MSU BL 2413 Test 3 Mallette
Article _____ of the Uniform Commercial Code prescribes a set of uniform rules for the creation and enforcement of contracts for the sale of goods.
2
Article _____ of the Uniform Commercial Code prescribes a set of uniform rules for the creation and enforcement of contracts for the lease of goods.
2A
Which of the following is an INCORRECT statement regarding arbitration? A. Arbitration is conducted by a neutral third party known as a barrister. B. Arbitration is a non-judicial, private resolution of a contract dispute. C. Many business contracts contain arbitration clauses. D. Many consumer contracts contain arbitration clauses. E. Most arbitration agreements stipulate binding arbitration.
A. Arbitration is conducted by a neutral third party known as a barrister.
Which of the following is an INCORRECT statement regarding duress? A. If someone threatens to physically harm another person unless that person signs a contract, this is economic duress. B. The threat to commit extortion unless someone enters into a contract constitutes duress. C. A threat to bring a criminal lawsuit unless someone enters into a contract constitutes duress even if the criminal lawsuit is well-founded. D. Duress can occur where a threat does not involve physical harm. E. A threat to bring a civil lawsuit does not constitute duress unless such a suit is frivolous or brought in bad faith.
A. If someone threatens to physically harm another person unless that person signs a contract, this is economic duress.
Which of the following is an accurate statement regarding silence as acceptance? A. Silence is not usually considered acceptance. B. Silence usually constitutes a counteroffer. C. Silence usually results in the creation of a unilateral (one-sided) contract. D. Silence usually constitutes a revocation of the offer. E. Silence is usually considered acceptance.
A. Silence is not usually considered acceptance.
Which of the following is an INCORRECT statement regarding a minor's right to disaffirm a contract? A. Special formalities are required for a minor to expressly disaffirm a contract. B. A former minor can disaffirm a contract entered into while he or she was a minor for a reasonable time after reaching the age of majority. C. A minor can orally disaffirm a contract. D. A minor can disaffirm a contract through his or her conduct. E. A minor can disaffirm a contract at any time prior to reaching the age of majority.
A. Special formalities are required for a minor to expressly disaffirm a contract.
Which of the following is an element that must be shown to prove that a contract or a clause in a contract is unconscionable? A. The adhering party had no reasonable alternative. B. One party reasonably used his or her bargaining power. C. The parties possessed equal bargaining power. D. The parties gave mutual consideration. E. The contracting parties entered into an "arm's-length" transaction.
A. The adhering party had no reasonable alternative.
Which of the following is an INCORRECT statement regarding undue influence? A. Undue influence occurs when the servient party unduly persuades the dominant party to enter into a contract. B. A court may permit the rescission of a contract based on undue influence. C. If there is a confidential relationship between persons, any contract made by the servient party that benefits the dominant party is presumed to be entered into under undue influence. D. For undue influence to occur, the persuasion by the wrongdoer must overcome the free will of the innocent party. E. Undue influence is an equitable doctrine
A. Undue influence occurs when the servient party unduly persuades the dominant party to enter into a contract.
A contract requires which of the following? A. an offer and an acceptance B. a promise for a promise C. equal consideration D. a promise for an act E. an offer and a counteroffer
A. an offer and an acceptance
Which of the following is NOT a required element of a contract? A. counteroffer B. consideration C. lawful object D. agreement E. contractual capacity
A. counteroffer
Which of the following is NOT a valid type of consideration? A. illusory promise B. property C. money D. forbearance E. act
A. illusory promise
Which of the following is an INCORRECT statement regarding silence as misrepresentation? A. Generally, each party to a contract owes a duty to disclose all the facts to the other party. B. Silence can constitute misrepresentation if non-disclosure would cause death. C. Silence can constitute misrepresentation if non-disclosure would cause bodily injury. D. Silence can constitute misrepresentation if there is a fiduciary relationship between the contracting parties. E. Silence can constitute misrepresentation if federal and state statutes require disclosure.
