B Law Test #2
Which of the following guidelines applies to writing the title of a contract?
It should be descriptive of the agreement, and typed in all capital letters.
David and George have a contract wherein George agrees to buy sporting goods and equipment. Since the goods are not to be delivered for several months, they left the price open. Under the UCC, which of the following will be true?
The price will be the reasonable price based on the market value of the goods at the time of delivery or a price established by a neutral party or agency.
In which of the following situations is it likely that you may NOT need a written contract?
The terms of the agreement are simple and the value of the transaction is small.
Oxtron, Inc. sent the following price list to its customers. Dispensers: SBC-500J $670.00 True TDD-1 $875.00 True TDD-2 $1,465.00 True TDD-3 $1,515.00 CO2 Tank and Regulator $150.00 Which statement is correct?
These price quotes would generally not be considered offers.
Robert, a minor, buys a stereo from Jane for $200. State law allows a minor to disaffirm contracts within a reasonable time after turning 18. Robert disaffirms the contract the day after turning 18 and returns the stereo.
This contract was a voidable contract, Robert can disaffirm.
Vivian goes to an auction and sees a rare antique lamp that is an identical match to one she already has. At the proper time she bids on the lamp and is the highest bidder. Even though she is the highest bidder, the auctioneer refuses to accept her bid and withdraws the lamp from the auction. Can the auctioneer do that?
Unless otherwise stated, the auctioneer had the right to withdraw the item before the fall of the hammer.
On January 16, Deb offers to sell her waterbed to Colleen for $600. Colleen accepts and agrees to pay Deb $600 on January 27. Which of the following is correct?
Until January 16, the contract was executory.
Wally owns 200 acres of land. Wally offers to sell the land to Robert for $1,500 per acre. Robert replies that he does not need 200 acres of land but would like to buy 40 acres at $1,500 per acre. Wally agrees to sell but does not identify which 40 acres. Later, Wally refuses to sell any land to Robert. What is the result?
Wally wins; this agreement is too indefinite since it does not identify which 40 acres are to be sold.
Walter worked nights as a clerk in a fast-food store. On his last work shift, Walter's boss told him, "I'm really grateful for the year that you have worked here. I am going to give you a bonus of $1,000 in your last paycheck." When Walter got his last paycheck, there was no bonus. If Walter sues, the likely result will be
Walter will lose, as he gave no consideration.
Which of the following is one of the four steps in reading a contract?
What-ifs
If Crosby and Dash are in disagreement as to the exact amount of money that Crosby owes Dash, then they may choose to form a new agreement at a set amount. If they both perform the new agreement, their conduct would be an example of
an accord and satisfaction
Bailey Co. and Spryt Bros. enter into a contract for the manufacture and sale of 400 lawn chairs. If both parties agree that a modification is necessary
an agreement to rescind the contract will terminate the contractual rights of Bailey Co. and Spryt Bros. if neither of them had completed their obligations.
Jerry offers to shovel the snow from Ben's driveway for $35. Ben replies "OK." This is an example of
an express, bilateral contract.
Marco agrees to sell Clowns R Us some balloons. The contract states that Clowns may buy as many balloons as it wishes. This agreement is
an illusory contract
"I'll sell you my car if I decide to sell it" is an example of
an illusory promise
As it pertains to consideration, which of the following does NOT constitute value?
an illusory promise
An agreement in which a buyer agrees to buy all the goods produced by a manufacturer is known as
an output contract.
An agreement in which parties intend to form a valid bargain, but a court declares that some rule of law prevents enforcing it is called
an unenforceable agreement.
Bob signed an agreement with Joe under which Bob agreed to purchase all the hay that Joe grew during the coming growing season. This contract will be
enforceable as long as both parties act in good faith and Bob doesn't suddenly demand more hay than what was reasonably estimated.
A promise by Derkin Restaurants to buy all of the produce it needs this next year at an established price from Elfredo's Produce would be an
enforceable requirements contract
An agreement between two parties to pay a lesser amount to settle an unliquidated debt is
enforceable, as there is consideration.
Mike made the following offer to Mick: "I will pay you $500 if you agree to paint my house." Mick replied that he would. At this point, the contract is an
executory, bilateral, express contract.
What phrase explains how a requirements contract can be valid?
in good faith
A contract most likely will be declared unconscionable if
it is oppressive and one-sided.
Which term refers to whether an offeree accepts an offer by promising, by making a down payment or by performing?
manner of acceptance
Under the Uniform Commercial Code, an agreement modifying a contract
may not require consideration.
