of Frauds? -defining who may testify in a dispute over a contract -ensuring that all details of a contract are well defined -preventing fraudulent behavior in the formation of contracts -requiring written evidence of agreements concerning important transactions
requiring written evidence of agreements concerning important transactions
Which of the following are objections that a creditor may bring to bankruptcy distribution proceedings? Choose 3 answers. -A creditor may object to a distribution plan if the debtor has been fraudulent. -An unsecured creditor may object to being paid after a secured creditor if his claim was filed first. -A secured creditor may object to being excluded from the distribution if she had not been notified of the bankruptcy. -An unsecured creditor may object to being excluded from the distribution if she had not been notified of the bankruptcy.
-A creditor may object to a distribution plan if the debtor has been fraudulent. -A secured creditor may object to being excluded from the distribution if she had not been notified of the bankruptcy. -An unsecured creditor may object to being excluded from the distribution if she had not been notified of the bankruptcy.
Which of these contracts would be enforceable, despite the existence of a mistake? Choose 2 answer choices. -Christopher agrees to sell his washer and dryer to Ella in "as is" condition. Ella thinks the set is in excellent condition and is willing to take a chance on buying it. Neither works after a few weeks of use. -Christopher agrees to sell his washer and dryer to Ella. Ella thinks the dryer uses gas instead of electricity, but she is incorrect. -Christopher agrees to sell his washer and dryer to Ella. Christopher overhears Ella telling her friend that she is happy she is getting such a great deal on a new washer and dryer, although Christopher knows he has used them for a year, but he does not correct her. -Christopher agrees to sell his washer and dryer to Ella. He bought them at a yard sale and the sellers told him they were new. Ella believes they are new as well and, as a result, pays a higher price. When Ella encounters problems, a friend shows her parts that are worn.
-Christopher agrees to sell his washer and dryer to Ella. Ella thinks the dryer uses gas instead of electricity, but she is incorrect. -Christopher agrees to sell his washer and dryer to Ella in "as is" condition. Ella thinks the set is in excellent condition and is willing to take a chance on buying it. Neither works after a few weeks of use.
Which of these statements are true about involuntary bankruptcy proceedings? Choose 2 answers. -If a debtor has eight or more creditors with at least $1,000 in claims, any one of them may file an involuntary bankruptcy petition. -An involuntary bankruptcy case can be filed against a farmer. -If a court dismisses an involuntary bankruptcy case, the filing creditors may be required to pay court and filing costs for the defendant. -If an involuntary bankruptcy case is filed frivolously, the petitioner may be liable to the debtor for damages to his reputation.
-If a court dismisses an involuntary bankruptcy case, the filing creditors may be required to pay court and filing costs for the defendant. -If an involuntary bankruptcy case is filed frivolously, the petitioner may be liable to the debtor for damages to his reputation.
Linda wants to buy some equipment and needs computer software to use the equipment. Linda asks the salesperson if the software is Mac-compatible because she owns only one computer and it is a Macbook. The salesperson states that the computer software is Mac-compatible and many of his customers use the software on their Apple computers. The software box offers no information regarding operating system requirements. When Linda arrives home and opens the package, she discovers the software is not Mac-compatible. The store states it will not accept returns of opened software, and the salesperson says he was relying on what other customers told him. What will be the result if Linda files a lawsuit? -The store wins because the salesperson was not an expert on software and merely relied on feedback from other customers. -Linda wins under implied warranty of fitness for a particular purpose. -Linda wins under warranties implied from prior dealings or trade custom. -The manufacturer is liable for any damages because it did not include the operating system information on the software packaging.
-Linda wins under implied warranty of fitness for a particular purpose.
In general, certain terms must be included in contracts to satisfy the requirement of definiteness. What are the exceptions to this rule? Choose 2 answer choices. -Courts can rewrite contracts even if the intent is vague. -Courts can complete a contract to supply some missing items. -Sales contracts under the UCC -If the contract is in writing, not all terms are required to be included.
