BLAW Chapters 9 - 13

Which of the following is enforceable without consideration?

A new promise to pay a debt barred by the statute of limitations.

Which of the following would NOT be a merchant under Article 2 of the UCC?

A person who inherits three speedboats and wants to sell them to buy a car.

The court in the Weichert Co. Realtors v. Ryan case held that the performing party was entitled to recoup the reasonable value of the services rendered under:

quantum meruit.

A(n) __________ is a measure designed to protect the public from unqualified practitioners.

regulatory license.

A __________ is the refusal to accept an offer.

rejection.

Justifiable reliance:

requires that the misrepresentation contribute substantially to the misled party's decision to enter into the contract.

Permissible lender's expenses, which would not be considered in determining the rate of interest under usury statutes, include all but which of the following?

A charge to the borrower of $500 to investigate the borrower's credit, when it actually cost the lender $75.

Adam wants to buy a six-passenger car. The salesman tells him that the two-seat sports car Adam sees on the car lot would be just perfect for six people. Adam test drives the car and then buys it. In this case:

Adam was not justified in relying upon the salesman's representation that the car would seat six people.

If there is no time specified for the acceptance of an offer, when does the offer terminate?

After a reasonable period of time.

Al, an accountant, 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 sale contract, he agrees that he will refrain from practicing accounting anywhere within a 100-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. In this situation:

Al is in violation of the sale agreement.

Albert read ElectroCorp's ad in the local newspaper advertising a flat-screen TV for $89. Albert rushed to the store to buy the TV only to be told by the salesperson that the ad was a misprint and the price should have been $389. Albert gave the salesperson $89 plus sales tax and demanded the TV.

Albert is merely making an offer to ElectroCorp to buy the TV for $89 plus sales tax.

Destruction of the subject matter has what effect on the offer?

The offer is terminated.

Under the common law, the __________ must be the mirror image of the __________.

acceptance, offer.

A fraudulent misrepresentation:

must be material to recover damages.

According to the UCC, an enforceable agreement involving the transfer of title of goods from a seller to a buyer for a price is called a(n):

sale.

Contract law is significant in that it is basic to other fields of law such as:

sales of personal property. commercial paper. secured transactions.

Relationships that may lead to a court's careful scrutinization of contracts between the parties to make sure undue influence was not present include all but:

salesperson and customer.

Which of the following is true with regard to an exculpatory clause?

An exculpatory clause excuses one party from liability for her own tortious conduct. Where one party has a superior bargaining position that has enabled him to impose an exculpatory clause upon the other, the courts are inclined to nullify the provision. An exculpatory clause may be unenforceable for unconscionability.

Which of the following contracts is generally held to be unenforceable?

An exculpatory clause on the back of a parking lot claim check, attempting to relieve the parking lot operator for negligence.

Which of the following will often not constitute valid consideration?

An illusory promise.

Which of the following is not an element necessary for recovery in quasi contract?

An implied or express promise.

A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of them is eligible?

An off-duty deputy sheriff from a county other than the one where the arrest occurred.

Andrew agrees to paint Rosalene's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job, unless Rosalene agrees to pay him $100 more. What principle applies to this fact situation?

Andrew was already obligated to paint the house. He gives no additional consideration in return for Rosalene's promise to pay more money.

Which of the following would most likely be a merchant with respect to the goods in question under the UCC definition?

Arthur is an authorized IBM computer dealer. Brian employs two salesmen to sell his homemade furniture. Clarence has a store in which he sells used lawn mowers.

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 Speedy Mail-to-You Express, Inc., but due to their 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?

At 11 a.m. on Tuesday.

Which of the following are the two basic elements to consideration?

Bargained-for exchange and legal sufficiency.

Which of the following is enforceable without new consideration?

Beth, after reaching the age of majority, promises to pay off a debt she incurred while a minor.

Arnold has offered to take Bob into his accounting firm as a partner upon payment of $5,000 cash. In response, Bob 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."

Bob has made a counteroffer and hence there is no contract.

Which of the following is NOT an element of fraud?

Competent parties.

Which of the following, if any, are requisites for fraud in the inducement?

