[COMPLETE] Business Law CH. 13,14,17,18 SB & Key Terms

equal dignity rule

A rule requiring that contracts that would normally fall under the statute of frauds and need a writing if negotiated by the principal must be in writing even if negotiated by an agent.

A contract may not be enforced under which of the following situations?

Genuine assent to the offer does not occur.

What section of the Uniform Commercial Code (UCC) requires contracts for the sale of goods in excess of $500 to be in writing?

Section 2-201

intentional misrepresentation

See fraudulent misrepresentation.

All but which of the following is true regarding silence as a means of acceptance of an offer?

Silence can be acceptance if the offeror demonstrates the benefits of the offered services with reasonable expectation to be compensated.

When one party is forced into an agreement by the wrongful act of another party, it is known as:

duress

Article 2 of the Uniform Commercial Code (UCC) governs contracts for the sale of: ______.

goods

If a unilateral mistake has been made about a material fact of the contract, the courts are ______ the contract

hesitant to void

In case of the death of the offeror, the offer terminates

immediately

A(n) _______ contract arises not from words, but from the conduct of the parties.

implied

A false statement about a material fact that was based on an innocent belief that the false statement was true is a(n):

innocent misrepresentation

A(n) _______ results from a false statement about a fact material to an agreement that the person making it believed to be true.

innocent misrepresentation

Basing the existence of a contract on the parties' outward manifestations of intent and basing the interpretation of that intent on how a reasonable person would interpret it is known as the: Blank______.

objective theory of contracts

An agreement is based upon

offer and an acceptance.

Knowing whether a contract is bilateral or unilateral is important because the classification determines when the:

offeree is legally bound to perform

Formation of a contract begins when the party initiating the contract, called the _______, makes an offer to another party, called the _______.

offeror; offeree

The elements of a contract include all but which of the following?

A writing

integrated contract

A written contract intended to be the complete and final representation of the parties' agreement.

negotiable instrument

A written document signed by a person who makes an unconditional promise to pay a specific sum of money on demand or at a certain time to the holder of the instrument; an acceptable medium for exchanging value from one person to another.

A special relationship in which one person takes advantage of a dominant position in a relationship to unfairly persuade the other and interfere with that person's ability to make his or her own decision to enter into a contract is known as:

undue influence

Jack and Jill entered into a contract with Farmer Dell to fetch pails of water from his well to the barn. For each pail of water they delivered down the hill and to the barn, they were to be paid $10 per pail. The contract specified that they were to work five days a week for a whole month. During the last week, Farmer Dell failed to pay Jack and Jill. The matter went to court, and the court ordered Farmer Dell to pay Jack and Jill because the contract was:

valid

A mistake can be of two types. One is a mistake of fact about the deal. The other is a mistake of the ______ of what is being exchanged.

value

A _______ contract is, in effect, not a contract at all because its object is illegal, or it has a defect so serious that the agreement is not a contract at all.

void

If courts determine that the parties have not given legal assent, the contract may be considered _______.

voidable

misrepresentation

An untruthful assertion by one of the parties about a material fact.

duress

Any unlawful act or threat exercised on a person whereby the person is forced to enter into an agreement or to perform some other act against his or her will.

If a contract is for the sale of goods, the law that governs the contract is: _______.

Article 2 of the UCC, which governs contracts for the sale of goods

_______ is when the means by which acceptance can occur is expressly stated in the offer.

Express authorization

Felipe, Adam, and Shirley are neighbors. Felipe overhears Adam's offer to sell an antique clock to Shirley for $3,000. Under these circumstances,

Felipe makes a new offer to Adam when he offers to buy the clock for $3,000. The offer must be communicated to the offeree or the offeree's agent. Only the offeree (or his agent acting on his behalf) can accept the offer.

condition precedent

In a contract, an event that must occur in order for a party's duty to arise.

communication

In a contract, an offer made to the offeree or the offeree's agent.

termination

In a contract, the point at which an offer can no longer be accepted as part of a binding agreement or an offeree no longer has the power to form a legally binding contract by accepting the offer; can occur through revocation by the offeror, rejection by the offeree, death or incapacity of the offeror, destruction or subsequent illegality of the subject matter of the offer, or lapse of time or failure of another condition stated in the offer.

material terms

In a contract, the terms that allow a court to determine what the damages are in the event that one of the parties breaches the contract; include the subject matter, quantity, price, quality, and parties.

