ACCT 324
_____ as an element of a contract refers to what each party gets in exchange for his or her promise under the contract.
Consideration
_____ is best described as what a person will receive in return for performing a contract obligation.
Consideration
A(n) _____ is defined as a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.
Contract
Which of the following conditions must be present for an offer to have a legal effect?
Definite and certain terms
Felipe, Adam, and Shirley are neighbors. Felipe overhears Adam's offer to sell an antique clock to Shirley for $3,000. Under these circumstances, _____.
Felipe makes a new offer to Adam when he offers to buy the clock for $3,000
Ronald agrees that he owes a bank $10,000, as claimed by the bank. Ronald explains to the bank that he can only pay the bank $8,000 as full payment toward the money he owes. The bank agrees to accept $8,000 from him. The following month, Ronald receives his new bank statement claiming that he still owes the bank $2,000. Which of the following statements is true of this scenario?
If Ronald does not agree to pay the remaining $2,000, the creditor may sue Ronald for the balance it believes is owed.
Which of the following is true of the mailbox rule?
It provides that the acceptance of an offer is valid when the offeree places it in the mailbox.
Which of the following can be used as a defense to the enforcement of a contract?
Lack of genuine assent
Amy offers to paint Louis's house for $1,000. The offer stated that acceptance in person was required. Within a reasonable time, Louis e-mailed Amy his acceptance. Which of the following statements is true about this situation?
Louis has not accepted the offer as required by the offeror, and there is no contract
Maya pays $5,000 and purchases a car from her friend, Jane. Later, Maya realizes that the car is worth less than $3000. Which of the following statements will be true if Maya plans to sue her friend?
Maya cannot sue Jane because the court seldom considers adequacy of consideration.
Lucas is planning to buy a house owned by Janet. He gives her an initial amount of $10,000 to hold the offer open for a 45-day period. Janet will deduct the $10,000 from the purchase price if Lucas purchases the property within those 45 days. If he does not, Janet can keep the $10,000 and offer the house to another party. Which of the following contracts does this scenario best illustrate?
Option contract
_____ are best described as contractual obligations imposed by the courts in order to prevent one party from being unjustly enriched at the expense of another.
Quasi-contracts
Which of the following is true of the intent of an offeror to be bound by an agreement?
The courts interpret intent to contract only by the offeror's outward manifestations
Which of the following indicates that the terms of an acceptance must reflect the terms of an offer?
The mirror-image rule
Which of the following statements accurately brings out the difference between bilateral and unilateral contracts?
Unilateral contracts call for actions, not promises, whereas bilateral contracts involve promises in exchange for promises.
In which of the following situations do the parties to a contract lack contractual capacity?
When one of the parties to the contract is intoxicated
Which of the following conditions would terminate an offer, even if the offeree does not know of the terminating event?
When the offeror loses the legal capacity to enter into a contract
A counteroffer occurs when
an offer is made by an offeree to his or her offeror relating to the same matter as the original offer made by the offeror.
Jason agrees to buy Sara's car for $10,000. However, Sara tells Jason that she will only sell the car to him if he pays $12,000. In this scenario, Sara makes a(n):
counteroffer
A(n) _____ is best described as a contract that arises not from words but from the conduct of the parties.
implied contract
A void contract is:
in effect not a contract at all; either its object is illegal or it has some defect so serious that it is not a contract.
When a counteroffer is made by an offeree, the original offer:
is terminated
When there is no dispute over the amount of debt or existence of debt, it is referred to as a _____.
liquidated debt
In an unliquidated debt, an accord is best described as the:
new agreement to pay less than the creditor claims is owed.
The _____ states that we base the existence of a contract on the parties' outward manifestations of intent and we base its interpretation on how a reasonable person would interpret it.
objective theory of contracts
For an unliquidated debt, _____.
once the debtor pays the amount agreed on by both the parties, the debt is fully discharged
A key feature of a voidable contract is that:
one or both parties have the ability to either withdraw from or enforce the contract.
In a unilateral contract, if one party's consideration is a promise, the:
other party's consideration will be an act.
Kevin is offered a job by a reputed company in a different city. To take up the new job, Kevin quits his previous job and moves to the new city along with his family. When he shows up at work, he is told that there is no job. Kevin can sue the employer under the theory of _____.
promissory estoppel
Tracy offers Liam a job as a store manager at a liquor store, which she plans to open in a small property owned by her husband. The property is located near a school. Before Liam accepts the offer, the state passes a rule that liquor stores can not be located within a five-mile radius of a school. In this scenario, the employment offer terminates due to:
subsequent illegality of the subject matter
A debt is unliquidated when:
the parties dispute over the existence or amount of the debt.
If a party to a contract asks for an additional amount of money and agrees to do more work than the contract requires, the result is that the promise:
to do the extra work is valid consideration.