L-201 Exam 2 Prep
How much will RBC's damages be?
$20 million
When did a delegation occur?
2016
When did an assignment occur?
2017
In which of the following cases would a court most likely award punitive damages?
A butcher uses forged credentials to become a surgeon and botches a surgery he is hired to perform.
In which of the following cases should a court award merely nominal damages?
A buyer contracts to buy a tablet computer for $800. Prior to the transaction the seller backs out and the buyer finds the same table elsewhere for $600.
In which of the following cases might a court award punitive damages?
A car dealer rolls back the odometer on a car before selling it to the purchaser.
If an offeror does not limit the offer to its own terms, what kind of response constitutes a counteroffer?
A form that materially alters the deal.
Which of the following statements about gratuitous assignments is false?
A gratuitous assignment will not be revoked upon the assignor's death or incapacity.
Which of the following statements about a novation is false?
A novation only requires the obligee's consent to having the delegatee perform the duties.
What is objectively indicated when an offeror communicates terms of an offer to an offeree?
A present intent to be bound by those terms.
Which of the following meets the requirements of consideration?
A promise that involves the exchange of a legal value
Which of the following is not an element of promissory estoppel?
A written contract
Which of the following is the first step in the contract formation process?
An offer in definite terms
What is "legal value?"
Any act that is not legally required, or any abstention from an activity that is the party's legal right.
Which of the following is an exception to a consideration requirement?
Charitable subscription
If the Uniform Commercial Code (UCC) does not govern a contract, what law does govern?
Common law of contracts.
What types of contracts does the Uniform Commercial Code govern?
Contracts for the sale of goods.
Which types of transactions are governed by the Uniform Commercial Code?
Contracts for the sale of goods.
Which of the following characterizes definiteness standards under classical contract law?
Courts are contract enforcers.
Which of the following statements about the year 2018 is true?
Cunningham owes the debt to Epic, but it is not her duty to track Epic down as the new owner of the debt.
In which of the following cases would the battle of the forms most likely apply?
Defective computer components. Correct
Who performs the duty under a proper delegation?
Delegatee
Which of the following is an accurate statement?
Detroit's disavowal of the contract gives RBC the right to sue immediately.
Eric pays a clown to perform at his son's birthday party. What role is the son playing?
Donee beneficiary.
Bo and Luke entered a completely integrated contract for Bo to paint Luke's car. Before the contract was written in final form, Luke said to Bo, "And you know you have to use Coletrain Premium Paint on the car, of course." Under the parol evidence rule, Luke's oral statement would be admissible only if it were used to:
Explain what is meant in the contract by the phrase "the agreed upon brand of paint."
True or False: An offer that fails to provide a specific time for acceptance is void.
False. An offer without a specific acceptance time is valid for a reasonable amount of time.
Which of the following is an agreement by a promisee to refrain from pursuing a legal claim against a promisor?
Forbearance to sue
Which of the following statements about standardized form contracts is false?
Frequently, the terms of standardized contracts are negotiable.
Mr. Green creates a unilateral contract with his nephew, Paul. Mr. Green promises to buy Paul a laptop if he gets accepted to college. In order for Paul to accept this contract what must he do?
Get accepted into college
The ultimate goal of contract damages is:
Give the nonbreaching party the benefit of its bargain.
Which of the following characterizes an auction "without reserve"?
Goods cannot be withdrawn after a call for bids
Which of the following statements about governmental contracts is true?
Governmental contracts are generally covered by statute.
In what cases does the mirror image rule apply instead of the battle of the forms for determining contract acceptance?
In all cases but those involving the sale of goods.
How does a bilateral contract differ from a unilateral contract?
In unilateral contracts, only one party makes a promise in exchange for doing a requested act.
Which of the following is an element of promissory estoppel?
Injustice to the promisee as a result of reliance
How has the mirror image rule changed with time?
It is less strict than it once was.
Which of the following conditions characterizes a firm offer regarding the sale of goods?
It must be made by an offeror who is a merchant.
A contract is different than a promise. Essentially a contract is:
Legally enforceable promise or set of promises.
In the case in the text, Yung-Kai Lu v. Univ. of Utah, the court held that:
Lu's claim was barred by the statute of frauds and under Utah's parol evidence rule, he could not testify to any pre-contract verbal agreement.
You wish to download free software from the Internet. The download procedure includes a page titled "download now" that asks you to "please review" the licensing agreement that is available to you on another webpage. The "download now" page has a button that initiates the download process. You click that button without going to the licensing agreement page. You later learn that the licensing agreement contains an arbitration provision. Are you bound by this provision?
No, because you did not perform an action that indicated your assent to the licensing agreement.
Can a local businessman pay a police officer $50 a week to watch his business more closely?
No, public officials cannot give consideration on duties they are already supposed to perform.
Are punitive damages appropriate?
No.
Suppose that Kroger had limited its initial offer to its own terms, and that San Martin had nonetheless altered the risk-bearing provision. Kroger didn't notice, and wired the contract price to San Martin, which shipped the sardines. What does the contract say about risk-bearing?
Nothing.