What type of contract is intended to be a complete and final representation of the parties' agreement?

Integrated

Which of the following references the requirement that a contract not be either illegal or against public policy?

Legal object

Amy offers to paint Louis's house for $1,000. The offer stated that acceptance in person was required. Within a reasonable time, Louis e-mailed Amy his acceptance. Which of the following statements is true about this situation?

Louis has not accepted the offer as required by the offeror, and there is no contract.

Melinda signs a three year contract for employment as a legal studies lecturer. Does this type of contract fall within the scope of the statute of frauds?

Yes, because it is a contract whose terms prevent possible performance within one year

A secondary obligation, which falls within the scope of the statute of frauds writing requirement, occurs when a party outside a primary agreement promises to fulfill one of the original party's (primary debtor's) obligations if the original party fails to fulfill it. A secondary obligation is also called a _______ promise.

collateral or suretyship

Secondary obligations are also known as:

collateral promises suretyship promises

If a contract involves the sale of goods, it is governed by the Uniform Commercial Code (UCC). All other contracts are governed by:

common law

The law of contracts is primarily:

common law

Sources of contract law include

common law and the Uniform Commercial Code.

Removing 10,000 miles from the odometer on a pre-owned car before selling it is an example of

concealment.

A(n) ______ is a statement made in court, under oath, or at some stage in a legal proceeding in which one party against whom charges have been brought admits that an oral contract existed, even though the contract was required to be in writing. Multiple choice question.

admission

If there is a an obvious typographical error in a written contract, the court will:

admit parol evidence to correct it

If a written agreement has missing parts, the court will:

admit parol evidence to fill in missing parts

If oral evidence is being offered to clarify an ambiguous term in a written contract, the court will:

admit the oral evidence

Alyssa was a severe schizophrenic who had to be institutionalized. Alyssa's cousin, Marlene, told Alyssa that she would buy her house for $10,000. Alyssa agreed and Marlene gave her the $10,000. Just as she was going to take possession of the house, Alyssa's brother stepped in and claimed that there was no contract between Alyssa and Marlene. The matter went to court and the court agreed with Alyssa's brother, stating that there was no contract due to one missing element. The missing element is: Blank______.

capacity

The most important sources of contract law are :

case law. the CISG. the UCC.

If the written contract has ambiguous terms, the court allows oral evidence for the purpose of:

clarifying the contract

When a contract has been fully performed, it is a(n): ______ contract

executed

Philip promises to tutor Erin for $25 an hour. Philip has tutored Erin but she has not paid. This contract is ______.

executory

The terms of ______ contracts are all clearly set forth in either written or spoken terms

express

Susan contracted with the owner of a local clothing shop to sell her knitted hats and gloves. All terms, including delivery date, quantity, selling price, etc., were clearly specified. When terms are clearly specified in the contract, this is known as a(n): Blank______.

express contract

Identify a defense to the enforcement of a contract.

Lack of genuine assent

What are methods by which termination of a contractual offer can occur? (Check all that apply.)

Revocation by the offeror Counteroffer by the offeree

statute of frauds

State-level legislation that addresses the enforceability of contracts that fail to meet the requirements set forth in the statute; serves to protect promisors from poorly considered oral contracts by requiring that certain contracts be in writing.

Which of the following terms would be considered material terms?

Subject matter, price, parties, quality, and quantity

rejection

Termination of a contract that occurs when an offeree does not accept the offer or terms of the contract.

revocation

Termination of a contract that occurs when an offeror takes back the initial offer and annuls the opportunity for the offeree to accept the offer.

concealment

The active hiding of the truth about a material fact.

nondisclosure

The failure to provide pertinent information about a projected contract.

intent

The intended purpose or goal of an action, especially in a contract.

Under common law, what are the necessary elements of a valid contractual acceptance? (Check all that apply.)

The intent of the offeree to be bound by acceptance of the contract. The acceptance will have the definite and certain terms of the offer.

The creation of a valid contractual offer requires what elements?

The intent of the offeror for an agreement, definite terms, and the offer must be communicated to the offeree

A valid offer under common law requires which of the following elements? (Check all that apply.)

The intent to be bound by an acceptance Definite and certain terms Proper communication of the offer to the offeree

Which of the following is primarily common law?

The law of contracts

What are the elements of a contractual offer? (Check all that apply.)

The offer must be communicated to the offeree. The offer must indicate the offeror's intent to be bound by the agreement. The offer must contain definite terms.

