UNIT 5 REVIEW

FALSE

""Words such as "a share of the cost" or "competitive cost" are okay to use for terms in a contract, as long as both parties are in agreement to their exact meaning."" - FALSE, The court must be able to determine what the parties intended; these terms are too ambiguous.

FALSE

"An example of a unilateral contract is when you promise to have the money by noon on Friday to purchase a car." -- FALSE, Unilateral is a promise for an action; therefore, the person selling the car is giving a promise for action. The situation would have to be as follows: "I will sell you my car (the promise) if you will have the money to me by noon on Friday (the action)." Can you see the difference between this situation and the one given in the question? In this situation, if the money is not there by noon on Friday (action), there is no contract.

Unless stated as an escape clause in the contract, these reasons do not discharge a contract.

"Contracts may be legally discharged for impossibility of performance such as strikes, natural disasters, difficulty in obtaining materials, etc." FALSE

Oral contracts are hard to prove, but not all contracts are required to be in writing.

"Contracts must be in writing because oral contracts are hard to prove in court." FALSE

It is legal if the restriction is reasonable both in time and place.

"It is illegal to contract with a former business owner that prevents him or her from entering the same business in the same area as his or her former business." FALSE

Goodwill is considered a business asset.

"Only the physical assets of a business can be considered when selling a business, not the business's goodwill." FALSE

Real property only pertains to land and the buildings attached.

"Real property and personal property are interchangeable terms." FALSE

The court requires that liquidated damages be reasonable.

"Since both parties agree what the liquidated damages will be at the time they first enter the contract, these damages can be as little or as unreasonable as they want them to be." FALSE

FALSE

"The law treats all the contracts of those lacking capacity in the same way." FALSE, Minors are treated differently than someone who is declared insane.

FALSE

"Voidable and void both mean a contract is not enforceable." - False.... If a contract is void, it is not valid and is therefore unenforceable; however, voidable means that an otherwise valid contract has the possibility of being cancelled by one of the parties.

TRUE

A breach occurs when one of the parties in an agreement fails to live up to what she or he agreed to do.

FALSE

A competent adult can disaffirm a contract with a minor if the minor misrepresents his or her age as an adult. -- FALSE, The adult is still bound; only the minor may disaffirm.

TRUE

A contract can be valid and unenforceable at the same time. -- It can be valid, containing all six elements, but also unenforceable because of a certain time lapse.

TRUE

A contract may be legal in one state but illegal if it is carried out in another state.

TRUE

A memorandum is the written evidence of an agreement and may be in the form of a sales slip, a letter, an invoice, or a check.

FALSE - To be considered fraud, the misrepresentation has to be deliberate and deceiving.

A person who makes an innocent misrepresentation of fact while entering into a contract can be sued for fraud. - FALSE

TRUE

Acceptance is the unqualified willingness to go along with the offer without changing the terms in any way.

TRUE

Agreements made under duress are either void or voidable.

claims to damages for less that $500

All of the following are reasons why some rights may not be transferred except - claims to damages for personal injuries - right to personal services, especially those of a skilled nature or when a person's trust and confidence are involved. - claims against the United States ------- claims to damages for less that $500

TRUE

An express contract can be expressed in writing or verbally.

revocation

An offer can be terminated when the offeror takes back the offer before it is accepted by the offeree. This is known as

specific performance

Because the law considers each parcel of real estate unlike other parcels of real estate, which remedy is important to this rule? - right of recission - liquidated damages - money damages -----------specific performance

voidable

Contracts entered into by minors are considered - unenforceable ----- voidable - valid - void

TRUE

Even though a person who is intoxicated is considered to lack capacity, the courts hold those persons to a stricter standard than others who lack capacity.

TRUE

Even though it is easier to prove in court, not all contracts need to be in writing.

TRUE

If a person pays no attention to a misrepresentation, he or she cannot win a lawsuit for fraud.

TRUE

Most contracts are discharged when the parties have performed as agreed.

promise is enforced even though no consideration is given for it.

Promissory estoppel is when

TRUE

Rights are assigned and duties are delegated.

TRUE

The parole evidence rule states that evidence of statements given orally before signing a written document cannot be presented in court to change or add to the terms of that written agreement.

accepting the offer without changing the terms in any way.

The principle behind the mirror image rule is: - the offer mirrors the acceptance - the offer becomes a counteroffer when changes are made - a meeting of the minds - accepting the offer without changing the terms in any way

Both parties have returned consideration and have given credit for what cannot be returned.

The right of rescission and the right of cancellation are the same in what regard? - The injured party still retains the option to other remedies. - Both parties agree upon the damages. --------- Both parties have returned consideration and have given credit for what cannot be returned. - Neither party receives damages.

TRUE

The term given for demanding a higher rate of interest than allowed by law is usury.

reasons of bankruptcy and the statute of limitations.

The two reasons why the court may deny the injured party a remedy would be for

FALSE

Under a unilateral mistake, only the party making the mistake can back out of a contract. - FALSE

novation is a transfer of rights and duties so all of these

What has occurred when a new party has replaced the original party to a contract? - transfer of rights - transfer of duties - novation -------- all of these

when an exchange of benefits and detriments has occurred between the parties entering a contract.

What is consideration?

TRUE

When the offeree uses the same method of communication when accepting the offer, then the contract comes into existence when the acceptance is sent.

TRUE

When there are handwritten terms on a printed or typewritten agreement, the handwritten terms prevail.

those for non-necessaries

Which contracts by a minor can be disaffirmed? - those for both necessaries and nonnecessaries - those for necessaries ---- those for non-necessaries

ALL

Which of the following agreements does not provide consideration? - a promise to give a gift - a promise to obey the law - past consideration ---- all of these

"The offer must be accepted within a reasonable time."

Which one of the following is not a basic requirement of an offer? - The offer must be accepted within a reasonable time. - The offer must be intended seriously. - The offer must be definite and complete. - The offer must be communicated to the offeree.

a twenty-five-year old mentally handicapped man

Which one of the following lacks capacity to contract? -a forty-year-old female who has downed two cans of beer - an eighteen-year-old high school student ----- a twenty-five-year old mentally handicapped man - a convict who has just been released from prison.