Business Law Exam 2
What is a requirement of an express contract?
. The terms are stated in words.
A contract that where neither party has performed (or done what the party promised to do) is:
. executory.
Retail stores typically put advertisements in newspapers describing goods and stating prices.
. offers only if they are not made by merchants
In most cases, the offeree's __________ and failure to act cannot be regarded as acceptance.
. silence
When there is a mutual mistake of a material fact:
. the contract is voidable by the adversely affected party.
Bertha, was an alcoholic, one weekend while she was extremely intoxicated, her son took her to the store and had her purchase an expensive computer. If Bertha wishes to rethink this contract, Bertha: a. must sober up and ratify the contract as a whole. b. cannot ratify the contract it is void and without meaning. c. may at any time keep the computer, but doesn't have to pay for it as the store should have known better than to do business with an intoxicated customer. d. may return the computer, but cannot get her money back.
A
Bill offers to sell his house to Harry for $90.000. Harry tells Bill he will buy the house for $90,000 if Bill will fix the roof. a. Harry has made a counteroffer. Unless Bill accepts the counteroffer, there is no contract. b. Under the UCC, Harry has accepted the offer even though his acceptance was not the mirror image of the offer. c. Harry has made a counteroffer. If Bill does not accept the counteroffer, Harry can still accept Bill's original offer. d. Harry has revoked Bill's offer.
A
Mabel is 88 years old and under the court ordered legal guardianship of her daughter. One day Mabel receives a telephone call from a health insurance salesman and purchases a $400-a-month Medigap insurance policy. The contract is: a. void. b. voidable. c. valid. d. unconscionable. Hide Feedback
A
Proof of fraud requires each of the following, except: a. there is liability whether anyone is harmed or not. b. the defendant made a material false statement. c. the defendant knew that the statement was false or was recklessly indifferent regarding its truth. d. the defendant intended for the other party to rely on the false statement.
A
The Jones have always admired a house that sits on the top of a hill owned by the Smiths. Martin is a mutual friend of both the Jones and the Smiths. One day, Martin mentions to the Smiths how much the Jones would love to buy the Smith home. The Smiths say that if they sell the house, they would be happy to sell it to the Jones. Martin relays this conversation to the Jones and the Jones immediately call the Smiths to accept the Smith's offer to sell. Have Smiths made an offer to sell their home to the Jones? a. No. The Smiths did not objectively intend to make an offer because they did not clearly state they were willing to sell the house. b. Yes. Because all the elements of a contract are present. c. No. Because they used a 3rd party in the negotiations. d. Yes. Because it is common knowledge that they wanted to sell.
A. No. The Smiths did not objectively intend to make an offer because they did not clearly state they were willing to sell the house.
If an offer has no stated time by which it must be accepted, when does the offer terminate?
After a reasonable period of time.
AZC Corp. contracted with Summer Side Lawncare to cut the grass at their facility within 2 days of AZC calling them. Additionally, the contract called for the Summer Side to plant any shrubs or flowers that the company bought and left out for them. What type of contract is this? a. requirements b. divisible c. output d. implied
B
Cierra is at the Doland's house walking their dog while they are on vacation. The Doland house is for sale & while she is there, Mr. Jaymeson comes to view the house and makes an offer to purchase it for the listed amount. Cierra accepts the offer on behalf of Mr. & Mrs. Doland. Is a contract formed? a. A contract is formed because Cierra was at the house and showed Mr. Jaymeson around. b. No contract was formed because Cierra is not the one selling the house. c. A contract is formed because any offer can be accepted by anyone present at the time. d. No contract is formed because Mr. Jaymeson did not put any money down.
B
__________ is what each party to a contract gives up to the other in making their agreement.
Consideration
Alan finds Marcia's dog on the side of the road. He then takes the dog home and treats the dog's injuries. When he calls Marcia to tell her he has found the dog, she promises to reimburse Alan for the cost of treating the dog. Is Marcia's promise binding? a. Yes, because she should be grateful to him. b. Yes, because Marcia promised to pay him. c. No, because Alan is not a health care professional. d. No, because there was no bargained for exchange.
D
The fact that the consideration turns out to be disappointing __________ the binding character of the contract.
Does not affect
Who may accept an offer?
Only the person to whom an offer is made may accept it.
