BLAW 265 Exam 2 Quiz Questions with Answers
Lou enters into an agreement with LaFancy Inc., an event management company, to coordinate her wedding in June for the sum of $10,000. In March, Lou calls LaFancy to tell the company the deal is off, because she thinks she can do a better job herself. LaFancy sues Lou, and Lou argues lack of consideration as a defense. Which of the following statements holds true of this scenario? A) LaFancy has given consideration. B) LaFancy had a legal duty to plan Lou's wedding even before the agreement was signed. C) Lou can enforce LaFancy's promise to her. D) Lou was the only promisor in this contract.
A) LaFancy has given consideration.
The manager of Mack's Bar sent Olive Outlet an order for 200 cases of olives to be shipped "as soon as possible." The day Olive Outlet receives Mack's order, it ships the olives. Later that day, Mack's manager phones Olive Outlet and tries to revoke his offer. Under these circumstances: A) Mack's Bar cannot revoke because a contract was created when Outlet shipped the olives. B) Mack's Bar can revoke because the acceptance had not been received. C) Mack's Bar can revoke based on principles of promissory estoppel. D) Mack's Bar cannot revoke, since the olives will spoil if they are shipped back.
A) Mack's Bar cannot revoke because a contract was created when Outlet shipped the olives.
Rudo asked Harun to detail his brand-new sports car by painting flames on the side of the vehicle. After the parties signed a contract and after Harun had already started to paint, Rudo decided that he also wanted Harun to install a new stereo system in the car at the same cost and modified the contract likewise. Harun painted the flames on the side of the vehicle as originally agreed but did not install a new stereo. Rudo refuses to pay the originally agreed upon price. If Harun sues Rudo for the contract price, he will win because A) Rudo's modification was unenforceable for lack of consideration. B) Rudo's promise was unenforceable. C) the old contract automatically got cancelled with the addition of a new condition. D) Harun's act was not a preexisting duty and hence of no legal value.
A) Rudo's modification was unenforceable for lack of consideration.
If Kate promises a stereo system to Uli, which of the following holds true with regard to the idea of consideration? A) Uli will not be able to enforce Kate's promise if he has not done anything in return. B) Uli has to perform an act in return for Kate's promise. C) Kate's promise should not be supported by consideration. D) Uli's consideration should be an act and not a promise.
A) Uli will not be able to enforce Kate's promise if he has not done anything in return.
If the amount of a debt is "due and certain," _____. A) a promise to pay less than the amount lacks consideration B) the debt is considered to be an unliquidated one C) there is a dispute about the existence of the debt D) there is a dispute about the amount of the debt
A) a promise to pay less than the amount lacks consideration
In a contract involving elements of both goods and services, a court will determine whether Article 2 of the Uniform Commercial Code (UCC) applies by: A) asking which element predominates in the contract. B) balancing the need to apply a uniform standard with the interest of justice. C) asking if the contract is barred by public policy. D) using the criteria of reasonableness.
A) asking which element predominates in the contract.
If Gwen hands Lisa a detailed offer for the purchase of Lisa's pottery wheel and Lisa signs the offer without changing any of its terms, the parties have created a: A) bilateral contract. B) contingent contract. C) unilateral contract. D) multilateral contract.
A) bilateral contract.
If an offer does not state a time for acceptance, it is valid: A) for a reasonable time, which depends on the circumstances of the offer. B) for 10 days from the day the offer is made. C) for 20 days from the day the offer is received by the offeree. D) until the offeree accepts it.
A) for a reasonable time, which depends on the circumstances of the offer.
A counteroffer: A) impliedly rejects an offer. B) does not affect the material terms of the contract. C) is a mirror-image of the offer. D) is an inquiry into the terms of the offer.
A) impliedly rejects an offer.
According to the Uniform Commercial Code, if the original agreement requires any modification to be in writing, an oral modification: A) is unenforceable. B) is enforceable. C) can be enforced if the value of the goods exceeds $500. D) can create legal value.
A) is unenforceable.