The individual with the power to reject an offer is the:
Offeree
Whose signatures are needed in order to satisfy the statute of frauds?
Only the signature of the party against whom enforcement is being sought.
Which of the following is true?
Parol evidence can be used to show that a contract has been modified.
Which of the following states the overall goal of contract damages most accurately?
Place the nonbreaching party where it would have been if the contract had been performed fully.
Which of the following would a court recognize as binding without consideration?
Promissory estoppel
Which of the following is a doctrine by which courts imply, as a matter of law, a promise to pay the reasonable value of goods or services when the party receiving such goods or services has knowingly done so under circumstances that make it unfair to retain them without paying for them?
Quasi-contract
If an offeree makes a counteroffer with materially different terms from the original offer, the original offer is considered to be:
Rejected.
If contract law protects agreements or bargains, what is it that promissory estoppel protects?
Reliance
In which of the following cases might specific performance constitute an appropriate remedy?
Someone contracts to sell a farm and then tries to back out of the deal.
If an offer does not have a specific time for acceptance, how would a court interpret the offer?
Such offers are considered valid for a reasonable time.
Which of the following transfers will generally be valid without the consent of the other parties?
The assignment by a patent holder of the right to receive royalties.
Which of the following is NOT true?
The fraud exception to the parol evidence rule is limited to cases involving minors.
At what point did a contract first arise between Jake and the pastor?
The last day of the school year.
What is implied by the duty to mitigate damages?
The nonbreaching party must take care to mitigate the effects of the breach.
It is important to promptly notify the obligor that an assignment has occurred. Why?
The obligor might perform to the assignor rather than the assignee.
Which of the following conditions can prevent additional terms from becoming a part of a contract formed between parties who are merchants?
The offer expressly limits acceptance to its own terms.
In which of the following cases would a court most likely award punitive damages?
The seller of a home misrepresents the home as being up to code, and it burns down after the buyer moves in.
Which of the following circumstances would not terminate an offer?
The subject matter of the offer was destroyed by fault of the offeror
If an offer is deemed to be too vague, what test is it likely to fail if a court is asked to enforce an alleged contract?
The test for specificity or definiteness of terms.
To reject an offer, the offeree can:
To reject an offer, the offeree can:
In Cordas v. Uber Technologies, Inc., the case in the text, the court held that:
Uber's arbitration clause was enforceable because Cordas affirmatively acknowledged it.
The terms used to differentiate a contract where one or both parties are making promises are:
Unilateral and bilateral
Which of the following statements about the year 2020 is true?
Unless a novation occurred, Wilkins owes Epic the remaining debt.
Which of the following contracts are agreements that create no legal obligations and for which no remedy is given?
Void contracts
In which of the following circumstances is a debt settlement a binding contract?
Where the amount of the debt is certain and undisputed.
Is there a contract between these two parties?
Yes, since the difference between the forms is not fundamental.
Was there bargained-for consideration?
Yes.
Consideration can be a(n) _____ in the case of a unilateral contract.
act
A(n) ______ contract is a contract where its terms are included as a hyperlink on a page, and the indication of agreement is purportedly the use of the product or service.
browse-wrap
Valid contracts are ________________________.
contracts that meet all legal requirements for a binding contract
In Sogeti USA LLC v. Scariano, the case in the text, the court held that:
express consent of an employee is not required before an employer's contractual rights can be assigned to, and enforced by, a successor company.
Prior to the enactment of the UCC, common law courts often refused to enforce both output contracts and requirements contracts because they:
failed to specify the quantity of goods to be produced or purchased.
Mel promises to buy all the video games he wants from Bart. This promise is:
illusory.
A bilateral contract is accepted when the offeree:
makes the promise requested by the offer.
In Welsh v. Lithia Vaudm, Inc., the case in the text, the court held that:
no additional consideration existed where Lithia had a preexisting duty under the oral contract.
Contracts in which one party to the agreement agrees to buy all of the other party's production of a particular commodity is called a(n):
output contract.
An obligor:
owes a duty to perform under a contract.
In determining whether an offeree accepted an offer, the court is looking for the same _____ on the part of the offeree that it found on the part of the offeror.
present intent to contract
In 17th-century England, before the enactment of the Statute of Frauds in 1677, a legal rule:
prohibited parties to a lawsuit from testifying in their own cases.
Consideration is bargained for if ________________
quid pro quo takes place between the two parties to the contract.
Greg signed a contract to work as an auto-parts manager for Jones Chevrolet. This contract is governed by:
state common law.
Rex Garner recently made an offer to Harry Barns for the sale of his shop using a registered letter. The offer says that Harry "may accept by registered letter." This detail is an example of a _____.
stipulation
A third party is categorized as a donee beneficiary when:
the promisee's primary purpose in contracting is to make a gift of the agreed-on performance to the third party.
Standardized contracts present the dangers that the party who signs the contract:
will not know what he is agreeing to.
Which of the following statements about "usage" is false when courts interpret contracts?
"Usage" refers to past actions by the parties in previous transactions that demonstrate what the parties mean when they use specific language in their agreements.
After Jake and the pastor agreed to the $50 sum, and after the pastor paid it, how much did the pastor still owe Jake?