What is the effect of slight intoxication on the capacity of a person to enter into a contract?
Slight intoxication will not destroy one's contractual capacity.
__________ is a set of oppressive or grossly unfair contract terms or exclusions.
Substantive unconscionability
What is the rule about a unilateral mistake?
The party making the mistake can avoid the contract if the other contracting party knew or should have known of the mistake.
__________ means contrary to the dictates of the conscience; unscrupulous or unprincipled; exceeding that which is reasonable or customary; inordinate, unjustifiable.
Unconscionable
Taylor bought several lottery tickets at the local quick-stop store. What type of contract is this?
Unilateral contrac
Harrison enters into a written contract to sell his home, valued at $200,000, to his only daughter Olivia for $100,000. His 2 sons file lawsuit claiming that the reduced price does not constitute consideration. What would the court likely rule about the amount of consideration? a. Courts will generally not consider the adequacy of consideration. b. Courts would require Olivia to pay fair market value for the home c. Courts would require the home or the subsequent value to be split between the 3 siblings. d. Courts would consider this an illusory promise and thus unenforceable.
a
Courts allow a minor a certain amount of time to disaffirm a contract when he turns 18 years of age. That time period is:
a reasonable period of time after reaching the age of majority.
A(n) __________ is the offeree's manifestation of intent to enter into a binding agreement on the terms stated in the offer.
acceptance
A valid contract is:
an agreement between two or more parties that the law will enforce.
Marilyn sells her highly successful travel agency to Adelle. In the sales contract, Marilyn agrees never to open a travel agency in the United States. Which of the following best describes this contract clause? a. Binding as fair protection. b. Unenforceable as a violation of public policy. c. Valid as a reasonable restraint on trade. d. Void as an illegal violation of a statute.
b
A given agreement may not violate any statute but may still be so offensive to society that courts feel that enforcing the contract would be:
contrary to public policy
Andrew received a bill for $500 from Jeff for a tune-up Jeff performed on Andrew's SUV. Andrew called Jeff and told him, "The car runs no better now than before the tune-up. I am sending you $200 and no more." Jeff received the $200 check which was marked "paid in full SUV repair" and cashed it. Is Andrew still liable to Jeff for the remaining $300? a. Yes, Andrew is liable for the full amount of the repair. b. Yes, only a court can order that the amount was unfair. c. No, because the car wasn't fixed. d. No, if the check is marked "paid in full" and references the transaction.
d
Bethany's grandmother promised to give her a car when she turned 21 if Bethany agreed not to drink alcohol or smoke cigarettes until that date. Would this be a contract with consideration? a. Yes because her grandmother is concerned for her safety b. No because forbearance never qualifies as consideration c. Yes because a gift is an enforceable contract d. No because it is already illegal for Bethany to drink until she turns 21.
d
Parol evidence is admissible to show: a. fraud. b. duress. c. mistake. d. All of these are correct.
d
Tanner posted a guitar for sale on-line. Several emails about the guitar were then exchanged with Andre who asked about the style, age and condition of the guitar. They never discussed price or shipping methods, however the next week, Andre receives a package with the guitar and a bill for $250. Andre refuses to pay. What would likely be the result in the case? a. Andre would have to pay for the guitar because it had already been shipped. b. Andre would have to pay for the guitar because the emails constitute a contract. c. Andrew would not have to pay because the transaction took place on-line, not actually in "writing." d. Andre would not have to pay because no contract was formed due to lack of specific terms.
d. Andre would not have to pay because no contract was formed due to lack of specific terms.
A buyer of a business may negotiate a __________ contract clause to keep the seller from running a competing business.
good faith
A contract is __________ when it is contrary to public policy.
illegal
Every adult is presumed to have capacity unless:
it is proven that capacity is lacking or there is status incapacity.
Sometimes both parties make a mistake of judgment, then the contract is:
not voidable by the adversely affected party
In a __________, the parties stipulate that one shall win and the other lose depending on the outcome of an event in which their only interest is the possibility of such gain or loss?
wager
Sally offers to sell her Business Law textbook from last semester to Bob for $50.00. Bob accepts Sally's offer and tells her he will pay her on Friday when he gets his paycheck. A contract is formed: a. when Sally offers to sell her book to Bob. b. when Bob gets his paycheck. c. when Bob pays Sally. d. when Bob accepts Sally's offer
when Bob accepts Sally's offer
Ordinarily, courts do not consider the __________ of the consideration given for a promise.