If an offer states that it is good for thirty days, what happens in thirty days if the offeree has not responded?

The offer terminates immediately.

If there is no stated period when the offeree must accept or reject an offer, when will the offer expire?

The offer will expire after a reasonable period of time.

Which of the following is not a basic common-law requirement for a valid acceptance?

The offeree's written acceptance, dispatched by certified mail, to the offeror

What conditions would legally cause an offer to be immediately terminated? (Check all that apply.)

The offeror loses the legal capacity to be in a contract Death of the offeror

definite and certain (terms)

The requirement, under common law, that a contract must include and clearly define all material terms.

rescind

To cancel a contract.

According to the Uniform Commercial Code (UCC), which of the following contracts is enforceable even if it is an oral contract?

When a merchant sells goods to another merchant

When, generally speaking, is a revocation effective?

When it is received by the offeree.

Under the common law mirror-image rule, when is a counteroffer formed?

When the offeree's acceptance does not include all of the terms of the offeror's offer

Gordon asks Nina to paint his room purple for him for $150. Nina says she will try to get to it this week. Nina goes and gets purple paint and paints Gordon's room. Do they have a contract?

Yes, Nina accepted the unilateral contract by buying the paint and painting the room.

Contracts made in consideration of marriage ______ subject to the Statute of Frauds.

are

Under the parol evidence rule, oral testimony is inadmissible to prove certain terms or agreement if it comes: ______. (Check all that apply.)

before the existence of a written contract. at the same time as the execution of the written contract.

In a(n) ______ contract, the offeror makes a promise in return for a promise from the offeree. (Check the BEST answer)

bilateral

Stella told Jozsef that if he would pick up her mail when she was on vacation, she would pay him $50. Jozsef did as he promised and was paid $50. Since all of the terms were fully executed, this contract has been fully:

executed

With fraudulent misrepresentation, the party knows that the misrepresentation is false, yet still makes the representation to another party. This indicates that the party making the misrepresentation has:

scienter

Regarding contracts that involve an interest in land, the statute of frauds covers _____.

some transfers of interests in land

Contracts for the sale of goods totaling more than $500 must be in writing according to _______.

the Uniform Commercial Code

The title "statute of frauds" is misleading because:

there is not one statute; instead, the statute of frauds is a general collection of concepts that has been incorporated at the state level

In an option contract, the offeree gives consideration to the offeror:

to have an offer that cannot be revoked by the offeror for a period of time

Carol was the favorite niece of her aunt Esther. Esther had always loved to pamper her niece and usually indulged her in almost anything. Carol had a lot of sway over her aunt and convinced her to invest in a land development project. If Carol persuaded her aunt to sign a contract for the land deal, Carol would be given a $50,000 bonus. Carol pressured her aunt to come to a decision about the contract and prevented her aunt from consulting her attorney. Aunt Esther would normally never have engaged in such a contract, but her judgment was affected by her relationship with Carol. Carol had:

undue influence over Aunt Esther

A(n) _______ contract represents a situation where the offeror seeks performance from the offeree to form the contract.

unilateral

All contracts are either bilateral or:

unilateral

When a contract has all of the required elements and is enforceable, it is known as a(n) Blank______ contract.

valid

Parol evidence is admitted to determine whether a contract is:

voidable void

Under the mailbox rule, a revocation is effective:

when it is received by the offeree

Under the statute of frauds, which of the following statements is true of the one-year rule for contracts?

Under the statute, the one-year period begins the day after the contract is created, not when it is scheduled to begin.

_______ can occur in those special relationships in which one person takes advantage of a dominant position in a relationship to unfairly persuade the other and interfere with that person's ability to make his or her own decision.

Undue influence

According to the ______, parol evidence is admissible for the sake of clarification if it addresses prior dealings between the parties or usages of trade in the business they are in.

Uniform Commercial Code

According to the _______ rule, an acceptance is valid when the offeree places it in the mailbox, whereas a revocation is effective only when the offeree receives it.

mailbox

The ______ rule states that an acceptance is valid when mailed and a revocation is only effective when received. Multiple choice question.

mailbox

One of the benefits of the statute of frauds is that it:

makes contractual negotiations easier by ensuring all the specific terms of a contract are written and aware to all parties

An erroneous belief about the facts of a contract at the time the contract is concluded is a

mistake of fact.