$450
Marsha promises to give Dawn $100,000 for her birthday as a gift. Dawn, a college student, gives $75,000 to her favorite charity on credit, expecting to pay the loss down with the birthday money. The birthday rolls around and Marsha gives Dawn $1,000 instead. Marsha explains that she decided $100,000 was one hundred times too much for a birthday present. Dawn sues Marsha for breaking the promise, and wins. How much should Marsha pay in damages?
$74,000
John and Dave sign a written contract that is completely integrated. John claims that they orally agreed to various terms, as well. He testifies that they orally agreed to: (1) a different term that what appears in the writing prior to the drafting and signing of the contract; (2) an additional term to what appears in the writing while they were signing the document; and (3) a term that significantly altered the contract about a month after the signing. A court applying the parol evidence rule would generally permit the use of evidence to prove which of those oral agreements?
3, but not 1 and 2
Aaron promises to sell his boat to Matt, and Matt promises to buy it from Aaron. What type of contract is this?
A bilateral contract
Which of the following disparities between the offer and the reply would "materially alter the deal?"
A change in the price.
Which of the following disparities between the offer and the reply would "materially alter the deal?"
A change in the quantity of the goods being sold.
Which of the following duties is most likely delegable?
A duty to deliver raw materials to a manufacturer under a contract that does not forbid delegation of duties.
Suppose that a party to a contract delegates one of the following duties, which delegation would a court see the most favorable?
A duty to supply goods under a contract that does not forbid delegation of duties.
Which of the following will be legally binding on all parties despite lack of consideration?
A promise to donate money to a charity, which the charity relied upon in incurring large expenditures.
_____ is the actual or implied receipt and retention of that which is tendered or offered. Multiple Choice
Acceptance
Under common law, which of the following is necessary to amend a contract?
Additional consideration.
Which of the following can impact the time that an offeree may respond to an offer that does not include a specific time to accept the offer?
All of these answers would influence the time frame.
To distinguish an offer, courts look for certain requirements. Which of the following is required to create a legally binding offer?
All of these are necessary to create a legally binding offer.
Which of the following constitute elements of promissory estoppel?
All of these are necessary to establish promissory estoppel.
Which of the following items is required to create a legally enforceable contract?
All of these are required to create a legally enforceable contract.
In which of the following cases would specific performance likely be an appropriate remedy?
An art dealer decides to hang on to an original painting he has already contracted to deliver.
In which of the following cases might a court award specific performance?
An art dealer has contracted to deliver an original painting, but decides to keep it and breach.
Notice of an assignment by an assignee to an obligor is of great importance. Why is that?
An assignment is useless to the assignee unless the obligor knows to whom to render the duty.
In which of the following cases might a court award nominal damages?
An employer fires employee, breaching a contract. The employee immediately finds higher-paying job next door.
Which of the following is true regarding silence as acceptance?
An offeree's silence is considered acceptance when he/she indicates so.
Which of the following requires consideration to be enforceable?
An oral contract.
If it is not indicated in the memorandum, where should the parties sign to make the document enforceable?
Any place on the memorandum
Alana, who manages a flower shop, sells Jose a shotgun. Jose is unemployed, and Alana has never sold a firearm before. Which of the following statements is true?
Article 2 of the UCC applies because a shotgun is a movable thing.
Which of the following is NOT true?
Article 2 of the UCC has no parol evidence rule.
Mr. Blue is in a contract with Mr. Brown for the repair of Mr. Blue's roof for $9,000. Mr. Brown has already performed the work, but contacts Mr. Blue that he should pay his cousin Joe Jr. the amount owed. Joe Jr.'s status under the contract is called what?
Assignment
Which of the following characterizes assignability?
Assignment is ineffective when contrary to public policy.
When does the battle of the forms apply, and when does the mirror image rule apply?
Battle of the forms: sale of goods. Mirror image: everything else.
Ann receives an advertisement in the mail for Big Box's special edition tablet computers for $500. Ann goes to Big Box's store indicating her acceptance of the advertisement. Ann is informed that Big Box is sold out. Which of the following statements is true?
Big Box's advertisement did not constitute an offer, but rather, it was an invitation for an offer.
A promise to exchange car repair services in return for a promise to pay $100 is an example of what type of contract?
Bilateral
Who, in this case, is a merchant?
Both Kroger and San Martin are merchants.
How can courts prevent an offeror from revoking a unilateral contract once the offeree has started performance?
By holding that the offeree's performance made it a bilateral contract
How much of a difference between the offeror's and the offeree's forms will the contemporary mirror image rule tolerate before it determines there is no contract?
Changes in spelling, typographical changes and the like, but nothing material.
Which source of law requires the acceptance to be a "mirror image" of the offer in order to form a contract?
Common Law
Historically, free promises were not enforced unless they had which of the following supporting them?
Consideration
What is the legal name for a "legally enforceable promise or set of promises"?
Contract
Mr. Green contracts with Mr. Brown for $500 to landscape the home of Roy, who is Mr. Green's son. What is Roy's status in the contract with Mr. Green and Mr. Brown?