Adequacy
Wendy is taking a prescribed medication which makes her drowsy and inattentive. If she enters into a contract when she is in that condition, the contract: a. would be unaffected as long as she took the medication exactly as prescribed by her doctor. b. would be voidable even if her judgement was not impaired. c. would be voidable only if she restored the status quo ante d. would be voidable if she is unable to comprehend the subject, nature, and consequences of the contracts at the time that she made them.
D
What is the capacity of a person adjudicated incompetent by a court order? a. A merchant might be able to recover the fair value of any necessaries. b. The person's own contracts are void. c. The guardian may be able to ratify contracts made by the ward. d. All of these are correct.
D
__________ is an unenforceable promise under the law of contract because of a lack of consideration.
Gift
Jennifer and Jamal are having lunch together and Jennifer mentions that she is thinking about selling her 3 year old car. Jamal asked several questions about the car such as its gas mileage and handling abilities and how much she might be asking for the car. At the end of lunch, Jamal asks Jennifer to let him know if she decides to sell the vehicle and she agrees. What type of contract is this?
No contract was formed
Which of the following would generally be considered to be a regulatory licensing law? a. A statute requiring that doctors be licensed after finishing medical school. b. A statute requiring that salespeople be licensed, but not establishing any educational or training requirements. c. A statute requiring plumbers to be licensed, but not establishing any standards of competence.
a
A legally binding agreement that can be avoided by one of the parties is called a:
a voidable contract
As an exception to the rule on courts inquiring as to the adequacy of the consideration, a court will take evidence to establish: a. one party clearly has the better of the deal. b. one party claims to have been defrauded. c. one party has more business experience than the other. d. one party shows a much lower price nationally-advertised on television.
b
Contracts for the sale of goods priced (starting) at _____ or more must ordinarily be in writing under UCC Section 2-201. a. $50 b. $500 c. $1500 d. $1,000
b
Examples of an enforceable oral contract is/are: a. an oral promise by an executor to guarantee payment of a decedent's debt. b. an oral agreement to substitute the place of closing a land contract. c. an oral agreement to extend an employee's contract for six months to a total of two years. d. All of these are correct.
b
Fred operates a fledgling remodeling business and is in desperate need of a certain type of drywall. He obtains the material from Megaworks, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of: a. discrimination. b. substantive unconscionability. c. supervening illegality d. restraint of trade. Hide Feedback
b
Braydon, a 16 year old, owns a business called Summertime Lawn Care and enters into a written contract with several people in the neighborhood to take care of their lawns while they are away on vacation. However when one of the families returned from their cruise, their lawn & flowers were dead and had clearly not been maintained. The family asked for their money back and for Braydon to pay for the refurbishment of their lawn but Braydon told them he was not obligated because he was a minor. What would be the probably result of this situation? a. The contract is voidable because Braydon is a minor so he will not be under any obligation. b. The contract is valid because it was in writing. c. The contract is not voidable because Braydon was running a business. d. The contract is voidable because a 16 year old cannot start businesses.
c
Louis owns several abandoned buildings in the city where drug dealers and homeless people are now living unlawfully. Louis offers Al $5,000 to burn down the buildings in order to run off the people living there. Al sets fire to the buildings about a week later, but the fire department comes before much damage is done and now the drug dealers and homeless people are back. Louis refuses to pay Al because he claims Al did not complete the job and the buildings are still standing. Which of the following statements is true? a. The agreement is voided because Jerry did not complete the task he was hired to do. b. The agreement was legal because Louis owned the buildings that he hired Jerry to burn. c. The agreement is illegal because it was based on commission of a crime. d. All the elements of contract are present making the agreement legal.
c
A contract based on __________ is not enforceable.
past consideration
Cosigners have duties under the contract, which are:
payment of the debt.
The spirit of the law that underlies the concept of quasi contract is to:
prevent unjust enrichment.
Making a purchase online:
should follow the same rules with respect to contracts as any other purchase.
An activity is not gambling when the result is solely or predominantly a matter of:
skill
The customs and __________ or commercial activity to which the contract relates may be used to interpret the terms of a contract.
usage of trade
Which of the following is not always necessary in order for a valid contract to be formed?
