Business Law Exam 1 - MC
A major difference between trespass to personal property and conversion is that the latter does not require intent to harm whereas trespass does.
False
A mental illness or defect of one of the parties to a contract automatically makes a contract void.
False
A person may employ deadly force to protect his property.
False
A person who falls asleep while driving would not be liable for any resulting injury since it would be an unavoidable accident.
False
A quasi contract is another name for an oral contract.
False
A social guest is a public invitee.
False
A typical state long-arm statute applies only to nonresident defendants who commit criminal acts in the state.
False
A unilateral mistake of fact is ordinarily grounds for avoiding a contract.
False
ABC Corp. is building a new office tower. Ace Plumbing Supplies refuses to provide plumbing materials on credit to the plumbing subcontractor on the building. ABC promises Ace that it will pay for the materials if the subcontractor does not. ABC's promise is unenforceable unless in writing.
False
Al owns a farm that he believes is worth $150,000. Betty knows that there is oil under the farm and offers Al $160,000 for it. Al accepts and sells the farm to Betty. Al later realizes that the land was worth more than $160,000. Al can have the contract avoided based upon fraud.
False
All furniture, television sets, and appliances purchased by a minor for her apartment would be considered necessaries.
False
All intervening events that occur subsequent to the defendant's negligent conduct will relieve the defendant of liability.
False
All states agree that a minor who has fraudulently misrepresented her age when entering into a contract has no power to disaffirm the contract.
False
Although a contract to purchase an undeveloped lot must be in writing to be enforceable, a contract to run power lines over someone else's lot need not be.
False
An agreement to sell the entire production of a particular plant to a particular purchaser is a requirements contract.
False
An appeal from a small claims court is taken to the state court of appeals, where a trial de novo is begun.
False
An auctioneer is free to withdraw the goods from sale if the sale is advertised or announced in explicit terms to be without reserve.
False
An example of language creating a suretyship as meant under the statute of frauds would be the following: "If my business partner does not write out the check for the supply bill for our company, I will."
False
An exclusive dealing contract is one type of contract which is illusory because it lacks consideration.
False
An implied contract is not an enforceable contract.
False
An offer is effective as soon as it is dispatched.
False
An offer must be in one particular form to have legal effect.
False
Ann makes a material misrepresentation of fact to Brian, and based upon the misrepresentation, Brian enters into a contract. Ann now thinks that the contract is not fair to her. This contract is voidable at Ann's option.
False
Because of the harshness of the all-or-nothing contributory negligence rule, nearly all states have now substituted the last clear chance doctrine for contributory negligence.
False
Beth, at age 17, sells an antique pin she inherited. Even if the buyer resells the pin to someone who did not know that it was purchased from a minor, Beth can recover the pin from the third person if she changes her mind about wanting to sell it.
False
Bill is currently enrolled in law school. He expects to graduate and take the bar exam in order to be able to practice law. Before Bill becomes a lawyer, he promises to represent his friend, Tom, in a breach of contract action if Tom will pay him 25% of the settlement. Bill negotiates and the case settles for $50,000. Tom refuses to pay Bill. Bill then graduates and attempts to sue Tom. Bill has a legal right to enforce the agreement.
False
Bodily contact intended as a compliment or as a joke cannot constitute a battery since there is no intent to offend.
False
Brent loans Manuel $1,600 on his oral promise to repay the loan in three annual installments. Most courts would hold Manuel's promise is unenforceable under the one-year provision of the statute of frauds.
False
Common law relating to the formation of contracts has little relevance in the business world today.
False
Comparative negligence by a plaintiff results in the plaintiff's being completely unable to recover.
False
Contracts generally require adequacy of consideration where the consideration given by both parties is of fair value and equitable.
False
Courts require that for a contract to be unenforceable based on unconscionability, both substantive and procedural unconscionability must be equally present.
False
D owes C a past-due undisputed debt of $500. D sees C in a bar and pays him $400. C then says to D, "Forget about the other $100 you owe me. I'm glad to get the $400." C's promise to discharge the remainder of the debt is binding.
False
On a federal question, a decision of the Sixth Circuit Court of Appeals: a. may be persuasive but is not binding on a Tennessee court. b. is binding on a Tennessee court. c. has no effect on any state court. d. is binding on all other federal appeals courts.
a) may be persuasive but is not binding on a Tennessee court
A civil lawsuit commences when the plaintiff files with the clerk of the trial court a complaint against the defendant.
True
A conditional promise is a promise the performance of which depends upon the happening or nonhappening of an event not certain to occur.
True
A contract exists when an offer has been accepted.
True
A court needs to have both subject matter jurisdiction and jurisdiction over the defendant involved before it can hear a particular case.
True
A covenant not to compete is a type of restraint of trade that courts today will enforce under certain circumstances.
True
A deposition is a pretrial discovery device, which consists of sworn testimony of a witness, taken out of court.
True
A long-arm statute allows a state to obtain jurisdiction over a nonresident defendant when the nonresident defendant has sufficient contacts with the state.
True
A mental condition that impairs a person's ability to act in a reasonable manner is one type of mental incompetence.
True
A modification of a preexisting contract occurs when the parties agree to change one or more of its terms and, under the common law, must be supported by mutual consideration to be enforceable.
True
A noncontractual promise may be enforceable where there has been justifiable reliance on the promise.
True
A number of states have included social guests in the invitee category, although they have traditionally been labeled as licensees.
True
A part performance exception to the statute of frauds in many states requires both that the transferee has paid at least a portion of the purchase price and has either taken possession of the real estate or has started to make valuable improvements on it.
True
A party to a contract that is unenforceable because of the statute of frauds may be able to recover in restitution the benefits conferred on the other party in reliance on the unenforceable contract.
True
A person can be guilty of trespass whether he or she intended or did not intend to violate the other's rights.
True
A person under guardianship by court order has no contractual capacity.
True
A person would be liable to the rightful owner of stolen property for conversion even though the person bought it in good faith from the thief and without knowledge that it had been stolen.
True
A possessor of land is under a duty to exercise reasonable care to protect invitees against dangerous conditions they are unlikely to discover.
True
A pretrial conference between the judge and the attorneys representing the parties in a lawsuit is held to simplify the issues in dispute and to encourage settlement of the dispute without trial.
True
A promise to pay $1,000 a year to a local police officer to not have your store vandalized is legally unenforceable under the rule that makes performance of a pre-existing legal obligation legally insufficient consideration.
True
A reasonable person, as used in the law of torts, is a fictitious individual who is always careful, prudent, and never negligent.
True
A seller's promise to service a sewing machine free for the next 90 days when she has no intention of doing so is actionable as a false representation of a fact if the other elements of fraud are present.
True
A unilateral contract may consist of a promise exchanged for an act or forbearance.
True
A usage of trade is a practice or method of dealing, regularly observed and followed in a place, vocation, or trade.
True
A widely applied test for causation in fact is the "but-for" test.
True
AB, Inc. fires an employee and then, when asked for a reference on him, knowingly makes some untrue statements which prevent him from finding a job. AB is liable for defamation.
True
Abuse of process applies even when there is probable cause or when the plaintiff or prosecution succeeds in the litigation.