False representation of a fact that is material. Representation is made with knowledge of its falsity and the intention to deceive. The representation is justifiably relied on.

Which of the following results in a void, rather than voidable, agreement?

Fraud in the execution.

Howard 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 for $179.99. Howard called the store and demanded the advertised price. They say okay.

Howard must pay $179.99.

Harold purchased 400 pairs of gloves from Isaac at a contract price of $800. Fifty of the gloves were defective and a dispute arose as to the amount due and owing under the contract. Harold refuses to pay the $800 and Isaac is threatening to sue. Which of the following is correct with regard to this transaction?

If Isaac agrees to accept $600 to settle the dispute and Harold agrees to pay that amount, the agreement is enforceable.

Jason's mother would like him to go to college, so in June he enrolls at the local university. He also quits his job and tells his mother his plans to take classes. His mother says, "I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485. Which of the following is true regarding his mother's promise?

It is unenforceable, because Jason had already enrolled in school when she made the statement that she wanted to pay for his books, and there is no consideration.

Janice has wagered $200, which William is holding, on a horse race. If, before the race starts, Janice wants to take back her money and withdraw from the transaction:

Janice may withdraw from the transaction.

Maxine offered to sell her video camera to Tom for $200 and also stated to Tom, "I will give you two weeks to accept my offer." One week later Tom learned that Maxine had sold the video camera to Cindy.

Maxine has revoked her offer to Tom.

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 best describes the situation?

McHenry is liable to Nancy based on the concept of promissory estoppel.

__________ is/are any property other than an interest in real property.

Personal property

Remedies for breach of contract include all but which of the following?

Punitive damages.

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 $28,000. Steve made no attempt to verify the statements until after the transaction was completed. In this case:

Ralph has committed fraudulent misrepresentation. the contract is voidable at Steve's option.

Brian makes a material misrepresentation of fact regarding his horse to Rosalind while out riding one day. Later that day, Rosalind makes an offer to buy the horse which Brian accepts, without correcting his earlier misrepresentation of fact.

Rosalind may avoid the contract.

Shane contracts to build a garage for Bob for a price of $6,000. Because of an increase in the cost of labor and materials, Shane refuses to perform. Bob wants the garage, so he agrees to pay an additional $500. In this case:

Shane has given no additional consideration, and under the common law he must perform at the agreed-upon original price.

Material terms in a contract include all but which of the following?

Shipping method.

Michelle's Boutique places an ad in the Sunday paper for beautiful, top-of-the-line designer suits for $3.00. Alice sees the ad in the paper and goes to the store to stock up on business suits for her new job. Michelle apologizes for the misprint. Alice has just finished a class in contract law and insists that the store sell her five suits for $15.00. Alice threatens to sue Michelle for breach of contract.

The ad in the newspaper is a solicitation seeking offers, but is not an offer to sell; therefore, Alice will not be able to successfully sue for breach of contract.

Roberto obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years.

The manufacturer is obligated to use his best efforts to supply the goods even if no such clause appears in the written franchise agreement. Roberto has an implied obligation to use his best efforts to promote the sale of the widgets.

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?

Unenforceable as a violation of public policy.

Sam owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. He has been offered a two-year graduate fellowship, but he will not be able to pay the loan back if he accepts the fellowship. The bank manager tells Sam that if he pays $3,000 now, they will forgive the loan. Should Sam accept the offer?

Yes, because the early payment of the loan is consideration that makes the bank's promise binding.

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?

Yes, there is consideration for the modified amount.

Lyle offers to sell his house to Dennis for $75,000. Dennis responds, "I will pay you $75,000 for the house if you first paint the second floor." This response could best be described as:

a counteroffer.

George has been declared incompetent by the court and is under the care of his sister. Unknown to his sister, George rents the 30,000-seat civic center for his birthday party. George's contract to rent the civic center is best described as:

a void contract.

Rose is working hard on Arlin's mayoral campaign. She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 if she will register and vote for Arlin. Violet does so, but Arlin loses the election, and Rose now refuses to pay. This:

agreement is unenforceable and opposed to public policy.

The concept of consideration in contract law includes:

an inducement to each party to make a return exchange.