According to the Uniform Commercial Code (UCC), when acceptance is made expressly conditional on agreement to new terms proposed by the offeree, _____ contract is created. A) no B) an implied C) a conditional D) a unilateral
A) no
According to the rule of _____, if a promisee's performance was rendered before the promisor's promise was made, then it can never serve as consideration, even though it may meet the "legal value" part of the test. A) past consideration B) preexisting duty C) forbearance D) promissory estoppel
A) past consideration
An honest dispute about the existence or amount of a debt makes the debt a(n) _____ one. A) unliquidated B) illusory C) liquidated D) nominal
A) unliquidated
Which of the following is true of a contract made by a minor? A)A minor is given the right to disaffirm his or her contract. B)If a minor's contract involves title to real estate, the minor can disaffirm before reaching majority. C)Adults who contract with minors are bound to the agreement unless the adult chooses to disaffirm. D)A minor's capacity to contract is never presumed.
A)A minor is given the right to disaffirm his or her contract.
_____ involves misstatements about the content or legal effect of something usually contained in a form or preprinted contract. A)Fraud in the execution B)Undue influence C)Mutual mistake D)Unintentional tort
A)Fraud in the execution
Which of the following is the meaning of the term " caveat emptor"? A)Let the buyer beware B)The parties' duty of care C)Justifiable reliance D)Remedy for fraud
A)Let the buyer beware
Terry and Farah have an oral contract for the sale of 100 books at $30 per book. If Terry delivers the books and Farah accepts them, or if Farah pays for the books and Terry accepts payment, which of the following is true? A)Terry can raise the statute of frauds defense to enforce the remainder of the contract. B)Both Terry and Farah can raise the statute of frauds defense as it is a complete performance. C)Neither Terry nor Farah can raise the statute of frauds defense as the agreement has been performed at least partially. D)Farah can raise the statute of frauds defense to enforce the remainder of the contract.
A)Terry can raise the statute of frauds defense to enforce the remainder of the contract.
Which of the following is true of blue laws? A)They prohibit the performance of certain work on Sunday. B)They were passed to regulate betting. C) They regulate the amount of interest charged for the use of money. D)They do not vary across states in a country.
A)They prohibit the performance of certain work on Sunday.
Will wants to sell a car to Timothy. Will tries to convince Timothy that it is a good buy. Will lies by telling him that the car has 10 months of free service left in order to convince him to buy it. The car actually has only 2 months of service left. Which of the following is true in this scenario? A)Will is guilty of fraud. B)Will is not guilty of fraud because he did not have commercial interests behind the lie. C)It is a case of mutual misunderstanding. D)Will cannot be tried by the court because the defendant's motivation is not known.
A)Will is guilty of fraud.
To create acceptance to an offer for a bilateral contract, _____. A)an offeree must perform the act requested by the offeror B)silence will never constitute acceptance of an offer C)acceptance must always be properly communicated to the offeror D)an offeror is allowed to word his or her offer so that the offeree will be bound to the contract
A)an offeree must perform the act requested by the offeror
A(n) _____ clause is a provision in a contract that attempts to relieve one party to the contract from liability for the consequences of his or her negligence. A)exculpatory B)indemnification C)arbitration D)severability
A)exculpatory
In an executory bilateral contract, most courts hold that: A)if a contract has been fully performed by one side, the promise of the other party is enforceable even if it cannot be performed within a year. B)even if a contract has been fully performed by one side, the other party may choose to not enforce its side of the contract. C)even if a contract has been fully performed by one side, the other party has no legal obligation to enforce its side unless it is in writing. D)if a contract has been partially performed by one side, the promise of the other party is enforceable if it is communicated orally.
A)if a contract has been fully performed by one side, the promise of the other party is enforceable even if it cannot be performed within a year.
In determining whether the offeree accepted the offer, the court looks for the offeree's _____ intent to contract. A)present B)future C)subjective D)revocable
A)present
21) The idea behind _____ is that adults who indicate an intent to be bound by contracts entered while still minors should be bound to those contracts and denied the right to disaffirm thereafter. A)ratification B)disaffirmance C)emancipation D)forbearance
A)ratification
"One who waits too long to complain has indicated satisfaction with the agreement despite the initial lack of true consent" is the idea behind the doctrine of: A)ratification. B)forbearance. C)rescission. D)emancipation.
A)ratification.
Statutes that require proof of character and skill and impose a penalty for violation are considered: A)regulatory. B)usury. C)wagering. D)revenue raising.
A)regulatory.