A. Generally, each party to a contract owes a duty to disclose all the facts to the other party.
_____ is a manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the _____ theory of contracts.
Acceptance; objective
_____ is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.
An offer
Which of the following is an INCORRECT statement regarding inferior performance? A. Where there has been a material breach of contract, the non-breaching party is discharged from any further performance under the contract. B. A non-material breach of a contract occurs when a party renders inferior performance. C. Where there has been a material breach of contract, the non-breaching party may rescind the contract and seek restitution of any compensation paid under the contract to the breaching party. D. Whether there has been a material breach of contract is made on a case-by-case basis. E. Where there has been a material breach of contract, the non-breaching party may treat the contract as being in effect and sue the breaching party to recover damages.
B. A non-material breach of a contract occurs when a party renders inferior performance.
Which of the following is an INCORRECT statement regarding the implied covenant of good faith and fair dealing? A. The covenant of good faith and fair dealing is usually implied in contracts where the parties have a special relationship that involves a fiduciary duty. B. States refuse to recognize the implied covenant of good faith and fair dealing, instead requiring that such a covenant be expressly included in the contract between the parties. C. Courts typically recognize the implied covenant of good faith and fair dealing in contracts between insurance companies and insureds. D. Under the implied covenant of good faith and fair dealing, the parties to a contract are not only held to the express terms of the contract but also required to act in "good faith" and deal fairly in all respects in obtaining the objective of the contract. E. A breach of the implied covenant of good faith and fair dealing is a tort for which tort damages are recoverable.
B. States refuse to recognize the implied covenant of good faith and fair dealing, instead requiring that such a covenant be expressly included in the contract between the parties.
Which of the following is an INCORRECT statement regarding defenses to the enforcement of a contract? A. If consent is obtained by duress, there is no real consent. B. The consent of the parties to create a contract need not be genuin C. If consent is obtained by fraud, there is no real consent. D. The law requires that certain contracts be in writing or in a certain form. E. If consent is obtained by undue influence, there is no real consent.
B. The consent of the parties to create a contract need not be genuin
Which of the following is an INCORRECT statement regarding covenants not to compete? A. In order to be enforceable, a covenant not to compete must be reasonable regarding the duration of the restriction. B. The reasonableness of covenants not to compete is examined on a uniform basis. C. If a covenant not to compete is unreasonable, the courts may either: 1) refuse to enforce it; or 2) change it so that it is reasonable; usually, courts choose the first option. D. In order to be enforceable, a covenant not to compete must be reasonable regarding the geographic area protected. E. In order to be enforceable, a covenant not to compete must be reasonable regarding the line of business protected.
B. The reasonableness of covenants not to compete is examined on a uniform basis.
Which of the following is a required element for an offer to be effective? A. The offeror must subjectively intend to be bound by the offer. B. The terms of the offer must be definite or reasonably certain. C. The offeree must make a counteroffer to the offer. D. The offeror must personally intend to be bound by the offer. E. The offer must be communicated to the offeror.
B. The terms of the offer must be definite or reasonably certain.
Which of the following is an INCORRECT statement regarding the enforceability of contracts entered into by intoxicated persons? A. A person who disaffirms a contract based on intoxication generally must be returned to the status quo. B. Under the majority rule, all contracts entered into by intoxicated persons are void. C. The amount of alcohol or drugs that must be consumed for a person to be considered legally intoxicated to disaffirm contracts varies from case to case. D. A person who disaffirms a contract based on intoxication generally must return the consideration received under the contract to the other party and make restitution that returns the other party to status quo. E. Intoxicated persons are liable in quasi contract to pay the reasonable value for necessaries they receive.
B. Under the majority rule, all contracts entered into by intoxicated persons are void.
Which of the following is an INCORRECT statement regarding intentional interference with contractual relations? A. As an essential element of the tort of intentional interference with contractual relations, it must be shown that there was a valid, enforceable contract between the contracting parties. B. The third party does not have to have acted with malice or bad faith. C. A party to a contract may not sue a third person who intentionally interferes with the contract and causes that party injury. D. The tort of intentional interference with contractual relations usually arises when a third party induces a contracting party to breach a contract with another party. E. As an essential element of the tort of intentional interference with contractual relations, it must be shown that the third-party induced one of the contracting parties to breach the contract.
