Contracts Multiple Choice Questions

Which of the following represents a correct usage of the verb "estop"? a. The defendant should be estopped from asserting that the contract was without consideration. b. The court should order that the defendant be estopped from selling the house to anyone but the plaintiff.

a. The defendant should be estopped from asserting that the contract was without consideration.

In a contract between a minor and an adult, who may void out the contract? a. The minor b. The adult c. Both d. Neither

a. The minor

A contract modification is enforceable if the performance of the preexisting legal duty includes an additional or a different type of consideration provided that the change reflects more than a pretense of a bargain. a. True b. False

a. True

A guaranty agreement is within the statute unless the guarantor stands to benefit from the agreement. a. True b. False

a. True

An illusory promise is not a promise at all since the purported promisor is not committing to an action or forbearance. a. True b. False

a. True

In a "conditional acceptance," the offeree states that he agrees to enter into the agreement, but only if the offeror agrees to varying or additional terms. a. True b. False

a. True

In determining whether a party has manifested intent to make a promise, a court will start by considering the ordinary meaning of the words. a. True b. False

a. True

One key distinction between promissory restitution and quasi-contract is the existence of a promise made because of an action done in the past. a. True b. False

a. True

The reasonable expectation element principally refers to whether the promisor could foresee that the promisee would take an action or forbearance. a. True b. False

a. True

For the mental incapacity defense, incompetency must be determined a. at contract formation. b. when performance is due. c. at the time of the trial. d. Any of the above

a. at contract formation.

The meaning of a party's manifestation of assent is judged a. by the objective reasonable interpretation of his outward expression of consent and not by his subjective intent. b. by the party's subjective meaning regardless of his outward expression of consent.

a. by the objective reasonable interpretation of his outward expression of consent and not by his subjective intent.

The primary policy behind the adequacy of consideration rule is a. freedom of contract. b. equity and fairness.

a. freedom of contract.

In an option contract, the optionee a. has the right but not the duty to enter into the underlying contract. b. has a duty to enter into the underlying contract by the end of the option period.

a. has the right but not the duty to enter into the underlying contract.

According to the Restatement, a fraudulent misrepresentation requires that the party knows or should have known the statement was false and a. he made the statement with the intent to induce the recipient to enter into an agreement. b. the statement has a materially adverse effect on the outcome of the agreement

a. he made the statement with the intent to induce the recipient to enter into an agreement.

A person is deemed to be an officious intermeddler a. if the interference in the affairs of others is not justified by the circumstances. b. if the interference in the affairs of others is justified by the circumstances.

a. if the interference in the affairs of others is not justified by the circumstances.

For the mental incapacity defense, the traditional rule for testing for incompetence is a. the cognitive test. b. the volitional test.

a. the cognitive test.

Charlie wants to play a prank on his friend Jeremy. He knows that Jeremy wanted to purchase Charlie's vintage 1963 Ford Thunderbird; however, Charlie refused to sell it. Additionally, Charlie was sure that Jeremy did not have the money to purchase the car. One night while drinking, Charlie taunts Jeremy and says that he is willing to sell Jeremy the car for $30,000 — a price that is 25% above the fair market value. Jeremy agrees, and Charlie puts their agreement in writing. After sobering up

b. A contract exists and Charlie is liable for breach.

which of the following is a correct statement of when UCC § 2-201(1) applies? a. A contract for the sale of goods of over $500 is subject to the statute of frauds. b. A contract for the sale of goods of $500 or over is within the statute of frauds

b. A contract for the sale of goods of $500 or over is within the statute of frauds

Which of the following is the best statement of the Restatement (Second) of Contracts regarding when a unilateral contract is formed? a. A unilateral contract is formed when the offeree promises to perform the requested act. b. A unilateral contract is formed when the offeree completes performance of the requested act. c. A unilateral contract is formed when the offeree substantially performs the requested act. d. A unilateral contract is formed at any time deemed reasonable by the objective sta

b. A unilateral contract is formed when the offeree completes performance of the requested act.