In most states, the agreement of a person who has been adjudicated insane is _____. A)void B)conditionally enforceable C)voidable at the election of that person (or his or her guardian or administrator) D)voidable at the election of the other contracting party (or his or her agent)
A)void
If a court later finds that a person lacked mental capacity at the time the contract was entered into, the contract is _____. A)voidable at the election of that person (or his or her guardian or administrator) B)voidable at the election of the other contracting party (or his or her agent) C)void ab initio D)void
A)voidable at the election of that person (or his or her guardian or administrator)
Which of the following statements is true of a quasi contract? A) A quasi contract is a legal fiction created by the court to avoid just enrichment. B) A person is not held liable under quasi contract for benefits he or she received unknowingly. C) A person is held liable under quasi contract for benefits he or she reasonably believed were given as a gift. D) A quasi contract does not involve contract-like duties imposed by the court.
B) A person is not held liable under quasi contract for benefits he or she received unknowingly.
Which of the following is true about auctions? A) Acceptance occurs when an offeror makes the highest bid. B) Bidders are treated as offerors, making offers the seller is free to accept or reject. C) An item cannot be withdrawn from sale prior to acceptance. D) The seller is required to accept the final offer when the auction is advertised as being "with reserve."
B) Bidders are treated as offerors, making offers the seller is free to accept or reject.
Yael sent Jen an offer to sell his mountain bike for $150. After thinking about the offer for a few days, Jen sent Yael a letter accepting his offer and asking if he intended to leave the book basket attached to the bike. The next day, before Jen's letter arrived, Yael phoned Jen and told her that he had decided to sell his bike to Jake, who had offered him $200. Which of the following statements holds true of this case? A) Jen used unauthorized means of acceptance. B) Jen's acceptance was good and a contract was created when Jen's letter was mailed. C) Yael could revoke the contract as the goods had not exchanged hands yet. D) The contract was not valid as the UCC held acceptances to be valid only when they were received and acknowledged in writing by the offeror.
B) Jen's acceptance was good and a contract was created when Jen's letter was mailed.
Sue Smith, the owner of Hi-Fi heaven, orders 100 stereo receivers from Steve Jones, a salesman for Slick Sound Manufacturing Company. Sue has made a promise to pay for the receivers in exchange for Slick Sound's promise to deliver them. This is a(n) _____ contract. A)unilateral B)bilateral C)implied D)quasi
B) bilateral, because both parties agree to do something
Consideration can have legal value if the promisee: A) does not perform an act in the case of unilateral contracts. B) does something he or she had no prior legal duty to do in exchange for the promisor's promise. C) agrees to do something he or she has a legal right to do in exchange for the promisor's promise. D) does not give up something in exchange for the promise made by the promisor.
B) does something he or she had no prior legal duty to do in exchange for the promisor's promise.
Under the Uniform Commercial Code (UCC), a sales contract can be created: A) if the contract is reduced to writing. B) in any manner sufficient to show agreement. C) when the offeror forms subjective intent to contract. D) when the contract contains the price terms.
B) in any manner sufficient to show agreement.
With regard to the terms of a contract created by the exchange of nonconforming forms, the Uniform Commercial Code (UCC) states that if the parties are both _____, the additional terms in the offeree's form are included in the agreement unless the offer _____ limited acceptance to its own terms, the new terms would materially alter the offer, and the offeror gives notice of objection to the new terms within _____ after receiving the acceptance. A) merchants; impliedly; thirty (30) days B) merchants; expressly; a reasonable time C) nonmerchants; impliedly; a reasonable time D) nonmerchants; expressly; thirty (30) days
B) merchants; expressly; a reasonable time
Article 2 of the Uniform Commercial Code (UCC) applies to all contracts for the: A) liquidation of assets. B) sale of goods. C) sale of securities. D) transfer of money between banks.
B) sale of goods.
Bill downloaded an antivirus software from the Internet. Under the Uniform Commercial Code (UCC), the software is a: A) good. B) service. C) good-faith warranty. D) mixture of goods and services.
B) service.
Forbearance occurs when: A) a debtor and two or more creditors agree to accept a stated percentage of their liquidated claims against the debtor. B) someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration. C) promises are worded in a way that allows the promisor to decide whether or not to perform the promise. D) there is no dispute about the existence or the amount of the debt.
B) someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration.
The means used by an offeror to communicate the offer is: A) the impliedly authorized means for accepting regardless of circumstances. B) the impliedly authorized means for accepting unless the circumstances indicate otherwise. C) the only authorized means of communication for accepting. D) always the offeror's particular trade usage in communication, as it impliedly authorizes a given means of acceptance.