To be considered exempt from the statute of frauds, a contract:

must be possibly performed in one year, even if the performance is highly unlikely

Ida and Kwame are both mistaken as to the content within their contract. This type of mistake that is shared by both parties to an agreement is a[n] _______ mistake.

mutual

Peter contracted with Abe to buy his motorcycle. Peter thought he had bought the 2019 motorcycle, but Abe had intended to sell his 2009 motorcycle. Since both parties were mistaken about a material term of the contract, this is called a ______ mistake.

mutual

A(n) _______ occurs only when the party making a false statement, without the intent to deceive, should have known the truth using the skills and competence required of a person in his position or profession.

negligent misrepresentation

If Ron makes a statement that he believes is true, but Ron could have known the truth about a material fact if he used reasonable care to find the truth, the statement that was made is known as a(n):

negligent misrepresentation

A failure to provide pertinent information about a projected contract is called

nondisclosure.

For promissory estoppel to apply, the agreement must:

not otherwise be an enforceable contract

The _______ states that we base the existence of a contract on the parties' outward manifestations of intent and we base its interpretation on how a reasonable person would interpret it.

objective theory of contracts

A counteroffer to an offer is made by the ______ to the ______.

offeree; offeror

A valid offer includes

offers communicated by the offeror to the offeree's agent.

A key feature of a voidable contract is that

one or both parties have the ability to either withdraw from or enforce the contract.

contract

A promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.

mistake of fact

(1) A mistake that is not caused by the neglect of a legal duty by the person committing the mistake but, rather, consists of unconscious ignorance of a past or present material event or circumstance. (2) An affirmative defense in which the defendant tries to prove that she or he made an honest and reasonable mistake that negates the guilty-mind element of a crime.

fraudulent misrepresentation

(1) The tort that occurs when a misrepresentation is made with intent to facilitate personal gain and with the knowledge that it is false. (2) In contracts, a false representation of a material fact that is consciously false and is intended to mislead the other party. Also called intentional misrepresentation.

legal assent

A promise to buy or sell that the courts will require that the parties obey.

letter of credit

A binding document that a buyer obtains from his or her bank to guarantee that payment for goods will be made to the seller.

merger clause

A clause in a written agreement within the statute of frauds which states that the written agreement accurately reflects the final, complete version of the agreement.

parol evidence rule

A common law rule which states that oral evidence of an agreement made prior to or contemporaneously with a written agreement is inadmissible when the parties intend to have the written agreement be the complete and final version of their agreement.

express contract

A contract in which all the terms are clearly set forth in either written or spoken words.

implied contract

A contract that arises not from words of agreement but from the conduct of the parties.

Which of the following is true of a contract? (Check all that apply.)

A contract that has all four elements of a contract may not be legally binding if it lacks genuine assent. A party can defend against the enforcement of a contract even if it has all four elements of a contract.

simple contract

A contract that is not a formal contract. Also called an informal contract.

Which of the following is not a valid exception to the statute of frauds?

A contract that is unprofitable to both parties

formal contract

A contract that must have a special form or must be created in a specific manner.

informal contract

A contract that requires no formalities. Also called simple contract.

What is the term for an offer made by the offeree to the offeror proposing a substituted bargain differing from the original proposed offer?

A counteroffer

quasi-contract

A court-imposed contractual obligation to prevent unjust enrichment.

lack of genuine assent

A defense to the agreement of a contract in which the offeree claims that the offeror secured the agreement through improper means, such as duress, fraud, undue influence, or misrepresentation.

innocent misrepresentation

A false statement made about a material fact by a person who believed the statement was true.

negligent misrepresentation

A false statement of material fact made by a person who thinks it is true but who would have known the truth about the fact had he or she used reasonable care to discover or reveal it.

acceptance

A key factor in the agreement element of a contract; consists of the agreement of one party, the offeree, to the terms of the offer in the contract made by the other party, the offeror.

offer

A key factor in the agreement element of a contract; consists of the terms and conditions set by one party, the offeror, and presented to another party, the offeree.

unilateral

A mistake that is the result of an error by one party about a material fact, that is, a fact that is important in the context of the particular contract.

mirror-image rule

A principle which holds that the terms of an acceptance must mirror the terms of the offer. If the terms of the acceptance do not mirror the terms of the offer, no contract is formed and the attempted acceptance is a counteroffer.

bilateral contract

A promise exchanged for a promise.

unilateral contract

A promise exchanged for an act.

In a bilateral contract, the offeror is expecting what action from the offeree?