Which of the following would likely not be considered a "necessity" under the incapacity doctrine? a. Food for a minor whose parent or guardian refuses to provide it b. A wedding dress for a minor whose parents have agreed to let her get married but who refuse to pay for the wedding expenses c. Medical services for a minor who is seriously injured and whose parent cannot be reached at the time of injury d. An apartment lease for a minor whose parents have kicked him out of the house

b. A wedding dress for a minor whose parents have agreed to let her get married but who refuse to pay for the wedding expenses

How does UCC §2-207 differ from the common law? a. The mirror image still applies, but the last shot rule does not. b. An acceptance with varying or different terms may form a contract.

b. An acceptance with varying or different terms may form a contract.

Alvin and Beatrice are contemplating entering into a contract. Alvin knows that Beatrice has a certain interpretation of a provision of that contract. Alvin has a different interpretation, and Beatrice is unaware of Alvin's interpretation. Both interpretations are reasonable. Alvin and Beatrice enter the contract, but there is a dispute later over the interpretation of the provision mentioned above. If a court is applying Restatement (Second) of Contracts §201, whose interpretation will the c

b. Beatrice's

A court may not limit the remedy under the promissory estoppel theory and must award the full value of the promise that was made. a. True b. False

b. False

A gratuitous promise always creates a contractual duty, the breach of which results in a remedy. a. True b. False

b. False

A threat is improper only if what is threatened is a crime or a tort. a. True b. False

b. False

Courts will always enforce promises under the doctrine of promissory estoppel even if there is no detriment to the promisee because of the moral principle that promises — once made — should be kept. a. True b. False

b. False

For duress, a legal remedy, such as bringing a lawsuit, will always be considered a reasonable alternative. a. True b. False

b. False

If an option is granted but the optionee never pays the consideration, then the optionee never has the power of acceptance. a. True b. False

b. False

Promissory estoppel is a legal principle rooted in the theory of freedom of contract. a. True b. False

b. False

Quasi-contracts are enforceable legal contracts with consideration. a. True b. False

b. False

The mirror image rule allows the offeree to form a common law contract even though the offeree's acceptance has varying terms. a. True b. False

b. False

To establish that promissory estoppel exists, a party must prove that the promisee was unreasonable in taking action based on the promise. a. True b. False

b. False

Under UCC §2-207(2), if one party is a merchant, then the different or additional terms become part of the contract unless one of the exceptions applies. a. True b. False

b. False

Undue influence only requires that a party be induced into entering a contract by unfair persuasion and undue susceptibility. a. True b. False

b. False

Hilda promises Gertrude to sew Gertrude's wedding dress. Which legal label correctly identifies Gertrude? a. Gertrude is the promisor because she is the person to whom the promise is made. b. Gertrude is the promisee because she is the person to whom the promise is made.

b. Gertrude is the promisee because she is the person to whom the promise is made

Hotel and Contractor enter into an oral agreement where Contractor would build a new wing for Hotel in return for $1 million. The construction was of the nature that a builder working at a reasonable pace would take 18 months to build the wing. However, the project could be done in a year if the builder paid his workers overtime. Contractor is unlikely to pay his workers overtime, since that would cut into his profits. Is the contract within the statute? a. Yes, because it would reasonably take

b. No, because it is possible to complete the contract within a year, even if it is not probable.

Generally, does an implied in law contract differ from a quasi-contract? a. Yes, because, by definition, a quasi-contract has consideration and an implied in law contract does not. b. No, the terms are generally treated as synonymous.

b. No, the terms are generally treated as synonymous.

Two parties enter a contract but they have different interpretations of an important term of the contract. Both interpretations are reasonable. Neither party knows of the other party's interpretation. If the parties end up in litigation over the contract and a court applies Restatement (Second) of Contracts §201, which of the following statements best reflects a likely outcome? a. The court would decide which interpretation would be most objectively reasonable without regard to the intent of

b. The court may conclude that a contract never formed since there was no "meeting of the minds."

Which of the following is subject to the statute of frauds writing requirement? a. J. J. and Dee Dee exchange mutual promises to marry each other. b. Uncle promises to give Dee Dee and J. J. a three-week vacation in Hawaii if they get married.

b. Uncle promises to give Dee Dee and J. J. a three-week vacation in Hawaii if they get married.