C. A party to a contract may not sue a third person who intentionally interferes with the contract and causes that party injury.
Which of the following is an INCORRECT statement regarding rejection of an offer? A. Any subsequent attempt by the offeree to accept the offer is ineffective and is construed as a new offer that the original offeror is free to accept or reject. B. Generally, a rejection of an offer is not effective until it is actually received by the offeror. C. An offer is not terminated if the offeree rejects it. D. A rejection may be evidenced by the offeree's express words. E. A rejection may be evidenced by the offeree's conduct.
C. An offer is not terminated if the offeree rejects it.
Which of the following is an INCORRECT statement regarding undue influence? A. To prove undue influence, it must be shown that a fiduciary or confidential relationship existed between the parties. B. Undue influence is an equitable doctrine. C. Courts may permit the modification, but not the rescission, of a contract based on the doctrine of undue influence. D. A contract that is entered into because of undue influence is voidable by the innocent party. E. To prove undue influence, it must be shown that the dominant party unduly used his or her influence to persuade the servient party to enter into a contract.
C. Courts may permit the modification, but not the rescission, of a contract based on the doctrine of undue influence.
Which of the following is an INCORRECT statement regarding federal arbitration law? A.The U.S. Supreme Court has upheld the Federal Arbitration Act's national policy favoring arbitration and the enforcement of arbitration agreements. B. The Federal Arbitration Act promotes the arbitration of contract disputes involving state law. C. Federal law requires an arbitrator to either be a judge or have at least five years of experience as a litigator. D. The U.S. Congress has enacted the Federal Arbitration Act. E. The Federal Arbitration Act promotes the arbitration of contract disputes involving federal law.
C. Federal law requires an arbitrator to either be a judge or have at least five years of experience as a litigator.
Which of the following is an INCORRECT statement regarding silence as misrepresentation? A. Silence can constitute misrepresentation if non-disclosure would cause death. B. Silence can constitute misrepresentation if there is a fiduciary relationship between the contracting parties. C. Generally, each party to a contract owes a duty to disclose all the facts to the other party. D. Silence can constitute misrepresentation if non-disclosure would cause bodily injury. E. Silence can constitute misrepresentation if federal and state statutes require disclosure.
C. Generally, each party to a contract owes a duty to disclose all the facts to the other party.
Which of the following is an INCORRECT statement regarding the enforceability of immoral contracts? A. Judges must look to the practices of society when defining immoral conduct. B. Immoral contracts have as an objective the commission of an act that society considers immoral. C. Judges are free to define morality based on their individual views. D. Immoral contracts may be found to violate public policy. E. Judges must look to the beliefs of society when defining immoral conduct.
C. Judges are free to define morality based on their individual views.
Which of the following is an accurate statement regarding past consideration? A. A promise based on past consideration is enforceable at the election of the promisor. B. Under the Uniform Commercial Code (UC, a promise based on past consideration is enforceable in a contract for the sale of goods transaction. C. Past consideration is not consideration for a new promise. D. Past consideration is adequate consideration for a new promise. E. Past consideration is also known as forbearance.
C. Past consideration is not consideration for a new promise.
Which of the following is an INCORRECT statement regarding contracts entered into by minors for the necessaries of life? A. The seller's recovery is based on the equitable doctrine of quasi-contract. B. There is no standard definition of what constitutes a necessary. C. The minor is obligated to pay the contract price for the necessaries he or she received. D. The minor is obligated only to pay for the reasonable value of the necessaries he or she received. E. Items such as food and clothing are generally considered to be necessaries.
C. The minor is obligated to pay the contract price for the necessaries he or she received.
Which of the following is NOT a required element for the doctrine of promissory estoppel to apply? A. Injustice would be caused if the promise were not enforced. B. The promisor made a promise. C. The subject contract is supported by mutual consideration. D. The promisor should have reasonably expected to induce the promisee to rely on the promise. E. The promisee actually relied on the promise and engaged in an action or forbearance of a right of a definite and substantial nature.
