Business Law Test 2

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 ________________.

9:02 Monday; 4:30 p.m. Tuesday

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?

$6,000 because she agreed to the higher price

________________ is what each party to a contract gives up to the other in making their agreement.

Consideration

Contracts under seal

Contract executed by affixing a seal or making an impression on the paper or on some adhering substance such as wax attached to the document.

Implied Contract

Contract expressed by conduct or implied or deduced from the facts.

Output Contract

Contract of a producer to sell its entire production or output to a given buyer.

Requirements Contract

Contract to buy all requirements of the buyer from the seller

Option Contract

Contract to hold an offer to make a contract open for a fixed period of time

Unilateral Contracts

Contract under which only one party makes a promise.

Quasi Contract

Court-imposed obligation to prevent unjust enrichment in the absence of a contract.

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?

Courts will generally not consider the adequacy of consideration.

Which of the following is true of an auction sale? a) In 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.

The main issue in the Puget Sound Service Corp. v. Dalarna Management Corp. case was an issue with water damage to a building that was being sold. The court had to decide the issue of whether:

Dalarna's failure to disclose the extent of the water damage to the building constituted fraud in the case.

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?

He would be responsible for the fine, even if he didn't know what he was doing.

What rule of law did the court apply in the Shurgard Storage Centers v. Lipton-U City, LLC?

If a material mistake of fact made by one party is known to the other party (or should be obvious), the mistaken party has a right to a recission.

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.

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, they didn't have the money to pay the bill and the hospital sued. Who is responsible for the bill?

Jamal because the treatment was a "necessarie"

Which of the following will terminate an offer?

Lapse of time.

_______________ means doing that which the pormiser was under no prior legal obligation to do.

Legal detriment

Madeline, age 17, ordered a pair of diamond earring son 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?

Samantha is still liable because selling the earrings amounted to a ratification.

Informal (or simple) contracts

Simple oral or written contract.

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.

Privity

Succession or chain of relationship to the same thing or right, such as privity of contract, privity of estate, privity of possession.

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 the $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?

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.

Brandon, 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 and 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 probably be the result of this situation?

The contract is not voidable because Braydon was running a business.

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 Caitlin should have held the car until she came up with the money. What is the likely outcome of this dispute?

The contract was terminated when Maria didn't pay by the agreed upon deadline.

The offeree rejcts the offer when she ignores the original offer and replies with a different offer. What is this called?

The counteroffer.

Which of the following statements best describes the rule of law that the court applied in Peddy v. Montgomery?

The court examined the constitutionality of a contract that treated married women different than married men and unmarried women.

Myles is a writer and 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 idea is worth. Just before publishing, Myles again offers to pay Drew, but he declines payment. When the book becomes a success, Drew dues Myles for $1 million for using his ideas. What is the likely outcome?

The discussion did not create a contract because the discussion was indefinite and vague.

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.

What is a requirement of an express contract?

The terms are stated in words.

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?

The wedding planner will not be liable because it was a statement of opinion.

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?

This would be considered forbearance and thus consideration.

A bilateral contract is essentially an exchange of promises.

True

A claim of undue influence will be unsuccessful unless the contracting parties have a close relationship of trust.

True

A contract is essentially an agreement that creates an obligation.

True

A person who has drank too much alcohol at a party and signs a contract may be able to rescind that contract.

True

A person who makes a promise is the promisor, while the person to whom the promise is made is the promisee.

True

A quasi contract may arise in a situation in which no contract exists.

True

A unilateral mistake as to a fact does not affect the contract when the mistake is unknown to the other contracting party.

True

An executed contract is an agreement that has been completely performed.

True

An implied contract is one in which the agreement is shown not by words, written or spoken, but by the acts and conduct of the parties.

True

An incompetent person may ordinarily avoid a contract in the same manner as a minor.

True

An option contract gives one of the parties an absolute right to enter into a second contract at a later date.

True

As a general rule, the nondisclosure of information that is not asked for does not impose fraud liability or impair the validity of a contract.