Donee beneficiary
Which of the following is admissible with respect to a partially integrated contract?
Evidence that resolves ambiguities in the contract
Adam and Eve entered a completely integrated contract for Eve to plant apple trees in Adam's yard. Before the contract was written in final form, Adam said to Eve, "As is usual, we agree that all of the apple trees will be purchased from Hissing Snake Farms." Under the parol evidence rule, Adam's oral statement would be admissible only if it were used to:
Explain what is meant in the contract by the phrase "the agreed upon greenhouse."
Alastair and Bronwyn entered a completely integrated contract. Before the contract was written in final form, Alastair said to Bronwyn, "Of course, we're agreeing that my brother's trucking company, Loving Brother Hauling, Inc., will do all of our hauling and delivery work." Under the parol evidence rule, Alastair's oral statement would be admissible only if it were used to:
Explain what is meant in the contract by the phrase "the agreed upon hauling and delivery agent."
Generally under common law, if we want to amend our contract, what must we bring to the table?
Fresh consideration.
Identify which of the following is an example of legal value.
I agree not to move out of the state for three more months.
If a contract were entered into today, which of the following would be a promise that has legal value?
I agree to stay at my current job for the next year.
Which of the following does not constitute legal value?
I refrain from drinking until I am of legal drinking age.
In The Industrial Development Board of the City of Montgomery v. Russell, the case in the text, the court held that:
IDB should not be relieved from liability based on its assignment of its rights under the option
In which of the following circumstances are offerors free to revoke their offers?
In case of common law rule on revocation.
I buy a farm for one dollar. On the day the farmer is scheduled to turn over the deed, he changes his mind. Will a court enforce the deal?
In theory, there could be a contract. In practice, there isn't. The only possible recourse is promissory estoppel.
Paul's offers to sell Cindy his house for $1. Can there be a legal contract for the sale of the house for $1?
In theory, yes; but in practice, the deal is almost certainly unenforceable.
Under the battle of the forms, an attempt to accept an offer will become a rejection and counteroffer if it contains new terms that "materially alter the deal." What does that mean?
It means the same thing as "material difference" does in the context of the mirror image rule.
Which of the following is true regarding promissory estoppel?
It requires reasonable reliance on the promisor's promise.
What legal effect does death or insanity of the offeror have on the offer?
It terminates the offer automatically.
Why did the Restatement of Contracts not have the force of law?
It was the product of a private organization.
Patrick, a farmer, leaves 10 bushels of corn with Jackie, the owner of a grocery store, saying "Look this corn over. If you want it, it's $5 a bushel." Jackie sells the corn. Which of the following statements is true?
Jackie impliedly accepted Patrick's offer.
Jim's contract with Frank obligated Jim to pay Frank $10,000. Frank properly assigns the contract to Abel. At that time, Abel notifies Jim about the assignment. Jim, however, forgets and pays the $10,000 to Frank. By this time, Abel is screaming for his money. However, by then, Frank goes into bankruptcy. In this case:
Jim is liable to Abel for $10,000.
Martha purchases a book from Just Books on credit and later sells the book to her friend, Christina. Christina in turn sells the book to David, who agrees to pay the balance to Just Books. Who is the creditor beneficiary in this exchange?
Just Books
Which of the following would indicate a rejection under the mirror image rule?
Material changes to offer
After weeks of sensitive negotiations, Ay Bee See Corp. and Ex Why Zee, Inc., have finally come to an agreement about a long-term supply contract. The representative from each company wants to be sure that the written document the attorneys are drafting memorializes the complete and exclusive statement of their entire agreement. Which of the following should the attorneys include in the contract to help ensure this goal is accomplished?
Merger clause
Nancy's car collides with Randy's truck at an intersection. Randy believes the accident is his fault and asks Nancy if she will agree to a settlement of $5,000 for the damage to her vehicle and her promise not to sue him. Nancy believes the accident is her fault, but agrees to Randy's proposal anyway. Which of the following statements is true?
Nancy's forbearance does not amount to consideration because she does not have a good faith belief in the validity of her claim against Randy.
If, instead of freely entering into the contract to fix your friend's car in exchange for $100, your friend is holding a gun to your head, can a contract be formed?
No - the agreement must be voluntary, i.e., not coerced, on the part of both parties.
Would a contract to fix a car for $100 still be binding if one of the parties entered into the contract because of coercion?
No - to qualify as a contract, a set of promises must be based on voluntary agreement.
Sue offers to buy a house from John and they were negotiating the price of the house. In the meantime, Sue confides in John's wife that she is willing to pay an amount of $50,000 for the house. Delighted to hear this, John's wife tells John the good news. John immediately calls Sue and accepts her offer. Is there a binding contract?
No, because the offeror did not communicate the terms of the offer to the offeree.
If someone says to you, "Your bicycle is beautiful. Can I buy it?", and you say, "Sold!" - has a contract been formed?
No, because there is not sufficient specificity or definiteness to create an offer.
Sara tells Kate that she will give her $50 to clean her garage. When Kate is halfway done, Sara decides to revoke her offer. Is this a valid revocation?
No, because this is now a bilateral contract.