-Sales contracts under the UCC2 -Courts can complete a contract to supply some missing items.
Breeze Manufacturing agrees to purchase goods from Hawkins Inc. In what situation could Breeze reject a shipment of goods from Hawkins under the perfect tender rule? -The industry practice is to allow for minor flaws, but Breeze and Hawkins did not specifically agree to that. -The goods do not meet the specifications detailed in the contract. -If Breeze accepted flawed goods from Hawkins in the past. -If Hawkins Inc. hires a carrier to deliver the goods that was different from the carrier the parties included in the contract.
-The goods do not meet the specifications detailed in the contract.
A debtor who wishes to file a voluntary petition must: (Choose 3 answer choices) -meet eligibility requirements for the Chapter under which they wish to file. -file the petition and required schedules. -undergo credit counseling. -have more than three creditors.
-meet eligibility requirements for the Chapter under which they wish to file. -file the petition and required schedules. -undergo credit counseling.
Which of the following would be considered a merchant under the UCC? a) A man who owns a jewelry store sells his used car to a neighbor. b) All of these are correct. c) A gun dealer sells a rifle to someone who enters his shop. d) A woman sells her pistol to someone responding to a classified ad.
A gun dealer sells a rifle to someone who enters his shop.
Which of the following statements concerning a Chapter 11 reorganization plan is TRUE? a) A reorganization plan will be confirmed by the court only if a majority of each class of creditors votes in favor of the plan. b) A reorganization plan binds only the debtor and not the creditors. c) A reorganization plan can be confirmed by the court over objections of some creditors if the court determines that the plan is feasible and fair. d) Only the bankruptcy court has the authority to confirm or reject the reorganization plan. Creditors do not have a right to vote on the plan.
A reorganization plan can be confirmed by the court over objections of some creditors if the court determines that the plan is feasible and fair.
Which scenario is an example of puffery? a) A salesperson tells Jinxing that the shiny, chrome-covered motorcycle he is looking at is "the hottest ride on the road." b) Simon threatens to smash the windshield out of Clara's vintage Pontiac GTO unless she agrees to sell it to him. c) The clerk at the candy store tells Billy the "Jug 'o Jellybeans" contains 1,000 jellybeans. When Billy takes the jug home and counts, he finds that the jug contains only 995 jellybeans. d) Martina purchases a ring from Alison. Both genuinely believe the stone in the ring is an emerald, but Martina later finds out the stone is just cut glass.
A salesperson tells Jinxing that the shiny, chrome-covered motorcycle he is looking at is "the hottest ride on the road."
The type of bankruptcy where a trustee takes the nonexempt property, sells it, and uses the proceeds to pay the debtor's general unsecured creditors is called: Chapter 11. Chapter 7. Chapter 12. Chapter 13.
Chapter 7.
The Uniform Commercial Code applies to what types of contract? Contracts for goods over $500 Contracts for leasing Contracts for services over $500 Contracts for real estate
Contracts for goods over $500
What evidence outside of the written contract is a party allowed to present? Choose 2 answer choices. -Evidence to prove agreement on an essential element of the contract -Evidence showing a change to the contract after it is signed -Evidence showing an agreement that is different from the contract that the parties agreed to before the contract was signed -Verbal negotiations leading to the signing of the contract
Evidence showing a change to the contract after it is signed Evidence to prove agreement on an essential element of the contract
Which is NOT an exception to the parol evidence rule? -Jayden wants to present evidence that Jignesh verbally promised he would include the trailer with the boat he sold to Jayden. -Jayden has evidence that Jignesh misrepresented portions of the deal they made and would like to present this evidence to terminate the contract. -Jayden wants to present evidence that Jignesh agreed to deliver the boat to Jayden before Memorial Day of next year, but the contract incorrectly states the delivery will take place before Memorial Day 2098. -Jayden has evidence that he and Jayden agreed to move back the boat delivery date from the original date in the contract when Jayden discovered a hole and Jignesh agreed to repair it before delivery.
