Campolongo Test 2 from previous semester
Which of the following is not a basic element of a contract? -a voluntary agreement (offer and acceptance) -made for any purpose or objective
-made for any purpose or objective
Ryan borrowed $10000 from Baker, promising to repay it with $1000 interest on Jan 1 2016. There is no dispute as to the terms or amount of the loan. On the due date of the loan, Ryan gave Baker a valid check for 10,500 marked "payment in full for loan due Jan 1, 2016". Baker accepted the check and deposited it into his account. If Baker then sues Ryan for the unpaid $500, what is the result?
Baker wins, because Ryan gave no consideration in exchange for Baker's promise to forgive $500
T OR F: Contracts must always be in writing to be enforceable
FALSE
T or F: Article 2 of the UCC will never apply to contracts that involve both the sale of goods and services; instead the common law will always apply
FALSE
If an offer for services states that the offeree must accept the offer by certified mail, and the offeree accepts by regular mail, then the acceptance is effective only when it is received by the offeror
False
T OR F: A party who has the right to rescind a contract may do so at any time
False
T OR F: A promise to refrain from smoking cannot be legal consideration because a promise to refrain from doing something that one has a legal right to do is not a valid consideration
False
T OR F: Fraud requires that there was an active concealment of a fact, such as installing new carpeting over a wood floor damaged by extensive dry rot, but would not include simply failing to volunteer information, such as the fact that a house was built with defective drywall
False
T OR F: Present intent to contract is judged by a subjective test
False
T OR OF: Alan and Brian contracted for Alan to mow Brian's lawn once a week for 20 weeks, at a price of $20 per week. Three weeks later, Alan demands $25 per week to mow Brian's lawn, and Brian agrees. Later, if Brian only pays Alan $20 per week and Alan sues Brian for the difference, Brian's promise to pay $25 per week is enforceable
False
T OR F: In order for the consideration requirement in contracts to be met, the consideration given by each party must be of equal value
False, each party must give consideration
T OR F: Pedro sold his car to Juan, telling him that the car only had 50,000 miles of use. The odometer read 50,000. In truth, the actual mileage was 150,000. However, Pedro did not know this, as he had purchased the car from Marla, who had told him that the mileage was 40,000 at the time of sale, when in truth it was 140,000. Pedro had driven the car for 10,000 miles and he believed that it had only 50,000 miles when he told Juan that was the mileage. Soon Juan discovered the truth and sued Pedro. Pedro will lose because fraud has occurred.
False, he will lose because legal misrepresentation has occurred.
Otto inherited an old safe from his uncle. Otto did not have the combination to the safe and had no idea of its contents, if any. Nevertheless, he sold the safe to his friend Marcel, "as is" for $35. When Marcel hired a locksmith to open the safe, he found $25,000 in cash. Now Otto wants to rescind the contract, claiming that the doctrine of mistake gives him that right. Is Otto correct? Why?
He is not correct; Otto assumed the risk of the mistake
John and his friends, all sailing enthusiasts, are co-owners of sailboat. John promised that he would obtain insurance for the sailboat for an upcoming voyage. However, John fails to insure the sailboat, and it sinks in rough seas. The co-owners sue John for breach of contract. Will they succeed?
No, because it was a purely gratuitous promise
Jim saw an ad in the Daily Press stating that the Brass Cro store was offering to sell Browning shotguns, model 100, for $400. Jim went the next day to Brass Cro store and said, "Here is $400. I accept your offer to sell me a Browning model 100 for $400" Has an enforceable contract been formed?
No, because the ad was not an offer
Leonard and Barry had a long-standing personal and professional relationship. In 2001, Barry's business began experiencing financial troubles. The two friends discussed Barry's financial difficulties. In 2003, Leonard flew from Atlanta to NY to meet Barry. Prior to Leonard's flight, Barry's employee faxed copies of various construction contracts and correspondence relating to Barry's projects to Leonard for his review. In late 2005, Leonard billed Barry $40,000 that Leonard claimed Barry owed on the alleged oral contract. Barry did not pay the bill. Leonard filed suit against Barry for breach of contract. Will Leonard succeed?
No, because there was no valid acceptance by Barry, and thus no valid contract formed
If no UCC rule applies to an issue regarding a sale of goods contract, the common law rules apply
TRUE
T OR F: A contract is a legally enforceable promise or set of promises
TRUE
T OR F: A and B have a contract. A has 100% performed and B has 50% performed. This is an executory contract
TRUE
T OR F: A promises to pay B $50 if B will mow A's lawn. B does not promise to mow A's lawn, however later that day B completely and satisfactorily does mow A's lawn. This is an example of a unilateral contract
TRUE
T OR F: Daisy company, a retail garden supply store, sends a purchase order to Johnson and Parkins, a distributor of rose bushes. The terms of the purchase order state: "500 bushes of American Beauty roses at $2 each. Shipping costs payable by Johnson and Parkins. Delivery within 15 days of the date on this purchase order. Payable within 90 days of delivery" Johnson and Parkins receives the purchase order and immediately sends an invoice. It reads, in pertinent part "Total cost of order is $1000 (500 x $2 each) All disputes between merchant and seller arising from this order will be resolved by binding arbitration in LA, CA." Under UCC 2-207, there is a valid contract between the parties, the arbitration clause becomes part of the contract unless the new term materially alters the offer.
