B Law Ch 10 Questions
A contract is ________ if the offeror's offer can be accepted only by the performance of an act by the offeree. A) unilateral B) bilateral C) implied-in-law D) executory
A
A(n) ________ is stated orally or in written words. A) express contract B) implied-in-law contract C) implied-in-fact contract D) quasi-contract
A
According to the objective theory of contracts, the intent to enter into an express or implied-in-fact contract is judged by the ________. A) reasonable person standard B) legality of the contract C) doctrine of equity D) common law of contracts
A
Contracts that have been fully performed by one side but not by the other are classified as ________ contracts. A) executory B) executed C) void D) voidable
A
Ron's response to sell the computer to Carl is considered as a(n) ________. A) mirror image rule acceptance B) rejection C) counteroffer D) equivocal response
A
The ________ theory of contracts states that the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties. A) objective B) relational C) collateral D) bargain
A
What is recognizance? A) a party's acknowledgement in court that he or she will pay a specified sum of money if a certain event occurs B) a sealed document that contains a formal contract whose contents are known to both parties and the referee who supervised its signing C) a sealed document that contains an informal contract whose contents are known only to the parties D) a party's acknowledgement in court that he or she is not liable to pay any money if a certain event occurs
A
What is the key difference between an agreement and a contract? A) A contract is always enforceable in the court of law, while an acceptance may or may not be. B) A contract can only be between two individuals, while an acceptance can have two or more people involved. C) A contract required mutual assent from all parties, while an acceptance need only be accepted a majority of people involved. D) A contract need not be legally binding, while an agreement must be legally binding.
A
Which of the following describes Ron's action of deciding not to sell his computer? A) revocation B) rejection C) counteroffer D) unequivocal acceptance
A
Which of the following is a difference between acceptance and revocation? A) Revocation is valid only if the offeree receives it, while an offeree's acceptance is valid when dispatched. B) Revocation can be done by the offeror or offeree, while an acceptance can only be done by the offeree. C) An acceptance must be received by the offeror to be valid, while a revocation need not be received by the offeree. D) A revocation can be made after acceptance, while an acceptance cannot be made after revocation.
A
Which of the following is true for an auction with reserve? A) The seller retains the right to refuse the highest bidder. B) Invitations to make an offer are not allowed. C) Goods cannot be withdrawn from sale after the offer has been made. D) A bid once made cannot be withdrawn and is legally binding.
A
Which of the following is true of the Restatement of the Law of Contracts? A) It serves as a reference for guidance in contract disputes. B) It does not identify negotiable instruments as formal contracts. C) Its goal is to create a uniform system of commercial law among the 50 states. D) It is the absolute federal law for contracts drafted in the U.S.A.
A
Which of the following is true of the equity doctrine? A) Equity is resorted to when an award of money damages would not be the proper remedy. B) In an action in equity, the jury decides the equitable issue. C) An equitable action could be tried with a judge or a jury. D) The doctrine of equity cannot be applied in contract cases.
A
Which of the following statements is true about contracts? A) Parties to an informal contract can use any words they choose to express their contract. B) A contract under seal is disclosed only to the offeror of the contract. C) A letter of credit is an informal contract. D) A void contract is the same as a voidable contract.
A
________ is a manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the objective theory of contracts. A) Acceptance B) Revocation C) Proposal D) Counteroffer
A
A contract is ________ if the offeror's promise is answered with the offeree's promise of acceptance. A) unilateral contract B) bilateral contract C) executed contract D) executory contract
B
A contract that has been fully performed on both sides is called an ________ contract. A) executory B) executed C) option D) executive
B
A response by an offeree that contains terms and conditions different from or in addition to those of the offer is called a(n) ________. A) rejection B) counteroffer C) revocation D) acceptance
B
Alan tells Sherry that he will pay her $5,000 if she runs the Boston Marathon. Once Sherry starts running the marathon, Alan ________. A) can revoke the contract as informal verbal agreements are not binding B) cannot revoke the contract C) can reduce the money on offer D) can only increase the money on offer
B
In a(n) ________ contract, agreement between parties is inferred from their conduct. A) implied-in-law B) implied-in-fact C) express D) formal
B
A(n) ________ is a voluntary exchange of promises between two or more legally competent persons to do, or refrain from doing, an act. A) offer B) advertisement C) agreement D) proposal
C
A(n) ________ is a withdrawal of an offer by the offeror that terminates the offer. A) rejection B) advertisement C) revocation D) counteroffer
C
An agreement that an offeror will not sell his property for a specified period subsequent to the offeree paying consideration to the offeror is referred to as a(n) ________. A) unequivocal acceptance B) contract of adhesion C) option contract D) firm offer
C
An invitation to make an offer or an actual offer is referred to as a(n) ________. A) proposal B) reward C) advertisement D) bid
C
An offer is terminated on the grounds of "supervening illegality" when ________. A) the set period in the offer has expired B) the subject matter in the offer has been destroyed C) a statute or court decision deems an object of the offer unlawful D) the offeror or offeree passes away prior to the offer being accepted
C
An offeror uses blackmail to make an offeree sign a contract that involves the sale of the offeree's house. The contract is ________. A) valid B) void C) voidable D) unenforceable
C
An oral agreement to purchase a neighbor's bicycle is a(n) ________ contract. A) voidable B) void C) express D) implied
C
Ben was talking to Harry who was drunk. Harry agreed to give his car to Ben as a token of friendship. Once sober, Harry asks Ben to return his car. This contract is considered ________. A) valid B) void C) voidable D) unenforceable
C
George made an offer to Jacob to sell his house for $1 million. The offer was received by Jacob on the 1st of May, and stipulated that he had 13 days to accept. But Jacob could not arrange the money, and on 16th May made a counteroffer to George to buy the house for $850,000. Which of the following is true about the original offer made by George to Jacob? A) It is terminated by the counteroffer. B) It is still valid as the house has not been sold. C) It is invalid due to lapse of the stated time. D) It is invalid due to incompetency of the offeree.