Jayden wants to present evidence that Jignesh verbally promised he would include the trailer with the boat he sold to Jayden.
Lilly hired Harris Lawn Service to cut her grass one summer, and paid through automatic charges to her credit card. After taking three months off for winter weather, Harris staff cut Lilly's grass for four weeks in a row before charging the fees on Lilly's credit card. Lilly protested the charges, stating she did not hire the company to cut grass for the second summer. Harris sues Lilly. What law applies? Choose 2 answer choices. -Lilly's silence is acceptance because of the parties' past dealings. -Lilly's silence is not acceptance in this case because the offeree must affirmatively accept the terms of the offer in full and communicate that acceptance to the offeror. -Lilly's silence is acceptance because the offeree accepted the benefit offered. -Lilly's silence is not acceptance and Harris's service in the spring is considered a gift to her.
Lilly's silence is acceptance because the offeree accepted the benefit offered. Lilly's silence is acceptance because of the parties' past dealings.
When Myrtle comes home from work one evening, she finds that her yard has been mowed and trimmed. Later, a man comes to collect for the yard work done. Myrtle refuses to pay for the work since she has never seen the man before and did not hire him to do her yard work. Which of the following answers is most accurate? a) This is an express, voidable contract that either party may avoid. b) The court would order Myrtle to pay the reasonable value of the yard work because of the benefit conferred on her. c) This is an implied, unilateral contract and she must pay the price requested by the man. d) Myrtle would not have to pay for the yard work.
Myrtle would not have to pay for the yard work.
Fred and Wilma enter into a contract for horse riding lessons. Fred accidentally types the price for lessons to be $4.00 each instead of $44.00 each. Wilma wishes to enforce the contract at $4.00 per lesson. Which remedy would be most effective? Rescission Reformation Specific performance Injunction
Reformation
What are the differences between legal and equitable remedies? Choose 2 answer choices. One attempts to assist one party and penalize or restrict the other party. One requires actions instead of damages. Both attempt to reform the contract. One is monetary.
One requires actions instead of damages. One is monetary.
Under which circumstances has the buyer accepted goods? a) None of these are correct. b) Goods were delivered to Lao-tzu, who told the seller that he had received them; two days later, Lao-tzu informed the seller that, upon inspection, the goods were not conforming. c) Peter received a shipment of 100 toy soldiers on Monday; by the end of the week, he had already sold half of them. d) A shipment of goods was delivered to Kamala, who immediately picked up the box from her porch and placed it on her dining-room table.
Peter received a shipment of 100 toy soldiers on Monday; by the end of the week, he had already sold half of them.
What is the evaluation standard for a personal satisfaction contract? Choose 2 answer choices. Objective, reasonable person standard Accepted standards for the area or region Expert standards Subjective personal taste
Subjective personal taste Objective, reasonable person standard
Which of the following has the highest priority in the distribution of assets when two or more creditors have an interest in the same collateral? The creditor with the largest value secured interest. The creditor whose interest was perfected first. The creditor whose interest attached first. The creditor who filed first.
The creditor whose interest was perfected first.
The following are true for Chapter 7 Bankruptcies: (Choose 2 answer choices) It does not use a trustee. The debtor must pass the means test. They cannot be initiated by an involuntary petition. They are for individuals.
The debtor must pass the means test. They are for individuals.
What remedies are available to a buyer when a seller refuses to deliver the goods that are the subject of a contract? Choose 3 answers. The buyer may cancel the contract. The buyer may buy other goods and recover damages from the seller. The buyer may sue to obtain specific performance if the goods are unique or if damages are an inadequate remedy. The buyer may cancel all other contracts with this seller on the grounds of anticipatory breach.
The buyer may sue to obtain specific performance if the goods are unique or if damages are an inadequate remedy. The buyer may cancel the contract. The buyer may buy other goods and recover damages from the seller.
