Quiz 5 - Contract Law

Elmer wrote a letter to his friend Fred offering to sell Fred an 80-acre farm for $200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000 and changes his mind about selling. In this case, Elmer:

Can revoke his offer at any time before Fred accepts it, because there is no consideration to keep it open

The requirement that each party to a contract must intentionally exchange something of value as an inducement to the other party to make a return exchange is known as:

Consideration

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by:

State common law

Destruction of the subject matter has what effect on the offer?

The offer is terminated

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code?

The sale of a new car

When does acceptance of an offer to enter into a unilateral contract generally occur?

Upon full performance by the offeree

James offers to sell his fishing boat to Brenda for $3,000. Brenda says she will apply for a loan and will buy the boat within a week. A contract is formed:

When Brenda tells James she will buy the boat

Able is involved in an automobile accident and is injured. While he is unconscious, the police call an ambulance which takes him to a hospital. Able is treated at the hospital and released a day later. The hospital sends him a bill for $4,500, which Able refuses to pay, claiming it is too high and he never consented to the treatment because he was unconscious. Able:

Will have to pay the hospital, because this is a quasi-contractual agreement

Which of the following is NOT always necessary in order for a valid contract to be formed? (mutual assent, legality of purpose, a writing, and competent parties)

A writing

Under the common law, the __________ must be the mirror image of the __________

Acceptance, offer

If there is no time specified for the acceptance of an offer, when does the offer terminate?

After a reasonable period of time, which depends on the circumstances

Albert read ElectroCorp's ad in the local newspaper advertising a music system for $89. Albert rushed to the store to buy the system only to be told by the salesperson that the ad was a misprint and the price should have been $289. Albert gave the salesperson $89 plus sales tax and demanded the music system

Albert is merely making an offer to ElectroCorp to buy the music system for $89 plus sales tax

The Uniform Commercial Code does not apply to:

All of the above (everything that isn't the sale of goods)

An ad in a newspaper or a circular describing goods and stating prices would generally be considered:

An invitation to buyers to make an offer to buy goods

Elvis makes an offer to Fred, but before Fred can accept, the state supreme court decides a case that makes Elvis's offer illegal. The court's decision:

Automatically terminates the offer

To be effective, and offer must:

Be communicated to the offeree

A contract in which both parties exchange promises is a

Bilateral contract

Samuel Tate enters into a contract with Bill Smith under the terms of which Smith is to pay Tate $7,000 and Tate is to build a garage, repair a boat, and build a doghouse. If the doghouse has not yet been built, which term describes the type of contract in existence?

Executory contract

Which of the following is NOT generally required in order to have a valid contract? (Mutual assent, a lawful purpose, fairness of the bargain, and parties who have contractual capacity)

Fairness of the bargain

A __________ is the refusal to accept an offer

Rejection