C. The subject contract is supported by mutual consideration.
The goal of the Uniform _____ Code is to create a system of commercial law among the 50 states.
Commercial
_____ damages place the non-breaching party in the same position as if the contract had been fully performed by restoring the "benefit of the bargain."
Compensatory
Which of the following is an accurate statement regarding a completed gift promise? A. A completed gift promise can be rescinded for lack of consideration. B. A completed gift promise is voidable at the election of the donor. C. A completed gift promise is an executed contract. D. A completed gift promise cannot be rescinded for lack of consideration. E. A completed gift promise is an executory contract.
D. A completed gift promise cannot be rescinded for lack of consideration.
Which of the following is a correct statement regarding the enforceability of a contract entered into by an intoxicated person? A. Without exception, a contract entered into by an intoxicated person is void. B. A contract entered into by an intoxicated person is voidable if, at the time the contract was entered into, the person was intoxicated to the point that he or she would have been guilty of driving while intoxicated had she been operating a motor vehicle. C. Without exception, a contract entered into by an intoxicated person is voidable. D. A contract entered into by an intoxicated person is voidable only if the person was so intoxicated when the contract was entered into that he or she was incapable of understanding the nature of the transaction. E. Without exception, a contract entered into by an intoxicated person is revoked.
D. A contract entered into by an intoxicated person is voidable only if the person was so intoxicated when the contract was entered into that he or she was incapable of understanding the nature of the transaction.
Which of the following is an INCORRECT statement regarding gift promises? A. From the perspective of contract law, gift promises cause considerable trouble for persons who do not understand the importance of consideration. B. To change a gift promise into an enforceable promise, the promisee must give consideration in exchange for the promise. C. To change a gift promise into an enforceable promise, the promisee must offer to do something in exchange for the promise. D. A gift promise is enforceable if the donee desires to receive the gift. E. A completed gift promise cannot be rescinded for lack of consideration.
D. A gift promise is enforceable if the donee desires to receive the gift.
Which of the following is an INCORRECT statement regarding the elements of intentional misrepresentation (fraud)? A. The wrongdoer's intent to deceive the innocent party can be inferred from the circumstances. B. Statements of opinion generally do not form the basis for fraud. C. The innocent party's justifiable reliance on the wrongdoer's misrepresentation is generally found unless the innocent party knew that the misrepresentation was false or was so extravagant as to be obviously false. D. A misrepresentation of a material fact cannot occur by the conduct of a party. E. Predictions about the future generally do not form the basis for fraud.
D. A misrepresentation of a material fact cannot occur by the conduct of a party.
Which of the following is an INCORRECT statement regarding a mutual mistake of a material fact? A. A material fact is a fact that is important to the subject matter of a contract. B. An ambiguity in a contract may constitute a mutual mistake of a material fact. C. If there has been a mutual mistake, the contract may be rescinded on the grounds that no contract has been formed because there has been no "meeting of the minds" between the parties. D. A party may not rescind a contract if there has been a mutual mistake of a material fact. E. A mutual mistake of a material fact is a mistake made by both parties, while a unilateral mistake is made by only one party.
D. A party may not rescind a contract if there has been a mutual mistake of a material fact.
Which of the following is a correct statement regarding specific performance? A. Specific performance is not a remedy available to enforce contracts for the sale of rare coins. B. Specific performance is not a remedy available to enforce contracts for the sale of art. C. Specific performance is a remedy available to enforce personal service contracts. D. Courts have the discretion to award specific performance if the subject matter of the contract is unique. E. Specific performance is not a remedy available to enforce land contracts.
D. Courts have the discretion to award specific performance if the subject matter of the contract is unique.
Which of the following is an INCORRECT statement regarding the infancy doctrine? A. Under the infancy doctrine, a minor has the option of choosing whether to enforce a contract. B. If both parties to a contract are minors, both parties have the right to disaffirm the contract. C. A minor may not affirm one part of a contract and disaffirm another part. D. In most states, the infancy doctrine is a subjective standard. E. Generally, contracts for the necessaries of life are exempt from the scope of the infancy doctrine.
