Module 5 Self Assignment

A bond used as bail in a criminal case is which type of contract?

Formal contract One type of formal contract is a recognizance, which arises when a person acknowledges in court that he or she will perform some specified act or pay a price upon failure to do so. A bond used as bail in a criminal case is a recognizance

On the streets of downtown Lubbock, a man sells you a pocket watch for $20. He says all the watch needs is a new battery and it will be just like new and work perfectly. You buy a new battery for the watch, but the watch still does not work. The man selling the watch knew that the watch would not work, even with a new battery, but he told you it would anyway. This scenario is an example of what?

Fraudulent misrepresentation A fraudulent misrepresentation is a consciously false representation of a material fact intended to mislead the other party

When both parties are mistaken about a current or past material fact, _______

either party can choose to rescind the contract With mutual mistake, rescission is fair because any agreement was an illusion. Ambiguity prevented a true meeting of the minds

In contract law, a(n) _____________ is an erroneous belief about the facts of the contract at the time the contract is concluded

mistake of fact Legal assent is absent when a mistake of fact occurs

If no means of communicating the acceptance is specified, what type of means of accepting is generally not valid?

All of theses are valid: Telephone, mail, email, fax are all valid ways of acceptance If no means of communicating the acceptance is specified, any reasonable means is generally valid. Telephone, mail, fax, and e-mail are all valid means of accepting an offer, as is accepting it in person

Which of the following is an element of an offer under common law?

Intent to be bound by an acceptance The elements of an offer are: serious intent by the offeror to be bound to an agreement; definite and certain terms; and communication to the offeree

Which of the following elements is not necessarily required for a legally binding contract?

Money is exchanged A legally binding contract generally requires consideration as one of its elements - however, the consideration need not necessarily be money

A store places an advertisement in the newspaper for "Sale on Dell laptops - All Dell laptops for sale for $500 the last week in July!" Is the store making an offer?

No, the store is merely inviting potential customers to come to the store and offer $500 for a laptop Because no reasonable person would expect the store to be able to sell a computer to everyone who sees the ad, the court will interpret the intent of the store as being to invite readers to make an offer

Under the common law, which of the following qualifies an acceptance as a valid acceptance?

Agreement to the definite and certain terms of the offer Manifestation of intent to be bound by the acceptance Communication to the offeror Under the common law, the basic requirements for a valid acceptance parallel those for a valid offer.

Which one of the following is considered to be a legally binding offer?

Auction without reserve the seller is committing himself to sell a product to the highest bidder

What is it that can restrict what an employee may do after leaving a company and often dictates where, when, and for whom the employee may work?

Covenants not to compete Employers justify the use of covenants not to compete by saying they are necessary to protect their trade secrets, talent, and proprietary information

On rare occasions, rescission is permitted for unilateral mistakes. Which of the following scenarios is an example of when rescission might be available for a unilateral mistake?

One party made a mistake about a material fact and the other party had reason to know about the mistake Any of the following conditions would permit a court to invalidate a contract on grounds of unilateral mistake: (1) One party made a mistake about a material fact, and the other party knew or had reason to know about the mistake. (2) The mistake was caused by a clerical error that was accidental and did not result from gross negligence. (3) The mistake was so serious that the contract is unconscionable, that is, so unreasonable that it is outrageous

Suppose an operator of a weight scale certifies the weight of a good that is for sale. However, the accuracy of the scale used to weigh the good has not been checked in more than four years, even though the weight scale operator could have easily checked the accuracy of the scale. The scale gave an improper weight measurement that resulted in many problems with the shipping and sale of the product. This scenario is an example of what?

Negligent misrepresentation In this situation, the scale operator's lack of action could constitute negligent misrepresentation because he could have discovered the truth using reasonable care by calibrating the accuracy of the scale

Which of the following is not considered a material term?

Quantity Under the common law, the terms of the offer must be definite and certain. In other words, all the material terms must be included. The material terms allow a court to determine damages in the event that one of the parties breaches the contract. They include: the subject matter, price, quantity, quality, and parties

Suppose you entered into a contract to clean someone's pool. Then, both you and the pool owner discovered that the pool water has produced toxic levels of chlorine over time. As a result, you cannot clean the pool without first decontaminating it. This change in knowledge about the toxicity levels of the pool is considered a material fact in the agreement. Can you rescind the contract?

Yes, this seems like a mutual mistake When both parties are mistaken about a current or past material fact, either can choose to rescind the contract. Rescission is fair because any agreement was an illusion

The mail-box rule is not applicable when there is _______

instantaneous communication The mail-box rule provides that an acceptance is valid when the offeree places it in the mailbox, whereas a revocation is effective only when the offeree receives it. The mail-box rule is NOT applicable when there is instantaneous communication, such as over the phone, in person, or by telex