In many states, a person must be in what position to have standing to sue for the breach of a product's implied warranty? The buyer must still have the receipt for the product. The buyer must have received a written warranty. The buyer must have inspected the product at the time of sale. The buyer must be in privity of contract with the defendant.
The buyer must be in privity of contract with the defendant.
Abby hires a contractor to make repairs on her house. Before the repairs are finished, Abby dies. Her good friend Clay is appointed executor of Abby's estate. Clay orally promised that if the estate could not pay the repair bill, he would pay it even though he does not live in the house and has no entitlement under Abby's estate. If the contractor's bill does not get paid, who can the contractor collect from, if anyone? a) The contractor can collect from the estate only. b) The contractor can collect from Clay only. c) The contractor must collect from the estate first, and then collect any deficiency from Clay. d) The contractor can collect from either the estate or Clay.
The contractor can collect from the estate only.
Samuel has mental competency issues. Samuel entered into a contract with Beth, but now Samuel is petitioning the court to terminate the contract. What options does the court have in ruling in the case? Choose 2 answer choices. -The contract is voidable if a court has previously determined Samuel to be mentally incompetent. -The contract is void if Samuel has been previously determined to be mentally incompetent. -The contract is void if Samuel was incompetent at the time the contract was formed. -The contract is voidable if Samuel was incompetent at the time the contract was formed.
The contract is void if Samuel has been previously determined to be mentally incompetent. The contract is voidable if Samuel was incompetent at the time the contract was formed.
What is the test for whether a contract is governed by the Statute of Frauds because of the one-year rule? The contract start date must be more than one year from the date of signing. The contract must be unlikely to be performable in less than one year. The contract must be able to be performed in less than one year. The contract must be objectively impossible to perform within one year.
The contract must be objectively impossible to perform within one year.
What are the legal differences between a material breach and an immaterial breach of contract? Choose 2 answer choices. The level of the performance of the contractual obligations The dollar amount of damages Whether a party has announced repudiation of the contract Whether the court will discharge the contract
The level of the performance of the contractual obligations Whether the court will discharge the contract
Which of the following statements is true about assets in the bankruptcy estate? -The majority of states give debtors a choice between state and federal exemption guidelines. -The majority of states require debtors to follow federal exemption guidelines instead of state guidelines. -In the majority of states, federal and state exemption guidelines are the same. -The majority of states require debtors to follow state exemption guidelines instead of federal guidelines.
The majority of states require debtors to follow state exemption guidelines instead of federal guidelines.
How may a revocable offer effectively be revoked? Choose 2 answers. -The offeror may take an action that contradicts the offer and make that known to the offeree. -The offeree may reject the offer with a clear expression. -The offeror may convert the offer to an option contract. -The offeror may withdraw the offer with a clear expression.
The offeror may take an action that contradicts the offer and make that known to the offeree. The offeror may withdraw the offer with a clear expression.
What does the law require for a personal service contract? -A special acknowledgement by each party that the contract is a personal satisfaction contract -The experts who will be evaluating the work must be listed so the parties are on notice in advance. -The specific standards must be clearly delineated. -The personal service requirement must be stated.
The personal service requirement must be stated.
How do parties determine which is the appropriate law for a mixed contract? Choose 2 answer choices. Common law applies to all mixed contracts. The predominant-factor test dictates the proper choice of law. Common law is appropriate for some mixed contracts. The UCC applies to all mixed contracts.
The predominant-factor test dictates the proper choice of law. Common law is appropriate for some mixed contracts.
What elements are required for courts to apply the doctrine of promissory estoppel? Choose 3 answers. The promise must be definite and relied upon. There was a detrimental result from reliance on the promise. There must have been consideration given with the promise. Enforcement of the promise is necessary to avoid injustice to the promisee.
The promise must be definite and relied upon. There was a detrimental result from reliance on the promise. Enforcement of the promise is necessary to avoid injustice to the promisee.