TRUE
Kyle emailed Tara offering to sell her his car. Tara left the email open on her desk, where her roommate, Maggie, saw it. After reading the email, Maggie replied to Kyle and stated that she (Maggie) wanted to accept Kyle's offer. Which of the following is true? -Kyle and Tara have a contract for the purchase of Kyle's car because the mailbox rule applies -There is no contract between Kyle and Maggie because Kyle did not communicate the offer to Maggie
There is no contract between Kyle and Maggie because Kyle did not communicate the offer to Maggie
A makes an offer for services to B, saying "you may respond by registered letter" B accepts by a properly dispatched registered letter. This acceptance is effective upon dispatch of the registered letter.
True
Best Buy orders 200 TVs from Sony at $500 each. Best Buy later attempts to cancel the contract. Sony refuses, but agrees to reduce the price to $400 each. Sony's promise to reduce the price to $400 each is enforceable
True
Joe offered to sell his car to Beth for $5000. Beth responded by saying "okay, and I want to the new seat covers included at that price" Beth's response is an acceptance and the additional term is considered a proposal for addition to the contract
True
T OR F: A party injured by fraud in a contract for the sale of goods can both rescind the contract and sue for damages
True
T OR F: Allen promises to pay Bob $100 per week, in exchange for Bob's promise not to physically assault Charlie. There is no consideration for Allen's promise.
True
T OR F: An advertisement offering a regard for the return of lost property usually is treated as an offer for unilateral contract
True
T OR F: Bob offers to sell his bike to Sue for $100 and promises to keep his offer open for 5 days. Sue thanks him and leaves. At this point, Bob still has the power to revoke his offer
True
T OR F: If a term is left open in a sale of goods contract, that open term or "gap" can be filled by inserting a presumption found in the UCC's "gap filling" rules
True
T OR F: In order for a unilateral mistake to make a contract voidable, either the non-mistaken party must have caused or knew of the mistake, or enforcement of the contract must be unconscionable
True
T OR F: In return for services that Michael performed for James in the past, James promises to pay Michael $1000. There is no consideration for James' promise
True
T OR F: Joe sells his business to Shirley. During the negotiations, Joe tells Shirley that the business has turned a profit for the last five years. In reality, the business operated at a loss for each of those years. However, Shirley did not hear Joe's misstatement. Shirley cannot rescind the contract because she did not actually rely on Joe's misstatement.
True
T OR F: Promissory estoppel may apply when one relies upon another's promise to his detriment, even though there is no contract
True
T OR F: Ratification ends the right to rescind a contract
True
T OR F: Smith says to ford "I'd like to buy your house, and Ford responds, "Ok you've got a deal!" This is not a valid offer because of a lack of definiteness in the terms of the offer
True
T OR F: The UCC's rules often result in the formation of a contract even though no contract may exist under the traditional common law rules
True
T OR F: The three requirements for a valid offer are: present intent to contract, definiteness and communication to the offeree
True
T OR F: To accept an offer for a unilateral contract, the offeree must fully perform the requested act
True
T OR F: Today, courts have shown a growing tendency to apply the "mirror-image rule" in a liberal fashion, by holding that only material differences between an offer and an alleged acceptance is a counteroffer and would result in a rejection of the offer
True
T OR F: UCC section 2-207 allows contract formation even when there is some difference between the terms of the offer and the terms of acceptance
True
A faxed its standard form regarding the sale of goods to B. B responded by faxing its standard form to A. The standard forms do not agree on material terms. Under UCC 2-207, when will there be a contract? Assume that B did not make its acceptance expressly conditional on A's agreeing to any additional or different terms. -Only when A and B are merchants -When B's form is considered to be a definite and timely expression of acceptance
When B's form is considered to be a definite and timely expression of acceptance
If the following statement was false, would it create liability for fraud or misrepresentation? "this crane will lift a 10,000 pound load"
Yes
Chica, a women's clothing store, held a prize drawing for $500 shopping spree on Sautday that it had advertised during the week. Participation in the drawing required being at the store by noon and completing a form that included personal information and placing it in a box. The information would then be put into a database for marketing purposes. Susan arrived at the store by noon, completed the form and gave the requested personal information. Susan was the winner of the $500 shopping spree drawing. Has she given "consideration" for the prize?
Yes, she made an effort to go to the store and gave personal information that was for the store's use
Sig promises to purchase all of the widgets that he wants at a price of $4.50 per widget and Carl accepts the offer. This is an example of
an illusory promise
Ahmed promises to sell his boat to Mendel, and Mendel promises to buy it from Ahmed. What type of contract is this? -a promissory estoppel contract -a bilateral contract
bilateral contract
Which source of law requires the acceptance be an identical or almost identical "mirror image" of the offer in order to form a contract?
common law
Death or insanity of the offeror has what legal effect on the offer?
it terminates the offer automatically
Arnold agrees to lease Bob the fourth floor of his house. Arnold himself resides on the second floor. The person typing the contract strikes the wrong keys, and the contract reads "second floor". Neither Arnold nor Bob notices this error when they read and sign the contract. What will the court do?
reform the contract
A orally offers to sell B 100 premium-grade fountain pens but neglects to state the price. Such pens typically sell for $1 each. B orally accepts. Immediately thereafter, A tries to back out of the deal. At this point in time, which of the following is most likely to be true? -There is no offer, and therefore no contract, because the offer is indefinite -there is a valid contract
there is a valid contract