A return promise

plain-meaning rule

A rule of interpretation which states that words in a contract should be given their ordinary meaning.

mailbox rule

A rule which holds that an acceptance is valid when it is placed in the mailbox, whereas a revocation is effective only when received by the offeree. In some jurisdictions the mailbox rule has been expanded to faxes.

admission

A statement made in court, under oath, or at some stage during a legal proceeding, in which a party against whom charges have been brought admits that an oral contract existed, even though the contract was required to be in writing.

Uniform Commercial Code (UCC)

A statutory source of contract law in the United States that is applicable to transactions involving the sale of goods. The UCC was created in 1952 and adopted by all 50 states, the District of Columbia, and the Virgin Islands; it may be modified by each state to reflect the wishes of the state legislature.

valid

A term applied to a contract that includes all four elements of a contract—agreement (offer and acceptance), consideration, contractual capacity, and legal object—and thus is enforceable.

void

A term applied to a contract that is not valid because its object is illegal or it has a defect that is so serious that it is not a contract.

voidable

A term applied to a contract that one or both parties have the ability to either withdraw from or enforce.

unenforceable

A term applied to a contract that, because of a law, cannot be enforced by the courts.

executory

A term applied to a contract whose terms have NOT all been fully performed.

executedPhilip promises to tutor Erin for $25 an hour. Philip has tutored Erin but she has not paid. This contract is ______.

A term applied to a contract whose terms have all been fully performed.

A contract is not formed until acceptance is received by the offeror in which of the following situations?

An unauthorized mode of acceptance is used when the offer merely authorizes certain modes of acceptance but does not require a specific mode of acceptance.

In 1677, the English Parliament passed the _______.

Act for the Prevention of Frauds and Perjuries

Match the four elements of a contract with their definition. Instructions

Agreement - A voluntary and sincere offer and the acceptance of the terms of a contract Capacity - The legal ability to enter into a contract Consideration - Something of legal value that is given for the bargained-for exchange Legal object - Contract must be for a legal purpose and not against public policy

Which of the following indicates an admission exception to the statute of frauds?

An admission is a statement under oath or as part of a legal process in which a party being sued admits the existence of a contract.

covenant not to compete

An agreement not to compete against a party for a set period of time within a designated geographic area.

prenuptial agreement

An agreement two parties enter into before marriage that clearly states the ownership rights each party enjoys in the other party's property. To be enforceable, it must be in writing.

option contract

An agreement whereby the offeree gives the offeror a piece of consideration in exchange for the offeror's agreement to hold the offer open for a specified period of time.

partial performance

An exception to the statute of frauds in which the performance of portions of an unwritten agreement by one or both parties can constitute proof that an oral contract exists between the parties.

For several months, Yolanda has been picking up Tom's suit at the cleaners on the first Monday of each month. Each month, Tom pays her $25 when she delivers the suit to his office. This month she picks up the suit and delivers it to Tom's office. Tom refuses to pay Yolanda the $25, stating that they did not have a contract. What type of contract did Tom and Yolanda have?

An implied contract

recognizance

An obligation in which a party acknowledges in court that he or she will perform some specified act and/or pay a price on failure to do so.

counteroffer

An offer made by an offeree to the offeror that relates to the same matter as the original offer but proposes a substituted bargain that differs from the one proposed in the original offer.

Which of the following is true of intent to form a contract?

An offeror must show intent to be bound by the offeree's acceptance.

What type of contract allows the offeree a fixed amount of time to consider an offer without the offeror being able to revoke the contract during that fixed period of time?

An option contract

What kind of contract has an event or occurrence that must occur before the contract can be executed?

Condition precedent

_______ as an element of a contract refers to what each party gets in exchange for his or her promise under the contract.

Consideration

Which of the following falls under Article 2 of the Uniform Commercial Code (UCC)?

Contract for the sale of a good.

All but which of the following contracts falls within the statute of frauds?

Contracts for lifetime employment

What must be done in relation to contracts involving an interest in land?

Contracts involving an interest in land are covered by the statute of frauds, and as such, must be in writing.

Identify the contracts that are subject to the statute of frauds writing requirement. (Check ALL that apply.)

Contracts involving secondary suretyships Contracts related to an interest in land

What are the types of contracts that fall within the scope of the statute of frauds? (Check all that apply.)

Contracts related to an interest in real property Promises made in consideration of marriage

Which of the following is a type of contract that does not fall within the scope of the statute of frauds?

