Business Law Final - Old Quizzes

Which of the following statements is true about a counteroffer? A. A counteroffer terminates the existing offer. B. An offeree who makes a counteroffer is still considered the offeree. C. A counteroffer is effective even before it has been received by the original offeror. D. A counteroffer can only be made by the original offeror.

A. A counteroffer terminates the existing offer.

In terms of the doctrine of quasi-contract, which of the following statements is true? A. It is an equitable doctrine intended to prevent unjust enrichment. B. The agreement between the parties to a quasi-contract is inferred from their conduct. C. It allows a court to award damages to the defendant even though no actual contract existed between the parties. D. It only applies to situations involving an enforceable contract between the parties.

A. It is an equitable doctrine intended to prevent unjust enrichment.

Which of the following is acceptable consideration for a contract? A. money B. a penalty C. an arrest D. a sentence

A. money

Which of the following is true of covenants and conditions? A. A contract cannot contain conditions that excuse performance. B. A covenant is a conditional promise to perform. C. A conditional promise becomes a covenant if the condition is met. D. A party cannot sue the other party for breach of a covenant.

C. A conditional promise becomes a covenant if the condition is met.

Martha contacts a bakery to get a cake for her son's birthday party. She tells the baker that she will pay him $150 for the cake if he delivers the cake on Friday evening. If the baker does not deliver the cake on Friday evening, which of the following is accurate? A. Martha can sue the baker but cannot recover damages. B. Martha can sue the baker and recover $150 in damages. C. Martha cannot sue the baker. D. The baker must pay Martha $150 plus the cost of a replacement cake, as he entered into a verbal contract with her and did not perform his legal obligation.

C. Martha cannot sue the baker.

In order to prove fraud, which of these elements must be shown? A. The innocent party knew the wrongdoer. B. The innocent party detected the misrepresentation prior to the contract's formation. C. The innocent party justifiably relied on the wrongdoer's misrepresentation. D. The wrongdoer assumed a false identity.

C. The innocent party justifiably relied on the wrongdoer's misrepresentation.

Which of these is NOT one of the three types of performance of a contract? A. substantial performance B. complete performance C. adaptive performance D. inferior performance

C. adaptive performance

Which of the following contracts are required to be in writing in most states? A. contracts for the sale of goods priced at $100 B. handshake deals C. promises to transfer an ownership interest in real property D. contracts for the lease of goods with payments of $500

C. promises to transfer an ownership interest in real property

Which of the following statements is true of a breach of contract? A. Inferior performance constitutes a minor breach of contract. B. The most common remedy for a breach of contract is an award of equitable remedies. C. Substantial performance constitutes a material breach. D. Strict performance by a party discharges that party's obligations under the contract.

D. Strict performance by a party discharges that party's obligations under the contract.

Which of the following is true for an auction with reserve? A. A bid cannot be withdrawn and is legally binding from the moment it is made. B. An auctioned item cannot be withdrawn from the auction after an offer has been made. C. An invitation to make an offer is not allowed. D. The seller retains the right to refuse the highest bid and withdraw the goods from sale.

D. The seller retains the right to refuse the highest bid and withdraw the goods from sale.

A contract in which an agreement between the parties is inferred from their conduct is known as a(n) ________ contract.

D. implied-in-fact

________ is a situation in which one party threatens to do a wrongful act unless the other party enters into a contract.

Duress

Karen borrows $10,000 from Celeste. Karen is to pay Celeste the principal amount, with 8 percent interest, over the next five years in 60 equal monthly payments. After one year of receiving proper payments from Karen, Celeste assigns this right to receive future payments to Larry. Who has the duty to notify Karen about the assignment?

Larry

In terms of a contract's enforcement, which of the following is true? A. A contract is only considered valid if it is enforceable by both parties. B. An unenforceable contract allows at least one party the option to void his or her contract obligations. C. Parties may voluntarily perform a contract that is unenforceable. D. Void contracts are enforceable in cases involving mutual mistake.

Parties may voluntarily perform a contract that is unenforceable.

Which of the following is true of a contract with an adjudged insane person?

The contract is void.

What is a recognizance?

a party's agreement to pay a sum of money if another person does not pay it

An agreement whereby the parties agree to settle a contract dispute by accepting something different than in the original contract, and the subsequent performance of this agreement, is called a(n) ________.

accord and satisfaction

In general, third parties do not acquire any rights under other people's contracts. Two exceptions include those for ________.

assignees and intended third-party beneficiaries

An obligee who transfers a right is known as a(n) ________.

assignor

Why does an illusory contract lack consideration?

because one or both of the parties can choose not to perform their contractual obligations

A contract is a(n) ________ contract if the offeror's promise is answered with the offeree's promise of acceptance.

bilateral

A(n) ________ contract is a contract entered into by way of an exchange of promises between the parties.

bilateral

A(n) ________ is a response by an offeree that contains terms and conditions different from or in addition to those of the offer.

counteroffer

A contract into which parties enter but in which one or both of the parties can choose not to perform their contractual obligations is said to involve ________ promises.

illusory

A preexisting duty ________ consideration to support a new contract.

is not sufficient

Inferior performance is also called ________.

material breach

A ________ is a clause in a contract which stipulates that the contract is a complete integration and the exclusive expression of the parties' agreement.

merger clause/integration clause

Enforceable contracts ________ arise from a bargained-for exchange.

must

A(n) ________ exists if both parties know the object of the contract but are mistaken as to its value.

mutual mistake of value

Kimlon Informatics is owed $5,000 from a client for its services. The recovery period is 100 days, but Kimlon needs the money immediately. It sells the right of collecting money from its client to Quikcollect, a collection agency. Here, Kimlon Informatics is the ________.

obligee

A party who owes a duty of performance under a contract is called the ________.

obligor

The ________ states that if a written contract is a complete and final statement of the parties' agreement, any prior or contemporaneous oral or written statements that alter, contradict, or are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract.

parol evidence rule

The doctrine of ________ allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid injustice.

part performance

According to the objective theory of contracts, the intent to enter into a contract is judged by the ________.

reasonable person standard

________ refers to an equitable doctrine that permits the court to rewrite a contract to express the parties' true intentions.

reformation

An offeror can ________ an offer by withdrawing the offer prior to its acceptance.

revoke

A contract is said to have legal value if ________.

the promisee suffers a legal detriment

A(n) ________ is a contract that courts refuse to enforce in part or at all because it is so oppressive or manifestly unfair as to be unjust.

unconscionable contract

If a contract is required to be in writing under the Statute of Frauds but is not, the contract is ________.

unenforceable

Two brothers, Sam and Jim, were fighting over the division of their ancestral property. After ten years of legal battle, a frustrated Sam contacted a powerful politician who subjected Jim to extreme duress, forcing him to sign a contract in favor of Sam. When Sam takes this contract to court, the contract will be declared ________.

voidable

While Harry was intoxicated, he sold his car to Ben for substantially less than its fair market value. This contract is considered ________.

voidable