Does a contract form if the offeree does not subjectively intend to accept an offer but by his words and actions objectively assents to all of the proposed terms? a. No. A fundamental principle of contracts is that a party must intend both by an outward manifestation and subjectively to enter into a contract. b. Yes. Assent is determined by the objective meaning of a party's outward manifestation and not by subjective means.

b. Yes. Assent is determined by the objective meaning of a party's outward manifestation and not by subjective means.

An "executory promise" is a. a promise that has been executed. b. a promise that has not yet been performed.

b. a promise that has not yet been performed.

In a unilateral contract the consideration for a promise is a. a reciprocal promise. b. actual performance.

b. actual performance.

A requirements contract is a type of contract where the buyer agrees to purchase a. all of a particular good that a supplier is able and willing to produce. b. all of a particular good the buyer needs from one particular supplier.

b. all of a particular good the buyer needs from one particular supplier.

A price quote is normally construed as a. an offer. b. an invitation to deal. c. preliminary negotiations. d. a prospective acceptance conditioned on the buyer making anoffer.

b. an invitation to deal.

In proving the defense of undue influence, the elements of unfair persuasion and undue susceptibility a. must be present in roughly equal amounts. b. can be measured on a sliding scale to allow for a greater degree of one element and a lesser degree of another

b. can be measured on a sliding scale to allow for a greater degree of one element and a lesser degree of another

One standard that courts consider in deciding whether an offer has been made is "whether the court can determine what a breach of contract is and what would be the appropriate remedy." Which element of the offer rule does this standard relate to? a. intent to enter a bargain b. certain and definite terms c. identified person or persons d. reasonable understanding by offeree that an acceptance forms a contract

b. certain and definite terms

Which of the following is a correct statement of the law a. A contract for one year is within the statue of frauds b. contracts that cannot be performed within one year are within the statute of frauds

b. contracts that cannot be performed within one year are within the statute of frauds

Between family members a promise to render services a. is always considered a gratuitous promise. b. creates a rebuttable presumption that the services are gratuitous. c. is presumptively a contract if between spouses. d. cannot be rescinded.

b. creates a rebuttable presumption that the services are gratuitous.

A moral obligation a. always creates a legal obligation. b. does not normally create a legal obligation but may be relevant as an independent basis to prevent unfairness or unjust enrichment.

b. does not normally create a legal obligation but may be relevant as an independent basis to prevent unfairness or unjust enrichment.

A reciprocal promise exists when a. at least one party's motive for making the promise is to induce the other party to make a promise. b. each party's motive for making the promise is to induce the other party to make a promise.

b. each party's motive for making the promise is to induce the other party to make a promise.

Requirements contracts are not illusory because a. the seller must sell all that he makes. b. if the buyer purchases anything, it must be from the seller who is a party to the requirements contract.

b. if the buyer purchases anything, it must be from the seller who is a party to the requirements contract.

The UCC gap fillers a. seek to find a middle ground between the offeror's terms and the offeree's varying terms. b. imply reasonable terms when terms are missing from an agreement.

b. imply reasonable terms when terms are missing from an agreement.

To be an offer there a. must be only one identified offeree. b. may be an identified offeree or offerees.

b. may be an identified offeree or offerees.

A buyer and seller enter into a contract for the sale of a privately owned island with the closing on August 1. Seller has a duty to transfer title to the island at closing. What type of duty is this? a. a gratuitous promise b. preexisting contractual duty c. public duty of a private person d. public duty of a public official

b. preexisting contractual duty

Services rendered by family members are a. always gratuitous — i.e., gifts. b. presumed to be gratuitous.

b. presumed to be gratuitous.

An on-duty police officer has a duty to serve and protect the public at large. What type of duty is this? a. public duty of a private person b. public duty of a public official c. preexisting contractual duty

b. public duty of a public official

Landlord rented an apartment to Tenant. With Landlord's knowledge and consent, Tenant enters into a contract with Contractor to make improvements to the apartment at Tenant's own expense. However, Tenant does not pay Contractor and then leaves the apartment before the lease expires. Landlord is able to lease the apartment at a higher rent because of the improvements. If a court finds that Landlord owes Contractor for his services, what is the most likely theory of recovery? a. implied in fac

b. quasi-contract

as an exception to the statute of frauds, promissory estoppel a. is applied using the same rule as is used when examining promissory estoppel as an alternative to consideration - i.e., Restatement (Second) of Contracts § 90. b. requires assessment of specific criteria not stated in Restatement (Second) of Contracts § 90.

b. requires assessment of specific criteria not stated in Restatement (Second) of Contracts § 90.