A contract that binds the offeror to keep an offer open for a specified period of time is known as:

an option.

An offer need not take any particular form to have legal validity. To be effective, however, it must:

be communicated to the offeree.

To be effective, an offer must:

be sufficiently definite and certain. be communicated to the offeree. manifest an intent to enter into a contract.

A contract in which both parties exchange promises is a:

bilateral contract.

Ben and Kate had been negotiating Ben's employment contract in conversations over the phone for a couple of weeks. Finally, they agreed on some contract terms. Kate offered to create a draft of the contract for Ben to read over. On the same day Ben was fired from his job. Afraid he would be unemployed, Ben signed Kate's draft without reading it. In this example Ben:

cannot avoid the contract because of economic duress or failure to read.

Jill contracts to purchase Kevin's automobile under the belief that she can sell it at a profit to Linda, but after Jill has bought the car, she finds out that Linda isn't interested in buying it. Jill:

cannot avoid the contract.

A __________ is an obligation imposed by law to avoid injustice.

contract implied in law. quasi contract.

Contracts induced by threats of __________ are voidable, regardless of whether the coerced party has committed an unlawful act.

criminal prosecution

The Uniform Commercial Code does not apply to:

employment contracts. service contracts. insurance contracts. contracts involving real property.

A(n) __________ contract is one in which the terms have been definitely and specifically stated and agreed upon.

express

The doctrine of promissory estoppel:

is a doctrine enforcing noncontractual promises. includes as a requirement within the doctrine that there has been justifiable reliance on the promise. a doctrine relying on justice and not contractual rights.

In order to form a contract, the parties must:

manifest their agreement objectively.

The definition of commercial reasonableness as used in contract law includes:

that the practices customary in the type of transaction involved be used as a standard.

In the Pacific Custom Pools, Inc. v. Turner Construction Company case, the court found that:

the purpose of the relevant licensing law was to protect the public from incompetence and dishonesty in those who provide building and construction services.

Stan sends for a law school catalog from Ivory Towers University. According to the catalog, the law school applications are evaluated on the basis of undergraduate grades, standardized test scores, and references. Stan, who is a straight-A student, has high test scores and excellent references, applies and pays the $100 application fee. His application is rejected. Later he finds out that others with low grades and test scores were accepted based on their family connections and donations made to the University. If Stan followed all of the guidelines in the college catalog and paid the required application fee, then according to the court in Steinberg v. Chicago Medical School:

there is a valid contract; the school bound itself to honor the obligations set forth in the college catalog.

The Uniform Commercial Code provides that a court may scrutinize every contract for the sale of goods to determine whether, in its commercial setting, purpose, and effect, the contract is:

unconscionable.

Quasi contracts are used to provide a remedy when the parties enter into a(n):

void contract.

Steven makes a material misrepresentation of fact regarding his motorcycle to Thelma who agrees to buy the motorcycle based upon the misrepresentation. This contract is:

voidable.

In addition to the four basic requirements of a contract, which of the following must also occur in order to have a valid contract?

There must be an absence of invalidating conduct, such as duress.

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?

There was no contract.

Which of the following statements best describes charitable subscription promises?

They are generally enforceable if there is reliance or a probability of reliance by the charity.

James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer pays James $100. Which statement describes the payment of $100?

This created an option contract.

Stewart entered into a contract with Will to have Will build a 10-unit apartment complex on Elm Street in Randolph County. Unknown to both parties, this land had recently been rezoned and only single-unit dwellings can be constructed.

This is a mistake in law, which is treated no differently than a mistake in facts.

When does acceptance of an offer to enter into a unilateral contract generally occur?

Upon full performance by the offeree.

Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract?

Yes, because Robbie gave up a legal right.

An undisputed debt is:

an obligation that is not contested as to its existence or amount.

The way parties usually show mutual assent is by:

an offer by words or conduct and an acceptance by words or conduct.

A fiduciary:

is a person in a confidential relationship who owes a duty of trust and loyalty to another.

A misrepresentation is material if:

it would likely induce a reasonable person to enter into a transaction. the maker knows it would likely induce the other party to enter into the transaction.