True
Alice, a resident of Ohio, has obtained a valid judgment against Bill, a resident of Kentucky. In this case: a. Alice can attach Bill's automobile in Ohio to satisfy her court judgment. b. Alice must go to Kentucky to satisfy her judgment. c. Alice has no recourse against Bill because he has left the state. d. Ohio has no jurisdiction over Bill because he is a resident of Kentucky.
a) Alice can attach Bill's automobile in Ohio to satisfy her court judgment
An action for negligence consists of five elements, each of which the plaintiff must prove. These elements include: a. harm. b. res ipsa loquitur. c. a reasonable person. d. All of these.
a) harm
Andrew negligently hit a dog, which lay stunned in the street for a moment and then ran toward Bill, a bystander, and bit him. In this case: a. the dog's action is a foreseeable cause of harm. b. the dog's action is a superseding cause of harm. c. Andrew will be liable to Bill, because the dog's behavior is a natural consequence of the situation caused by Andrew's negligence. d. the dog's owner will be held strictly liable for Bill's injuries, but Andrew will be liable to the dog's owner.
b) the dog's action is a superseding cause of harm
Andrew, an attorney, has a case that was recently heard by the United States Court of Appeals (8th Circuit). Andrew believes the case involves a significant issue of U.S. Constitutional law. He would like to have the United States Supreme Court hear the case. One way by which the U.S. Supreme Court may review the case is by: a. forum non conveniens. b. writ of certiorari. c. stare decisis. d. appellate novus
b) writ of certiorari
Contract law is significant in that it is basic to other fields of law such as: a. sales of personal property. b. commercial paper. c. secured transactions. d. All of these.
d.) All of these
Contracts that are implied in law: a. are obligations imposed by law on grounds of justice and equity. b. are intended to prevent unjust enrichment. c. do not rest upon the assent of the contracting parties. d. All of these.
d.) All of these
Express contracts and implied contracts are: a. both genuine contracts. b. equally enforceable. c. voidable for lack of capacity. d. All of these.
d.) All of these
Ratification can occur in which of the following ways? a. Through express language b. As implied from conduct c. Through failure to make a timely disaffirmance d. All of these.
d.) All of these
Which of the following gratuitous promises is/are enforceable by statute? a. A good-faith contract modification in a contract for the sale of goods b. A written offer signed by a merchant to buy or sell goods that assures it will be kept open for one month c. A renunciation of a claim in a written waiver that is signed and delivered by the aggrieved party when the contract involves a sale of goods d. All of these are enforceable by statute.
d.) All of these are enforceable by statute
Invasion of privacy consists of: a. appropriation. b. intrusion. c.public disclosure of private facts. d. All of these are invasions of privacy.
d.) All of these are invasions of privacy
Defenses to intentional torts include: a. self-defense and consent. b. defense of others and consent. c. self-defense and defense of property. d. All of these are valid defenses.
d.) All of these are valid defenses
A valid contract may be unenforceable for which reason(s)? a. Failure to satisfy the Statute of Frauds b. Running of the Statute of Limitations c. Lack of capacity d. All of these reasons
d.) All of these reasons
In an article about a prominent judge, a newspaper indicates the possibility that the judge had organized crime connections. The judge sues. The judge will have a cause of action: a. if the suit is for defamation and the newspaper responsibly checked its sources. b. if the suit is a suit for intrusion. c. whether or not the newspaper checked its sources as long as the information printed is ultimately found to be untrue. d. if the information is untrue and the newspaper did not check its sources.
d.) If the information is untrue and the newspaper did not check its sources
Harms or injuries that are tortious may be inflicted: a. intentionally. b. negligently. c. without fault. d. In all of these ways.
d.) In all of these ways
A basic element of fraud is a false representation or a misrepresentation.
True
A U.S. Court of Appeals is the final step in the appeal process within the federal court system.
False
A collateral promise is an undertaking to be primarily liable for the principal debtor's debt.
False
A contract to sell five acres of land is governed by Article 2 of the UCC.
False
A defamatory communication that is spoken or oral is designated libel.
False
A defendant will be liable for all harm that can be traced back to the defendant's negligence.
False
A directed verdict is a judge's final binding determination on the merits after a jury's verdict.
False
A letter sent to someone falsely accusing her of being a murderer constitutes the tort of defamation.
False
A liquidated debt is an obligation the existence or amount of which is in dispute.
False
Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.
False
Lydia makes a contract to purchase a used car on her seventeenth birthday. Six months later, her ratification of the contract can be effectively implied by her continuing payments.
False
Maria posted several signs in the neighborhood offering $50 for the return of her lost cat. Dave calls to get a description of the cat and tells Maria, "I'll look for your cat." A contract is formed by Dave's call to Maria.
False
Marjorie has been cared for by her family physician for 35 years. She decides to assume the mortgage on his new clinic. The contract is automatically invalid because of undue influence.
False
Matt sells bikes at a local discount store. To encourage Bob to buy a more expensive model than he originally contemplated, Matt tells Bob, "This is the most awesome bike money can buy at this price. You can expect lots of riding pleasure." Based on this statement Bob buys the bike. A week later, before his bike is fully paid for, Bob sees a far superior bike for a lower price at another store. Bob can avoid his contract with Matt because of fraudulent misrepresentation.
False
Mistake by failure to read a document is grounds to void a contract.
False
On March 20, Gordon orally agrees to work for Carrham, Inc. for a period of one year commencing on June 1. No writing is necessary here, because the contract can be performed within one year.
False
Past actions unbargained for by the parties in an agreement can become valid consideration for a contract.
False
Pat told her friends that her car got 35 miles to the gallon in the city when in reality it only got 20 miles per gallon. When Pat decides to sell the car and one of her friends decides to buy it, Pat is under no duty to tell the correct figure unless asked.
False
The Abbot Corporation contracts with the Baker Corporation to sell to Baker its entire production. After signing the agreement, Abbot can increase its production from one shift to two shifts and Baker will have to buy all of the doubled production.
False
The parol evidence rule applies to partially written agreements.
False
The parol evidence rule prohibits introduction of all evidence that would result in modifying written contracts.
False
A licensee for purposes of tort law is a person invited upon land as a member of the public or for a business purpose.
False
Darrell goes to lunch with an office equipment salesman. After drinking two beers and eating a Reuben sandwich, Darrell signs a contract to purchase a $1200 machine for the office. Two hours later, he has second thoughts and decides a different machine might be a better buy, so he calls the salesman and wants to disaffirm the contract based upon intoxication. Darrell can avoid the contract on this basis.
False
Disaffirmance may be express, but it may not be implied.
False
Edward, an engineer, is working on a new design for some highly technical equipment which XYZ, Inc. hopes to market within the next five years. The employment agreement between Edward and XYZ states that Edward will not go to work for another company in the same business for a period of two years after termination of his employment with XYZ, Inc. This agreement is void and unenforceable, because it would make it difficult for Edward to find other employment.
False
Emancipated minors have no ability to avoid contracts based upon their minority.
False
For a misrepresentation to be actionable as fraud in the inducement, it must be a misrepresentation of an opinion.
False
For a misrepresentation to be fraud in the inducement, it need not be material.
False
Fraud in the inducement will render an agreement void.
False
Generally, consent is not a defense in an intentional tort action.
False
Generally, whether or not the parties deal at arm's length does not affect whether silence alone amounts to fraud.
False
Historically, courts held that representations of law were statements of fact, but the present trend is to recognize that they have only the effect of statements of opinion.
False
Hugh recently purchased a motorcycle for $4,000 but has had extensive problems starting the motor. In disgust at not being able to start the motorcycle, Hugh shouts to his friends, "Any of you want to buy this thing for $20?" A contract will be formed if a friend gives Hugh a twenty-dollar bill.
False
If Bill tells Sara that he will give her two days to decide if she wants to buy his car, he cannot sell it to anyone else during that time.
False
If Carrie, age 14, contracted to buy a fur coat by mail, the coat manufacturer would not have to send it since the contract was void.
False
If Thomas seemingly offers to sell to Raquel his Toro lawnmower but he intends to offer and believes he is offering her his Murray mower, and she accepts the offer, reasonably believing it was for the Toro, no contract has been formed because there is no mutual assent.
False
If a contract is not clearly unilateral or bilateral, the courts presume that the parties intended a unilateral contract.
False
If a person's 150-pound sheep dog has a tendency to jump enthusiastically on visitors, the animal's keeper would not be liable for any damages done by the dog's playfulness.
False
If a promisor intends her promise as a joke, whether or not the promisee as a reasonable person should understand it to be such, the promise is not an offer.
False
If an offer states that a reply must be received by a certain date, the contract is formed at the time the offeree sends or dispatches the acceptance.
False
If no time limit is stated, an offer will not terminate until both parties agree.
False
If the act or threat would affect a person of average strength and intelligence, then and only then will the act constitute duress.
False
In a contract to sell necessaries to a minor, these goods and services are limited to medical care, food, and shelter.