A writing
Chris started working at age 15 ad saved enough money to buy his own car on his 17th birthday. He got a 3 year loan from the dealer and started making payments. However after 6 months, he stopped making the payments and the deal the then requested that he return the car. What is Chris' obligation in this situation? a. Under status quo ante, Chris must return the car if he does not pay for it b. Chris has no obligation, the dealer should have known not to enter a contract with a minor. c. A car is considered a "necessaries" so Chris' parents will have to pay the remainder of the loan. d. Chris misrepresented his age, therefore the contract would be disaffirmed.
A
When it is said that a contract made by a minor is voidable, which of the following is true? a. While still a minor, he can disaffirm the contract and return the property. b. At any time before he turns 21, he can disaffirm the contract and return the property. c. Within 72 hours of the contract a minor can disaffirm the contract. d. None of these are correct. Hide Feedback
A
Quotations of prices, even when sent on request, are likewise not offers unless: a. the parties have had previous dealings. b. unless a trade custom exists. c. that would give the recipient of the quotation reason to believe that an offer. d. All of these are correct.
All of the above
If both parties exchange promises, the contract is:
Bilateral
Jamal, a 16 year old, went to a party and got into a fight which resulted in Jamal going to the hospital and getting several stitches. When Jamal's parents got the $1,000 hospital bill, didn't have the money to pay the bill and the hospital sued. Who is responsible for the bill? a. Jamal's parents because he is a minor b. The person that caused Jamal's injuries c. Jamal because the treatment was a "necessarie" d. The hospital because they knew he was a minor and could not pay.
C
Mr. Pendleton is in his 70's but is just learning to use the internet. He is looking online and clicks an "I Agree" button to download music from his childhood. Later, he gets a credit card charge for $500 for downloading the music. Mr. Pendleton refuses to pay and says he didn't realize what he was clicking and that he didn't read the agreement. What is the likely outcome of this situation? a. He would not be responsible because he didn't read the terms before he clicked "I Agree". b. He would not be responsible because he didn't realize he had to pay to download music. c. He would be responsible for the fine, even if he didn't know what he was doing. d. He would be responsible based on the mailbox rule.
C
Betty is looking at the grocery ads in the newspaper and sees that canned tuna is on sale for 6 cents. Because this is an amazingly low price, she rushes off to the grocery store. She loads 10 cans into her cart, goes to the checkout counter and hands the cashier 60 cents. The cashier asks for $6.90 and tells her that the tuna is 69 cents per can and that the ad was a misprint. Betty demands that the tuna be sold to her for 6 cents a can. Which of the following statements about the ad is correct? a. The ad is a firm offer and the grocer must sell Betty the tuna for 6 cents a can. b. The ad is a contract and the store has a contractual obligation to sell the tuna to Betty for 6 cents a can. c. The ad is an offer and Betty has accepted the grocer's offer; therefore, there now is a contract between the grocer and Betty for the sale of tuna in exchange for 6 cents per can. d. The ad is an invitation for others to make offers. Betty has made an offer to buy the tuna for 6 cents a can and the grocer has rejected Betty's offer, but countered with an offer to sell it to Betty for 69 cents per can.
D
Darryl contracted with Right Builders to build an addition to his house for $25,000. After digging the foundation, Darryl decides he wants to have the house done earlier than was originally agreed. Right Builders agree, but say that it will need to charge an additional $5,000 for the job. Assuming Darryl agrees, which of the following is correct? a. Darryl will only have to pay the original $25,000 because that is what the original contract requires. b. This is a contract under seal which is enforceable. c. This work requires no additional consideration on the part of Right Builders. d. Daryl would have to pay $30,000 even though the addition was not part of the original contract.
D
Madeline, age 17, ordered a pair of diamond earrings on the installment plan. She paid $50 every month until she turned 18, the age of majority. The next day, she sold them to Samantha and disaffirmed the contract. What is the result? a. Samantha is still liable since she had to disaffirm before her 18th birthday. b. Samantha is not liable because earrings are not necessaries. c. Samantha is still liable because she used the earrings. d. Samantha is still liable because selling the earrings amounted to a ratification.