D. In most states, the infancy doctrine is a subjective standard.
Which of the following is an INCORRECT statement regarding the elements of intentional misrepresentation (fraud)? A. To prove fraud, the plaintiff must establish that the innocent party justifiably relied on the misrepresentation. B. To prove fraud, the plaintiff must establish that the wrongdoer intended to deceive the innocent party. C. To prove fraud, the plaintiff must establish that he or she was injured. D. To prove fraud, the plaintiff must establish that the wrongdoer made a false representation of a non-material fact. E. A misrepresentation of a material fact by the wrongdoer may occur by oral or written words.
D. To prove fraud, the plaintiff must establish that the wrongdoer made a false representation of a non-material fact.
_____ occurs when one party threatens to do some wrongful act unless the other party enters into a contract.
Duress
Which of the following is a correct statement regarding an advertisement for the sale of goods? A. An advertisement for the sale of goods constitutes an acceptance. B. By law, an advertisement is presumed to be premised on the seller's motive to "bait and switch" customers. C. An advertisement for the sale of goods constitutes a counteroffer. D. An advertisement for the sale of goods constitutes an offer. E. An advertisement for the sale of goods constitutes an invitation to make an offer.
E. An advertisement for the sale of goods constitutes an invitation to make an offer.
Which of the following is an INCORRECT statement regarding the doctrine of unconscionability? A. The courts are given substantial discretion in determining whether a contract or contract clause is unconscionable. B. The doctrine of unconscionability is based on equity. C. There is no single definition of unconscionability. D. The doctrine of unconscionability is based on public policy. E. The doctrine of unconscionability may be used merely to save a contracting party from a bad bargain.
E. The doctrine of unconscionability may be used merely to save a contracting party from a bad bargain.
Which of the following is NOT a valid type of consideration? A. money B. the performance of an act C. property D. forbearance E. an illusory promise
E. an illusory promise
_____ damages are damages that parties to a contract agree in advance should be paid if the contract is breached.
Liquidated
_____ of damages is a _____ party's legal duty to avoid or reduce damages caused by a breach of contract.
Mitigation; non-breaching
_____ damages are awarded when the non-breaching party sues the breaching party even though no financial loss has resulted from the breach.
Nominal
_____ damages are usually $1 or some other small amount.
Nominal
_____ is the act of a minor, after the minor has reached the age of majority, by which he or she accepts a contract entered into when he or she was a minor.
Ratification
_____ is a(n) _____ doctrine that permits the court to rewrite a contract to express the parties' true intentions.
Reformation; equitable
_____ is an action to undo a contract.
Rescission
_____ is the withdrawal of an offer by the offeror that terminates the offer.
Revocation
_____ is the offeror's withdrawal of an offer that results in termination of the offer.
Revocation
_____ performance of personal service contracts is not granted because the courts would find it difficult or impracticable to supervise or monitor performance of such a contract.
Specific
_____ performance occurs when there has been a minor breach of contract.
Substantial
Suppose a person threatens a business owner, "I will burn your business down unless you agree to pay me $10,000." Out of fear, the business owner promises to pay the money. Which of the following is an accurate statement regarding the business owner's obligation to pay the $10,000?
The agreement is not an enforceable contract.
_____ is a situation in which one person takes advantage of another person's mental, emotional, or physical weakness and unduly persuades that person to enter into a contract.
Undue influence
_____ occurs when one person takes advantage of another person's mental, emotional, or physical weakness and unduly persuades that person to enter into a contract.