B) the impliedly authorized means for accepting unless the circumstances indicate otherwise.
With respect to contracts, status quo ante refers to: A) minors losing the right to disaffirm if they fraudulently misrepresent their age. B) the position one would be in if a given contract had never come into existence. C) the basic risks of entering into contracts. D) a minor being protected by law on all counts of misbehavior.
B) the position one would be in if a given contract had never come into existence.
Jane tells Mark that she would pay him $50 if Mark finds her lost bag. This is an example of a _____. A) bilateral contract B) unilateral contract C) contingent contract D) multilateral contract
B) unilateral contract
To determine whether the offeror has created a present intent to contract, courts consider: A) how the offer was made. B) whether the offeror has communicated it to the offeree. C) the intent of the parties subjectively. D) the status of the person who has made the offer.
B) whether the offeror has communicated it to the offeree. They may also consider definiteness.
If a professor charges extra fees to take a regularly scheduled class, it would not qualify as consideration because such an act: A) is prohibited by promissory estoppel. B) would violate the preexisting duty rule. C) is new consideration that is provided to support a modification. D) is a tort.
B) would violate the preexisting duty rule.
Which of the following is true of emancipation? A)Emancipation is the term used to describe the termination of a parent's right to receive services and wages from a child and to generally control him. B)Emancipation occurs when a minor does not disaffirm within a reasonable time after attaining majority and thereafter loses the right to disaffirm. C)Emancipation occurs when a minor moves away from home and the parents object to his or her actions. D)Emancipation always gives a minor the capacity to contract.
B)Emancipation occurs when a minor does not disaffirm within a reasonable time after attaining majority and thereafter loses the right to disaffirm.
Which of the following statements is true of exculpatory clauses? A)Exculpatory clauses are always illegal and cannot be taken up in court. B)Exculpatory clauses, when enforced, can effectively relieve a party of liability for the consequences of his own negligence. C)Exculpatory clauses are effective only when the party which benefits by the clause owes a duty to the public. D)Exculpatory clauses that seek to avoid liability for willful misconduct or fraud, however, are generally enforceable.
B)Exculpatory clauses, when enforced, can effectively relieve a party of liability for the consequences of his own negligence.
Which of the following best defines scienter? A)It refers to the sales talk that people make while trying to convince a person to sign a contract. B)It refers to the mental state of the defendant. C)It pertains to an actionable misrepresentation that concerns a present or past fact. D)It is a causal connection between a misrepresentation and the complaining party's entry into the contract.
B)It refers to the mental state of the defendant.
Leroy writes a letter that says, "I agree to sell to Jay five modern art paintings," and he signs the letter. Jay is an art dealer and he receives this writing from Leroy and does not object in writing within 10 days of receiving it. Which of the following is true according to the Uniform Commercial Code? A)Leroy would have a good statute of frauds defense because Jay has not signed the contract. B)Jay has lost his statute of frauds defense because he did not object to the contract. C)The contract will be considered void because of the lack of written evidence from Jay. D)Leroy will be prevented by the statute of frauds to take the case to the court.
B)Jay has lost his statute of frauds defense because he did not object to the contract.
Which of the following is true of minors' ability to disaffirm? A)Minors may disaffirm their contract for a reasonable time before attaining majority. B)Minors may disaffirm their contracts at any time during their minority. C)Minors may disaffirm by doing anything that clearly indicates to the other party an intent to be bound by the terms of the contract. D)Minors may disaffirm before reaching majority if their contracts involve title to real estate.
B)Minors may disaffirm their contracts at any time during their minority.
Fernando is the owner of Pick Food Restaurant. He makes an oral agreement with Purple Lotus Works for the design and production of 5,000 unique custom-made dinner plates with the logo of Pick Food Restaurant on them. Purple Lotus reworks its production schedule and creates dies to add Pick Food Restaurant's logo in the designer plates. A week later, Fernando calls Purple Lotus and says that he no longer wants the plates and calls off the deal. In this scenario, it is most likely that: A)the parties' agreement is at Fernando's disposal because he is the customer. B)Purple Lotus is protected by the statute of frauds exception for specially-manufactured goods. C)the parties' agreement is not valid since it was only an oral agreement. D)the agreement between Fernando and Purple Lotus is unenforceable and Fernando is protected under the statute of frauds.
B)Purple Lotus is protected by the statute of frauds exception for specially-manufactured goods.