D
Bill enters into a contract with Harry. The terms are that Bill will build an addition to Harry's home and repave Harry's driveway in exchange for Bill's payment to Harry of several thousand dollars once all of the projects have been completed. If the driveway has not yet been completed, but the addition has been completed, which term describes the type of contract in existence?
Executory
Myles is a writer & his friend Drew makes some suggestions for his new book while they are having lunch one day. Myles likes the ideas and offers to pay Drew at that time. Drew says he won't accept any payment now but if the book does well then Myles can pay him whatever he thinks the ideas a worth. Just before publishing, Myles again offers to pay Drew, but he declines payment. When the book becomes a success, Drew dues Myles for $1million for using his ideas. What is the likely outcome? a. Drew would be entitled to part of the profits from the book. b. The discussion did create a contract because they talked about payment. c. No contract was formed because verbal contracts are not valid. d. The discussion did not create a contract because the discussion was indefinite & vague.
D
Which of the following can be consideration for a promise? a. Refraining from assaulting one's roommate. b. Promising to refrain from stealing from the boss. c. Refraining from using a controlled substance. d. Refraining from smoking cigarettes.
D
Which of the following is most likely to be classified as a necessary for which a minor will be held liable on a contract? a. A television. b. School supplies. c. Education. d. Food
D
A minor may avoid or __________ a contract by any expression of an intention to repudiate the contract.
Disafferm
Mr. Smith owns an apartment complex with extensive lawns and garden areas. He enters into an informal written contract with A1-Lawn Service to perform all of the lawns and garden work including mowing, weeding and watering. What does the fact that it is an informal contract mean to the parties?
It is a legally binding contract.
Which of the following will terminate an offer?
Lapse of time.
__________ means doing that which the promiser was under no prior legal obligation to do.
Legal detriment
Louie lives next door to Robbie. Robbie had contracted with My Painters to paint his house. Robbie's house is in good shape, but his wife would prefer they change colors even though the house does not need painting. Louie's house needs painting very badly but he is unemployed and disabled and cannot afford to hire someone to do the painting. When the painters show up, they don't look see an address but assume it is Louie's house that they are supposed to paint. Louie sees the painters at work but remains in his home and says nothing. When they are finished, My Painters knock on the door and hand Louie a bill for painting his house. What is Louie's responsibility for payment? a. Louie must pay the entire bill. b. Louie does not have to pay anything because he did not contract with My Painters. c. Louie does not have to pay the contract price, but does need to pay the reasonable value of the painters' services. d. Louie can give the bill to Robbie to pay since he is the one who contracted with My Painters.
Louie does not have to pay the contract price, but does need to pay the reasonable value of the painters' services
The offeree rejects the offer when she ignores the original offer and replies with a different offer. What is this called?
The counteroffer
__________ is when money is loaned at a higher rate of interest than the law allows.
Usury
BigOil promises Gasnow as many barrels of oil as they want at $50 per barrel. In this case: a. BigOil has made an illusory promise. b. BigOil's promise is legally sufficient unless BigOil knows they are running out of oil. c. BigOil has made a conditional promise which is not sufficient to form consideration. d. BigOil's promise is forbearance and the courts will therefore not enforce it.
a
Jake needs to raise money for college tuition so he decides to raffle off his car. He sells tickets for $10 each for a chance to win it. He raises about $15,000 which he uses to take a trip to Europe. He delivers the car to the winner. Is this a legal raffle? a. This is illegal because private lotteries & raffles are illegal. b. This is legal because the car was delivered as promised c. This is legal because all of the elements of a contract are present d. This is illegal because he didn't use the money for college tuition as advertised.
a
Sam emailed Bob offering to sell him his 1970 Corvette for $7,000. While waiting for a reply, Sam finds out 1970 Corvettes which are in excellent condition and have all the original parts sell for closer to $57,000. He changes his mind about selling the Corvette to Bob. What can Sam do? a. Sam can revoke his offer to Bob at any time so long as there has been no acceptance. b. Sam cannot revoke his offer to Bob because he made it via email and email is considered a writing. c. Sam cannot revoke his offer until Bob accepts it. d. Sam can revoke the offer at any time, even if it has been accepted, because he owns the car and the property is his to do as he pleases with.