Undue influence
According to the mailbox rule, what happens when an acceptance letter is dispatched (i.e., mailed) but lost in transmission?
acceptance is effective
A(n) _____ is an agreement whereby the parties agree to accept something different in satisfaction of the original contract.
accord
A(n) _____ is an agreement whereby the parties agree to accept something different in satisfaction of the original contract, while a(n) _____ is the performance of the new agreement.
accord; satisfaction
Preprinted forms whose terms the consumer cannot negotiate and that they must sign in order to obtain a product or service are called contracts of _____.
adhesion
The law has developed which two standards concerning contracts of mentally incompetent persons?
adjudged insane and insane but not adjudged insane
If no time is stated, an offer terminates _____.
after a reasonable time
The words _____ and contract are often used interchangeably.
agreement
A contract may not be enforced if the _____ of one or both parties to the contract was not genuine or real.
assent
Voluntary _____ by the parties is necessary to create an enforceable _____.
assent; contract
A writ of _____ orders the sheriff or other government officer to seize property in the possession of the breaching party that he or she owns and to sell the property at auction to satisfy the judgment.
attachment
Unless otherwise expressly stated, an auction is considered a(n) _____.
auction with reserve
In a(n) _____, the seller expressly gives up his or her right to withdraw the goods from sale and must accept the highest bid.
auction without reserve
Breach of the covenant of good faith and fair dealing is sometimes referred to as the tort of _____.
bad faith
A(n) _____ exchange leads to an enforceable contract.
bargained-for
A(n) _____ contract contains a clause that requires one or both of the parties to do their best to achieve the objective of the contract.
best efforts
A(n) _____ contract is a "promise for a promise."
bilateral
A(n) _____ contract is entered into by way of an exchange of promises between the contracting parties.
bilateral
Suppose Mary, the owner of the Chic Dress Shop, says to Peter, a painter, "If you promise to paint my store by July 1, I will pay you $3,000." Peter says, "I promise to do so." A _____ was created at the moment Peter promised to paint the dress shop.
bilateral contract
Most arbitration agreements stipulate _____ arbitration.
binding
A major source of contract law is the _____ law of contracts, which developed from early court decisions that became precedent for later decisions.
common
Most contracts are discharged by the _____ performance, or _____ performance, of the contracting parties.
complete; strict
An accord and satisfaction is also known as a _____.
compromise
An accord and satisfaction is also known as a(n) _____.
compromise
Fraud by _____ occurs when one party takes specific action to conceal a material fact from another party.
concealment
A promise lacks _____ if a person promises to perform a preexisting duty.
consideration
The recovery for breach of contract is usually limited to _____ damages.
contract
A(n) _____ is 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
Suppose Fei says to Harold, "I will sell you my house for $700,000." Harold says, "I think $700,000 is too high; I will pay you $600,000." Harold has made a(n) _____.
counteroffer
A(n) _____ by the offeree simultaneously terminates the offeror's offer and creates a new offer.
counteroffer
A(n) _____ is a response by an offeree that contains terms and conditions different from or in addition to those of the offer.
counteroffer
Promissory estoppel is also known as _____ reliance.
detrimental
According to the mailbox rule, acceptance is effective when it is _____.
dispatched
The threat to commit extortion unless someone enters into a contract constitutes _____.
duress
Promissory estoppel is a(n) _____ doctrine that permits a court to order enforcement of a contract that lacks _____.
equity; consideration
An _____ clause is also called a release of liability clause
exculpatory
A(n) _____ clause is also called a release of liability clause.
exculpatory
A completed contract is called a(n) _____ contract.
executed
A fully performed contract is called a(n) _____ contract.
executed
A written agreement to buy an automobile from a dealership is a(n)_____ contract.
express
A(n) _____ authorization is a stipulation in an offer that says the acceptance must be by a specified means of communication.
express
A(n) _____ contract is stated in oral or written words.
express
Fraud in the inception is also known as fraud in the _____.
factum
Fraud in the _____ occurs if a person is deceived as to the nature of his or her act and does not know what he or she is signing.
factum
Accepting an out-of-court settlement in exchange for dropping a lawsuit is an example of _____.
forbearance
Negotiable instruments are special types of _____ contracts.
formal
Two defenses may be raised to the enforcement of contracts: _____ and _____.
genuineness of assent; writing and form
A gift promise is also known as a(n) _____ promise.
gratuitous
A gift promise is also called a _____.
gratuitous promise
Scienter means _____.
guilty mind
A contract cannot be supported by a promise to refrain from doing an illegal act because that is _____ consideration.
illegal
If a department store had a sign above the entrance stating, "The store is not liable for the ordinary negligence of it employees," this would be a(n) _____clause.