Contracts related to any lease of land-related equipment

What are some of the exceptions to the parol evidence rule? (Check all that apply.)

Contracts that have been subsequently modified Contracts with ambiguous terms

Identify a true statement about contracts with unilateral mistakes.

Courts are hesitant to void them.

scienter

Deliberately or knowingly.

Promissory estoppel requires what major element to exist?

Detrimental reliance by the injured party

Which of the following is the reason the Uniform Commercial Code was drafted?

Different states had different laws governing contracts which did not result in a smooth flow of interstate commerce.

How is undue influence different from duress?

Duress is a much more visible and active interference with free will than is undue influence.

If a contract has an ambiguous provision, the judge should interpret that provision in which of the following ways?

If the contract contains an ambiguity, the judge should interpret it against the interests of the drafter.

In which of the following situations is parol evidence contradictory to the final terms admissible?

If the oral agreement was made subsequent to the creation of the contract

If a contractual offer becomes illegal, what is status of the offer?

It is immediately terminated.

Death of the offeror will have what effect on a contractual offer?

It will cause the offer to be terminated.

Which of the following transfer of interests in land fall within the statute of frauds? (Check all that apply.)

Lease contracts Mortgage contracts

Under common law, what types of terms must be included in a valid contractual offer?

Material terms, all major items necessary for mutual consent that are clearly laid out

Charlie offers Aaron $5,000 for some medical marijuana which is legal in the state. Aaron agrees, but the following day, the state legislature passes a law which basically makes any sale of marijuana, even for medicinal purposes, illegal. Does Aaron have to perform the contract?

No, because the object of the contract is no longer legal.

What is the standard that courts use to interpret contracts?

Objective

agreement

One of the four elements necessary for a contract; consists of an offer made by one party, the offeror, and the acceptance of the offer by another party, the offeree.

All but which of the following can demonstrate a party's lack of contractual capacity?

One of the parties is refuses to accept the offer.

Macon is planning to buy Kevin's car for $15,000. He gives Kevin $1,500 to keep the offer open for 30 days. Kevin will deduct the $1,500 from the price of the car if Macon purchases the car within the 30 days. If Macon does not buy the car during that time, Kevin will keep the $1,500 and may then offer the car to someone else. Which of the following contracts does this scenario best illustrate?

Option contract

A court will allow what type of evidence to prove a subsequent modification of a written contract?

Parol evidence

What is the common law rule that bars the admission of oral testimony to prove agreement to certain terms if there is a written contract between the parties after the oral testimony occurs?

Parol evidence rule

What are the reasons why the partial performance exception to the statute of frauds could be applied? (Check ALL that apply.)

Partial payment for a contract involving an interest in land A buyer has taken possession of a land interest as part of a contract

Which of the following are exceptions to the statute of frauds? (Check all that apply.)

Partial performance on a contract In an instance where promissory estoppel has been established Admission by one party to a contract

Which of the following allows for the use of parol evidence to clear ambiguity in a written contract by looking at past business dealings?

The Uniform Commercial Code

Which of the following are NOT elements of a written agreement under the statute of frauds? (Check all that apply.)

The agreement must be profitable for both parties. The agreement must be signed by an agent, not the principal to the contract.

Which of the following are not elements of a written agreement under the statute of frauds? (Check all that apply.)

The agreement must be profitable for both parties. The agreement must be signed by an agent, not the principal to the contract.

consideration

The bargained-for exchange; what each party gets in exchange for his or her promise under a contract.

What will a court use to determine if a contract is void or voidable?

The court will admit parol evidence to determine if a contract is void or voidable.

contractual capacity

The legal ability to enter into a binding agreement.

promissory estoppel

The legal enforcement of an otherwise unenforceable contract due to a party's detrimental reliance on the contract.

If the subject matter of a contractual offer is destroyed, what is the status of the offer?

The offer is immediately terminated.

An offer must include all but which of the following elements?

The offer must always be in writing.

Identify a true statement about integrated contracts. (Check all that apply.)

They are in written form. They are considered complete.

mutual (mistake)

The result of an error by both parties about a material fact, i.e., one that is important in the context of a particular contract.

Ben says he will sell Catalina a ring that he found in his yard. Ben and Catalina look at the ring and decide that they are not sure what it is, probably just a shiny stone. Catalina pays Ben $10 for the ring. The ring turns out to be a diamond worth much more than $10. Ben wants the ring back, and Catalina refuses. What is the most likely result?