False
In a typical case before a U.S. Court of Appeals, all the judges of the circuit sit en banc to decide the case.
False
In an employment agreement with Karl, Arnold promises to work for Karl for the rest of his life. This promise must be in writing to be enforceable.
False
In general, a minor may only disaffirm a contract after he has reached the age of majority.
False
In general, if a minor lies about her age in order to induce the seller to contract with her, she cannot disaffirm that contract.
False
In making conflict of law decisions, judges need not be concerned about choosing what laws to follow since conflict of law rules are the same from state to state.
False
In order to be sufficient, an agreement required to be written under the statute of frauds must be signed at the bottom and notarized.
False
In rem jurisdiction refers to jurisdiction over the person.
False
In settling a liquidated debt, payment of a smaller amount before the due date would constitute consideration, but paying a lesser amount on the due date at an agreed-upon different place of payment would not be legally sufficient consideration.
False
In the United States, there is never a right to a jury trial in a civil case.
False
Incompetents and persons under the age of 18 cannot be held liable for their intentional torts.
False
Jessica at the age of 15 entered into a contract to sell five acres of land to her uncle. She may disaffirm this contract at any time before reaching her majority.
False
Kris, age 17, who looks 18 or older, makes a contract to buy a car from Maisie, who is the age of majority. Maisie finds out Kris's age. Maisie may avoid the contract even if Kris did not misrepresent his age.
False
Legal detriment means the obtaining by the promisor of that which he had no prior legal right to obtain.
False
If Sam agrees to sell to Thomas all of the tomatoes he wants at $25 a bushel, there is no contract because of a lack of consideration.
True
Federal courts have exclusive jurisdiction over bankruptcy, patent, trademark, and copyright cases.
True
Federal courts have limited subject matter jurisdiction.
True
Al owns a farm that he believes is worth $150,000. Betty knows that there is oil under the farm and offers Al $160,000 for it. Al is suspicious and asks her why she wants to buy the place. She says she would like to live in the country. Al then asks her if she thinks there might be valuable minerals under the land. Betty laughs and says she doubts that very much, so Al sells her the farm for $160,000. Al later realizes that the land was worth more than he was paid. Betty's statement to Al was a misrepresentation requisite for fraud.
True
Albert breaches a contract with Bill in a state where the statute of limitations is six years. Seven years later Bill wants to sue. The contract is unenforceable, rather than void or voidable.
True
Alice makes a material misrepresentation of fact to Betty, and based upon the misrepresentation, Betty enters into a contract. Betty now realizes she was deceived and wants to get out of the contract. This contract is voidable at Betty's option.
True
All conversions of personal property are trespasses, but not all trespasses to personal property are conversions.
True
All states have at least one federal judicial district and some, more populous states have more than one.
True
An act that is contrary to public policy or is morally reprehensible may constitute duress.
True
An agreement in connection with the sale of a business that prohibits the seller from engaging in the same or a similar business for a period of twenty-five years would be unreasonable.
True
An agreement to refrain from a particular trade, profession, or business is enforceable if two requirements are met: that it protects a property interest of the promisee and that the restraint is no more extensive than is reasonably necessary to protect that interest.
True
An automobile may be considered a necessary item for a minor.
True
An exculpatory clause attempts to excuse one from liability for her own tortious conduct.
True
An exculpatory clause excusing a party from liability for harm caused by reckless conduct will generally make a contract unenforceable as a violation of public policy.
True
An illusory promise has the form of a promise but imposes no real obligation.
True
An implied in fact contract is formed by conduct.
True
An incompetent person who lacks understanding of a contract and its consequences can avoid it even if the other party had no reason to know of the incompetent's mental condition.
True
An intoxicated person must have been so intoxicated as to have been unable to understand the consequences of his actions or have been unable to act in a reasonable manner in order to avoid a contract.
True
An offer must be communicated to the offeree in order for the offer to be effective.
True
Article 2 of the Uniform Commercial Code does not apply to the sale of services.
True
As a general rule, illegal contracts are unenforceable and neither party can successfully sue the other for breach or recover for any performance rendered.
True
Assault is principally a mental rather than a physical intrusion.
True
At the marriage of her daughter, Lorna is given papers to sign which the catering company says are the invoices for the food, service, and decorations. Underneath the invoices are a carbon and a contract of sale for a portion of the failing catering business. As Lorna signs the papers, her signature is applied to the sales contract. This is a void contract because it was entered by fraud in the execution.
True
Attachment jurisdiction is jurisdiction over property.
True
Both the Code and the Restatement provide that, unless the offer or circumstances indicate otherwise, an authorized means of accepting an offer is any reasonable means of communication.
True
Businesses that conduct their business activities through employees are liable for their employees' torts committed in the course of employment.
True
By the majority view, a minor need only return any property he has received from the other party if the minor wishes to disaffirm the contract. He has no duty to return the property in the same condition in which he received it.
True
Charitable subscriptions are one of the most frequently occurring applications of the doctrine of promissory estoppel.
True
Clara types a letter to David setting forth the terms of their contract that falls within the statute of frauds. At the end of the letter, she types her name but does not sign her signature to it. If David wants to use the letter to satisfy the writing requirement, he may do so.
True
Comparative negligence has replaced the contributory negligence doctrine in most states.
True
Compliance with a legislative enactment or administrative regulation does not prevent a finding of negligence if a reasonable person would have taken additional precautions to avoid harm.
True
Consent, given by a person with capacity, negates the wrongfulness of an act.
True
Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.
True
Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.
True
Death or insanity of either the offeror or the offeree ordinarily terminates the offer.
True
For a misrepresentation to be material, it must be likely to induce a reasonable person to manifest assent or the maker must know that it would be likely to induce the recipient to do so.
True
For purposes of intentional torts, a person can have the intent to cause harm if the harm is substantially certain to occur even if he or she doesn't desire that such harm occur.
True
Physical compulsion and improper threats are the two basic types of duress.
True
Fran negligently drove her truck through Nick's fence, causing damage. If she promises to pay Nick $1,500 if he does not bring a lawsuit against her, Nick accepts and forms a unilateral contract by not filing suit. His forbearance is consideration.
True
Rescission is usually permitted where the parties to a contract are both mistaken about a material fact.
True
If a confidential relationship exists between parties to a contract, the law presumes that undue influence exists if it appears that the dominant party has gained at the other party's expense, but the presumption can be rebutted by evidence that it was not exercised.
True
If a defendant acts under emergency conditions, these conditions will be taken into account in applying the reasonable person standard.
True
If a defendant fails to respond to a summons, a default judgment will be entered against the defendant for the relief the court determines in a hearing.
True
If a person is adjudicated insane and placed in care of a guardian, that person's contracts are void.
True
If a person who has been declared incompetent by the courts enters into an agreement, that agreement is void, because it does not meet all the requirements of a binding contract.
True
If a plaintiff in a civil lawsuit wins the case but the defendant does not pay the judgment, the plaintiff may request the clerk to issue a writ of execution. If the writ is returned unsatisfied, certain property of the defendant may be seized by the sheriff and sold to pay the judgment.
True
If a promise is illusory, mutuality of obligation is lacking.
True
If a seller occupies a fiduciary relationship with the buyer and fails to make full disclosure to the buyer, then the latter will be able to avoid the transaction.
True
If an agreement is not voluntary and knowing, it will be either void or voidable.
True
If an offeror makes an offer to an offeree by letter and it is lost in the mail, no legally sufficient offer has been made.
True
If the offer specifies it MUST be accepted by telegram, a letter will not be a valid means of acceptance.
True
In a bilateral contract, if one party is not bound, neither party is bound.
True
In a unilateral contract, a promise is exchanged for an act or forbearance to act.
True
In cases where one party to an illegal agreement is less at fault than the other, he will be allowed to recover payments made or property transferred.
True
In determining a defendant's liability for negligence, his or her superior skill or knowledge will be attributed in applying the reasonable person standard, thus increasing the chance that the defendant may be held liable.