True

Consideration is what a promisor demands and receives as the price for a promise.

True

If an offer is indefinite or vague, no contract arises from an attempt to accept it.

True

In most states, promises made to another based on moral obligation lack consideration and are not enforceable.

True

In order for fraud liability to arise, the listener must actually rely on the false statement of fact.

True

Negotiable instruments are examples of formal contracts.

True

One promise may serve as consideration for many return promises.

True

Ordinarily, a party to a contract has no duty to volunteer information to the other party.

True

Ordinarily, doing or promising to do what one is already under a legal obligation to do is not consideration.

True

Ordinarily, every party to a contract is presumed to have contractual capacity until the contrary is shown.

True

Past benefits already received by a promisor cannot be consideration for a later promise.

True

Ratification consists of any words or conduct of a former minor manifesting an intent to be bound by the terms of a contract made while a minor.

True

The fact that the consideration supplied by one party is slight when compared with the burden undertaken by the other party is immaterial.

True

There is consideration for a partial payment by a debtor in satisfaction of a debt when the payment is made before the debt is due.

True

To make an offer, the offeror must appear to intend to create a binding obligation.

True

Under the doctrine of promissory estoppel, a promisor may be prevented from asserting that his or her promise is unenforceable because the promisee gave no consideration for the promise.

True

When a contract sets a price for services rendered, a plaintiff cannot sue for reasonable value.

True

When it is claimed that a contract is too indefinite to be enforced, a court will do its best to find the intent of the parties and thereby reach the conclusion that the contract is not too indefinite.

True

When necessary medical care is provided to a minor, a parent is liable at common law for the medical expenses provided the minor child.

True

With regard to a unilateral contract, the offeree does not accept the offer by express agreement, but rather by perfromance.

True

Chris started working at age 15 and 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 dealer then requested that he return the car. What is Chris' obligation in this situation?

Under status quo ante, Chris must return the car if he does not pay for it.

Taylor bought several lottery tickets at the local quick-stop store. What type of contract is this?

Unilateral contract

Acceptance

Unqualified assent to the act or proposal of another; as the acceptance of a draft (bill of exchange) of an offer to make a contract, of goods delivered by the seller, or of a gift or deed.

When the court ruled on In Re Plankenhorn what issue did the court consider for its ruling?

Whether there was a shared understanding between the parties on the quality of the workmanship.

Formal contracts

Written contracts or agreements whose formality signifies the parties' intention to abide by the terms.

In the matter of Wilcox Manufacturing, Inc. v. Marketing Services of Indiana, Inc. the court examined the issue of mental capacity to contract. Did the court enforce the judgement over the defendant's claim of lack of capacity?

Yes, the acts of a person of unsound mind are voidable until his capacity is judicially ascertained. After Wilcox regained his capacity he did not disaffirm the contract, but continued to make payments.

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 bean 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 good-faith adjustment could require Millie's Eateries to renegotiate the contract.

What is the capacity of a person adjudicated incompetent by a court order?

A merchant might be able to recover the fair value of any necessaries. The person's own contracts are void. The guardian may be able to ratify contracts made by the ward.

If an offer has no stated time by which it must be accepted, when does the offer terminate?

After a reasonable period of time.

Executory Contract

Agreement by which something remains to be done by one or both parties

Divisible Contract

Agreement consisting of two or more parts, each calling for corresponding performances of each part by the parites.

Express Contract

Agreement of the parties manifested by their words, whether spoken or written.

Void Agreement

Agreement that cannot be enforced.

Executed Contract

Agreement that has been completely performed.

Valid contract

Agreement that is binding and enforceable.

Voidable Contract

Agreement that is otherwise binding and enforceable but may be rejected at the option of one of the parties as the result of specific circumstances.

Bilateral Contract

Agreement under which one promise is given in exchange for another.

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.

Tanner posted a guitar for sale online. 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?