Joe promises to give his brother Bill a $30,000 new car for $50. Which of the following best describes the $50?
Nominal consideration
Which of the following, if any, is ordinarily required to effectuate an assignment?
None of these.
Which of the following is a difference between assignments and novations?
Novations discharge the original obligor of all obligations; assignments do not.
A determination of whether two parties to an alleged contract actually reached a "meeting of the minds" is governed by which standard of intent?
Objective standard
Why is it important to the battle of the forms to determine how many merchants are privy to the transaction?
Offers from merchants are limited to their own terms by default.
If one person relies on the promise made by another person - even though the promise and surrounding circumstances are not sufficient to justify the conclusion that a contract has been created because one or more elements is missing - what doctrine may protect the person who relies to his or her detriment?
Promissory estoppel
Which of the following is an equitable doctrine that protects those who foreseeably and reasonably rely on the promises of others by enforcing such promises when enforcement is necessary to avoid injustice, even though one or more of the elements normally required for an enforceable agreement is absent?
Promissory estoppel
Which of the following is enforceable without an exchange of consideration?
Promissory estoppel.
The text discusses that the drafters of the Uniform Commercial Code had several purposes in mind. Which of the following was not one of those purposes?
Protect the innocent consumer from fraudulent activity in the marketplace.
Fun Foods fraudulently induces Holly to buy a household products franchise by grossly misstating the average revenues of its franchisees. She discovers the misrepresentation after she resold some products that she received but before she has paid Fun Foods for the products. Holly wants to cancel the franchise contract on the basis of fraud. What is the remedy available to her?
Quasi-contract
According to what standard will RBC's damages be measured?
RBC will be given the benefit of its bargain.
How might a merchant reject an offer from another merchant, assuming the offeror has not limited the offer to its own terms?
Respond with a form that materially alters the deal.
Two parties negotiate a contract for employment. The prospective employer pulls a folded piece of paper from her pocket. It contains an offer. She signs and dates it and pushes it across the table toward the prospective employee. The prospective employee examines it for a few minutes, writes something on it, and pushes it back across the table. They now have a contract. What might the employee have added to the piece of paper?
Signature, date, maybe typographical corrections, but nothing at all that alters the arrangement.
Smith and Benson make an oral contract for the sale of land at a price of $500,000. After paying Smith $400,000 of the purchase price, Benson takes possession of the land. One month later, Smith wants to boot Benson off the land. His argument is that the parties' oral agreement is unenforceable under the statute of frauds. Which of the following is most correct?
Smith is incorrect, because Benson paid part of the purchase price and took possession.
Which of the following is a contract remedy whereby the defendant is ordered to perform according to the terms of his or her contract?
Specific performance
Exclusive of exceptions, the parol evidence rule excludes evidence of:
Statements made prior to or contemporaneously with, but not after the signing of a written contract.
Which of the following would not be used to determine whether an acceptance was communicated by reasonable means?
Subjective beliefs
Subsequent agreements are treated in what way under the parol evidence rule?
Subsequent agreements are admissible under the parol evidence rule
In Symons v. Heaton, the case in the text, the court held that:
Symons' unjust enrichment claim failed because, among other things, Symons never expected payment and took care of Plachek because he was his friend.
What does "bargained-for consideration" require?
That each party's consideration is given in exchange for the other's.
To reduce creditor attempts to pressure debtors to reaffirm, which of the following acts requires that a reaffirmation promise be made prior to the date of the discharge and gives the debtor the right to revoke his promise within 30 days after it becomes enforceable?
The Bankruptcy Reform Act
Which of the following statements about the UCC's Battle of the Forms is false?
The Battle of the Forms provides that an acceptance that was expressly conditioned on the offeror's agreement to the offeree's terms would be a valid acceptance.
Which of the following is true regarding the approach taken by the UCC toward the proper means of acceptance and the implications of using it or not using it?
The UCC does not change the traditional rule that, where the offer stipulates a certain means of acceptance, the offeree must use that means or there is no contract.Correct
A newspaper advertisement for Cashmere Closet states "This Saturday 9 a.m., 1 Red Cashmere Scarf, worth $299.95... $10.00 First Come First Served." Which of the following statements is false?
The ad lacks intent to constitute an offer.
Which of the following describes the effect of the knock-out rule?
The contract will consist of those terms on which the parties' writings agree plus any appropriate gap-filling presumptions of the Code.
Which of the following is true of a sales contract under the UCC?
The court needs to determine if the parties intended to make a contract.
The Uniform Commercial Code states that a party to a contract may delegate his duty to perform unless the other party has a substantial interest in having the original obligor perform the acts required by the contract. Which of the following is not considered in determining whether there is a substantial interest?
The degree to which performance is dependent on the reputation of the person who owes the duty to perform.
When a court is required to interpret a form contract that is both typewritten in part and handwritten in part and the two conflict:
The handwritten part will prevail.
When a typewritten form contract is altered by the handwriting of the parties, which is correct regarding conflicts between the terms?
The handwritten part will prevail.
A merchant sends a bid to buy goods to another merchant. The selling merchant responds with an identical form, but attaches an arbitration provision. This change means the two do not have a contract. What can be inferred in this situation?