C
If a fire destroys an office building that has been listed for sale, the offer is automatically terminated due to ________. A) supervening illegality B) death or incompetency of the offeror C) destruction of the subject matter D) lapse of time
C
Mandy has decided to sell her iPad, and makes an offer to her friend Shelly for $250. Shelly tells Mandy she is willing to buy the iPad, but would be glad if Shelly could lower her asking price. Mandy lowered the price to $210 and Shelly bought it. Which of the following would describe Shelly's response to Mandy for her first offer? A) counteroffer B) rejection C) equivocal acceptance D) grumbling acceptance
C
Michael Harrison opens an online store where people from all over the world can purchase and download iPhone apps. Which of these should Michael consult to know the rules of trading through his online store? A) common law of contracts B) objective law of contracts C) UCITA D) UCC
C
Peter has two houses that he plans to sell, numbered Lot 1 and Lot 2. Each priced at $800,000. David has shown interest in buying Lot 2, but could not make up his mind on the final offer, so he asks Peter to give him a week to decide and Peter accepts. But David takes two weeks to get back to Peter with a counteroffer. Before he could give David a reply to his counteroffer, Peter is killed in a fire that burned down Lot 1. Which of the following would be true of this case? A) The offer is terminated due to lapse of time. B) The offer is terminated due to destruction of the subject matter. C) The offer is terminated due to death of the offeror. D) David can still buy the house for Peter's original offer.
C
The ________ establishes uniform legal rules for the formation and enforcement of electronic contracts and licenses. A) common law of contracts B) Restatement of the Law of Contracts C) UCITA D) UCC
C
The ________ states that an acceptance is effective when it is dispatched, even if it is lost in transmission. A) rule of silence as acceptance B) mirror image rule C) mailbox rule D) mutual assent rule
C
The ________ states that the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties. A) Restatement of the Law of Contracts B) Restatement (Second) of Contracts C) objective theory of contracts D) common law of contracts
C
Two brothers, Sam and Jim, were fighting over the division of their ancestral property. After ten years of legal battle, a frustrated Sam contacted a powerful politician who subjected Jim to extreme duress to make him sign a contract of assent in favor of Sam. When Jim takes this contract to court, the contract will be declared ________. A) enforceable B) conditionally enforceable C) voidable D) unenforceable
C
Which of the following contradicts the mirror image rule? A) silence as acceptance B) option contract C) counteroffer D) acceptance-upon-dispatch
C
Which of the following elements must be established to create an implied-in-fact contract? A) The plaintiff provided the property or services gratuitously. B) The plaintiff made the defendant sign the contract and then changed its terms, calling the new terms "previously implied". C) The defendant was given an opportunity to reject the property or services provided by the plaintiff but failed to do so. D) The defendant accepted the property or services offered by the plaintiff as a fee for an illegal activity.
C
Which of the following is an informal contract? A) check B) bank draft C) lease D) recognizance
C
Which of the following is true for an auction without reserve? A) The bidder is considered the offeror. B) The seller need not accept the highest bid. C) The goods on sale cannot be withdrawn. D) The auctioneer is not allowed to set a minimum bid.
C
Which of the following statements is true of the doctrine of quasi-contract? A) It allows a court to award monetary damages to a defendant because no actual contract existed between the parties. B) It applies only where there is an enforceable contract between the parties. C) It is an equitable doctrine intended to prevent unjust enrichment. D) Agreement between parties to a quasi-contract has been inferred from their conduct.