True
In determining whether a defendant's conduct is reasonable in an emergency not created by the defendant, the standard is that of a reasonable person under the circumstances.
True
In general, an acceptance is effective upon dispatch.
True
In general, minors have liability for their torts.
True
In interpreting a contract, terms which have been separately negotiated are given priority over standardized, pre-printed terms.
True
In most, if not all, cases where there is a legal detriment to the promisee, there is also a legal benefit to the promisor.
True
In order to constitute a battery, contact need not cause physical injury.
True
In order to induce a car dealer to sell her son a car on credit, Mary promises that she will pay for the son's car if the son defaults on his monthly payments to the dealership. Mary's promise must be in writing or have a sufficient electronic record.
True
In some states, minors are liable for contracts involving bank accounts and student loans and cannot avoid these contracts even though they can avoid other types of contracts.
True
In the majority of states, in a case of negligence per se the plaintiff would only have to prove violation of a statute in order to show negligent conduct.
True
Intent, for purposes of tort law, does not require an evil or hostile motive.
True
Intoxicated persons are liable in quasi contract for necessaries purchased during their incapacity.
True
Jim promises to marry Cynda if she will buy him a new Ferrari for his birthday. This promise must be in writing to be enforceable.
True
John is 17 years old and earns extra money by repairing cars. Nathan, who is 21, brings his car to John for repairs, and John ruins the brake system of the car, because of his inexperience. If Nathan sues John for negligence in performing the auto repair contract, in most states John will have no liability, because the tort of negligence and the auto repair contract are connected.
True
Larry says to Jeff, "If you will mow my lawn, I will give you fifteen dollars." Under these facts, no contract is formed until Jeff finishes mowing the lawn.
True
Mike, the owner of a yogurt shop, orders 500 quarts of yogurt from his supplier. Nothing, however, is said by either party about the price or method of payment. The supplier ships the yogurt as ordered. Since this is a contract implied in fact, Mike must pay his supplier for the yogurt.
True
Most courts consider a merger clause to be conclusive proof of an integrated contract.
True
Most types of contracts are valid without being written.
True
On appeal, neither party may bring new evidence to the court.
True
One type of restraint of trade is a covenant not to compete.
True
Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.
True
Persons who lack mental capacity at the time they enter into a contract may avoid liability under the agreement.
True
The computation of time for the one-year provision of the statute of frauds starts when the agreement is made, not when the performance is to begin.
True
The executor-administrator provision applies to promises of an executor of a decedent's will to the decedent's creditors.
True
The main purpose doctrine is an exception developed by the courts to the suretyship provision.
True
The parol evidence rule does not prevent the use of evidence that a party would like to use to establish the defense of fraud, duress, or undue influence.
True
The parol evidence rule only applies to written contracts.
True
The parties to a contract may modify the agreement with no additional consideration by simply substituting a new contract.
True
The statute of frauds does not prevent the performance of oral contracts if the parties are willing to perform.
True
Bankruptcy cases are heard by: a. the U.S. Bankruptcy Courts within the federal court system. b. only special courts within the state court system. c. either federal or state courts. d. the U.S. Court of Appeals for the Federal Circuit, if an appeal is made.
a) the U.S. Bankruptcy Courts within the federal court system
Which of the following is enforceable without consideration? a. A new promise to pay a debt barred by the statute of limitations. b. An illusory promise. c. Under the common law, a promise made to satisfy a preexisting moral obligation. d. A promise by a father to pay someone for rendering emergency services to his injured son before the father had arrived at the accident scene.
a.) A new promise to pay a debt barred by the statute of limitations
Which of the following are the two basic elements to consideration? a. Bargained-for exchange and legal sufficiency b. Legal detriment and legal benefit c. Legal sufficiency and legal adequacy d. Promise and forbearance
a.) Bargained-for exchange and legal sufficiency
Carlos ordered an aluminum storm door for $249.99. Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door at $179.99. Carlos calls the store and demands the advertised price. If the store agrees: a. Carlos must pay $179.99. b. Carlos must pay $249.99. c. there is no contract. d. there is a contract for the reasonable value of the door.
a.) Carlos must pay $179.99
Donald, a minor, makes a contract with Albert, an adult, to buy a computer. One week later, Donald has his eighteenth birthday. If shortly thereafter Donald tells Albert he will pick up the computer the next week: a. Donald has expressly ratified the contract. b. the contract must be renegotiated, because Donald was a minor when it was made. c. Donald can change his mind and avoid the contract, because it was made when he was a minor. d. the contract is void ab initio, because Donald was a minor at the time it was made.
a.) Donald has expressly ratified the contract
Chad has offered to take Miles into his accounting firm as a partner upon payment of $5,000 cash. In response, Miles says, "I'll give you $3,000 cash now and I will pay you the remainder in two months after I see whether things are working out as a partnership." In this case: a. Miles has made a counteroffer; hence there is no contract. b. Miles has rejected the terms of the original offer, but there is still a contract. c. Chad is a merchant making a firm offer under Article 2 of the UCC. Hence there is a contract. d. any indefinite provisions in the contract between Chad and Miles will be supplied by Article 2 of the UCC.
a.) Miles has made a counteroffer; hence there is no contract
Ralph sold a motel to Steve by stating that he had paid $250,000 for it and that his net average annual profit from the business has been $40,000. In reality he paid $100,000 for the motel and has earned a net average annual profit of only $30,000. Steve made no attempt to verify the statements until after the transaction was completed. In this case: a. Ralph has committed fraudulent misrepresentation and the contract is voidable at Steve's option. b. Steve is bound by the contract, because he failed to verify the statements which were made to him. c. the contract is not voidable, but Steve may sue for damages. d. the contract is automatically void.
a.) Ralph has committed fraudulent misrepresentation and the contract is voidable at Steve's option
Assume an offeree mails a rejection to the offeror on November 1. This rejection arrives at the offeror's place of business on November 5. In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November 6. Which of the following statements correctly describes the situation? a. There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one. b. There was a contract since the acceptance was mailed prior to the time the rejection was received. c. There was no contract because the rejection was mailed first. d. There was no contract because the acceptance was mailed more than three days subsequent to the rejection.
a.) There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one
An example of a special court in the federal judicial system is the: a. U.S. Court of Federal Claims. b. Federal District Court. c. U.S. Supreme Court. d. U.S. Court of Appeals.
a.) U.S. Court of Federal Claims
Elvis makes an offer to Miguel, but before Miguel can accept, the state supreme court decides a case that makes the offer illegal. The court decision: a. automatically terminates the offer. b. has no effect on the offer. c. acts as a condition on the offer. d. acts as a rejection of the offer by the offeree.
a.) automatically terminates the offer
A(n) ____ contract is one in which the parties have manifested their agreement by oral or written language, or both. a. express b. implied c. executory d. formal
a.) express
Al has a tax service and accounting business in Redwood City. He decides to move to Center City, which is 150 miles away and sells his accounting practice to Able and Baker, a CPA firm. In the sales contract, he agrees that he will refrain from practicing accounting anywhere within a 20-mile radius of Redwood City for a period of two years. However, on weekends he returns to his house in Redwood City, and when clients call him, he meets with them in his home. The sales agreement: a. is being violated by Al. b. is invalid, because it is an illegal restraint of trade. c. is illegal, because it is a violation of public policy. d. will be divided into an enforceable, valid portion and an unenforceable, invalid portion, which is the time provision, because the two-year period is too long.
a.) is being violated by Al
The requirement of legally sufficient consideration: a. is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor. b. has nothing to do with the legal value of what is exchanged. c. means the subject matter that the parties agree to exchange has to have the same value. d. is the same as the requirement of adequacy of consideration.
a.) is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor
A misrepresentation is material if: a. it would likely induce a reasonable person to enter into a transaction. b. it changes the price paid by the buyer. c. it is made knowingly. d. All of these.
a.) it would likely induce a reasonable person to enter into a transaction
Damages for interference with contractual relations include: a. payment for emotional distress. b. nominal damages. c. conversion fees. d. criminal fines.