The part performance exception to the statute of frauds for land sale contracts is satisfied if the buyer reasonably relied on the contract by a. paying the full purchase price. b. taking possession and making valuable improvements.

b. taking possession and making valuable improvements.

In granting restitution, the key concept that courts focus on is a. the harm that a party suffered by not being compensated. b. the degree to which a party has been enriched and whether it would be unjust for that party to keep the benefit without paying for it.

b. the degree to which a party has been enriched and whether it would be unjust for that party to keep the benefit without paying for it.

Juan sent a signed email message to Mary stating, "I offer you a one-year contract to work as a secretary in my architecture firm starting August 1 for a salary of $40,000 a year." Mary is a. the offeror. b. the offeree.

b. the offeree.

In a case where a party is claiming the mental incapacity defense, the law presumes that a. the party asserting the defense is incompetent until proven otherwise by the defendant. b. the party asserting the defense is competent until that party proves incompetency.

b. the party asserting the defense is competent until that party proves incompetency.

Parties are in preliminary negotiations if a. both the offeror and the offeree have manifested the intent to enter a contract. b. the purported offeree knows that the purported offeror is not willing to enter into a bargain.

b. the purported offeree knows that the purported offeror is not willing to enter into a bargain.

UCC §2-207(3) applies when a. the original offeror assents to the conditional acceptance. b. the writings do not establish the existence of a contract but the parties act in a manner that recognizes the existence of a contract.

b. the writings do not establish the existence of a contract but the parties act in a manner that recognizes the existence of a contract.

A contract induced by physical duress is a. voidable at the option of the party asserting the defense. b. void as a matter of public policy.

b. void as a matter of public policy.

Under the common law, the last shot doctrine provides that a contract is formed a. when the offeree sends the conditional acceptance to the offeror. b. when the original offeror performs under the contract.

b. when the original offeror performs under the contract.

After using the incapacity defense to void a contract, the minor must return the consideration (i.e., the property conveyed) and pay for any depreciation or for the "use value." Which of the following is the correct assessment of the previous statement? a. Always correct b. Never correct c. Correct if the minor willfully or negligently harmed the property d. Correct, but not if the minor engaged in a tort

c. Correct if the minor willfully or negligently harmed the property

Sofia says to Rafael, "I assure you that I will not go to the dance with David." Rafael replies, "In that case, I might go to the dance with you." Which of the following best identifies the nature of these two statements? a. Both Sofia's and Rafael's statements are promises. b. Neither Sofia's nor Rafael's statements are promises. c. Sofia's statement is a promise and Rafael's reply is a not a promise. d. Sofia's statement did not make a promise, but Rafael's reply is a p

c. Sofia's statement is a promise and Rafael's reply is a not a promise.

Which of the following is the best statement of the law? a. The offer must be directed at a single individual identified by the offeror. b. The offer could be directed at an individual or a group, but the offeror must specify the offeree(s) by name. c. The offer does not have to be directed at the offeree by name provided there is some way to identify the individual or group. d. The offer is open to any reasonable person who is the first to seeit.

c. The offer does not have to be directed at the offeree by name provided there is some way to identify the individual or group.

Buyer sent Seller an email offering to purchase Seller's yacht for $1 million. Seller immediately accepts the offer by replying to the email. Seller is extremely excited because the yacht is actually worth only $500,000. Excited, Seller jumps up from his desk. He slips, hits his head on the floor, and dies instantly. Buyer later learns the true value of the yacht and attempts to revoke his acceptance given the death of the offeree. Which of the following is a correct statement? a. Buyer's po

c. The parties have entered into an enforceable contract

Why do most advertisements fail to be offers? a. They lack certain and definite terms. b. They lack intent to enter a bargain. c. There is no identified offeree. d. It is not reasonable for an offeree to conclude that an offer has beenmade.

c. There is no identified offeree.