The ring will remain with Catalina because the parties contracted on the assumption that they did not know the value of the ring.

undue influence

The situation in which one person takes advantage of his or her dominant position in a relationship to unfairly persuade the other person and interfere with that person's ability to make his or her own decision.

The statute of frauds is found in what federal code?

The statute of frauds is not found in any federal code, but is instead encompassed in state statutes and state common law.

What are the elements of a written agreement under the statute of frauds? (Check all that apply.)

The subject matter of the agreement must be defined. All pertinent terms must be listed in the agreement. The parties to the agreement must be identified.

Using the objective standard to establish contractual intent, courts are concerned with looking at which of the following? (Check all that apply.)

The words and documents in public from the parties regarding the agreement The actions and behavior of the parties in public regarding the agreement

All but which of the following is a requirement for a writing to be legally sufficient under the statute of frauds?

The writing must be according to the specific form required by the statute of frauds.

Which of the following is correct regarding secondary obligations? (Check all that apply.)

They involve a party outside the primary agreement. They fall within the statute of frauds.

Identify a purpose of the statute of frauds.

To ease contractual negotiations by requiring sufficiently reliable evidence to prove the existence and specific terms of a contract

The purpose of the parol evidence rule is to prevent which of the following from being admitted to challenge a written agreement as being deficient in some way?

To prevent evidence of subsequent oral agreements that seeks to substantially contradict the contract in its written form

A promise that the courts will require the parties to obey is known as:

legal assent

If a court finds _______ to a contract, it will require the parties to obey the promises they made.

legal assent

Which of the following is an element for the creation of a valid contractual offer in common law?

You need the intent to be bound by an acceptance of the offeree.

Almost all business relationships are formed by

a contract

A pharmaceutical company was marketing a new drug which had been tested for its effectiveness in curing headaches. The drug was very good at curing headaches, but that was all it did. However, the executives wanted to raise the sales of the drug by also claiming that it provided a cure for hair loss. There was absolutely no proof of this, but the pharmaceutical company advertised the drug as a headache cure and a hair loss cure. Soon there were complaints that the drug did not work as a hair loss cure. The pharmaceutical company is responsible for:

a misrepresentation

Tiffany went to a jewelry store with her fiance to pick out her engagement ring. The jeweler showed her a tray of diamond engagement rings and Tiffany picked out the one she liked. The jeweler told her that the ring was a genuine diamond ring, but the jeweler knew for a fact that it was really cubic zirconia. The jeweler's statement about the ring being a diamond instead of being cubic zirconia is:

a misrepresentation

The parties to a contract typically have a particular understanding as to the good or service they are giving or receiving. If one or both parties are under the wrong impression of that good or service, we say that ______ has occurred.

a mistake

The partial performance exception to the statute of frauds covers contracts involving:

a property interest

A promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty is known as a(n)

contract

A(n) _______ is defined as a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.

contract

Contracts that are required to be in writing by the statute of frauds include

contracts to pay the debt of another if that person does not pay.

Justin informs Joseph that he will not be able to accept the contract for doing woodwork for the winter at Joseph's farm because of prior commitments. A day later, Justin calls up Joseph and tells him the original terms of the contract are acceptable to him and he can take up the offer. Joseph tells Justin he would indeed like Justin to do the work; however, her will pay only $15 per hour rather than $18 per hour as mentioned in the original contract. This proposal made by Joseph illustrates a

counteroffer

Under the common law mirror-image rule, if an offer and acceptance do not have the exact terms in the contract, the acceptance is treated as a(n) ______.

counteroffer

Jason agrees to buy Sara's car for $10,000. However, Sara tells Jason that she will only sell the car to him if he pays $12,000. In this scenario, Sara makes a(n)

counteroffer.