When one or both parties to an illegal bargain are ignorant of the facts that made the bargain illegal, the court is most likely to: A)never allow either party to recover damages for breach of the agreement. B)allow recovery for performance rendered before the parties learned of the illegality. C)declare the bargain unconscionable. D)regard the contract a serious threat to public welfare and declare it void.
B)allow recovery for performance rendered before the parties learned of the illegality.
People who regain their mental capacity: A)cannot ratify their contracts if the contract involves real estate. B)can ratify their contracts. C)can ratify their contracts only if a guardian signs up along with the person. D)cannot ratify their contracts.
B)can ratify their contracts.
Contracts that are traditionally required to be in writing by the statute of frauds are: A)bilateral contracts that are capable of being performed within a year of their formation. B)contracts for the transfer of an interest in land. C)bilateral contracts that have been fully performed by both parties. D)contracts for the sale of goods costing less than $500.
B)contracts for the transfer of an interest in land.
If a contract is divisible, the court: A)voids the entire contract. B)enforces the legal parts of the contract. C)enforces the entire contract. D)rules that the entire contract is unenforceable.
B)enforces the legal parts of the contract.
The parol evidence rule refers to the: A)oral evidence given by the defendant during a hearing. B)idea that when the parties have expressed their agreement in a complete, unambiguous writing, the writing is the best evidence of their intent. C)rule that perjury in criminal sentences is a non-bailable offense. D)use of the equitable doctrine of promissory estoppel to prevent parties from seeking compensation under the statute of frauds.
B)idea that when the parties have expressed their agreement in a complete, unambiguous writing, the writing is the best evidence of their intent.
When parties to an oral contract have both fully performed their obligations under the contract, the parties are: A)allowed to rescind the contract. B)not allowed to rescind the contract. C)allowed to seek compensatory damages. D)not allowed to recover the value of the performance in quasi contract.
B)not allowed to rescind the contract.
A party that enters into an illegal contract can recover the considerations given if the party: A)reports the illegal act to law enforcement after committing it. B)rescinds the contract before any illegal act has been performed. C)demonstrates an unequal bargain due to the illegal contract. D)rescinds the contract immediately after the illegal act has been performed.
B)rescinds the contract before any illegal act has been performed.
Mayor Magnus wants to recruit a Harvard economist, Milton, as the chief developer for the Small Town's economic development division. The legal cap on the job of chief developer is $60,000. Magnus offers Milton $100,000. The contract is: A)voidable. B)unlawful. C)exculpatory. D)enforceable.
B)unlawful.
Maya makes an agreement with Ravi for Ravi to steal Professor Hussain's laptop computer. The agreement between Maya and Ravi is _____. A)voidable B)void C)valid D)unenforceable
B)void
Which of the following statements is true of Article 2? A) Article 2 does not apply to contracts for the sale of goods. B) Article 2 applies to bonds, information, and other intangibles. C) Article 2 does not apply to service contracts. D) Article 2 applies to contracts for the sale of real estate or stocks.
C) Article 2 does not apply to service contracts. Article 2 only applies to the sale of goods, which includes tangible personal property
On October 29, 1989, Alex agrees to paint Georgia's house during the Thanksgiving week for $4,000 in exchange for Georgia's promise to pay him $4,000 in cash immediately upon completion of the work. Which of the following statements is true of this case? A) Georgia could hire another painter on October 31 without legal liability to Alex because until he has painted the house, he has not given any consideration for Georgia's promise to hire him. B) Alex could back out of the deal on October 31 without legal liability to Georgia because she has not given any consideration for Alex's promise to do the work until she pays him. C) Both parties are bound on October 29 because each has given consideration for the other's promise. D) Alex could back out of the deal on October 29 without legal liability if he could prove that $4,000 was inadequate consideration to paint Georgia's house.
C) Both parties are bound on October 29 because each has given consideration for the other's promise.
Which of the following is a change that took place in the legal system that led to the development of contract law in the process? A) Courts began to shift their emphasis from protecting consumers and workers to protecting business and promoting industrialization. B) Courts today are not willing to consider defenses based on inequality of bargaining power between the parties. C) Courts tend to view with great suspicion attempts by manufacturers to limit their responsibility for their products by contract. D) Courts are not given the authority to control any contractual relationships as they are left to private bargaining.
C) Courts tend to view with great suspicion attempts by manufacturers to limit their responsibility for their products by contract.