Wedney, Inc. sold a meat processing machine to Yoro Chickens, taking a security interest in the machine. Yoro Chickens defaulted on the loan. Wedney repossessed the machine. Wedney would like to retain the machine to use as a model. Which of the following statements is correct? a) By taking possession, Wedney automatically foreclosed on the collateral. Wedney has valid title and need do nothing else. b) Wedney can retain the machine but must pay Yoro the surplus, the difference between the fair market value of the machine and the amount of the debt. c) Since the machine is equipment, Wedney cannot retain the machine. Wedney must dispose of the collateral in a commercially reasonable manner. d) Wedney must notify the debtor that it intends to retain the machine and give Yoro 20 days to object.
Wedney must notify the debtor that it intends to retain the machine and give Yoro 20 days to object.
In what situation could a party enforce strict performance? -When the parties specifically agree to it in the contract -When one of the parties did not act in good faith -When the requirement is reasonable -The plaintiff received sufficient benefit and the difference can be compensated with monetary damages
When the parties specifically agree to it in the contract When the requirement is reasonable
What is the term for the legal ability to enter into a binding contract? contractual capacity legal capability mental competence emancipation
contractual capacity
Manuel contracts to sell a painting that was painted by his deceased grandmother, then has a change of heart and decides to hang it in his own bedroom. He notifies Nadine, the person who had planned to buy it. Can Nadine have the contract enforced? No, it can't be enforced because Manuel canceled the contract before it was executed. Yes, it can be enforced under the equitable remedy of specific performance. Yes, it can be enforced under the theory of quasi-contract because Nadine had relied on Manuel's promise. No, it can't be enforced because this is of a personal nature, and Manuel retains the rights to the painting.
Yes, it can be enforced under the equitable remedy of specific performance.
LaVon contracts with Nathan for Nathan to sing at her comedy club every Friday night in July. The first Friday, the crowd loved Nathan. The second Friday, they booed him. The next week, Nathan got a better offer, so he hired his twin brother Ethan to fill in for him at LaVon's club. Can LaVon compel Nathan to perform? Yes, she can compel him under the theory of quasi-contract because LaVon had relied on Nathan's promise and she has printed posters and advertisements. No, she can't compel him because Nathan has gotten a better offer. Yes, she can compel him under the equitable remedy of specific performance. No, she can't compel him because Ethan is an acceptable substitute for Nathan.
Yes, she can compel him under the equitable remedy of specific performance.
Can the parties to a contract agree to change the time limit for commencing an action for breach of contract under the Uniform Commercial Code (UCC)? No, they must abide by the Statute of Limitations time limit of four years. Yes, they may set the time limit to any time between one year and four years. Yes, they may set the time limit to any time they agree upon. Yes, but the maximum time allowed is ten years.
Yes, they may set the time limit to any time between one year and four years.
What types of contracts violate public policy? Choose 3 answers. -a candidate for public office paying his competitor to retire -conducting trade with a country that is an enemy to the United States -a contract to allow a political candidate exclusive use of billboards you own -employment contracts that forbid membership in a union
a candidate for public office paying his competitor to retire conducting trade with a country that is an enemy to the United States employment contracts that forbid membership in a union
Jennifer has offered to sell her laptop computer for $500 to Jack. She tells Jack that the computer is only six months old but, in fact, it is three years old, and Jennifer wants to unload the lemon. Jack agrees to buy the computer based on Jennifer's representations. This contract is a) a void contract because of the UCC. b) a void agreement because of the fraud involved. c) a voidable contract, one that Jack can void. d) a voidable contract, because it is unilateral.
a voidable contract, one that Jack can void.
What are the elements of consideration? Choose 2 answer choices. -an exchange to which the parties agree -something of value from each party -past consideration -a preexisting duty
an exchange to which the parties agree something of value from each party
An agreement in which parties intend to form a valid bargain, but a court declares that some rule of law prevents enforcing it is called a) an unenforceable agreement. b) a void agreement. c) a voidable contract. d) a quasi-contract.
an unenforceable agreement.