a.) payment for emotional distress
Custom Sales and Rentals uses a four-page contract with important contract terms buried in the fine print. This is an example of: a. procedural unconscionability. b. a reasonable, legal business practice. c. a "Blue law." d. substantive unconscionability.
a.) procedural unconscionability
Contracts are governed primarily by: a. state common law. b. federal common law. c. statutory law. d. federal case law.
a.) state common law
Barbara, a wealthy widow, promises the pastor of her church that she will donate $20,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $80,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around-the-world cruise instead. In this case: a. the doctrine of promissory estoppel can be applied. b. the promise to pay $20,000 is a promise to give a gift and is therefore not enforceable. c. under the Restatement, Barbara's promise is enforceable only if it is in writing. d. Barbara's promise is not enforceable because the church did not give consideration.
a.) the doctrine of promissory estoppel can be applied
Hannah, as a joke, offers to sell her violin to Mike. Her statement would have legal effect if: a. the intended jest is so successful that Mike as a reasonable person under the circumstances believes the joke is an offer and he accepts. b. Hannah's intent, determined subjectively, is to enter a contract. c. Hannah's intent, determined objectively, is not to enter a contract. d. Mike did not, but should have realized that Hannah was not serious.
a.) the intended jest is so successful that Mike as a reasonable person under the circumstances believes the joke is an offer an he accepts
Janet's husband, Paul, is called for jury duty and is selected for possible service on a jury. However, when he is questioned by the defendant's attorney before final jury selection, he admits that he thinks the defendant is guilty based on the news reports that he saw on the local television news. The defendant asks the judge to excuse Paul from serving on the jury. If the judge agrees: a. this is a valid challenge for cause. b. this is a valid peremptory challenge. c. this is not a valid challenge. d. the plaintiff's attorney can have Paul serve by making an offer of proof to the judge.
a.) this is a valid challenge for cause
Bart sends Carla an offer by express mail. Carla receives it at 10 a.m. on Tuesday. At 11 a.m. on Tuesday, Carla delivers an acceptance to Federal Express, but due to an error, the letter is not sent out by the company until Wednesday at 8 a.m. At what time does the law consider the acceptance to be effective? a. At 10 a.m. on Tuesday b. At 11 a.m. on Tuesday c. At 8 a.m. on Wednesday d. At the time Bart receives the letter
b.) At 11 am on Tuesday
Kyle wants to buy a six-passenger car. The salesperson tells him that the two-seat sports car Kyle sees on the car lot would be just perfect for six people. Kyle test drives the car and then buys it. In this case: a. Kyle has a valid cause of action for fraud. b. Kyle was not justified in relying upon the salesperson's representation that the car would seat six people. c. the element of scienter is missing. d. the salesperson is a fiduciary.
b.) Kyle was not justified in relying upon the salesperson's representation that the car would seat six people
An offer under Article 2 of the UCC that is irrevocable even though no consideration is given to keep it open is known as a(n): a. option. b. firm offer. c. requirements contract. d. output contract.
b.) firm offer
Barry's Sport Shop calls Champs Tee Shirt Company to order 200 designer tee shirts at $2 per shirt. The next day, Barry decides he can easily sell 100 more. Before the order is filled, he calls to change the order to 300 tee shirts. Champs sends 200. Can Barry force Champs to send the additional 100? a. No, because there is no consideration for the extra 100 shirts b. No, because Barry does not have a writing signed by Champs Tee Shirts c. Yes, because this is a subsequent modification of the original contract d. Yes, because Champs Tee Shirts is a merchant within the meaning of Article 2 of the UCC
b.) No, because Barry does not have a writing signed by Champs Tee Shirts
Alice offers to sell her computer, monitor, and printer to Bradley for $300. Bradley says he will accept provided that Alice includes her word processing software. What is the status of their discussions? a. There is a valid contract for the computer, the monitor, the printer, and the software. b. There is no contract, because Bradley has made a counteroffer. c. There is no contract, because the time for delivery has not been decided. d. There is no contract, because the offer has been revoked by the offeror.
b.) There is no contract, because Bradley has made a counteroffer
Tom tries to sell his classic car to Victoria for $12,000. Tom tells Victoria, "I paid $12,000 for the car in 1978 and it's worth twice that today." Tom really paid $8,000 for the car in 1978. If Victoria buys the car, basing her decision on Tom's statement, which of the following correctly states the situation? a. Tom's statements amount to puffing only. b. Tom's statements provide grounds to set the contract aside. c. Tom's statements are actionable only if negligently made. d. Tom's statements amount to fraud in the execution.
b.) Tom's statements provide grounds to set the contract aside
In which of the following situations would a court be likely to find an affirmative duty to act? a. Where a pedestrian witnesses an auto accident in which one of the drivers is injured. b. Where an airline attendant sees one passenger threaten another passenger. c. Where the driver of a car sees a two-year-old toddler wandering in the middle of a busy street. d. All of these are situations where legally there is an affirmative duty to act.
b.) Where an airline attendant sees one passenger threaten another passenger
Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable? a. Yes, there is no way for the dealer to get the extra money anyway. b. Yes, there is consideration for the modified amount. c. No, there is no consideration and the dealer can sue for the extra $300. d. No, there is an implied contract to pay the dealer whatever he billed Jack.
b.) Yes, there is consideration for the modified amount
Janet promises Eli $4,000 for one of his original paintings on the condition that she receive $1 million from her mother's will. Janet has made: a. an illusory promise. b. a legally sufficient promise unless Janet knew at the time she made the promise that she could not inherit the $1 million. c. a conditional promise which is not sufficient to form consideration. d. a legally inadequate promise, and the courts will therefore not enforce it.
b.) a legally sufficient promise unless Janet knew at the time she made the promise that she could not inherit the $1 million
Actionable fraud would be likely to be based on falsity of: a. a car owner's statement that, "This car is the best buy you will find." b. a realtor's statement that, "The contractor used 25-year warranted shingles on the roof." c. an art dealer's statement that, "This painting will increase in value." d. a stockbroker's statement that, "This stock should double in price within six months."
b.) a realtor's statement that, "The contractor used 25-year warranted shingles on the roof."
An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as: a. an output contract. b. a requirements contract. c. a firm offer. d. promissory estoppel.
b.) a requirements contract
Bodily contact that is harmful or offensive can give rise to the tort of: a. assault. b. battery. c. defamation. d. appropriation.
b.) battery
A contract in which both parties exchange promises is a: a. voidable contract. b. bilateral contract. c. unilateral contract. d. quasi contract.
b.) bilateral contract
Elmer wrote a letter to his friend Fred offering to sell Fred an 80-acre farm for $200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000 and changes his mind about selling. Elmer: a. has made a firm offer to Fred which cannot be revoked. b. can revoke his offer at any time before acceptance, because there is no consideration to keep the offer open. c. must keep the offer open, because this is an option contract. d. is prohibited from revoking his offer to Fred under the doctrine of promissory estoppel.
b.) can revoke his offer at any time before acceptance, because there is no consideration to keep the offer open
Conduct on the part of the plaintiff which falls below the standard to which he should conform for his own protection and which cooperates with the negligence of the defendant in bringing about the plaintiff's harm is: a. comparative negligence. b. contributory negligence. c. res ipsa loquitur. d. voluntary assumption of the risk.
b.) contributory negligence
Contracts induced by threats of ____ are voidable, regardless of whether the coerced party has committed an unlawful act. a. civil prosecution b. criminal prosecution c. tortious conduct d. physical force
b.) criminal prosecution
Intent as used in the law of intentional torts requires the defendant to: a. understand that her actions created the end consequence. b. desire to cause the consequence of her action. c. believe the consequences are substantially certain to result from her action. d. All of these.
b.) desire to cause the consequence of her action
Ann, a minor, disaffirmed her agreement to buy $127 worth of cosmetics from Facial Glo Company. She had used up all the eye shadows, lipsticks, and powders. The general rule is that she may: a. disaffirm, but she must pay the asking price of the cosmetics used. b. disaffirm, but she has to return the makeup that is not used up. c. not disaffirm without paying the value of used makeup. d. not disaffirm because she has used the goods.