a
Which of the following is true regarding noncompliance with the statute of frauds? a. The basic legal effect under the statute of frauds and the UCC is the same. b. The statute of frauds applies to executed and executory contracts. c. A party to a contract which was unenforceable because of the statute of frauds but who relied upon the contract may not recover in restitution the benefits he conferred on the other party. d. The doctrine of promissory estoppel cannot displace the requirement of a writing under a statute of frauds.
a
Which of the following promises does have to be evidenced by a writing in order to be enforceable? a. Jack's agreement with Steve to sell his condominium for $150,000. b. Sarah's promise to work for Angie for ten months. c. Sam and Alicia decide to get married. . d. Karen's agreement with Sandy to buy her sewing machine for $200.
a
The sole hospital in a city offers a standard patient 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
In some situations the courts will enforce new promises to perform an obligation that originally was not enforceable. Which of the following would be that sort of promise? a. An illusory promise. b. A new promise to pay a debt barred by the statute of limitations. c. A promise to supply all of the materials a manufacturer will need for the production of a certain item for a specified period of time. d. In the majority of states, a promise by a father to pay someone who rendered emergency services to his injured son before the father had arrived at the accident scene.
b
Jacob was injured when Felicia's car struck him as he was jogging to the park. Felicia's insurance company asked Jacob to sign a settlement accepting $75,000 but promising that he would not sue for any further damages. Is this consideration? a. A person cannot give up their legal right to sue in exchange for money. b. this would be considered forbearance and thus consideration c. This would be considered forbearance and thus not consideration
b
Mclane had always admired Randi's car. One day Randi mentioned the car was for sale and Mclane asked several questions about gas mileage, oil changes, and the condition of the tires and even test-drove the car. They reached an agreement and Mclane paid Randi $9,000 for the car. A few months later, the paint began peeling from the car and Mclane found out that the car had been in an accident and that Randi had the car repainted with poor quality paint. Should Randi have disclosed the information about the accident and the paint to Mclane? a. Randi is guilty of negligent misrepresentation b. Randi has no duty to volunteer information that is not asked c. Randi is obligated to inform Mclane of any possible problems that might occur d. Randi is not liable because he is not a car dealership
b
Tanner lives in an apartment building and his neighbor just bought a new dog that barks constantly while its owners are away. Tanner works nights and cannot sleep with the barking dog. After several months of the noise, Tanner pays Jerry, the building maintenance worker $50 to open the neighbor's apartment door and let the dog out. The next day, Jerry lets the dog go and tries to collect the money from Tanner. Acting like he didn't know what Jerry was talking about, Tanner refuses to pay. What is the most likely outcome of this contract? a. Tanner would have to pay Jerry the money because they entered a contract. b. Jerry cannot recover the money because it was based on the formation of an illegal act c. There was nothing illegal done because Jerry had a key to the apartment and did not break in. d. Jerry could recover the money if he could prove that Tanner hired him.
b
The Hallman family contracted with My Home Realtors to sell their house for a 4% fee and Marcus, who worked for My Home, was assigned as their agent. Marcus sold their home in 2 weeks and the Hallman's were so excited that they recommended Marcus to several of their friends. One of the friends told them that Marcus was not a licensed agent and at the closing, My Home Realtors confirmed that Marcus was still in the process of obtaining his license. The Hallman family refused to pay the 4% fee to Marcus for selling the house. Can Marcus recover the 4% fee? a. Yes because he provided all the services of a licensed agent b. No because a license for a realtor is a statutory requirement c. Yes because all the elements of a contract were present d. No because he lied to them about his license
b
When the parties express their contract in a writing that is intended to be the complete and final expression of their rights and duties, the __________ excludes prior oral or written negotiations or agreements of the parties? a. promissory estoppel rule b. parol evidence rule c. statute of frauds d. the possibility test
b
Mrs. Boyle contracted with All-Around-Roofing to repair and replace her entire roof for $4,000 which included labor and materials. After working off and on for 4 weeks, the contractor called Mrs. Boyle and told her the materials she requested were going to cost more than expected and asked if he should purchase them. Frustrated because it was taking so long, Mrs. Boyle told him yes, go ahead. Three days later the job was completed and she got a bill for $6,000 because of the added cost of the materials she requested. How much is Mrs. Boyle obligated to pay? a. Only the original $4,000 as stated in the contract b. $6,000 because she agreed to the higher price c. $4,000 because when she agreed, she didn't realize how much it would be d. Nothing, the roofer breached the contract and it is not invalid.
b. $6,000 because she agreed to the higher price
Which of the following is true of an auction sale?. AIn an auction "with reserve", the auctioneer takes the highest bid offered for the property. b. In an auction "without reserve", the property must be sold to the person making the highest bid regardless of how low that bid may be. c. The auctioneer must accept the highest bid offered in any auction. d. The bidder may withdraw a bid at any time before or after an auction.
b. In an auction "without reserve", the property must be sold to the person making the highest bid regardless of how low that bid may be.