What is the term for the action of a party to a contract who notifies the other party that he or she will not perform his or her duty under a contract? suspension of performance anticipatory repudiation nullified obligations retractment
anticipatory repudiation
Which mistake is likely to be voidable? Mistakes of Value A prediction mistake Bilateral mistake Unilateral mistake
bilateral mistake
Creditors wishing to file an involuntary petition for a debtor may do so under: Chapter 13 only. Chapter 7 or Chapter 11. Chapter 7 only. Chapter 7, 11, or 13.
chapter 7 or 11
Which of the following debts is non-dischargeable in bankruptcy? a personal loan that was used to pay off a car loan claims for amounts borrowed by the debtor to pay federal taxes overdue rent on a primary dwelling unsecured credit card debt
claims for amounts borrowed by the debtor to pay federal taxes
Which of these types of contracts must be in writing under the requirements of the Statute of Frauds? Choose 3 answers. collateral promises to pay the debt of another person promises made in consideration of marriage contracts for the sales of land contracts for the sale of goods priced at $1,000 or more
contracts for the sales of land promises made in consideration of marriage collateral promises to pay the debt of another person
What remedies are available after an anticipatory repudiation? Choose 3 answers. cover canceling all other contracts with the breaching party suspending performance requiring assurance
cover suspending performance requiring assurance
Iris received a discharge under a Chapter 7 bankruptcy. She cannot receive another discharge under Chapter 7 for at least a) ten years after the prior discharge. b) six years after the prior filing. c) She cannot file another Chapter 7, but could file a Chapter 11 or 13 bankruptcy. d) eight years after the prior filing.
eight years after the prior filing.
Quon and Bert have signed a contract for Bert to mow Quon's grass every week in June, July, and August for a price of $40 per week. They have agreed to all the necessary terms, but Bert has not yet mowed because it is still May. What type of contract do they have? void unilateral executory executed
executory
What is the time limit for commencing an action for breach of contract under the Uniform Commercial Code (UCC)? there is no time limit 90 days one year four years
four years
M & E contracted to sell 500 music stands to Coda, Inc. M & E shipped the stands in accordance with the agreement. Coda paid for the stands as promised. The contract between M & E and Coda is discharged by a) accord and satisfaction. b) full performance. c) agreement. d) rescission.
full performance.
An unconscionable contract is one that a court refuses to enforce because of a) fundamental unfairness. b) illegality. c) its limit to free trade. d) overt vagueness.
fundamental unfairness.
What is the implied duty in every contract that each party will deal fairly with the other? strict performance good faith reasonable person standard golden rule
good faith
A security interest has attached when the creditor: has possession or control of the collateral. receives the first installment of loan payments. and the debtor have reached an agreement. has described the collateral in writing.
has possession or control of the collateral.
Sal has ordered 100 pounds of shrimp for his restaurant from Sam every Friday for 5 years and has always paid that week's market price. One Friday, Sal decides to take a vacation but doesn't tell Sam. Sam claims they have a contract, even though it was never written down. What kind of contract do they have? express implied-in-fact quasi implied-in-law
implied-in-fact
Which of the following types of contracts cannot be either contradicted or supplemented by evidence of prior agreements or expressions? a) integrated contracts b) incomplete contracts c) ambiguous contracts d) implied contracts
integrated contracts
The Bankruptcy Code exempts (limited to a certain dollar amount) which type of property? cash family heirlooms one vehicle per driver in the household jewelry
jewelry
A buyer who is unable to obtain cover a) may be allowed the remedy of specific performance. b) will lose the money or goods invested in the breached contract. c) will be limited to the remedy of consequential damages. d) will be limited to the remedy of incidental damages.
may be allowed the remedy of specific performance.
An example of unsecured credit is a: car loan. private student loan. business loan to buy a piece of equipment. mortgage.
private student loan.