The initial offer was limited to its own terms.
Define "duty to mitigate."
The nonbreaching party must try to keep damages as low as possible.
If there is an offer for a sale of goods, why is relevant if all the parties are merchants regarding the "battle of the forms"?
The terms added to the accepting form, if any, will generally become part of the contract unless the offeror objects timely, the new terms materially alter the offer or the offer expressly limited acceptance to its own terms.
Mr. Yellow delivers a stack of newspapers to Mr. Green's store to see if he wants them. A note attached indicates the stack of papers is $50. Mr. Green, without communicating an acceptance, sold the entire stack of papers to his customers. What is the status of the agreement between Mr. Yellow and Mr. Green?
There is a contract because Mr. Green implied acceptance by his action
April Roberts ordered one hundred 19-inch color television sets from Carl Soans and requested prompt shipment of the goods. Carl promptly shipped fifty 21-inch color television sets and fifty 19-inch color television sets without informing April that the shipment of nonconforming television sets was an accommodation. Which of the following is true?
There is an acceptance but Carl has breached the contract by shipping nonconforming television sets.
Mr. Green is a local mobster who makes Mr. Blue pay $100 not to have his business burned to the ground. What is the status of the contract between Mr. Green and Mr. Blue?
There is no contract because Mr. Green gave inadequate consideration
Kyle sent Tara a letter offering to sell Tara his car. Tara left the letter on her desk, where her roommate, Maggie, saw it. After reading the letter, Maggie wrote to Kyle and stated that she (Maggie) wanted to accept Kyle's offer. Which of the following is true?
There is no contract between Kyle and Maggie because Kyle did not communicate the offer to Maggie.
A car dealership decides that it is going to outsource the cleaning of its used vehicles to save money. A local detail shop sends a bid for the cleaning contract to the dealership. The dealership finds the terms agreeable and sends back a form that is identical except that reallocates the risk of environmental impact of the disposal of the cleaning materials between the two parties. Which of the following statements is correct?
There is no contract.
An amusement park notices that many of its trees are developing a fungus. A local tree surgeon makes a bid to eradicate the fungus. The amusement park finds the terms agreeable and sends a form back to the tree surgeon that is identical except that an arbitration clause is attached. Which of the following statements is correct?
There is no contract.
Suppose Virgin Records sends Pusha T a deal that would require T to release his next three records on Virgin. T responds with a form reducing the number to two. Which of the following is a true statement?
There is no contract.
In the case in the text, Trapani Construction Co. v. Elliot Group, Inc., the court held that:
There was a contract implied in fact because the circumstances and behaviors of the parties demonstrated a general course of dealing and a mutual intent to contract.
When is parol evidence NOT permitted?
To contradict the written terms of a partially integrated contract
If, instead of selling car repair services in exchange for $100, you owned an automotive dealership and you were in the business of selling actual cars, what law govern the contract?
Uniform Commercial Code
Debbie Jones and Bill Schneider exchanged standard order forms to formalize their contract for a batch of goods and realized that their standard forms do not agree on material terms. Under UCC section 2-207, when will there be a contract? Assume that Bill did not make his acceptance conditional on Debbie's assent to any additional or different terms.
When Bill's form is a definite and seasonable expression of acceptance.
Yasmin offers to landscape Bert's property for $2,000. Two days after making the offer, Yasmin changes her mind and mails Bert a letter revoking her offer. The next day, Bert, who has not received Yasmin's letter, calls Yasmin and accepts her offer. Does a contract exist?
Yes, because Bert was not notified of Yasmin's revocation at the time he accepted.
Kevin offers to sell Howard his vintage piano for $1,000. Howard tells Kevin, "If you don't hear from me in seven days, I accept." Kevin did not hear from Howard in those seven days. Does Howard's silence amount to acceptance?
Yes, because an offeree's silence can operate as an acceptance if he has indicated that it will.
Does the pastor's promise to pay $500 have legal value, assuming Jake was motivated or induced by the pastor's promise?
Yes, because the promise to pay $500 limits the Jake's prospective freedom.
Does Jake's abstention from smoking have legal value?
Yes, even if Jake would not have smoked anyway.
Chica, a women's clothing store, held a "prize drawing" for a $500 shopping spree on Saturday that it advertised throughout the week. Participation in the drawing required being at the store by noon and completing an application form that included personal information. The information would then be put into a database for marketing purposes. Fashion consultants offering merchandise for sale greeted customers arriving at the store on Saturday morning. Joy was the winner of the drawing. Has she given consideration for the prize?
Yes, she came to the store and gave information that was for the store's use.
Suppose that two weeks after San Martin sends its form to Kroger, San Martin delivers the goods as scheduled in the agreement. About a hundred of the 4,000 cans are dented or damaged. Kroger requests reimbursement for the unsalable cans. Both parties agree the cans were damaged en route to Kroger. Must San Martin reimburse Kroger? The knockout rule does not apply in this jurisdiction.
Yes, unless Kroger objected timely to the provision in San Martin's form that provided Kroger would bear the risk of damage.