Divided Parcel (DP) includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through the intentional or reckless fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to the manufacturer to be repaired anyway. The watch is destroyed when the DP driver uses the package for a ball and tosses it to his buddy. Mary is:

likely to collect from DP because it attempted to excuse intentional and reckless behavior.

In relation to fraud, scienter is a legal term which means:

that the seller had knowledge that his statements are false and had the intention to deceive.

Don offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer."

Diane cannot accept the offer, because it wasn't made to her.

Which of the following is correct with regard to duress?

Duress by improper threats is the most common form of duress.

Which of the following results in a void contract?

Duress by physical force.

Samuel Tate enters into a contract with Bill Smith under the terms of which Smith is to pay Tate $7,000 and Tate is to build a garage, repair a boat, and build a doghouse. If the doghouse has not yet been built, which term describes the type of contract in existence?

Executory contract.

Which of the following is not generally required in order to have a valid contract?

Fairness of the bargain.

Hal promises not to foreclose on a mortgage that he holds on an office complex that Christopher owns. In reliance on this promise, Christopher spends $200,000 to remodel the complex. Which of the following is correct with regard to Hal's promise?

Hal's promise not to foreclose is unsupported by consideration. Hal's promise is noncontractual. Hal's promise may be enforced against him based upon the doctrine of promissory estoppel.

Mary agrees to sew Georgia's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay:

$60, since the modified agreement is supported by additional consideration.

Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement?

"This car has a new radiator."

If incorrect, which of the following would probably be considered a misrepresentation of a material fact?

"This car has new brakes."

Which of the following need NOT be proved in order to establish the defense of economic duress?

That one party explicitly made the economic threat.

Which of the following would be considered a valid and legally enforceable agreement?

An agreement by a fund-raising director not to operate a fund-raising business in Marin County for a period of one year after terminating his employment.

Which of the following would always be considered to be contrary to public policy?

An agreement to pay someone to make false statements about a competitor's product.

__________ is a provision excusing one party from liability.

An exculpatory clause

Express contracts and implied in fact contracts:

are both genuine contracts. are equally enforceable.

The remedies of damages and rescission are available for:

fraudulent misrepresentation. negligent misrepresentation. innocent misrepresentation.

Anna by mistake delivers to Bob a plain, unaddressed envelope containing $50 intended for Cora. Bob:

has a quasi-contractual obligation to return the money.

If Anna Laura, in return for the payment of $200 to her by Catherine, gives Catherine an option to buy Jesse, a prime Arabian mare, at any time within the next 14 days at a price of $50,000, Anna Laura's offer to Catherine is:

irrevocable for the 14 days covered by the option.

A person who makes a promise is a(n):

promisor.

Which of the following can meet the scienter requirement to establish fraud in the inducement?

Actual knowledge. Lack of belief in the statement's truthfulness. Reckless indifference as to a statement's truthfulness.

Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so. Edward agrees.

The consideration from Darla to Edward is the promise of $6,000 subject to a condition.

Elvis makes an offer to Fred, but before Fred can accept, the state supreme court decides a case that makes Elvis's offer illegal. What is the effect of the court's decision on the offer?

The court's decision automatically terminates the offer.

Promissory estoppel is a contractual doctrine that includes which of the following considerations?

The courts use the doctrine of promissory estoppel to enforce noncontractual promises. Under this doctrine, the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the promise to take action or refrain from taking action and the promisee does so.

Charlene hears about a reward being offered by the local television station for information leading to the arrest and conviction of a local rapist. She supplies the requested information and the suspect is then arrested and convicted.

The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Charlene has accepted.

William agrees to drill a well up to 200-feet deep for John's rural cabin. The contract price is $3,000. After drilling 100 feet, William strikes solid granite rock. He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract. He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price. Because John is anxious to have the well, he agrees to pay William an additional $1,000 to complete the job. However, once the well is finished, he changes his mind and now says he will pay only the originally agreed-upon amount.

The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000.

Which of the following would not be enforceable without additional consideration?

The settlement of an undisputed debt.