According to the Uniform Commercial Code (UCC), oral contracts for ______ are enforceable even if they would ordinarily have to be in writing.

customized goods

A prenuptial agreement involves a contract before marriage:

dealing with property rights

Under common law, a valid contractual offer will be:

definite in its terms certain in its terms

Negligent misrepresentation occurs when someone makes a statement of material fact that he or she thinks is true, but he or she could have known the truth by using reasonable care to:

discover or reveal the truth

Abraham told Linda that if she did not sign over her stock options to him he would inflict bodily harm on her and her family. Linda quickly signs over all of her stock options. This is known as _______.

duress

Philip is badgering his elderly Uncle Al to sell Al's house to Philip. Philip gets so aggravated when his uncle refuses to sell that Phillip threatens to beat his uncle if he does not sign the bill of sale for the house. Philip's threat is known as:

duress

Contracts that have a special form or must be created in a specific manner are known as ______ contracts

formal

When there are requirements to the manner and look of a contract, it is considered a(n) ______ contract.

formal

According to the statute of ______, if a contract can possibly be performed within one year, the contract does not need to be in writing to be enforceable.

frauds

An intentional and knowing false representation of a material act that is intended to mislead the other party is known as a(n): ______

fraudulent misrepresentation

Katie offered to buy Jonathan's set of trading cards. Although Jonathan was reluctant to sell the cards to Katie, Katie threatened to physically hurt him if he did not sell. Jonathan reluctantly agreed and Katie gave him the money she had promised. Jonathan later changed his mind and went to court to try to get his trading cards back. Jonathan's best argument to have the contract voided is that there was no:

genuine assent

Jonathan was a sales person at a hardware store. The store had run a promotion for the past week which would give any customer who bought a lawnmower a free leaf blower. The promotion had ended the previous day, but Jonathan thought the promotion ran through the next day. Jonathan's customer had agreed to buy a lawnmower and Jonathan put a leaf blower in his cart thinking that it would be free due to the promotion. However, the check-out person rang it up as a charge against the customer. Jonathan's assertion that the customer would get a free leaf-blower with the purchase of the lawnmower is an example of (a):

innocent misrepresentation

Written agreements intended to be the complete and final representation of the parties' agreement are called

integrated contracts.

Dameon offers to sell his camper trailer to Wanette. Before Wanette can decide if she wants to buy the camper, a storm destroys the camper. The offer _______.

is automatically terminated

Anna and Vivian are discussing a piece of property in a downtown mall. Anna wishes to ensure that an offer will in fact be held open for her for two weeks while she secures funding. Anna may enter into a[n] _______ _______ with Vivian to hold the offer open for her for two weeks.

option contract

Whenever a written agreement contains a serious and obvious typographical error, ______ evidence is admissible to demonstrate it was an error, as well as to set forth the proper term.

parol

The _______ makes oral evidence of an agreement inadmissible if it is made before or at the same time as a writing that the parties intend to be the complete and final version of their agreement.

parol evidence rule

Like the statute of frauds, the ______ evidence rule recognizes eight ______ that would be admissible in court.

parol; exceptions

Courts can allow ______ evidence to ______ the missing parts, while not modifying the written agreement in any substantial way.

parol; fill in

Regarding the objective theory of contracts, the existence of a contract is based on the:______.

parties' outward manifestations of intent

The _______ rule states that if a writing, or a term in question, appears to be _______ on its face, we must determine its meaning from just "the four corners" of the document, without resorting to outside evidence, and give the words their ordinary meaning.

plain meaning; unambiguous

A contract for land was being litigated in court. There was a disagreement as to what the term "corner property" actually meant. If the court only looks at the words and they are clear and unambiguous, and the court will only interpret the terms using the agreement itself, the court is said to be using the: ______.

plain-meaning rule

One of the best known rules of contract interpretation states that if a writing, or a term in question, appears to be plain and unambiguous on its face, we must determine its meaning from just the four corners of the document, without resorting to outside evidence and give the words their ordinary meaning. This rule is known as the:

plain-meaning rule

When a contract is based on a future event occurring first, that future event is called a condition

precedent

A pact entered into before marriage that outlines ownership rights each party has in the other party's property is called a _______ agreement.

prenuptial

A prenuptial agreement is an agreement made by two parties ______ regarding ownership rights to property.

prior to their marriage

According to the Uniform Commercial Code (UCC), parol evidence is admissible for the sake of clarification if it addresses _______ dealings between the parties or _______ of trade in the business they are operating.

prior; usages

In an agreement for the sale of goods over $500, only the ______ needs to be stated.

quantity

The remedy that is most appropriate when a mutual mistake has occurred is:

recission

As discussed in the text, a main purpose of the _______ is to prevent unreliable oral evidence from interfering with a contractual relationship.

statute of frauds

When a contract consists of both written and oral elements, judges tend to

treat it as nonfinalized contract

Judges will typically address an agreement that consists of both written and oral elements by:

treating the contract as not finalized and assuming the parties do not intend to have the written part represent the entire agreement