Which of the following would constitute duress, and therefore render a contract void due to the lack of voluntariness of consent?
Your friend threatens to harm you if you do not fix his car.
Fiona owed Lutz $5,000. As the result of an unrelated transaction, Lutz owed Bing that same amount. The three parties signed an agreement that Fiona would pay Bing instead of Lutz and Lutz would be discharged from all liability. The agreement among the parties is:
a novation.
To qualify as a contract, a set of promises must be based on a voluntary agreement, which is made up of an offer and a(n) _____ of that offer.
acceptance
Ian Sanders offered to sell his car to Beth Jones for $5,000. Subsequently, Beth demanded that he provide new seat covers for the car as she was paying a rather heavy price for the car. Beth's response represents a(n) _____.
additional termCorrect
An offer that is unclear about the form of acceptance that is necessary to create a contract, is called a(n) _____ offer.
ambiguous
A void contract is:
an agreement that creates no legal obligations.
A valid assignment always requires:
an intention to assign.
The first step in any contract formation process is to make
an offer
The effect of a valid delegation of duties is that it:
appoints the delegatee to perform the delegator's duty to the obligee.
Most states' statutes of frauds do not require land leases to be in writing unless they:
are for one year or more.
Offers that fail to provide a specific time for acceptance are:
are valid for a reasonable time.
With regard to an assignment, the person to whom the right has been transferred is called the:
assignee.
X and Y have a contract, which obligated X to sell Y 100 boxes of screws for $100. The parties orally modify the contract so that X will sell Y the same 100 boxes of screws for $125. The second agreement is:
binding by virtue of being mutually agreed on.
An oral contract for the sale of land that has been completely performed by the vendor:
can be enforced without a writing.
A newspaper advertisement made to the general public:
can be revoked by using a similar newspaper advertisement.
A contract must be between parties who have _____ to contract.
capacity
The underlying purpose of the statute of frauds is to:
corroborate the existence of an oral contract.
The shipment of nonconforming goods intended as an accommodation to the buyer is a(n) _____.
counteroffer
With regard to an agreement for the sale of real estate, the statute of frauds:
does not require that all parties sign the agreement.
Melanie owes $250 to Jessica. Jessica gifts the right to receive the money from Melanie to her daughter Kelly in writing. This assignment is:
enforceable despite the lack of consideration.
Early American courts took a subjective approach to contract determination. This was troublesome as it created uncertainty in the enforcement of contracts because: Multiple Choice
every contract was vulnerable to disputes about actual intent.
A(n) ______ is when a merchant offeror makes written offer to buy or sell goods, giving assurances that the offer will be held open.
firm offerCorrect
The objective standard of intent refers to
how a court would view an offeror's words and acts, as well as the circumstances surrounding an offer.
Sigmund enters into a contract with Carl. The terms are that Sigmund will purchase all the gasoline that he wants to purchase in 2011 at a price of $2.50 per gallon, and Carl agrees to sell on those terms. This is an example of a(n):
illusory contract.
As a general rule, members of the public are held to be _____ of contracts entered into by their municipalities or other governmental units in the regular course of carrying on governmental functions.
incidental beneficiaries
A third party who is unable to establish that the contract was made with the intent to benefit her is called a(n):
incidental beneficiary.
Advertisements for the sale of goods at specific prices are considered to be:
invitations to offer.
Big Bank is a major creditor of Bonwill Department Store. After a major loss in profits due to poor holiday sales, Big Bank decides to help keep Bonwill from bankruptcy. Big Bank orally promises Mary Tudor, a supplier of Bonwill's, that it will guarantee Bonwill's payment for goods that Mary sells to Bonwill. Most likely, Big Bank's oral agreement:
is enforceable under the "main purpose" or "leading object" exception to the statute.
As discussed in the case in the text, McLellan v. Charly, promissory estoppel:
is used as a consideration substitute.
A bilateral contract is "taken out of the statute of frauds" when:
it is fully performed by at least one party.
Under the _____, no writing is required where the guarantor makes a collateral promise for the main purpose of obtaining some personal economic advantage.
leading object rule
Rick tells Dan that Sue will inherit a mansion if she pays him back an old debt. Since Sue is unable to pay the debt, Dan offers to pay it, provided that he gets the mansion from Rick. The agreement between Dan and Rick need not be in writing under the:
leading object rule.
The reason that modern courts reject the subjective standard of intent in most cases is that
leaves contracts vulnerable to disputes about actual intent, thereby creating uncertainty in the enforcement.
Ted Nix purchased two acres of land from Sally Pine. Nix paid 15 percent at the closing and gave his note for the balance secured by a 30-year mortgage. Five years later, Nix found it increasingly difficult to make payments on the note and finally defaulted. Pine threatened to accelerate the loan and foreclose if Nix continued in default. Pine told Nix either to get the money or obtain an acceptable third party to assume the obligation. Nix offered the land to Quick Co. for $4,000 less than the equity Nix had in the property. This was acceptable to Pine and at the closing, Quick paid the arrearage, executed a new mortgage and note, and had title transferred to its name. Pine surrendered Nix's note and mortgage to him. The transaction in question is a(n):
novation.