Jack has been in the business of selling carpeting for 20 years. He calls Bob, who is opening another branch of his furniture stores, and offers to sell him 100 yards of carpet at $20 per yard. Bob agrees and sends back the following letter confirming the deal: Dear Jack: As we discussed on the phone January 3, we accept your offer of 100 yards of Saxony "heather blue" carpeting at the rate of $20 per yard. We also reserve the right to purchase any additional yardage we need to carpet our other showroom facilities at the same rate for one year from that date. Very truly yours, Bob Which of the following is true?

There is a contract for only 100 yards of carpeting.

Action Play Equipment ordered 200 feet of chain, 400 clasps, and 50 swing seats from Brace Company for $1,600 to be delivered within three weeks of the order. Brace sent back an acceptance form which stated payment was due within 30 days of delivery or a finance charge of 2% per month would be added to the balance. What is the status of the interaction between Action and Brace?

There is a valid contract under the UCC, and the additional payment terms become part of the contract unless Action objects within a reasonable period of time.

Wayne helped Hank study all night for an important exam. After Hank got an "A" on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it."

There is no contract because there is no valid consideration.

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?

This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders.

Carl and Ron are both engaged in road construction work. They know that several jobs are going to be up for public bids, and agree between themselves that Carl will bid on one job and Ron will bid on the other, so that they both have work for the summer. When the bids are opened, Carl realizes that Ron has bid on both jobs. Ron is awarded both contracts. Carl now wants to sue Ron for breach of contract.

This is an agreement in violation of public policy that will not be enforced by the courts.

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?

Tom's statements provide grounds to set the contract aside.

Under which of the following circumstances would a court be unlikely to enforce the illegal contract?

Where the agreement is with an unlicensed attorney.

Steven has a typed copy of a contract, which he would like to have Thomas sign. Thomas, who needs glasses to read typing, doesn't want to sign until he has read the document, but Steven convinces Thomas to sign it anyway, because it is a "standard" contract for this type of situation. Is the contract which Thomas signed binding upon him?

Yes, because he was negligent in not ascertaining its contents.

Don has an employment contract with Dunkirk Ice Cream. He sells ice cream and novelty ice cream products. He has nine children and doesn't make enough money, so he decides to see if another dairy will hire him, too. "After all," he reasons, "most stores carry four or five different brands." His employment contract prohibits him from competing. If Don sells for another dairy in addition to Dunkirk, will he be in trouble under his contract?

Yes, it is likely to be enforceable during employment.

Tim mails an offer to Brian on June 15. Brian receives the offer on June 16. Tim mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18. Brian receives the revocation on June 19. Tim receives the letter of acceptance on June 20. Was a contract formed?

Yes, on June 18.

Wes, who is an art collector, offered to buy a print from Le Monde Gallery. Le Monde balked at the price, sending Wes a letter of rejection. That day it discovered that the print was not as highly valued as originally thought. Le Monde immediately telephoned Wes to accept his offer. Is there a contract?

Yes, since the acceptance was received before the rejection.

In the Osprey L.L.C. v. Kelly-Moore Paint Co.,Inc. case, the Supreme Court of Oklahoma held that:

a faxed delivery of the written notice to renew the commercial lease was sufficient to exercise the renewal option of the lease.

In the Lesher v. Strid case, the court held that:

a mutual mistake of fact renders a contract voidable by the adversely affected party if the mistake is so fundamental that it frustrates the purpose of the contract.

An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as:

a requirements contract.

Vi offers to pay Allison $150 if Allison will paint her apartment while she is out of town on vacation for two weeks. Allison makes no promise but tells Vi that she will think about it. While Vi is out of town, Allison paints the apartment. This is best described as:

a unilateral contract.

The sole nursing home in the county offers a long-term care agreement. The contract is prepared on a standard form and offers terms on a take-it-or-leave-it basis. Such a contract is called:

an adhesion contract.

Elmer promises to pay Fred $100 if Fred will register and vote in the next election as a Democrat. This is:

an illegal agreement.

An ad in a newspaper or a circular describing goods and stating prices would generally be considered:

an invitation to buyers to make an offer to buy goods.

"B2C" transactions on the Internet:

are more complex for services than for goods.

Contracts that are implied in law:

are obligations imposed by law on grounds of justice and equity. are intended to prevent unjust enrichment. do not rest upon the assent of the contracting parties.