Hensley and Boyer have been negotiating for several months over issues related to the purchase and sale of some real estate. They draft a letter of intent that
may or may not be an offer, depending on the exact language and whether the document indicates that the parties have reached an agreement.
Noncompetition agreements are
more common today than they were in the past, although policy issues they raised in the 1700s have never gone away.
If Becky promises not to drink alcohol until she becomes a legal adult in exchange for Ben's promise of $1,000, the agreement is
not enforceable because Becky does not have a legal right to drink alcohol.
John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky Derby. Prince Charming came in last, much to John's frustration and embarrassment. John exclaims in a loud voice, "I'm selling that horse to the first person who hands me $100!" John has
not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer.
If Rudy offers Oscar $200 for his laptop valued at $600 and Oscar agrees, a court will probably
not set aside the agreement based on the adequacy of the consideration.
Jaime offered to buy Kevin's bike. Jamie is the
offeror
The basic distinction between a bilateral contract and a unilateral contract is that
only one promise is involved in a unilateral contract.
As English judges were developing the common law of contracts in the twelfth and thirteenth centuries,
promises were found not binding unless written and sealed.
Contract provisions that are enforceable independently are referred to as
reciprocal promises.
Larry goes to his barber who has cut his hair for the past several years. The barber proceeds to cut his hair as they talk about the most recent snow storm to hit the area. This is an example of a
unilateral, implied contract.
When a party to a contract intentionally makes the terms of a contract unclear, it is called
vagueness.
An unliquidated debt can be described as
a debt in which the existence or amount is in dispute.
What is a force majeure event?
a disruptive, unexpected occurrence for which neither party is to blame that prevents one or both parties from complying with a contract
Which of the following is a standard provision frequently found in contracts?
choice of forum
The courts will find an implied contract when
conduct of the parties indicates they intended an agreement.
If the subject of the contract includes issues that may be controversial or "touchy," it is best to
deal with them up front before the relationship becomes strained.
Two parties are debating whether or not to put their contract into writing. In making their determination, which of the following factors would normally NOT be considered?
the length of time covered by the agreement
If an offer specifies no time limit in which to accept
the offeree has a reasonable period during which to accept.
In a contract modification, the phrase "charged with such amendment" refers to
the party who will be adversely affected by the change.
A seller's form clearly states no warranty is included. The buyer's form states that the seller warrants the goods for one year. In this case
the warranty term is a "different term," and the majority of states hold that a contract can be formed but the contradictory terms cancel each other out.
The intent of the offeror to extend an offer to the offeree is generally determined by reference to
the words and conduct of the offeror
"Scrivener's error" is another (fancier) name for a typo.
true
Which of the following represents a unilateral offer?
"I will pay you $50 if you mow my lawn."
Courts may award damages called quantum meruit, which means
"as much as he deserves."
Acme Co. offers to buy 1000 widgets from Widget World Co. The written offer provides for 1000 at $10 per widget, to be delivered May 1. The offer has no other provisions. Widget World sends a written acceptance. However, the acceptance also states that if any claim arises under this contract, Widget World must be notified within 10 days. Acme does not object to this provision. Both parties are merchants. Which of the following best describes this situation?
A contract exists. The additional terms are not material, they are part of the contract.
A+ Modeling Agency signs a contract with Sandi to do a photo shoot for the local used car dealer's advertising. The contract was most likely written by
A+ Modeling Agency's lawyer.
Ralph is a professional football player. He signs a valid contract with the Miami Dolphins. Later, he claims that he was also promised free use of the Dolphins' private jet, but this was not in the contract. What type of clause in his contract would prevent him from flying away with this claim?
An integration clause
What element of a contract refers to the parties involved being "adults of sound mind"?
Capacity
Bob, a house painter, contracts with Ollie to paint a rental house which Ollie owns. Bob hires Rob to take his place as the painter on this contract. What has Bob done?
Delegated his duties
Jamie is building a house on her lot. She invites Earnie of Earnie's Excavation to bid on the excavation job. Earnie observes that the lot next to Jamie's is also under excavation and the soil in that lot is normal and not excessively rocky. Based on the assumption that the soil in Jamie's lot will be similar, he and Jamie agree that the excavation will cost $3,000. When Earnie starts digging, he learns there is solid rock under Jamie's lot. Earnie says it will cost an extra $2,500 for the excavation work. Jamie agrees just to get the job done but later refuses to pay a dime more than $3,000. If Earnie sues, the most likely result would be
Earnie wins, as the modification was due to unforeseen difficulties.