illegal exculpatory
A contract that provides that one of the parties has to perform only if he or she chooses to do so is a(n) _____ contract.
illusory
A(n) _____ contract is a contract into which both parties enter but in which one or both of the parties can choose not to perform their contractual obligations.
illusory
A(n) _____ authorization is a mode of acceptance that is implied from what is customary in similar transactions, usage of trade, or prior dealings between the parties.
implied
A(n) _____ term in a contract is one that can reasonably be supplied by the courts.
implied
A quasi-contract is also known as a(n) _____ contract.
implied-in-law
At common law, parties to an illegal contract were considered _____.
in pari delicto
Legal insanity is a state of contractual _____, as determined by law.
incapacity
Fraud in the _____ occurs if a person is deceived as to the nature of his or her act and does not know what he or she is signing.
inception
The _____ doctrine allows minors to disaffirm most contracts they have entered into with adults.
infancy
To protect minors, the law recognizes the _____ doctrine, which gives minors the right to disaffirm most contracts they have entered into with adults.
infancy
A(n) _____ is a court order that prohibits a person from doing a certain act.
injunction
A promise based on past consideration _____.
is unenforceable
Usually, misrepresentation of _____ is not actionable as fraud.
law
A _____ is an agreement by the issuer of the letter to pay a sum of money on the receipt of an invoice and other documents.
letter of credit
The acceptance-upon-dispatch rule is more commonly known as the _____ rule.
mailbox
A(n) _____ fact is a fact that is important to the subject matter of a contract.
material
For an acceptance to exist, the offeree must accept the terms as stated in the offer. This is called the _____ rule.
mirror image
Genuineness of assent may be missing because a party entered into a contract based on _____, fraudulent misrepresentation, or _____.
mistake; duress
A mistake made by both parties concerning a material fact that is important to the subject matter of a contract is known as a(n) _____ mistake of a material fact.
mutual
A _____ mistake of value exists if both parties know the object of the contract but are mistaken as to its value.
mutual
Mary enters into an employment contract with Microhard Corporation. It is a three-year contract, and Mary is to be paid $100,000 per year. After Mary works for one year, Microhard Corporation fires Mary. The next day, Mary finds a better position at Microsoft Corporation, in the same city, paying $125,000 per year on a two-year contract. Mary has suffered no monetary damages but could bring a civil lawsuit against Microhard Corporation because of its breach and recover _____ damages ($1).
nominal
The intent to enter into a contract is determined using the _____ theory of contracts.
objective
The _____ theory of contracts states that the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties.
objective
In order for an offer to be valid, the offeror must _____ intend to be bound by the offer.
objectively
The _____ is the party to whom an offer has been made.
offeree
The _____ is the party to whom the offer is made.
offeree
The _____ is the party who makes an offer to enter into a contract.
offeror
The _____ is the party who makes an offer.
offeror
The _____ is the party who makes an offer to enter into a contract, and the _____ is the party to whom the offer is made.
offeror; offeree
In an auction without reserve, the seller is the _____, and the bidders are the _____.
offeror; offerees
An exculpatory clause can be used to relieve a party from tort liability for _____.
ordinary negligence
In a(n) _____ contract, the seller agrees to sell all of its production to a single buyer.
output
A promise lacks consideration if a person promises to perform a(n) _____ duty.
preexisting
A _____ is something a person is already under an obligation to do.
preexisting duty
Under the modern law of contracts, a contract is considered to be supported by legal value if the _____ suffers a legal detriment or the _____ receives a legal benefit.
promisee; promisor
The doctrine of unconscionability is based on _____.
public policy
Generally, _____ damages are not recoverable for breach of contract.
punitive
Which of the following is NOT a type of formal contract?
quasi-contract
A(n) _____ statute is enacted to protect the public.
regulatory licensing
The anticipatory breach of a contract is also called anticipatory _____.
repudiation
In a(n) _____ contract, the buyer agrees to purchase from the seller all of an item it needs.
requirements
Generally, to _____ a contract, the parties must make restitution of the consideration they received under the contract.
