acct 324 exam 1 quizzes

_______ performance occurs when all aspects of the parties' duties under the contract are carried out perfectly. A) Whole B) Material C) Perfect D) Complete

D

When a court can void the illegal part of an agreement and enforce the rest if the terms represent the main purpose of the original agreement, it is a(n) _______ contract A) quasi B) severable C) adhesion D) unilateral

B

When the obligations of a contract are terminated by a future event, that future event is referred to as a condition _______. A) subsequent B) successive C) preceding D) precedent

A

A _______ is a particular event that must occur in order for a party's duty to arise. A) material condition B) condition precedent C) condition subsequent D) concurrent condition

B

_______ occurs when one party makes a promise knowing the other party will rely on it, the other party does rely on it, and the only way to avoid injustice is to enforce the promise. A) Forbearance B) Promissory estoppel C) A tort D) A crime

B

A valid offer includes A) preliminary negotiations and advertisements. B) vague and ambiguous proposals. C) offers communicated by the offeror to the offeree's agent. D) expressions of possible interest by the offeror.

C

A(n) _______ contract is likely to be held in violation of public policy. A) unconscionable and implied B) conscionable and expressed C) unconscionable and in restraint of trade D) in restraint of trade and implied

C

_______ terms in an offer and its resulting contract 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. A) Customary B) Nonnegotiable C) Material D) Salient

C

Implied conditions are those conditions which _______. A) the parties may choose to enforce before their obligations to perform under the contract arises B) are not explicitly stated in the contract but are inferred from the nature and language of the contract C) the parties determine based upon an accord and satisfaction D) are explicitly stated in the terms of the agreement

B

UCC Section 2-718 pertains to liquidated damages and allows the non-breaching seller to claim against a breaching buyer _______ percent of the purchase price or _______, whichever is _______, as liquidated damages. A) 40; $1,000; less B) 20; $500; less C) 50; $1,500; more

B

Which of the following refers to agreements in which parties pay consideration for the chance, or opportunity, to obtain an amount of money or property? A) Defalcation B) Gambling C) Predatory lending D) Usury

B

A contract is not formed until acceptance is received by the offeror in which of the following situations? A) A contract will be formed regardless of the mode of acceptance provided the offeree dispatches the acceptance by the due date. B) An authorized mode of acceptance is used when the offeror conditions acceptance based on use of that specific mode of acceptance. C) An unauthorized mode of acceptance is used when the offer merely authorizes certain modes of acceptance but does not require a specific mode of acceptance. D) A contract can never be formed unless an authorized mode of acceptance is used.

C

Which of the following conditions would terminate an offer, even if the offeree does not know of the terminating event? A) When the offeree has begun performance of the action necessary to accept a unilateral offer. B) When the offeror and the offeree are in an option contract that is still valid. C) When the offeror loses the legal capacity to enter into a contract. D) When the offeror decides to revoke the offer made to the offeree.

C

When the buyer in a sales contract is in breach, the UCC allows sellers to recover A) the difference between the original contract price and the profits made through resale. B) any out-of-pocket expense incurred. C) liquidated damages. D) the difference between the resale price and the contract price, plus incidental damages and minus expenses saved.

D

Suppose that Hannah agrees to purchase Rachel's computer for $500. Hannah's payment of $500 is the _______ that Rachel will receive for her car. A) agreement B) consideration C) offer D) reciprocity

B

If an offer provides certain ways of acceptance but does not require a specific way of acceptance, use of a different means of acceptance A) results in a contract immediately. B) makes the acceptance void and unenforceable. C) results in a contract only after the acceptance is received by the offeror. D) makes the acceptance voidable by the offeree.

C

Under the Uniform Commercial Code (UCC), which of the following statements is true of the remedies available to buyers and lessees when a seller or lessor breaches a sales contract? A) Buyers and lessees can recover the goods identified in a contract if the seller or lessor becomes insolvent within 30 days after receiving the first payment due. B) Buyers or lessees are allowed to accept nonconforming goods and then seek monetary damages to give them the benefit of the bargain. C) When buyers or lessees reject nonconforming goods, they only have the rights to cancel the contract and not seek any cure from the seller. D) In order to obtain cover in a breach of contract by the seller or lessor, buyers or lessees should avoid purchasing goods that are substitutes.