The primary focus of the consideration rule is to establish whether or not there was a. a promise between the parties. b. a gratuitous promise between the parties. c. a bargain between the parties. d. legal value.

c. a bargain between the parties.

Cindy is a classical singer who performs at summer music festivals throughout the country. Adam is a promoter who books acts for such festivals. Adam proposes that Cindy perform at a series of five festivals on specific dates during the summer but that Cindy's fee will be discussed later. Which of the following best describes the Adam's proposal? a. an offer, because the UCC will imply a reasonable price if one is missing b. an enforceable agreement to agree c. an attempted offer that fails

c. an attempted offer that fails for lack of certainty

If UCC §2-207(3) applies, then the terms are those that the writings agree upon and a. the varying terms of the offeree's acceptance. b. the terms of the original offeror's offer. c. any supplementary terms that can be incorporated under the UCC. d. None of theabove.

c. any supplementary terms that can be incorporated under the UCC.

What standard does a court use to determine whether a party has manifested assent to the terms of an offer? a. by performance in a bilateral contract and a promise in a unilateral contract b. by written evidence submitted to show the truth of the matter asserted c. by the objective standard d. by the subjective standard

c. by the objective standard

A contract modification under the UCC requires a. no additional consideration regardless of whether the parties are operating in good faith. b. additional consideration made in good faith. c. no additional consideration provided that the modification be made in good faith. d. additional consideration regardless of whether the parties are operating in good faith.

c. no additional consideration provided that the modification be made in good faith.

A witness at a trial has a duty to tell the truth. What type of duty is this? a. a newly formed contractual duty b. preexisting contractual duty c. public duty of a private person d. public duty of a public official

c. public duty of a private person

The power of acceptance is a. an element of an offer. b. the right of the offeror to manifest intent to form the bargain. c. the right of the offeree to form the contract. d. a bargained for exchange right as consideration for the offer.

c. the right of the offeree to form the contract.

Fill in the blank with the answer that best reflects the promise rule. A promise occurs when a party manifests an intention so made as to justify a promisee in understanding that a commitment has been made a. to perform a specific action b. to not perform a specific action c. to either perform or not perform a specific action d. none of the above

c. to either perform or not perform a specific action

If a party proves economic duress, then the contract is a. voidable by either party. b. void as a matter of public policy. c. voidable by the party asserting the defense. d. void, provided that a jury determines that public policy demands it be so.

c. voidable by the party asserting the defense.

Choose the statement below that best reflects the rule. In a conditional contract, the contract is formed a. on part performance of the offeree. b. on payment of consideration. c. when the condition occurs. d. on full performance of the offeree.

c. when the condition occurs.

For the intoxication defense, a party would be considered incapacitated and able to void a contract a. when they become too drunk to legally drive. b. when they stumble and fall. c. when they are unable to reasonably understand what they are doing. d. All of the above.

c. when they are unable to reasonably understand what they are doing.

Which of the following is an exception to a minor's incapacity defense? a. The minor misrepresents his age. b. The minor intentionally destroys goods that he purchased. c. The minor purchases food because he was hungry. d. All of the above

d. All of the above

The primary policy function of consideration is to a. provide evidence that the parties intended to enter an enforceable bargain. b. caution the parties so that they are not making thoughtless promises. c. help the courts efficiently channel promises into legally enforceable and non-legally enforceable categories. d. All of the above are true.

d. All of the above are true.

Seller is a food distributor. On January 1, Seller sends a signed email to Buyer, a grocery store chain, stating that Seller will sell up to 300 bushels of apples a month to Buyer at $75 a bushel. Seller states that this offer will remain open until May 1. After what date may Seller revoke his offer? a. January 1, because offers are generally revocable before acceptance. b. February 15, because in a dispute, a reasonable time is the mid-date of the three-month time period. c. May 1, because that

d. April 1.

Why is past consideration usually unenforceable? a. Because the detriment induced the promise. b. Because the detriment did not induce the promise. c. Because the promise induced the detriment. d. Because the promise did not induce the detriment.

d. Because the promise did not induce the detriment.

Which of the following statements is correct? a. Either the offeror or offeree may reject an offer. b. An offeree may revoke an offer so long as it is done before acceptance. c. An offeror loses the power of acceptance after the offer has been rejected. d. It is the offeree who might reject the offer and the offeror who might revoke.

d. It is the offeree who might reject the offer and the offeror who might revoke.