Travel Lines offered to sell 10 round-trip tickets to Elaine. Travel Lines stated that the acceptance must be in writing by USPS next-day service. Which of the following acceptances will create a contract between Travel Lines and Elaine?
Elaine sends a letter by USPS next-day service to Travel Lines stating that she will buy the tickets.
Farmer's Fortune Insurance has a contract with Farmer Fran to insure her crops against insect damage. The contract does not specify which insects are covered or how much damage is necessary to make a claim. The contract will probably be enforced in favor of
Farmer Fran.
Bernie owes an undisputed amount to Wilde's Heating & Air Conditioning. Which of the following is true?
If Wilde's agrees to accept less than the full amount as full payment, the agreement is not binding.
Jack mails an offer to Joan that states, "I offer to sell you my car for $2000. If I don't hear from you in 10 days, I will assume you are willing to buy the car for the stated price." Jack hears nothing by the deadline and assumes he has a deal. What is the result?
Joan is not bound. Generally an offeree must say or do something to accept an offer.
Collector Carl displays his beer can collection at the local swap meet. Mary sees the collection and is interested in buying it. Carl says he will sell the collection for $1,500. Mary says she really likes the collection but is only willing to pay $1,000. Which of the following is correct?
Mary's counteroffer terminates Carl's offer of $1,500.
Walter enters a dentist office and points to a damaged tooth. The dentist, Matt, treats the tooth. If Walter refused to pay and Matt sued,
Matt would win; this is an implied contract.
When Myrtle comes home from work one evening, she finds that her yard has been mowed and trimmed. Later, a man comes to collect for the yard work done. Myrtle refuses to pay for the work since she has never seen the man before and did not hire him to do her yard work. Which of the following answers is most accurate?
Myrtle would not have to pay for the yard work.
Mid-American Oil had a contract with NSB Company to supply 1,000 gallons of oil by September 1. The contract contained a provision which required all modifications to be written and signed by the company presidents. In early August, an executive of Mid-American talked with the purchasing agent of NSB who orally agreed to two shipments of oil; one in September and the second one in December. By September 30, when only 500 gallons had been delivered, NSB sued. The likely outcome of this lawsuit is:
NSB wins because the modification has to be in writing.
Patty is a poor college student struggling to work and keep up with her studies. Fred, her uncle, promises to pay Patty support of $200 per month for the next six months. Although Fred didn't ask her to, she quits her current job in order to devote full time to her studies for the next six months. Fred makes one payment and then stops with no explanation. If Patty sues, what is the likely result?
Patty may win under the doctrine of promissory estoppel.
Police Officer Paul apprehends a wanted criminal and then demands the $10,000 reward offered by Crime Stoppers. Which of the following statements is true?
Police Officer Paul is not entitled to the reward because he was under a pre-existing duty to make the arrest.
One of the factors leading courts away from a laissez-faire approach to contract law was
a change in relative bargaining power between parties to contracts.
Seth told the salesperson at Outdoor Times that he wanted the sleeping bag that was advertised in the Sunday paper; one that would keep him comfortable if the temperature drops to 10 degrees Fahrenheit. The salesperson told Seth they were sold out of that bag, but there were two other styles that would meet his needs and were the same price. Seth insisted he wanted the advertised bag and threatened to sue for breach of contract. Which is true?
Seth will not prevail, as the advertisement was simply a request for offers.
John enters into a contract to paint Chad's house. When Chad decides on a color, John will buy the paint and paint the house for the price of $2,500. Which of the following is true?
The common law of contracts governs because the predominant factor of the contract is for the sale of services and not goods.
Which of the following is generally NOT in the introductory paragraph of a contract?
The covenants of the contract
Shelly offers to sell Jane goods both parties know are stolen. Jane accepts the offer, and agrees to pay for the goods. Later, Jane refuses to accept or pay for the goods. If Shelly sues Jane for breach of contract, what is the probable result?
The law would not enforce Jane's promise, as it does not have a lawful purpose.
Dick offers to sell Jane his 1955 Thunderbird convertible. Before Jane can accept the offer, lightning strikes the car and it is totally destroyed. Which of the following is true?
The offer is terminated by law
Floyd offers to sell his 1967 Ford Mustang convertible to Tim. Before they conclude their negotiations, Floyd dies. Which of the following is true?
The offer terminates automatically upon Floyd's death.
In January, Alex promised to pay Y-K Inc. $5,000 if it would refrain from filing suit against him on a breach of contract action. Y-K agreed and accepted a $5,000 check from Alex. Which of the following statements is correct?