Andre would not have to pay because no contract was formed due to lack of specific terms.

Quantum Meruit

As much as deserved; an action brought for the value of the services rendered the defendant when there was no express contract as to the purchase price.

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.

a) While still a minor, he can disaffirm the contract and return the property.

Contractual Capacity

ability to understand that a contract is being made and to understand its general meaning.

A(n) ______________ is the offeree's manifestation of intent to enter into a binding agreement on the terms stated in the offer.

acceptance

Ordinarily, courts do not consider the ________________ of the consideration given for a promise.

adequacy

A valid contract is:

an agreement between two or more parties that the law will enforce.

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

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.

If both parties exchange promises, the contract is:

bilateral.

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?

d. Daryl would have to pay $30,000 even though the addition was not part of the original contract.

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. Refraining from smoking cigarettes.

A minor may avoid or ______________ a contract by any expression of an intention to repudiate the contract.

disaffirm

The fact that the consideration turns out to be disappointing _____________________ the binding character of the contract.

does not affect

A contract where neither party has performed (or done what the party promised to do) is:

executory.

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:

has a legally binding agreement with the online seller that has been executed.

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:

void.

A legally binding agreement that can be avoided by one of the parties is called a:

voidable contract.

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:

when Bob accepts Sally's offer

The court in In re Delphi Corp. considered which issue:

whether Automodular was entitled to an increase in price after production was reduced in requirements contract ordered by Delphi.

One issue before the court in Crookham & Vessels, Inc v. Larry Moyer Trucking, Inc. case was:

whether Moyer was obligated to dig the ditches after they failed as a continuation of his original contract.

One issue before the court in Wigod v. Wells Fargo Bank case was:

whether Wells Fargo Bank intended to offer Wigod a permanent mortgage modification.

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:

would be voidable if she is unable to comprehend the subject, nature, and consequences of the contract at the time she made them.

BigOil promises Gasnow as many barrels of oil as they want at $50 per barrel. In this case:

BigOil has made an illusory promise.

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.

Harry has made a counteroffer. Unless Bill accepts the counteroffer, there is no contract.

Contract

A binding agreement based on the genuine assent of the parties, made for a lawful object, between competent parties, in the form required by law, and generally supported by consideration.

Katie's car is a gas-guzzler and she is looking for a used hybrid car to buy to take on her cross-country trip. Katie makes a deal to buy her friend Heather's Prius in 1 week so that Katie has time to sell her current car and leave on her trip the following day. They spent that week talking about the car and how to take care of it. Katie shared her plans for the trip. When Katie shows up on the agreed upon day with the money, her friend Heather says she no longer wants to sell the car. Katie now cannot go on her trip and has sold her own car in anticipation of buying the Prius. Katie will lose several hotel deposits that she made because she cannot get a car in time to leave for her trip that day. Under what reasoning could Katie sue to get the car and the money she lost by not being able to make the trip?

Detrimental reliance

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?

Divisible

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

Offer

Expression of an offeror's willingness to enter into a contractual agreement.

A binding contract cannot contain a cancellation provision.

False

A contract obtained by physical duress is void.

False

A contract of record arises when the accountant of one of the parties has made an entry of the contract in the business record of that party.

False

A party who speaks with a reckless disregard for the truth not knowing of the falsity of his or her words cannot be liable for fraud.

False

A promise to make a gift is enforceable.

False

A void contract is one that is otherwise valid but may be rejected or set aside by one of the parties.

False

An agreement cannot be enforced if it does not set forth every contractual detail.

False

An offer may be made only to a specific person.

False

An unenforceable promise will constitute consideration as long as the parties to the contract appear to be in agreement.

False

Because transfer of value is essential to a valid contract, contracts cannot arise in the performance of personal services.

False

Factual incapacity is imposed because of the class or group to which a person belongs.

False

Generally, a promise is legally enforceable even if nothing is given or received for the promise.

False

Generally, advertisements, catalog prices, and circulars are offers that can be accepted.