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:

can revoke his offer at any time before Fred accepts it, because there is no consideration to keep it open.

The UCC battle of the forms rule:

changes the mirror image rule. may yield different results depending on whether the parties are merchants. may result in formation of a contract quite different from the terms of the offer.

A standard determined in terms of the business judgment of reasonable persons familiar with the practices customary in the type of transaction involved and in terms of the facts and circumstances of the case is:

commercial reasonableness.

The requirement that each party to a contract must intentionally exchange something of value as an inducement to the other party to make a return exchange is known as:

consideration.

An offer that is made by a merchant under the UCC and is irrevocable even though no consideration is given to keep it open is known as a(n)

firm offer.

An intentional misrepresentation of a material fact made with knowledge of the falsity and intention to deceive and which a party justifiably relies upon to his detriment is known as:

fraud in the inducement

Sam wants to sell his Golden Retriever to Al. Sam tells Al that the dog is three years old and that he will point, back, and retrieve. Although the dog is three years old and will point at birds, he will not back (honor another dog's point). Al relies on these statements and purchases the bird dog. The buyer has probably been a victim of:

fraud in the inducement.

Non-compete agreements drafted for employees of Internet companies:

have been held subject to larger geographic restrictions than for other types of companies.

Archie bets his friend Jerry $100 that the Packers will win the next Super Bowl. This is an:

illegal wagering agreement.

Albert found a stone in his yard and took it to Bob, a jeweler, for evaluation. Bob wasn't sure as to the nature of the stone, but told Albert 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. This:

is a valid contract that should be enforced by the law, because neither party knew the exact nature of the stone at the time of the sale.

Barbara, a wealthy widow, promises the pastor of her church that she will donate $10,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $30,000 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. Barbara's promise to pay $10,000:

is enforceable under the Restatement of Contracts.

Carlos owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Virginia 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:

is unreasonable. unduly interferes with the interests of the public.

Bill, a builder, 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 Bill'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:

the city was aware of Bill's mistake. When it accepted the bid, with knowledge of Bill's mistake, the city sought to take an unconscionable advantage of Bill's error. there is a palpable unilateral mistake.

In the Catamount Slate Products, Inc. v. Sheldon case, the court found that:

the intent of the parties to be bound to a contract is determined by an objective standard of what a reasonable person would have believed based on the words and conduct of the parties.

An arm's length transaction is one in which:

the parties are acting in their own self-interest.

An agreement to refrain from a particular trade, profession, or business is enforceable if:

the purpose of the restraint is to protect a property interest of the promisee. the restraint is no more extensive than is reasonably necessary to protect the promisee's property interest.

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 a good imitation, which fooled even the dealer. In this case:

the sale may be rescinded, because the dealer has made a nonfraudulent misrepresentation.

By holding a knife to his back, Ed compelled Sean to sign a contract advantageous to Ed. This contract was entered under:

physical duress.

Nanette wanted to purchase a new car and found one she liked at Minson Motors. Several important contractual terms were buried in the written agreement and some of the meaning of the contract was obscured by legal jargon. These practices involved:

procedural unconscionability.

There are certain transactions that are enforceable without consideration. These include:

promises to pay a debt barred by the statute of limitations. a promise to pay a debt that has been discharged in bankruptcy if certain requirements are met. a new promise to perform a voidable obligation that has not previously been avoided.

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):

quasi contract.

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:

substantive unconscionability.

A __________ is a law establishing a maximum rate of permissible interest for which a lender and borrower of money may contract.

usury statute

James offers to sell his fishing boat to Brenda for $3,000. Brenda says she will apply for a loan and will buy the boat within a week. A contract is formed:

when Brenda tells James she will buy the boat.

Rorzex, Inc. entered into a contract with Denzil under the terms of which Denzil would receive $20,000 if he stole trade secrets from the leading competitor of Rorzex. Denzil performed his end of the agreement by delivering the trade secrets. Rorzex now refuses to pay Denzil for his services. Denzil:

will be unable to recover, because this is an illegal contract.