b.) disaffirm, but she has to return the makeup that is not used
Humberto writes to Stan asking if Stan will buy his cultivator for $600. Humberto's question: a. if answered in the affirmative by Stan, creates a contract. b. indicates merely a willingness to enter into negotiation rather than a willingness to enter into a contract. c. is a definite and certain offer communicated to an offeree. d. is subject to the mirror image rule.
b.) indicates merely a willingness to enter into negotiation rather than a willingness to enter into a contract
If the judge denies a defendant's ____, then the defendant has the opportunity to present evidence. However, if the judge grants the motion, then the defendant automatically wins the case and does not need to present any evidence. a. motion for a new trial b. motion for a directed verdict c. offer of proof d. motion for change of venue
b.) motion for a directed verdict
Randy, a minor, buys a new four-wheel drive truck from the Jones Dealership. Randy sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to Arthur Smith. Arthur does not personally know Steve or Randy. Randy may: a. recover the vehicle from Mr. Smith. b. not recover the vehicle from Mr. Smith. c. hold Steve liable in tort. d. recover the reasonable value of the vehicle from Mr. Smith but not the vehicle itself.
b.) not recover the vehicle from Mr. Smith
A(n) ____ is a non-trespassory invasion of another's interest in the private use and enjoyment of land. a. trespass to real property b. nuisance c. interference with contractual relations d. fraudulent misrepresentation
b.) nuisance
Appellate judges can reverse a decision of the trial court: a. where any error below is found. b. only where there was an error that prejudiced the decision. c. only where the outcome of the case is clearly wrong. d. where the losing party desires a new trial.
b.) only where there was an error that prejudiced the decision
A fiduciary is a: a. person in a subservient position. b. person who owes a duty of trust, confidence, and loyalty to another. c. form of formal conduct. d. person of equal power and control.
b.) person who owes a duty of trust, confidence, and loyalty to another
Any property other than an interest in real property is: a. goods. b. personal property. c. tangible property. d. intangible property.
b.) personal property
A purchaser's agreement to buy from a particular seller all the materials of a particular kind he needs is a(n) ____ contract. a. illusory b. requirements c. output d. exclusive dealing
b.) requirements
A traffic offense, such as a speeding ticket, would be heard by a: a. U.S. District Court. b. state inferior trial court. c. state probate court. d. U.S. Court of Federal Claims.
b.) state inferior trial court
Fay, age 17, ordered a pair of skis on the installment plan. She paid $20 every month until she turned 18, the age of majority. The next day, she sold them to Sharon and disaffirmed the contract. Fay is: a. still liable since she had to disaffirm before her 18th birthday. b. still liable because selling the skis amounts to a ratification. c. not liable because she disaffirmed the contract. d. not liable because skis are not necessaries.
b.) still liable because selling the skis amount to a ratification
Alex wants to submit a bid on a city sewer project. He computes the cost, but mistakenly omits the cost of one item. Accordingly, he submits a bid of $430,000 to the city. The next highest bid is $675,000, and the rest of the bids are even higher. The city is happy to have such a low bid, so it accepts Alex's bid and awards him the contract for the job, even though the city engineer is of the opinion the job cannot be done for less than $650,000. In this case: a. Alex must perform for the agreed upon price because he has made a unilateral mistake. b. the city was aware of or should have been aware of Alex's mistake. When it accepted the bid with knowledge of Alex's mistake, the city sought to take an unconscionable advantage of Alex's error. c. the city must allow Alex to revise his bid to include the cost of the omitted item. d. Alex will be paid the fair market price according to the UCC for his work.
b.) the city was aware of or should have been aware of Alex's mistake. When it accepted the bid with knowledge of Alex's mistake, the city sought to take an unconscionable advantage of Alex's error.
If an offer asks for acceptance by mail and the offeree faxes his acceptance: a. there is no contract, and the offer is revoked. b. there is a contract if the acceptance is actually received within the time the authorized means would have arrived. c. the acceptance is merely a counteroffer. d. there is a contract, but only if the offeree calls the offeror and gets permission to fax the acceptance.
b.) there is a contract if the acceptance is actually received within the time authorized means would have arrived
Intentional harm to property includes which of the following torts? a. Trespass to real property b. Nuisance c. Trespass to personal property d. All of these.
d) All of these
A quorum consists of how many justices on the U.S. Supreme Court? a. 3 b. 5 c. 6 d. 7
c. 6
John operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of: a. in para delicto. b. partial illegality. c. substantive unconscionability. d. procedural unconscionability.
c.) substantive unconscionability
Adam doesn't like having neighborhood teenagers walk across his yard at night. He rigs an animal trap on the path the teenagers usually use to cross his land. One night, Tim and his friends are walking across the yard when Tim gets caught in the trap. He is taken to the hospital for his injuries. In this case: a. Tim is a trespasser on Adam's property, and Adam has the right to use animal traps to strongly discourage anyone from trespassing. b. Adam has no duty toward Tim. c. Adam is not free to inflict intentional injury on a trespasser. d. All of these.
c.) Adam is not free to inflict intentional injury on a trespasser
If untrue, which of the following would probably be considered a misrepresentation of a material fact? a. "This is the one that I think is the best buy." b. "This is the best computer on the market." c. "This car has new brakes." d. "These tires will wear like iron."
c.) "This car has new brakes"
Before granting an injunction enjoining a former employee from competing in a described territory, the courts insist that the employer demonstrate that the restriction is: a. exculpatory. b. conscionable. c. necessary to protect the employer's legitimate interest. d. in compliance with the state's Blue Law.
c.) necessary to protect the employer's legitimate interest
If a statute establishing a reasonable person standard of conduct is found to be applicable to a fact situation, then the courts will hold that an unexcused violation of that statute which causes an injury to another is: a. strict liability. b. res ipsa loquitur. c. negligence per se. d. assumption of the risk.
c.) negligence per se
Sam, a shopkeeper, dies unexpectedly at the age of 46. His lifelong business associate, Paul, is appointed the administrator of the estate. Sam had a personal debt of $8,000 which he owed to Art's Appliance Store. Paul says to Art, "If there isn't enough money in the estate, I'll personally see that the bill is paid." Which of the following is correct? a. The oral statement is enforceable because Paul is the administrator. b. An oral statement such as this is not enforceable because it is outside the statute of frauds. c. An oral statement such as this is not enforceable because this promise is within the statute of frauds. d. The oral statement is enforceable because it is a collateral promise.
c.) An oral statement such as this is not enforceable because this promise is within the statute of frauds
Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia agrees never to open a hair salon in the state. Which of the following best describes this contract clause? a. Void as an illegal primary restraint b. Valid as a reasonable restraint on trade c. An unenforceable restraint of trade contrary to public policy d. Binding as fair protection
c.) An unenforceable restraint of trade contrary to public policy
Cal sprayed pesticide on his crops in a very careful manner on a windless day. Nevertheless, some of the pesticide spray fell on his neighbor's side of the fence and contaminated the feed for the chickens. The chickens died, and the neighbor sues. What is the likely result? a. Cal is not liable because he was not negligent in his spraying operation. b. Cal is not liable because the neighbor assumed the risk of damage to the feed by placing it so close to the fence. c. Cal is liable because spraying pesticides is an abnormally dangerous activity. d. Cal is not liable for the damage because of contributory negligence.
c.) Cal is liable because spraying pesticides is an abnormally dangerous activity
Nell gives Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true? a. Nell can get the money back from Al through litigation. b. Nell can get the money back and force Al to do as he promised. c. Legally, Nell can neither get the money back nor force Al to do as he promised. d. Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50.
c.) Legally, Nell can neither get the money back nor force Al to do as he promised
Which of the following requires consideration in order to be binding upon the parties? a. A written promise by a merchant to keep an offer to buy goods open for 14 days b. Material modification of a sale of goods contract under Article 2 of the UCC c. Material alteration of a personal service contract d. Settlement of a disputed debt
c.) Material alteration of a personal service contract
Chris was driving a car with defective brakes very slowly down Fifth Avenue looking for a parking place. Mindy jumped out into the street five feet in front of his car. Chris could not avoid hitting her. What is Chris's best defense to the charge of negligence? a. Mindy had a mental deficiency. b. Chris was not negligent since he did not have a statutory duty to keep his brakes in top condition. c. Mindy illegally crossed in the middle of the street, which was a superseding cause of the accident. d. Chris was lawfully seeking a parking place and did not see her jump out.