To be effective, an offer must:
be communicated to the offeree.
For purposes of general contract law (common law), an offer must:
be sufficiently definite and certain.
All of the following will serve as adequate consideration except: a. forbearance to do an act. b. performance of services. c. an illusory promise. d. a promise to perform.
c
Bill faxes Harry an offer at 9 a.m. on Monday and the fax arrives at Harry's office at 9:02 a.m. Monday. Because Harry is taking a vacation day on Monday, he does not read the fax until Tuesday at noon. Harry decides to accept Bill's offer and tells his assistant at 3 p.m. Tuesday to prepare an acceptance for his signature. The acceptance is placed in the U.S. mailbox, with sufficient postage, at 4:30 p.m., Tuesday. The offer is effective at __________ and the acceptance is effective at __________. a. 9 a.m. Monday; 3 p.m. Tuesday b. Tuesday noon; 9 a.m. Wednesday c. 9:02 Monday; 4:30 p.m. Tuesday d. Tuesday noon; Friday morning
c
Maria offers to buy Catlin's car for $10,000 and agrees to bring the money by June 1st at noon. Catlin agrees to this offer. By June 5th, Maria still has not paid for the car so Catlin sells it to someone else. On June 8th Maria shows up with the money saying she had to wait for her paycheck to come before she could pay and that Catlin should have held the car until she came up with the money. What is the likely outcome of this dispute? a. The contract cannot be terminated because Catlin didn't tell Maria that she was going to sell the car to someone else. b. The contract was still valid for 30 days, regardless of the stated deadline. c. The contract was terminated when Maria didn't pay by the agreed upon deadline. d. The contract was terminated by counteroffer.
c
Neal has worked for Holder Inc. in Chicago for 15 years as a sales representative. When he was hired, Neal signed an "agreement not to complete". The agreement stated that if he left Holder, he could not take a job with any of Holder's competitors within 100 miles of Chicago for 2 years. How would the courts likely view this agreement? a. This agreement would not be allowed in any state because it would severely limit Neal's ability to find a job b. All agreements "not to complete" are illegal in all states c. The agreement would be upheld in some states but not in others. . d. This agreement would be upheld in all states because it protects Holder, Inc goodwill & trade secrets while allowing Neal to find other employment. .
c
Ned's father orally promises to give him a car for his twenty-first birthday. Using the rule in most states, can Ned legally enforce this promise? a. Yes, Ned can sue his father based on the promise. b. Yes, Ned can sue his promise based on the statute of frauds. c. No, a gift promise is unenforceable. d. No, Ned should have gotten the promise in writing.
c
Which of the following is not a collateral promise? a. A mother tells the gas station to extend $1,000 worth of credit to her son over the school year and says, "If he doesn't pay, I will." b. Brett promises Denny's bank that if Denny cannot pay his bills, Brett will. c. A father tells Best Computer to deliver a laptop to his son and says, "Send me the bill. I'll pay for it." d. All of these are correct.
c
Which of the following is required in order to recover in quasi contract? a. An implied or express promise b. A valid contract c. Acceptance or retention of a benefit conferred on the defendant by the plaintiff d. A voidable contract
c. Acceptance or retention of a benefit conferred on the defendant by the plaintiff
Cinnful Buns, Inc. entered into a contract with Darius under the terms of which Darius would receive $10,000 if he stole the trade secret recipe from their leading competitor. Darius performed his end of the agreement by delivering the recipe. Cinnful Bunns now refuses to pay Darius for his services. Darius has this option, he: a. may recover based upon the express contract of the parties. b. may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of Cinnful. c. will be able to recover based upon promissory estoppel, d. will be unable to recover, because this is an illegal contract.