Y-K's promise to refrain from suing Alex was supported by legal consideration and is enforceable.
Zero, Inc. agreed to build Millie a storage building for $8,000. After beginning the project, Zero realized that it could not complete the job and make a profit. Zero demanded $9,500 to complete the building. Millie agreed to pay the $9,500. When the project was complete, Millie tendered $8,000 to Zero for the job. If Zero sues Millie for the remaining $1,500,
Zero will lose because there was no legal consideration to support the additional $1,500.
Which of the following types of property would be considered "goods" under the Uniform Commercial Code?
a computer
Which of the following are generally considered to be legal offers?
a note scribbled on a restaurant napkin that includes the details of the offer
If someone provides a service that he or she is already obligated to do, it is an example of
a preexisting duty
Which of the following is NOT required to establish promissory estoppel?
a promise made by the plaintiff in response to the defendant's promise
What type of contract is a possible remedy for an injured plaintiff in a case with no valid contract, when the plaintiff can show benefit to the defendant, reasonable expectation of payment, and unjust enrichment?
a quasi-contract
Jennifer has offered to sell her laptop computer for $750 to Jack. She tells Jack that the computer is only six months old but, in fact, it is three years old, and Jennifer wants to unload the lemon. Jack agrees to buy the computer based on Jennifer's representations. This contract is
a voidable contract, one that Jack can void.
Which of the following offers are considered to be irrevocable for a given period? Select one:
all of the above
When a provision in a contract is unclear by accident, it is a case of
ambiguity
Nate works as a sales representative. His employment contract specifies that he cannot work for a competitor for a period of two years from employment. This is an example of
ambiguity.
An agreement to settle a debt for less than the sum claimed is referred to as
an accord
Standard provisions in a contract that are often listed under the heading "Miscellaneous" are called
boilerplate.
When one party to a contract fails to perform as promised, it is called
breach
Which of the following is NOT one of the three ways to amend a written contract?
by verbally agreeing to the changes and shaking hands on the deal
An honest effort to meet both the spirit and letter of the contract is termed
good faith
An express contract
has both parties setting forth their intentions.
In the case of scrivener's errors, a court will usually
reform the contract if it is clear that the mistake is not what the parties intended.
Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days. The parties negotiated and meant to say in the written agreement, delivery in 50 days. If the evidence is clear that the two parties intended to agree to 50 days, the courts will probably
reform the contract.
Statements of fact about the past and present are called
representations and warranties.
Upon graduating from college, Kathy announced her plans to enter law school the following fall and to marry Rick in December. Kathy's father was afraid that marriage during her first year in law school might cause her to fall behind in her studies or cause her to drop out of school. He called Kathy and promised her $10,000 if she postponed her wedding until after completion of her first year of law school. Kathy agreed and postponed the wedding for a year. Kathy successfully completed her first year of law school, but soon thereafter, Kathy's father died. The administrator of her father's estate claimed she was not entitled to the $10,000 because there was no consideration for her father's promise. If Kathy sues the estate, she will probably be
successful, as there was consideration.
Mary owes $3,800 on her credit card. She sends the credit card company a check for $800 with the notation "payment in full" on the check. If the credit card issuer cashes the check,
the check may be subject to a UCC exception to the general rules for accord and satisfaction cases involving checks.
If Morales and Rolfes Supply negotiate for the purchase and sale of a supply of fuel for a three-year period for Morales' business,
the contract may indicate a method for determining the price, without stating a definite price.
On January 8, Quastrar, Inc. sent Hylavian Company a letter offering to sell $10,000 in restaurant supplies. On January 18, Hylavian mailed a letter to Quastrar accepting the offer. Quastrar received the acceptance letter on January 20. On January 17, Quastrar sent a letter revoking the offer. Hylavian received this letter on January 21. A contract between Quastrar and Hylavian
was formed on January 18.
The Johnsons decided to sell their summer cabin on Beech Lake. They sent flyers out to all who previously had expressed an interest in buying the cabin stating that they were planning on selling their cabin. The flyer described the location of the property, the size of the lot, and the price. If one of the recipients responds by sending a letter accepting, an agreement
will not be formed because the flyer was sent out as an invitation to make an offer.
Miles purchased a lawnmower with an attached warning that said, "The manufacturer is not responsible in the case of an injury caused by the lawnmower." If Miles is injured because of a defect in the mower and sues the lawnmower manufacturer, he will most likely
win, as this warning would be unenforceable.
In the historic case of Hamer v. Sidway, the nephew
won, as the Court found there was consideration.