Able is involved in an automobile accident and is injured. While he is unconscious, the police call an ambulance which takes him to a hospital. Able is treated at the hospital and released a day later. The hospital sends him a bill for $6,500, which Able refuses to pay, claiming it is too high and he never consented to the treatment because he was unconscious. Able:

will have to pay the bill, because this is a quasi-contractual agreement.

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by:

state common law.

Under the Code, an offer for the purchase or sale of goods:

may have missing terms supplied by inference.

Which of the following would generally be considered to be a revenue-raising licensing law?

A statute requiring that salespeople be licensed, but not establishing any educational or training requirements.

Which of the following would most likely be enforceable?

A substitute agreement to settle an undisputed debt.

Which of the following is NOT always necessary in order for a valid contract to be formed?

A writing.

Alice says to Brian, "If I decide to buy a word processor next year, I will buy it from you." This is an example of:

an illusory promise.

The mirror image rule applies to:

an acceptance.

When both parties are mistaken as to the same set of facts, it is termed:

mutual mistake.

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code?

The sale of a new car.

In DiLorenzo v. Valve and Primer Corporation, the court held:

there was no consideration for the stock option, and promissory estoppel did not apply because detrimental reliance was not proven.

James threatens to hit Kenneth in the head with a baseball bat unless Kenneth signs a contract agreeing to pay James $400 for his saw. If, because of the threat, Kenneth signs the contract:

James has committed physical duress against Kenneth.

Jan promises Eli $4,000 for one of his original paintings on the condition that she receives $1 million from her mother's will. In this case:

Jan's promise is legally sufficient unless Jan knows she cannot inherit the $1 million.

Which of the following would not be a promise statutorily made enforceable without consideration?

Jones promises to pay his cousin's past-due cell phone bill.

Morris interviewed for a job as plant manager at Northland Bearings and was offered a two-year contract if she could relocate and start the new job within three weeks. Morris agreed. Northland promised to follow up the oral agreement with a written contract setting forth all the agreed terms, but the contract had not arrived within several days. Morris wanted to give two-weeks' notice to her present employer, so she called Northland to check on the written contract and was told it was ready to be sent to her and assured her the job was hers. She gave notice of her intention to quit her present job and moved two states away to the Northland location. When Morris arrived for her first day of work, she was told someone else with better qualifications had been found and hired for the position. Morris:

may be entitled to good-faith reliance damages under the doctrine of promissory estoppel to avoid injustice.

Marilyn read an ad in the school newspaper offering a $1,000 swimming scholarship to anyone who could swim 500 laps in the school pool. Marilyn called the advertiser and began swimming. She has reached lap number 460; she feels great and is sure she can make it all the way. The advertiser:

must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or pay damages if he interferes with the completion of the laps.

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 __________ to protect the employer's legitimate interest.

necessary

A contract was made for 125 bales of cotton to arrive on a ship named "Peerless" from Bombay. Unbeknownst to either party to the contract, there were two ships named "Peerless," both of which were sailing from Bombay. One sailed in October and the other in December. The buyer had in mind the ship sailing in October, but the seller had in mind the ship sailing in December. Each party held his belief in good faith. When the goods failed to arrive on time, the buyer sued for breach of contract. In this case:

no contract exists due to mutual mistake of fact.

The Rogers family has always wanted to buy the beautiful house at the top of the hill. The owners of the house, the Thompsons, decided to sell and called Mr. Rogers. Before he could get back in touch with Mr. Thompson, Mr. Rogers suffered a heart attack and died. Mr. Rogers' adult daughter, to whom the Thompsons had not spoken, still wants the house. She may:

not accept, since the offer is terminated.

Jeb submits a bid to construct a student union building for the local community college. He realizes after submitting the final bid that he forgot to include the cost of the window casings for the entire building. He may:

not revoke his bid due to the statutory irrevocability of the bid.

Will offers to sell his bike to Stan. Will has seemingly offered to sell his motorcycle, but he intended to and believes he is offering his 10-speed bike. If Stan accepts the offer, reasonably believing it was for the motorcycle:

objectively Will and Stan are in agreement, so a contract has been formed.

The UCC provides that a merchant is bound to keep a written offer open for the stated period, but no longer than:

three months.