d
General contract provisions of a writing must: a. specify the parties to a contract. b. specify the subject matter and essential terms. c. be signed by the party to be charged or his agent. d. All of these are correc
d
In determining the meaning of an ambiguous contract the court will: a. ignore the issue of who drafted the contract. b. treat the parties equally in terms of strict interpretation. c. interpret the contract strictly against the person who failed to draft it. d. interpret the contract strictly against the person who drafted it.
d
JTC Maintenance was hired by Millie's Eateries to perform basic maintenance at all of their locations for a set annual fee for a 5 year period. 2 years into the agreement, Millie's Eateries began to expand and went from 10 locations to 75 locations in a 3 state area. This greatly increased the cost to JTC Maintenance and they were losing money on the contract so they asked for more money. Millie's Eateries agreed to pay JTC an extra 20% to travel to the other states. But when the checks came, there was no increase. What is the likely result of this situation? a. The current contract will likely stand with no increase for JTC b. An Illusory promise exists to give JTC the increase c. Promissory Estoppel would negate the original contract d. A good-faith adjustment could require Millie's Eateries to renegotiate the contract
d
Juliet has wagered $500, which Lance, as her bookie, is holding, on a prize fight. If, before the fight starts, Juliet wants to take back her money and withdraw from the transaction: a. Lance can successfully sue for breach. b. Juliet, by law, cannot withdraw from the transaction. c. Lance, by law, cannot withdraw from the transaction. d. Juliet cannot sue to recover any money because the contract to wager is illegal and unenforceable.
d
Kristen is working with her wedding planner to find a caterer for her wedding. The wedding planner recommends "Cakes & Cookies" saying that she has used them before at several weddings and the food was really good so Kristen hired them on this recommendation. But at the reception, the food did not taste good and many guests threw it away. Kristen sued the wedding planner saying that she relied on her recommendation and wants the money back that she paid to the caterer. What is the likely outcome? a. The wedding planner is guilty of fraud and will be responsible b. The wedding planner is guilty of negligent misrepresentation. c. The wedding planner will not be liable based on the status quo ante rule d. The wedding planner will not be liable because it was a statement of opinion
d
Nila is working hard on Sam's election campaign for the legislature. She thinks that just a few more votes could win the election, so she promises to pay her friend Daphne $50 if she will register and vote for Sam. Daphne does so, but Sam loses the election, and Nila now refuses to pay. This: a. agreement is enforceable. b. is an unconscionable contract covered by the UCC. c. is an agreement of contract adhesion. d. agreement is unenforceable and opposed to public policy.
d
Which of the following would meet the signature requirement for a writing to satisfy the statute of frauds? a. Initials of both parties. b. An electronic signature. c. A printed name. d. All of these are correct.
d
Bill surfs the net and finds a website for some awesome bikes. He notices that the bikes cost less online than they do in the local bike store in his home town. Bill orders the bike online and pays for it using his credit card. Bill receives an email telling him that his order has been accepted and that the bike is being shipped. Bill then decides that he really can't afford the bike and tries to cancel the order. He does not hear back from the seller and he sees that his credit card has been charged for the bike. The bike arrives the next day. Bill: a. has a legally binding agreement with the online seller that has been executed. b. can return the bike when it arrives because he tried to cancel his order. c. can get his money back because this was not a contract. d. can get his money back because he did not read all of the terms of the sale that were on the website.
has a legally binding agreement with the online seller that has been executed.
Under the so-called __________, a properly addressed, postage-paid mailed acceptance takes effect when the acceptance is?
mailbox rule, placed into the control of the U.S. Postal Service
When the __________ of the promisor's promise to pay the debt of another is to benefit the promisor, the statute of frauds is not applicable.
main purpose
Aaron's boss offers to pay him $500 if he will pretend he is sick so that he does not have to show up for jury duty, but will go to work instead. Aaron knows that this is against the law, but he would rather be paid $500 from his boss than the $30 that the court will pay him for jury duty. Aaron calls in sick and is excused from jury duty. This agreement between Aaron and his boss is:
not a contract
A noncompete agreement may be held invalid, the courts insist that the employer demonstrate that the restriction is __________ to protect the employer's legitimate interest without overly restricting the employee's ability to find another job.
reasonable and necessary
If a party is successful in suing for quasi contract, that party can recover:
the reasonable value of the benefit conferred upon the defendant