False

Generally, when a person of legal age makes a contract with a minor, the contract is voidable by either party.

False

In a contract for the sale of goods, any modification made by the parties to the contract must be supported by consideration to be binding.

False

Sara Student wished to pay off her $5,000 student loan. If she sends in a check for $3,000 and the creditor cashes the check, the debt will be fully satisfied provided the check is marked "paid in full".

False

Social invitations can be offers.

False

The doctrine of promissory estoppel is also known as the doctrine of beneficial reliance.

False

When a minor avoids contracts, the minor always must return the other contracting parties to their original financial positions.

False

Whenever a person receives a benefit for which payment has not been made, there is an unjust enrichment and the value of such benefit must be paid to the person conferring the benefit.

False

Which of the following is most likely to be classified as a necessary for which a minor will be held liable on a contract?

Food

_________________ is an unenforceable promise under the law of contract because of a lack of consideration.

Gift

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 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?

Louie does not have to pay the contract price, but does need to pay the reasonable value of the painters' services.

Mr. Benson owns an apartment building where several of the bathrooms have such bad leaks and the floors are rotting. He needs to lease the apartments to keep from losing money so he puts down a new floor without repairing the leaks and rents the apartments. A few weeks later the tenants complain about the leaks and want a refund. What is the likely result of this situation?

Mr. Benson would likely be liable based on active concealment.

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?

No because it is already illegal for Bethany to drink until she turns 21.

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

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?

No contract was formed because Cierra is not the one selling the house.

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?

No, a gift promise is unenforceable.

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 toe dog. Is Marcia's promise binding?

No, because there was no bargained for exchange.

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?

No, if the check is marked "paid in full" and references the transaction.

The Jones' have always admired a house that sits on the top of a hill owned by the Smith's. Martin is a mutual friend of both the Jones' and the Smith's. One day, Martin mentions to the Smith's how much the Jones' would love to buy the Smith home. The Smith's 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 Smith's to accept the Smith's offer to sell. Have the Smith's made an offer to sell their home to the Jones'?

No. The Smith's did not objectively intend to make an offer because they did not clearly state they were willing to sell the house.

Recognizance

Obligation entered into before a court to do some act, such as to appear at a later date for a hearing. Also called a contract of record.

Firm Offer

Offer stated to be held open for a specified time, under the UCC, with respect to merchants.

Who may accept an offer?

Only the person to whom a offer is made may accept it.

What was the legal reasoning behind the Court's decision in PIC Realty Corp v. Southfield Farms, Inc., to make PIC pay Southfield for work that Southfield had done that PIC did not request or agree to?

PIC received a benefit that it should have known Southfield was conferring on it because of the customary practice for farm tenants to cultivate land for the upcoming year and for landlords to pay for it, and it would be unjust for PIC not to pay Southfield.

Promisee

Person to whom a promise is made.

Offeree

Person to whom an offer is made.

Promisor

Person who makes a promise.

Offeror

Person who makes an offer.

Obligee

Promisee who can claim the benefit of the obligation.

Obligor

Promisor

Counteroffer

Proposal by an offeree to the offeror that changes the terms of, and thus rejects, the original offer.

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?

Randi has no duty to volunteer information that is not asked.

Right of First Refusal

Right of a party to meet the terms of a proposed contract before it is executed, such as a real estate purchase agreement.

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?

Sam can revoke his offer to Bob at any time so long as there has been no acceptance.

Which of the following is not always necessary in order for a valid contract to be formed? a. Mutual assent b. Legality of purpose c. A writing d. Consideration

c. A writing

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

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. an illusory promise.

Duress

conduct that deprives the victim of free will and that generally gives the victim the right to set aside any transaction entered into under such circumstances.