c.) Mindy illegally crossed in the middle of the street, which was a superseding cause of the accident
Percy, age 17, purchased a used mobile home from a mobile home dealer for $20,000. This price, however, was twice the reasonable value of the mobile home. One month later, Percy wishes to disaffirm the contract. If the mobile home is considered a necessary, then: a. Percy can disaffirm the contract based on the wrongful act of the dealer. b. Percy can disaffirm the contract because the minor can live in an apartment rather than a mobile home. c. Percy may keep the mobile home but is only liable for the reasonable value of the mobile home. d. Percy must keep the mobile home and abide by the original terms of the contract.
c.) Percy may keep the mobile home but is only liable for the reasonable value of the mobile home
The parol evidence rule does not apply to: a. a typographical error that obviously does not represent the agreement of the parties. b. evidence showing one of the parties to the contract lacks contractual capacity. c. The parol evidence rule does not apply to the evidence in either of these situations. d. The parol evidence rule applies to the evidence in both of these situations.
c.) The parol evidence rule does not apply to the evidence in either of these situations
Which of the following statements is most accurate concerning charitable subscription promises? a. They are generally not enforceable. b. The courts equate them with gifts. c. They are generally enforceable if there is reliance by the charity. d. The Restatement uses a strict reliance requirement in relation to charitable subscriptions.
c.) They are generally enforceable if there is reliance by the charity
Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct? a. Marilyn will have to pay $20,000. b. This is a contract under seal which is enforceable. c. This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders. d. This is the settlement of a disputed debt that requires no additional consideration on the part of Bravo Builders.
c.) This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders
In which of the following situations would a landowner NOT have liability to a trespasser? a. Where the landowner has rigged up a trap to injure anyone coming onto the property without permission b. Where a landowner next to a nursery school has an unfenced swimming pool and a trespassing child drowns. c. Where a trespasser trips over some lawn furniture in an unlighted backyard. d. The landowner would have liability to a trespasser in all of these situations.
c.) Where a trespasser trips over some lawn furniture in an unlighted backyard
A(n) ____ is a measure designed to protect the public from unqualified practitioners. a. exculpatory clause b. revenue license c. regulatory license d. usury statute
c.) regulatory license
A ____ is an offeree's refusal to accept an offer. a. revocation. b. counteroffer c. rejection d. statutory irrevocability
c.) rejection
Sue owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. She has been offered a two-year graduate fellowship, but she will not be able to pay the loan back if she accepts the fellowship. The bank manager tells Sue that if she pays $3,000 now, they will forgive the loan. Should Sue accept the offer? a. No, because the bank can still sue for the remaining $2,000 b. No, because the manager's promise is not binding on the bank c. Yes, because the early payment of the loan is consideration that makes the bank's promise binding d. Yes, because the bank must do whatever the manager says
c.) Yes, because the early payment of the loan is consideration that makes the bank's promise binding
On March 1, Sara, a student, received a telephone call from ComputerChip, Inc. offering her a job for one year beginning on June 15, after completion of the school year. According to the personnel manager, she will have to move to California and be ready to start work at 8:00 a.m. on June 15. Should Sara ask for a letter confirming the telephone conversation if she accepts the offer immediately? a. Yes, because the job offer is a collateral promise b. Yes, because the job offer is covered by the parol evidence rule c. Yes, because the job offer is for longer than one year from March 1 d. No, because the job offer is for one year from June 15
c.) Yes, because the job offer is for longer than one year from March 1
Midway Corporation is incorporated in Delaware, but it has its principal place of business in Minnesota. It does much of its business in California. For purposes of diversity of citizenship, Midway is a resident of: a. Delaware. b. Minnesota. c. both Delaware and Minnesota. d.Delaware, Minnesota, and California.
c.) both Delaware and Minnesota
Albert found a stone in his yard and took it to Bob, a jeweler, for evaluation. Although Bob knew what the stone was, he told Albert that he wasn't sure as to the nature of the stone, but that he thought it was a topaz. Bob then offered to buy the stone for $25 and Albert agreed. Later Albert found out the stone was an uncut diamond worth about $700. The sale: a. was a valid contract that should be enforced by the law. b. can be voided based upon fraud in the execution. c. can be voided based upon fraud in the inducement. d. can be voided based upon mistake as to the identity of the subject matter.
c.) can be voided based upon fraud in the inducement
Eliza was an antique expert. She went to a tea party at Grandma Jones' house and saw a magnificent Queen Anne table out on the back porch. She asked Grandma about it and was told it was in the way so they were going to store it in the barn. Eliza offered to buy it from her for $200. The next week, Grandma saw it in Eliza's store on sale for $3,000. Grandma: a. can get the table back because of fraudulent concealment of the value. b. can get the true value, because it would not be fair otherwise. c. cannot rescind the contract because Eliza did not have a duty to tell her the value of the table. d. cannot rescind the contract because she did not rely on Eliza to give her a fair price.
c.) cannot rescind the contract because Eliza did not have a duty to tell her the value of the table
Mark, a resident of Illinois, while driving on the freeway, hits Bill, a resident of Wisconsin, and totally destroys Bill's brand new vehicle. Bill may bring suit in federal district court: a. because of federal question jurisdiction. b. because there is always jurisdiction if there is diversity of citizenship. c. if the amount in controversy is over $75,000. d. if the accident occurred outside of Illinois or Wisconsin.
c.) if the amount in controversy is over $75,000
A ninety-year-old patient walked away from a nursing home and wandered onto some nearby railroad tracks. Once on the tracks, the patient stumbled and sprained his ankle. A few minutes later a train approached. The engineer saw the man on the track and could have stopped, but the train's brakes were defective. As a result, the train hit and killed the man. His family is suing the railroad for negligence. In this case: a. the patient has assumed the risk of wandering onto the railroad tracks. b. because the patient was contributorily negligent, most states would hold that the railroad has no liability. c. in states that follow the contributory negligence rule, the train had the last clear chance to avoid the accident, so the patient's negligence does not bar his estate's recovery. d. the train's striking of the man was an intervening cause, so the railroad company was strictly liable.
c.) in states that follow the contributory negligence rule, the train had the last clear chance to avoid the accident, so the patient's negligence does not bar his estate's recover
By law, all apartment buildings in Mary's state must have smoke alarms in the ceilings. If Mary suffers smoke inhalation because the smoke alarm in her apartment building was not yet installed and Mary sues the owner for negligence, Mary would have to prove: a. a duty existed toward her. b. a breach of that duty. c. injury and causation. d. All of these.
c.) injury and causation
Arthur fired a gun in the middle of the desert. He intended to fire the gun, but had no reason to believe anyone else was in the area. If the bullet hits Tom, who happened to be riding his ATV across the desert: a. Arthur has committed the tort of assault. b. Arthur has committed the tort of battery. c. it is unlikely that Arthur has the necessary intent to commit a tort. d. Arthur has committed the tort of intentional infliction of emotional distress.
c.) it is unlikely that Arthur has the necessary intent to commit a tort
Generally, State A may exercise "long arm" jurisdiction over a defendant located in State B if the defendant: a. once resided in State A. b. uses a product produced in State A. c. made a contract in State A. d. has relatives in State A.
c.) made a contract in State A
Consideration: a. must be given by the promisee to the promisor. b. must be adequate. c. may be given to the promisor or to some other person by the promisee or by some other person. d. need not be equal between the parties, but must be proportionate.
c.) may be given to the promisor or to some other person by the promisee or by some other person
Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress is too expensive. If she now wishes to cancel the order, Cheryl: a. must pay $500 for the dress because the dress was specially ordered for Cheryl. b. must pay $500 for the dress because clothing is classified as a necessity. c. may disaffirm this executory contract. d. must accept the dress and pay the reasonable value of the dress.