C
Which of the following would be considered an offer to form a unilateral contract? A) advertisement B) auction without reserve C) reward offer D) auction with reserve
C
Yvonne finds a carpenter to do some repairs for her house and tells him that if he finishes the job within Saturday, she would pay him $1,000. This offer creates a(n) ________ contract. A) executed B) executory C) unilateral D) bilateral
C
________ is a doctrine that permits judges to make decisions based on fairness, equality, moral rights, and natural law. A) Common law of contracts B) Restatement of the Law of Contracts C) Equity D) Objective theory of contracts
C
A term in a contract that can reasonably be supplied by the courts is referred to as a(n) ________. A) intent term B) unconditional term C) objective term D) implied term
D
A(n) ________ is an equitable doctrine whereby a court may award monetary damages to a plaintiff for providing work or services to a defendant even though no actual contract existed. A) bilateral contract B) common law of contracts C) implied-in-fact contract D) quasi-contract
D
An offer is terminated on the grounds of "lapse of time" if ________. A) the offeror dies before the offeree has accepted the offer B) the offer is not communicated to the offeree C) the offeror has communicated to the offeree a set time which is not mentioned in the offer D) the offer is not accepted within a stated time period
D
Carl's response to Ron's offer is considered as a(n) ________. A) mirror image rule acceptance B) rejection C) unequivocal acceptance D) counteroffer
D
Elizabeth signs a contract to purchase a new car from Spadace Motors. She has not yet paid for the car and Spadace Motors has not yet delivered the car to Elizabeth. This is an example of a(n) ________ contract. A) void B) unenforceable C) executed D) executory
D
If a contract is required to be in writing under the Statute of Frauds but is not, the contract is ________. A) valid B) void C) voidable D) unenforceable
D
In which of the following types of offers does the seller offer the goods for sale? A) revocation B) reward C) auction with reserve D) auction without reserve
D
Jennifer had put up a reward offer, in the local newspaper, for her lost watch for two weeks now. But after buying a new watch, Jennifer decided to not pursue her old watch, and so decided not to put up the reward offer in the third week. Betty, who found the watch, and saw the reward offer, returned the watch to Jennifer during the third week. Which of the following would be true about Betty receiving or not receiving the reward? A) Betty will not receive the reward as Jennifer had already revoked it. B) Betty will not receive the reward as Jennifer had stopped publishing the reward offer. C) Betty cannot claim the reward because she had not performed all the requested acts. D) Betty can claim the reward because Jennifer had not published a notice of revocation.
D
Kyle goes to a used-car showroom to buy a sedan. He signs an agreement with the store which bears the name of the car, price, and other details. This is an example of a(n) ________ contract. A) unilateral B) implied-in-law C) implied-in-fact D) express
D
Martha contacts a bakery to get a cake for her son's birthday party. She tells the baker that she will pay him $150 for the cake if he delivers the cake on Friday evening. If the baker does not deliver the cake on Friday evening, which of the following will hold true? A) Martha can sue the baker to recover $150 in damages. B) Martha can sue the baker but cannot recover damages. C) The baker has to give $150 plus cost of the replacement cake to Martha as he entered into a verbal contract with her. D) Martha cannot sue the baker.
D
Techstate, a hardware manufacturer in the United States, has an existing contract with a client based in the Republic of Karthasia, which is going through a domestic political crisis. The resulting upheaval in that country has led to some of the shipments to the client being destroyed by warring factions. As a sanction against the country, the United States government places an embargo on all exports to that country by U.S. firms. What will be the state of the contract between Techstate and the client in Karthasia after the embargo? A) It will be terminated due to destruction of subject matter. B) It will be terminated due to incompetency of the offeror. C) It will be terminated due to lapse of time. D) It will be terminated due to supervening illegality.
D
The mirror image rule states that ________. A) the offeree's counteroffer should match the value of the offeror's offer B) the offeree is allowed to modify the terms of the offer C) the offeror can modify the terms of the offer even after the offeree has accepted it D) the offeree must accept the terms as stated in the offer
D
Which of the following is true about an option contract? A) If the offeree chooses not to buy the property then money paid in consideration must be returned. B) If money is paid as consideration, then that is not applied to the sale price. C) Death or incompetency of either party terminates an option contract. D) The offer cannot be revoke during the option period.
D
Which of the following is true of enforcing a contract? A) A contract is only considered valid if it is enforceable by both parties. B) In an unenforceable contract, at least one party has the option to void his or her contractual obligations. C) Void contracts are enforceable in cases involving mutual mistakes. D) Parties may voluntarily perform a contract that is unenforceable.
D
Which of the following is true of the UCC? A) The UCC aims to create a uniform system of accounting among the 50 states. B) The common law of contracts normally takes precedence over the provisions of the UCC. C) Article 2 of the UCC prescribes a set of uniform rules for the creation and enforcement of rules of taxation. D) Article 2A of the UCC prescribes a set of uniform rules for the creation and enforcement of contracts for the lease of goods.