Joe send for a MBA catalog from State University. According to the catalog, the MBA applications are evaluated on the basis of undergraduate grades, GMAT (the appropriate standardized test) scores, and references, and will be accepted if they have a B average, a minimum articulated score on the GMAT and at least two good references. Joe has a 3.1 GPA, scores very well on the GMAT, and has three excellent references. Based on the criteria listed in the catalog, Joe 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 with the University. If Joe followed all of the guidelines in the college catalog and paid the required application fee, then according to the court in Aon Risk Services, Inc. v. Meadors,

here is a valid unilateral contract.

Undue Influence

influence that is asserted upon another person by one who dominates that person.

Fraud

intentional making a false statement of fact, with knowledge or reckless indifference that it is false with resulting reliance by another.

Retail stores typically put advertisements in newspapers describing goods and stating prices. These ads are generally considered to be:

invitations to buyers to make an offer to buy the goods educated.

Every adult is presumed to have capacity unless:

it is proven that capacity is lacking or there is status incapacity.

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

Bertha was an alcoholic, and 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:

must sober up and ratify the contract as a whole.

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.

Sometimes both parties make a mistake of judgement, then the contract is:

not voidable by the adversely affected party

As an exception to the rule on courts inquiring as to the adequacy of the consideration, a court will take evidence to establish:

one party claims to have been defrauded

Joe takes his car into the repair shop to have his tires realigned. While he is waiting for his car, he sees the repairmen take his car to the area where they change the car's oil. Joe tries to get their attention but cannot because he is not allowed in the repair area and there is too much noise in there for the repairmen to hear him knocking on the window. The car is then taken to the area where the tires are realigned. Joe watches while the tires are realigned. The employees next take Joe's car to be washed. Joe asks another customer in the waiting room if the car wash is complimentary. The customer points to the sign above the counter listing prices for services, including the car wash. Joe does not bother trying to get the attention of the repairmen because he was not successful before, but he does approach the cashier who has just returned from break. Joe tells the cashier he did not want the car washed. The cashier tells him it's too late because the car is already being washed. When Joe is presented with the bill, there is a charge for the oil change, the realignment, and the car wash. If challenged in court, the court will most likely require Joe to pay for:

only the realignment because that is all he contracted for.

Status quo ante

original positions of the parties.

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.

Confidential Relationship

relationship in which, because of the legal status of the parties or their respective physical or mental conditions or knowledge, one party places full confidence and trust in the other.

Reformation

remedy by which a written instrument is corrected when it fails to express the actual intent of both parties because of fraud, accident, or mistake.

Making a purchase online:

should follow the same rules with respect to contracts as any other purchase.

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.

Joe takes his car into the repair shop to have his tires realigned. While he is waiting for his car, he sees the repairman take his car to the area where they change the car's oil. The car is then taken to the are where the tires are realigned. Joe watches while the tires are realigned. The employees next take Joe's car to be washed. Joe did not know his car would be washed, but knows that many car repair businesses have a practice of cleaning the cars at no additional cost to the customer after completing the repair work. When Joe is presented with the bill, there is a charge for the oil change, the realignment, and the car wash. According to the courts in PIC Realty Corp. v. Southfield Farms, Inc., the court is most likely to make Joe pay for:

the contract price of the realignment because that is what he contracted for and the reasonable value of the oil change under the doctrine of quasi contract.

The court in Angel v. Murray ruled as follows:

the court decided for the city and Maher as the increase in Maher's workload was unforseen at the outset of the contract.

Quotations of prices, even when sent on request, are likewise not offers unless:

the parties have had previous dealings unless a trade custom exists that would give the recipient of the quotation reason to believe that an offer

If a party is successful in suing for quasi contract, that party can recover:

the reasonable value of the benefit conferred upon the defendant.

The main issue in the Schmidt v. Prince George's Hospital case was payment for the medical services. In order to answer that question, the court had to decide the issue of whether:

the services render where a necessary under the law.

Proof of fraud requires each of the following, except:

there is liability whether anyone is harmed or not.

Necessaries

things indispensable or absolutely necessary for the sustenance of human life.

Economic duress

threat of financial loss.

Physical Duress

threat of physical harm to person or property.