c.) may disaffirm this executory contract
Henry was burning leaves in his backyard. One of the burning leaves was lifted by the wind into Emilio's yard next door. It landed on the lawn mower which exploded, setting fire to the wooden lawn furniture. Henry's best argument against liability would be: a. that the leaf was not a substantial factor in causing the damage b. res ipsa loquitur. c. that it was not foreseeable that the lawn mower would explode. d. that the damage was not caused by the leaf but by the gasoline.
c.) that it was not foreseeable that the lawn mower would explode
In most states, whether the time within which a minor disaffirms a contract constitutes a reasonable time is determined by: a. state statute. b. the UCC. c. the facts and circumstances of the case. d. common law, without regard to the unique facts of the case at hand.
c.) the facts and circumstances of the case
Fred is a concert violinist who is scheduled to perform at Carnegie Hall for the first time. He buys what he is told is a Stradivarius violin from a well-known, reputable dealer in quality violins, and he pays the going rate for a Stradivarius. He later learns the violin is an imitation, although it is such a good imitation that even the dealer thought it was authentic. In this case: a. Fred has made a unilateral mistake and cannot avoid the contract. b. the dealer has committed fraud in the inducement. c. the sale is voidable by the purchaser for mutual mistake. d. the sale is voidable, because the dealer has made a fraudulent misrepresentation.
c.) the sale is voidable by the purchaser for mutual mistake
A party to a contract may be able to avoid the contract if: a. there is a mutual mistake, and the party undertook to bear the risk by conscious allocation. b. there is a unilateral mistake, and the party undertook to bear the risk by conscious ignorance. c. there was a mistake and the mistaken party was at fault in not discovering the problem before making the contract. d. None of these.
c.) there was a mistake and the mistaken party was at fault in not discovering the problem before making the contract
Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere within the state for a period of three years. The agreement: a. is reasonable. b. is unreasonable, but enforceable since Andrew agreed to it. c. unduly interferes with the interests of the public. d. is reasonable, but only if Betty paid Andrew enough for the store to compensate him for lost business for three years.
c.) unduly interferes with the interests of the public
Anna is 88 years old and under the legal guardianship of her daughter. One day Anna receives a telephone call from a health insurance salesman and purchases a $400-a-month Medigap insurance policy. This contract is: a. valid. b. voidable. c. void. d. voidable only at the option of Anna.
c.) void
Lee has been declared incompetent by the court and is under the care of his sister. Without his sister's knowledge, Lee rents the 30,000-seat civic center for his birthday party. Lee's contract to rent the civic center is best described as a: a. valid contract. b. voidable contract. c. void contract. d. quasi contract.
c.) void contract
R&R, Inc. entered into a contract with Scott, an agent, under the terms of which Scott would receive $20,000 if he stole trade secrets from the leading competitor of R&R. Scott performed his end of the agreement by delivering the trade secrets. If R&R now refuses to pay Scott for his services, Scott: a. may recover based upon the express contract of the parties. b. may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of R&R. c. will be unable to recover, because this is an illegal contract. d. will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by R&R.
c.) will be unable to recover, because this is an illegal contract
An absolute privilege exists to protect which of the following in defamation cases? a. Members of Congress on the floor of Congress b. Statements made by the U.S. President in the discharge of official duty c. Statements about third persons between spouses when they are alone d. All of these.
d) all of these
Arthur negligently stopped his car on the highway. Betty, who was driving along, saw Arthur's car in sufficient time to attempt to stop. However, Betty negligently put her foot on the accelerator instead of the brake and ran into Arthur's car. If Arthur sues Betty for damages: a. Arthur's contributory negligence will prevent his recovery from Betty in all jurisdictions. b. Betty had the last clear chance to avoid the accident and will bear full legal responsibility for it c. Arthur has assumed the risk of the accident. d. because both parties were negligent, in a state that follows the modified comparative negligence doctrine, both parties will share the liability for their injuries in proportion to their degree of fault unless the court finds Arthur's contributory negligence was as great as or greater than Betty's negligence.
d) because both parties were negligent, in a state that follows the modified comparative negligence doctrine, both parties will share the liability for their injuries in proportion to their degree of fault unless the court finds Arthur's contributory negligence was as great as or greater than Betty's negligence.
Able, a resident of New York, has a dispute with Baker, a resident of Illinois, involving a contract signed and performed in New York. His damages amount to $75,000, and he wants to sue. The case can be brought: a. only in the New York state courts. b. only in the New York federal courts c. only in the Illinois state courts. d. in either the New York state courts or the New York federal court.
d) in either the New York state courts or the New York federal court
Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed, only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement is most accurate? a. McHenry is not liable to Nancy since there is no consideration. b. McHenry is not liable to Nancy since there is past consideration. c. McHenry is liable to Nancy since adequate consideration is given by both parties. d. McHenry is liable to Nancy based on the concept of promissory estoppel.
d.) McHenry is liable to Nancy based on the concept of promissory estoppel
Mary, age 17, sold Mark, age 22, the briefcase she got for graduation. Mark's father liked it and bought it from him. If Mary decides to disaffirm the contract, will Mark's father have to return the briefcase to her? a. Yes, the briefcase is not a necessary. b. Yes, if Mark's father still has it. c. No, her contract was with Mark and he cannot return goods he does not have. d. No, if Mark's father bought it without knowing that Mary was a minor.
d.) No, if Mark's father bought it without knowing that Mary was a minor
Requirements for a memorandum that satisfies the statute of frauds include that the writing: a. must be a single document. b. must exist at the time of the litigation. c. needs to be notarized. d. None of these.
d.) None of these
If no time is specified for the acceptance of an offer, the offer terminates after: a. 24 hours. b. 48 hours. c. two weeks. d. a reasonable period of time.
d.) a reasonable period of time
Business torts consist of: a. interference with contractual relations. b. disparagement. c. fraudulent misrepresentation. d. All of these.
d.) all of these
Gail sent a letter of acceptance to an offer that has expired. Gail has made: a. a contract. b. a rejection. c. a revocation. d. an offer.
d.) an offer
An offer need not take any particular form to have legal validity. To be effective, however, it must: a. be spoken directly to the offeree. b. always contain the price of the product or service offered. c. always contain the place of delivery. d. be communicated to the offeree.
d.) be communicated to the offeree
Andrew noticed Michael and his pregnant wife Georgette walking down the street and, as a joke, drove his car within inches of Michael. Michael wasn't injured, but his wife suffered severe mental distress and needed to be hospitalized in order to save the pregnancy. Andrew has: a. no liability to Georgette, because he has not committed a tort against her. b. committed the tort of battery against Georgette. c. committed the tort of battery against Michael but has committed no tort against Georgette. d. committed the tort of intentional infliction of emotional distress against Georgette.
d.) committed the tort of intentional infliction of emotional distress against Georgette
In diversity of citizenship cases, federal courts apply: a. federal substantive and procedural law. b. state substantive and procedural law. c. state procedural and federal substantive law. d. federal procedural and state substantive law.
d.) federal procedural and state substantive law
An ad in a newspaper or a circular describing goods and stating prices would generally be considered a(n): a. firm offer if made by a merchant. b. offer if made by a merchant, but not a firm offer. c. offer irrespective of who made the offer. d. invitation to buyers to make an offer to buy goods.
d.) invitation to buyers to make an offer to buy goods
Divided Parcel (DP) includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through the fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to its manufacturer to be repaired anyway. The watch is destroyed when the DP driver negligently drops and runs over the package. Mary is: a. out of luck because the clause was communicated to her. b. out of luck because she should have insured the package. c. likely to collect from DP since exculpatory clauses always violate public policy. d. likely to collect from DP because it is a common carrier.
d.) likely to collect from DP because it is a common carrier
An obligation imposed by law where there has been no agreement or expression of assent by word or act on the part of either party involved is a(n): a. implied in fact contract. b. express contract. c. void contract. d. quasi contract.
d.) quasi contract