D
________ is a stipulation in an offer that says the acceptance must be by a specified means of communication. A) Option contract B) Mirror image rule C) Implied authorization D) Express authorization
D
Luke offered to sell his farm to Kent at $75,000, an offer which Kent declined. A week later, Luke offered to sell the farm for $65,000, stating that it was the final offer, it was valid for one month, and that he would not alter it. Two days later, Kent replied by saying that he was willing to pay $60,000 for the farm. A week after Luke received Kent's offer, Luke declined it. Ten days after that, Kent agreed to buy the farm for $65,000, but Luke refused to sell the farm. Kent decided to sue Luke for a breach of contract. The judge ruled in favor of Luke. Which one of the following is the reason for the ruling in Luke's favor? A) Luke's original offer of $75,000 is still valid, even though rejected. B) Kent's counteroffer of $60,000 had rendered the offer for $65,000 invalid. C) Kent's acceptance was past the set time period in the offer. D) Kent acted in an incompetent manner with regards to the offer.
B
Quentin is a member of the Album of the Month Club and receives a new music CD every month without fail. The Club usually gives its members a time period within which they can reject the selection and stop shipment of the CD, failing which the CD will be shipped. Last month, Quentin received a CD from Album of the Month Club, a copy of which a friend had already gifted him. He had not found time to reject the offer as he was away. Quentin could not reject the CD and had to buy it. What kind of an offer-acceptance model does Album of the Month Club have? A) mirror image rule acceptance B) silence as acceptance C) acceptance-upon-dispatch D) unequivocal acceptance
B
Section 24 of the Restatement (Second) of Contracts defines a(n) ________ as the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. A) order B) offer C) advertisement D) revocation
B
Stella is injured in a motor accident and is brought to the hospital by a passerby. Stella subsequently passes into a coma. The doctors and other staff perform the necessary medical procedures to save her life. Stella comes out of her coma after two months and is released from the hospital after the doctors are satisfied by her recovery. Under the doctrine of ________ contract, Stella has to pay the hospital for its services. A) express contract B) quasi-contract C) implied-in-fact contract D) formal contract
B
The legal power to accept an offer belongs to the ________. A) offeror B) offeree C) agent D) seller
B
The term ________ refers to a mode of acceptance that is indicated from what is customary in similar transactions, usage of trade, or prior dealings between the parties. A) express authorization B) implied authorization C) option contract D) unequivocal acceptance
B
Which of the following is a necessary condition for a contract to be considered valid? A) It is enforceable by both the parties. B) It is enforceable by at least one of the parties. C) It can be voided by one of the parties. D) It can be voided by both parties.
B
Which of the following is true for legally claiming a reward? A) A promise of completing the requested act is sufficient for a claimant to claim the reward. B) Knowledge of the reward before completing the requested act is necessary to claim the reward. C) The claimant can claim the reward even if he or she came to know of the reward subsequent to completing the act. D) The offeror cannot withdraw the reward once the offer has been placed in the public domain.
B
Which of the following is true of UCITA? A) It establishes the rules for operation of franchises in the U.S.A. B) It does not become law until a state adopts it as a statute. C) It solely deals with the formation of electronic contracts, not licenses. D) It addresses most of the legal issues that are encountered while starting an entrepreneurial venture.
B
Which of the following statements is true about a counteroffer? A) An offeree that makes the counteroffer is still considered the offeree. B) A counteroffer terminates the existing offer. C) A counteroffer can only be made by the offeror. D) A counteroffer need not be communicated to the offeror.
B
Which of the following statements is true about a revocation? A) It can be made by the offeree. B) It needs to reach the offeree to be effective. C) It can be done even after acceptance of the offer. D) It can be applied to an option contract.
B
Which of the following statements is true of an offer that was not communicated? A) The offer stays valid for 30 days from the date of creation. B) The offer cannot be accepted by the offeree if not communicated. C) The offeree can claim an offer that was not communicated. D) It is considered to be an implied term.
B
Which of these is an instance of a quasi-contract? A) an employee receiving his or her paycheck every month B) an unconscious man being nursed by a hospital, having been brought in by a passer-by C) two companies signing a business agreement that spans an undefined duration D) a woman hiring a caterer only after the caterer promises to deliver the food on time
B
Which one of the following would constitute a reward? A) a person buying a car after seeing an ad about it B) a person returning a lost item after seeing an ad about it C) a seller accepting a bid for an item D) a seller making an invitation for offers
B
Windsor, the owner of Windsor's Sandwiches contacts a new supplier Gary. He tells Gary that he will pay him $375 if Gary delivers 20 pounds of cheese the following morning. Gary promises to make the delivery as requested by Windsor. This creates a ________ contract between them. A) unilateral B) bilateral C) implied-in-law D) executory
B