To have an agreement that is bound and enforceable, there must be both a(n) _______ and a(n) ________.
offer, acceptance
The person who makes the offer is the ______. The person to whom the offer is given is the _____.
offeror, offeree
Ads that (1) limit the power of acceptance to one offeree or a small number of offerees, (2) are highly specific about the nature and number of items offered for sale and what is requested in return, and (3) leave nothing further to be negotiated are considered to be _____.
offers
Stewart, who wants to help Marcy establish her own business, promises ABC Bank that he will repay the loan that ABC Bank makes to Marcy if Marcy fails to pay it. In this instance, Marcy is the:
principal debtor.
The parol evidence rule, which is subject to exceptions, generally excludes evidence of statements made _____________________, but not _____________________ the signing of a written contract.
prior to or contemporaneously with; after
Just Books
promisee
April and Brian entered into a partially integrated written contract. During negotiations, April made an oral statement to Brian regarding the terms of the contract. This statement was not contained in the written contract. Under the parol evidence rule, evidence of April's oral statement would be admissible if it were used to:
prove an additional term consistent with the written agreement.
A written agreement was signed by two parties and it was intended to be their entire agreement. The parol evidence rule will prevent the admission of evidence that is offered to:
prove the existence of additional terms of the agreement to contradict the written terms of the contract.
A memorandum for the sale of goods that does not indicate the _____ of goods to be sold will not satisfy the UCC's writing requirement.
quantity
A promise for a charitable purpose will be enforced, despite the absence of consideration, when the promisee:
relied on the promised gift.
An agreement in which a party promises to supply all the other party's needs for a particular commodity is called a(n):
requirements contract.
The "confirmatory memorandum" exception to the UCC's statute of frauds provision:
requires that both parties to the contract be merchants.
According to the Code, when there is an acceptance that contains terms that are different from the original terms of the contract, the contract will consist of _____ and the appropriate gap-filling presumptions of the Code.
terms on which the parties' writings agree
If an offer has not been communicated, this may be an objective indication
that the offeror has not yet decided to enter into a binding agreement.
Under the mailbox rule, the acceptance of an offer is effective at the time the acceptance is dispatched unless
the acceptance is not in the authorized mode of communication.Correct
At an auction, acceptance occurs when:
the auctioneer strikes the goods off to the highest bidder.
In the case in the text, Franchise Holding II, LLC v. Huntington Restaurants Group, Inc., the court held all of the following, except:
the defendant materially breached the Stay Agreement.
When negotiations occur through the mail, there is usually a limit put on the time:
the offeree has to accept the offer.
In Green Garden Packaging Co. v. Schoenmann Produce Co., the case in the text, the court found in favor of Schoenmann because:
the oral agreement did not satisfy the statute of frauds because the agreement was for the sale of goods of $500 or more.
Once a court has decided what promises are included in the contract, the court is faced with interpreting the contract. The court will first attempt to determine:
the parties' principal objective.
Legal value means that _______________
the party has behaved in a way the law did not otherwise require him or her to behave.
Dan, President of BAZ Co., is happy with the extraordinary performance of Naomi, a BAZ Co. senior accountant. Dan informs Naomi that because of her superlative work in the past fiscal year, he is going to give her a 5 percent raise effective next month. Naomi, who has never heard of anyone at BAZ Co. getting a raise, is thrilled and thanks Dan. Later that day, Dan realizes that giving Naomi this raise might cause all senior accountants to demand salary increases. Dan decides not to give Naomi a raise after all. He believes that his promise to give her a raise is not legally binding. Dan is correct because:
there was no bargained-for exchange for the raise.
The Code empowers courts to deal fairly with a contract that is grossly unfair or one-sided by recognizing the concept of:
unconscionable contract.
A contract that "shocks the conscience of the court" is:
unconscionable.
An oral contract that is covered by the statute of frauds is:
unenforceable.
A contract that has all the required elements and is binding on the parties is a(n) _______ contract.
valid
An illegal contract, such as a mafia "hit" contract, is an example of a(n) ______ contract.
void
A contract in which one or more of the parties have the legal right to cancel their obligations under the contract is called a(n):
voidable contract.
In Kolodziej v. Mason, the case in the text, the court held that Mason's Dateline statement:
was not an offer because he did not have the intent to create an offer.
In ascertaining intent to benefit the third party, a court will look to all of the following, except:
whether the benefit to the third party had any value.
Bruce told Adam that he was selling his house in Syracuse, New York. Adam sent Bruce an e-mail containing an offer of $300,000 for the house. Bruce responded via e-mail that he wanted $315,000 for the house. After further e-mails, the parties finally agreed on a sale with a price of $310,000. A series of e-mails contained the terms of the sale, and all included a salutation containing their typewritten names. However, Bruce later decided to sell the house to Marty for $325,000. Adam sued Bruce, claiming that Bruce breached their contract for the sale of the house. Most likely, Adam will:
win, because the essential terms of the contract were set forth in the signed e-mails.
Under the UCC, an acceptance sent by unreasonable means:
would be effective on dispatch if it is received within the time that an acceptance by a reasonable means would normally have arrived.