Kathleen filed for voluntary bankruptcy, and the automatic stay went into effect. The automatic stay a) prohibits creditors from collecting debts against Kathleen that arose before she filed bankruptcy. b) stops creditors from trying to collect from Kathleen, but it does not stop them from filing lawsuits against her. c) acts to automatically discharge Kathleen's debts. d) stops only secured creditors from taking any act to collect, assess, or recover a claim against Kathleen that arose before she filed bankruptcy.
prohibits creditors from collecting debts against Kathleen that arose before she filed bankruptcy.
If Jane persuades Linda to buy her horse by telling Linda that the horse runs "like the wind," then Jane's statement is a) puffery. b) reckless misrepresentation. c) fraud. d) a unilateral mistake.
puffery
The goal of expectation interest is to a) serve as a penalty for breaching a contract. b) put the non-breaching party in the position it would have been in had the contract never been formed. c) put the non-breaching party in the position it would have been in if the contract hadn't been breached. d) award damages under the UCC when the sale of goods is the subject of the contract.
put the non-breaching party in the position it would have been in if the contract hadn't been breached.
Farmer Elvin is holding 200 pounds of potatoes in storage for Chef Noble but Chef Noble has breached the contract by failing to pay for the potatoes. If Farmer Elvin sells the potatoes to a local diner to make potato soup and salad, then this action would be considered a(n) a) reasonable mitigation of damages. b) attempt at reformation. c) attempt to maximize damages. d) attempt to realize an unwarranted profit.
reasonable mitigation of damages
Which of the following are the three basic purposes of bankruptcy laws? Choose 3 answers. relief of the burden of debt on a debtor allowing a struggling business to become more stable fair treatment of creditors full repayment of all debt
relief of the burden of debt on a debtor allowing a struggling business to become more stable fair treatment of creditors
In 2005, bankruptcy reform laws: -allowed debtors to have more of their debts discharged in bankruptcy. -required debtors to pay more of their debts in bankruptcy. -made student loans dischargeable in bankruptcy. -increased the amount of possessions a debtor may retain in bankruptcy.
required debtors to pay more of their debts in bankruptcy.
The correct order of payment of claims from the debtor's estate would be a) priority claims, unsecured claims, secured claims. b) secured claims, unsecured claims, priority claims. c) priority claims, secured claims, unsecured claims. d) secured claims, priority claims, unsecured claims.
secured claims, priority claims, unsecured claims.
What is the term for when a party to a contract performs his duties exactly according to the terms of the contract? substantial performance perfect performance strict performance specific performance
strict performance
If an offer specifies no time limit in which to accept, a) the offer is not valid and therefore it does not matter when the offeree responds. b) the offeree has 30 days to respond. c) the offeree has 10 days to respond. d) the offeree has a reasonable period during which to accept.
the offeree has a reasonable period during which to accept.
If the offer does not specify a type of acceptance, the offeree may accept in any reasonable manner and method. True False
true
The Bankruptcy Code uses the term "debtor" to refer to a person who cannot pay his debts. True False
true
The original Statute of Frauds is the English law that began the practice of requiring written evidence of certain kinds of contracts, but now the British government has repealed the writing requirement for most contracts. True False
true
Under the Statute of Frauds, the writing must: be signed by the defendant; and must state with reasonable certainty the name of each party, the subject matter of the agreement, and all of the essential terms and promises. True False
true
What is the term for a contract agreement in which an offeror promises to pay after the occurrence of a specified act, and the offeree is not required to respond in words? executed contract open contract bilateral contract unilateral contract
unilateral contract
What type of acceptance requires an affirmative action for the offeree to accept that offer? Browsewrap Agreements Unilateral contracts The typical type of acceptance to an offer Offeree's silence in response to an offer
unilateral contracts
A contract for an illegal purpose is: dischargeable. voidable. void. enforceable as a quasi-contract.
void