B

An exception to the common law rule requiring that a valid contract must have consideration is A) an option agreement. B) a contract under law. C) the mailbox rule. D) contract under seal.

D

Consequential damages include _______, as long as such damages are not too speculative. A) incidental damages B) losses avoided C) property loss D) lost profits

D

The term _______ refers to the fact that the agreement in question is so unfair that it is void of conscience. A) conscionable B) malconscionable C) subconscionable D) unconscionable

D

To recover damages in a breach-of-contract case, the nonbreaching party must demonstrate that she sought to _______ her damages. A) liquidate B) rescind C) substitute D) mitigate

D

If a person who suffers from a mental illness or defect yet still understands the nature of the contract and his or her obligations under the contract, which of the following will result? A) The contract will be considered voidable by the party who is not mentally ill. B) The contract will be considered valid. C) The court will have to approve the contract on behalf of the mentally ill person. D) The contract will be deemed void by the person who suffers from the mental illness or defect.

B

If nothing is stated to the contrary in the terms of an auction, the auction is presumed to be _______, which means that the seller is merely expressing intent to receive offers. A) without reserve B) with reserve C) conditional D) unconditional

B

The terms of an acceptance that reflect the terms of an offer are known as the _______ rule. A) near-privity B) mirror-image C) mailbox D) transmissions

B

In a(n) _______ debt, the parties either disagree about whether money is owed or dispute the amount. A) liquidated B) fluid C) unliquidated D) illiquid

C

A party will receive _______ in return for performing a contract obligation. A) consideration B) deliberation C) an offer D) a promissory note

A

Consideration can be anything, as long as it is the product of a(n) _______. A) bargained-for exchange. B) bilateral contract. C) unilateral contract. D) assignment.

A

Harry had agreed to hire 16-year-old Mac as a baker in Harry's restaurant. Before Mac could start working for Harry, a new state statute made it illegal to employ minors in any capacity other than servers in restaurants. In this scenario, Harry and Mac are discharged from their duties on the grounds of A) objective impossibility. B) anticipatory repudiation. C) accord and satisfaction. D) substituted contract.

A

Laurens, Inc. contracted with GSP, LLC to widen a four-lane road to a six-lane road for ten miles. When Laurens, Inc. and GSP, LLC drafted the contract, the agreement contained a provision that if either party breached the contract, that party was liable to pay $10 million dollars to the nonbreaching party. This scenario is an example of _______. A) liquidated damages. B) equitable damages C) punitive damages D) pre-existing damages

A

Maya, a wedding planner, had agreed to use purple orchids for Janet's wedding. However, due to an embargo against the country from where the flowers were to be imported, Maya could not fulfill her promise. In this scenario, the contract between Maya and Janet may be discharged on the basis of A) commercial impracticability. B) novation. C) condition subsequent. D) objective impossibility.

A

The UCC allows a seller or lessor to stop delivery of the goods if the goods are _______. A) in transit B) subject to resale C) nonconforming in part and conforming in part D) substantially impaired

A

To justify recovery based on a quasi-contract, a plaintiff must prove all but which of the following elements? A) The defendant would be enriched by receiving the benefit that was the result of a unilateral mistake on behalf of the plaintiff. B) The defendant would be unjustly enriched from receiving the benefit without compensating the plaintiff for it. C) The plaintiff had reasonably expected to be compensated for the benefit conferred on the defendant. D) The plaintiff conferred a benefit on the defendant.

A

Which of the following statements is INCORRECT concerning contracts made by intoxicated persons? A) Courts tend to allow the intoxicated person to disaffirm the contract if disaffirmance occurs within one month after the person becomes sober. B) Contracts made by intoxicated people are generally considered voidable. C) Courts tend to fairly liberally interpret behavior that appears to ratify the contract once the intoxicated person becomes sober. D) Contracts made by intoxicated people are generally considered enforceable if the intoxication merely causes the person to exercise poor judgment unless the other party unfairly capitalized on the impaired judgment.

A

When a debt is _______, the parties may enter into a(n) _______. A) liquidated; civic satisfaction B) unliquidated; accord and satisfaction C) unliquidated; civic satisfaction D) liquidated; accord and satisfaction

B

All of the following are requirements necessary for an "accord and satisfaction" to be enforceable, except A) the creditor agrees to accept as full payment less than the creditor claims is owed. B) the debt is unliquidated. C) the debt is liquidated. D) the debtor pays the amount he/she has agreed to pay.