Painter offers to paint Owner's house by November 1 for $5,000. Owner makes a counteroffer to pay $4,000 for the painting of both Owner's house and barn by November 1. Painter rejects Owner's counteroffer. Owner then says that he accepts Painter's offer to paint his house by November 1 for $5,000. Which of the following best describes the legal relationship between the parties? a. There is no offer present. The parties are in preliminary negotiations. b. A contract has formed for the pai

d. Painter has the power of acceptance as to Owner's offer to pay $5,000 for the painting of Owner's house by November1.

Which of the following does not fit the legal definition of a promise? a. Employer says to Employee, "I promise to give you a year-end bonus of $1,000." b. Frank says to Francis, "I promise to marry you." c. One roommate says to the other, "I promise to wash the dishes." d. Television meteorologist says to the audience, "I promise that it will not rain this weekend."

d. Television meteorologist says to the audience, "I promise that it will not rain this weekend."

Buyer wants to purchase a house owned by Seller. Seller makes an offer to Buyer to sell the house for $500,000 on a specified date. However, Buyer needs financing from his Bank if he is going to make the purchase, and he is not ready to accept Seller's offer. Seller says to Buyer, "I promise to keep this offer open until November 1. I will not sell it to anyone else." Buyer agrees. Which of the following is the most accurate statement of the legal relationship? a. Buyer has an implied opti

d. The offer is revocable before acceptance.

The UCC's merchant's firm offer rule (UCC §2-205) provides for some circumstances under which an offer can be made irrevocable for a period of time. Which of the following is a correct statement about the UCC's merchant's firm offer rule? a. Both parties must be merchants. b. Under the rule, a firm offer need not be in writing in order to be irrevocable. c. Although the rule requires that the offer be in writing, such writing need not be signed. d. There does not need to be consideratio

d. There does not need to be consideration for a firm offer to exist under the rule.

When will a court not enforce a promise because the consideration is inadequate? a. When the consideration is gross and unfair. b. When the consideration is unreasonable. c. When the consideration is $1. d. When the consideration suggests the pretense of a bargain.

d. When the consideration suggests the pretense of a bargain.

The legal value element of consideration requires a. a detriment to either the promisor or promisee plus a benefit to either the promisor or promisee. b. a benefit to the promisee or a detriment to the promisor. c. a detriment to the promisee and a benefit to the promisor. d. a detriment to the promisee or a benefit to the promisor.

d. a detriment to the promisee or a benefit to the promisor.

An executory gift is a. a gift already given. b. a gift that has been executed. c. any bequest made by virtue of a will that the executor has distributed to those who inherited. d. a gift that has not been given.

d. a gift that has not been given.

Painter and Madame enter into a contract governed by the common law where Painter will paint a "life-like" painting of Madame for $2,000. Painter's skill is questionable, and Madame is honestly and justifiably not satisfied because she says the finished painting is not "life-like." Painter and Madame enter into a contract modification where Madame only has to pay Painter $1,200. The modification is a. valid because this transaction is governed by the UCC and the UCC does not require co

d. a valid contract modification under common law principles.

Choose the answer that correctly completes the rule. A minor may disaffirm a contract under the minor incapacity defense a. before performance by the adult. b. before acceptance of the offer. c. up until the minor becomes 18 years old. d. before reaching or within a reasonable time after reaching the age of majority.

d. before reaching or within a reasonable time after reaching the age of majority.

the doctrine of part performance is an exception to the statute of frauds for a. land sale contracts. b. contracts for the sale of goods. c. any type of contract. d. both a and b.

d. both a and b.

An executed gift a. is the same as a gratuitous promise. b. is the same as an executory gift. c. is normally the result of a bargain. d. cannot be taken back since the promise to give a gift has been fulfilled.

d. cannot be taken back since the promise to give a gift has been fulfilled.

The predominate purpose test relates to a. contracts for the sale of land. b. contracts for the sale of goods. c. contracts for the sale of services. d. mixed goods and services contracts.

d. mixed goods and services contracts.

For duress, the element of inducement is tested by the objective standard subjective standard.

subjective standard.