rescind
According to the duty of _____, if a minor has transferred money, property, or other valuables to the competent party before disaffirming the contract, the party must place the minor in status quo.
restitution
Generally, to rescind a contract, the parties must make _____ of the consideration they received under the contract.
restitution
According to the duty of _____, a minor is obligated only to return the goods or property he or she has received from the adult in the condition it is in at the time of disaffirmance.
restoration
Licensing statutes enacted to raise money for the government are called _____ statutes.
revenue-raising
If an accord is performed, it is called a(n) _____.
satisfaction
Consequential damages are also referred to as _____ damages.
special
An award of _____ performance orders the breaching party to perform the acts promised in a contract.
specific
Complete performance is also known as _____ performance.
strict
The enactment of a statute, regulation, or court decision that makes the object of an offer illegal is known as a _____.
supervening illegality
An offer _____ if the subject matter of the offer is destroyed through no fault of either party prior to the offer's acceptance.
terminates
Prior to acceptance of an offer, the death or incompetence of the offeror or the offeree _____ the offer.
terminates
A counteroffer by the offeree simultaneously _____ the offeror's offer and _____ a new offer.
terminates; creates
What is the legal effect of fraud in the inducement?
the contract is voidable by the innocent party
If there has been a mutual mistake of material fact, _____.
the contract may be rescinded
What is the legal effect of a mutual mistake of value?
the contract remains enforceable by either party
Tender is a(n) _____ and _____ offer by a contracting party to perform his or her obligations under the contract.
unconditional; absolute
A(n) _____ contract is a contract that courts refuse to enforce in part or at all because it is so oppressive or manifestly unfair as to be unjust.
unconscionable
A contract based on an illusory promise is _____ because the contract lacks _____.
unenforceable; consideration
An offer to pay a reward (for example, for the return of lost property or the capture of a criminal) is an offer to form a(n) _____ contract.
unilateral
A _____ contract is a "promise for an act."
unilateral
In a _____ contract, the offeror's offer can be accepted only by the performance of an act by the offeree.
unilateral
Mary, the owner of the Chic Dress Shop, says to Peter, a painter, "If you paint my shop by July 1, I will pay you $3,000." This offer creates a _____.
unilateral contract
State _____ laws set an upper limit on the annual interest rate that can be charged on certain types of loans.
usury
Under the modern law of contracts, a contract is considered to be supported by legal _____ if the promisee suffers a legal detriment or the promisor receives a legal benefit.
value
A(n) _____ contract has no legal effect.
void
An agreement between two companies to engage in price fixing in violation of federal antitrust statutes is illegal and therefore _____.
void
An illegal contract is _____.
void
Any contract entered into by a person who has been adjudged insane is _____.
void
Contracts based on illegal consideration are _____.
void
Contracts contrary to public policy are _____.
void
Contracts that have an illegal object are _____.
void
Contracts to commit criminal acts are _____.
void
A(n) _____ contract has no legal effect.
void
Exculpatory clauses that result from superior bargaining power are usually found to be _____.
void as against public policy
A contract entered into by a person who is insane, but not adjudged insane, is generally _____.
voidable
A(n) _____ contract is a contract in which at least one of the parties has the option to void his or her contractual obligations.
voidable
Unless otherwise expressly stated, an auction is considered an auction _____.
with reserve
_____ is something of legal value given in exchange for a _____.
Consideration; promise
_____ contracts are implied from the conduct of the parties.
Implied-in-fact
_____ of damages is a _____ party's legal duty to avoid or reduce damages caused by a breach of contract.
Mitigation; non-breaching
Under the modern law of contracts, a contract is considered to be supported by legal value if the promisee suffers a legal _____ or the promisor receives a legal _____.
detriment; benefit
A contract is an agreement that is enforceable by a court of _____ or _____.
law; equity
A party may rescind a contract if there has been a _____ mistake of a _____ fact.
mutual; material
Gift promises are _____ because they lack _____.
unenforceable; consideration
A contract that is based on sexual favors is an immoral contract and _____ as against _____.
void; public policy