C

Covenants not to compete in conjunction with the sale of a business are generally enforceable if which of the following conditions are met? A) Provided the covenant not to compete allows the seller of the business to open a new business within the same county, the covenant will be enforceable. B) Provided the covenant not to compete also involves a covenant not to compete for future employment, the covenant will be enforceable. C) Provided the covenant not to compete is reasonable with regard time and location, the covenant will be enforceable. D) Provided the covenant not to compete does not prohibit the seller of the business from opening a new business within one year, the covenant will be enforceable.

C

Freddie offers to sell Lucy five video poker machines. Before Lucy can accept or reject Freddie's offer, the state legislature passes a statute that the purchase, sale, and possession of video poker machines is illegal. In this scenario, Freddie's offer terminates due to which of the following rules? A) Assumption of the risk B) Unilateral mistake C) Subsequent illegality of the subject matter D) Lapse of time

C

In determining the obligations of sellers/lessors and buyers/lessee, all but which of the following factors is considered? A) Custom B) The terms outlined in the parties' agreement C) Rules as determined by the United States Constitution D) Rules outlined in the Uniform Commercial Code (UCC)

C

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) A) collective bargain. B) addendum. C) counteroffer. D) reverse bid.

C

Legal capacity is A) not required for a valid contract. B) sufficient consideration to enter into a contract. C) the mental ability of a person to understand his or her rights and obligations under a contract and comply with the terms. D) the physical ability of a person to understand his or her rights and obligations under a contract and comply with the terms.

C

UCC Sections 2-703(f) and 2A-523(1)(a) allow a seller or lessor to cancel the contract if the buyer or lessee is in A) concurrence. B) agreement. C) breach. D) abeyance.

C

When is a contract voidable? A) When the contract is entered into by an emancipated minor. B) When the contract is entered into by a person adjudicated insane. C) When the contract is entered into by a minor. D) When the contract is entered into by an intoxicated person who understands his or her contractual obligations.

C

When there is no dispute over the amount of debt or existence of debt, it is referred to as a _______. A) subordinated debt. B) good debt. C) liquidated debt. D) venture debt.

C

Which of the following must occur when nonbreaching buyers or lessees obtain specific performance under the Uniform Commercial Code (UCC)? A) The buyers or lessees will receive the precise goods ordered in addition to the specific amount of monetary losses they incurred due to the breach. B) The buyers or lessees will be able to recover an amount equal exactly to their monetary losses. C) The sellers or lessors must deliver the goods identified in the contract. D) The sellers or lesser must pay the exact amount of damages the buyer or lessee sustained.

C

Formation of a contract begins when the party initiating the contract, called the _______, makes an offer to another party, called the _______. A) grantor; grantee B) transferor; transferee C) delegator; delegatee D) offeror; offeree

D

In a(n) _______, the original parties and a third party all agree that the third party will replace one of the original parties and that the original party will then be discharged. A) mutual rescission B) substituted contract C) accord and satisfaction D) novation

D

When a minor enters into a contract, the minor has which of the following rights? A) The minor has a right to ratify the contract before reaching the age of majority if the adult party agrees. B) The minor has the right to disaffirm the contract only after reaching the age of majority. C) The minor may disaffirm part of the contract before reaching the age of majority and then ratify the remaining provisions of the contract after reaching the age of majority.minor can choose to disaffirm only a portion of the contract. D) The minor has the right to disaffirm the contract before or within a reasonable time of reaching the age of majority.

D

Which of the following is true of an accord and satisfaction? A) A debt must be liquidated for an accord and satisfaction to be enforceable. B) As per common law, a debtor sending a check with "paid in full" written on it does not create an accord and satisfaction. C) A creditor agrees to accept as full payment, not less than he or she claims is owed, for an accord and satisfaction to been forceable. D) If a creditor inadvertently cashes a debtor's "paid in full" check, he can repay the debtor the same amount within 90 days to invalidate an accord and satisfaction.

D

_______ is the preferred remedy for nonbreaching sellers as it provides an easy means to determine damages in a breach of sales contract by buyers. A) Revocation of contract B) Obtaining cover C) Suing to get benefit of the bargain D) Resale of goods

D