Which of the following is true about a contract? A) It need not necessarily be an agreement. B) It need not necessarily be entered into by parties having capacity to contract. C) It must be voluntarily entered into, and it is to perform a legal act. D) It must always be supported by consideration.
C) It must be voluntarily entered into, and it is to perform a legal act.
Jin moves into a neighborhood in Philadelphia and opens a repair shop. He is harassed by the local gang leader who wants to extort money from him. He promises to pay Sheng, a police officer whose patrol includes Jin's store, $50 a week to "keep an eye on the store" while walking his patrol. Which of the following statements is true of this situation? A) Jin's promise is enforceable. B) The cop can sue Jin for not keeping his promise of paying $50 per week. C) Sheng's promises toward Jin are not consideration. D) Jin is the promisee and Sheng is the promisor.
C) Sheng's promises toward Jin are not consideration.
Bogdan, a painter, offers to sell his painting to Mirka for $90. Mirka responds that she needs more time to think about Bogdan's offer. Then Bogdan dies, and the value of the painting escalates. Mirka calls Bogdan's widow, Gizela, and says "I accept Bogdan's offer." Which of the following statements is true of the case? A) There is a binding contract entitling Mirka to the painting. B) There is a binding contract entitling Mirka to the painting if she did not know Bogdan was dead when she called Gizela. C) There is no binding contract entitling Mirka to the painting under any circumstances. D) There is no binding contract entitling Mirka to the painting unless she actually pays Gizela the $90.
C) There is no binding contract entitling Mirka to the painting under any circumstances.
The Uniform Commercial Code (UCC) differs from the United Nations Convention on Contracts for the International Sale of Goods (CISG) in that the: A) UCC does not require contracts to be in writing, while CISG requires contracts for the sale of goods in excess of $300 to be in writing. B) CISG applies to the sale of consumer transactions, while the UCC governs both consumer and commercial transactions. C) UCC holds merchants to higher standards in some circumstances, while the CISG does not make a distinction between merchants and nonmerchants. D) CISG applies to both consumer and commercial transactions, while the UCC applies only to commercial sales of goods.
C) UCC holds merchants to higher standards in some circumstances, while the CISG does not make a distinction between merchants and nonmerchants.
_____ prohibit charging more than a stated amount of interest for the use of money. A) Sunday laws B) Wagering laws C) Usury laws D) Blue laws
C) Usury laws
With respect to property, under the common law, minors: A) are entitled to the return of their property given as consideration only upon attaining majority. B) are entitled to the return of their property given as consideration even if they have been ratified. C) are entitled to the return of their property given as consideration, even if that property is possessed by a third party at the time of disaffirmance. D) are entitled to the return of their property given as consideration, except in cases where the property is possessed by a third party.
C) are entitled to the return of their property given as consideration, even if that property is possessed by a third party at the time of disaffirmance.
Yuan writes to Rita saying that he would sell her his car for $1,000. Rita writes back agreeing to buy the car on Yuan's terms. Given this information, the contract between Yuan and Rita is: A) unilateral and executory. B) bilateral and unenforceable. C) bilateral and executory. D) unilateral and implied.
C) bilateral and executory.
The requirement of _____ requires a promisee to pay the "price" the promisor asked for in order to gain the right to enforce the promisor's promise. A) promissory estoppel B) equity C) consideration D) forbearance
C) consideration
A promise to make a gift for a charitable or educational purpose is unenforceable unless and until the institution to which to promise was made incurs obligations by relying on the promise. This exception is usually justified on the basis of either _____ or _____. A) the Statute of Frauds; the applicable statute of limitations B) criminal law; civil law C) estoppel; public policy D) substantial performance; forbearance
C) estoppel; public policy
When an offeror does not specifically indicate what he is willing to do and what he wants the offeree to agree to do in return, his behavior will probably be classed as an: A) agreement. B) offer. C) invitation to negotiate. D) invitation to bid.
C) invitation to negotiate.
When an offeree uses a nonauthorized means of acceptance, the acceptance is: A) effective upon dispatch. B) illegal. C) not effective until it is received by the offeror. D) not effective upon receipt by the offeror.
C) not effective until it is received by the offeror.
Beck tells his mom that he is thinking of selling his vintage coupe to his neighbor, Sam, for $100. Beck's mom calls Sam and tells him about her conversation with Beck. Sam then calls Beck and tells him that he accepts his offer. Under these circumstances, _____. A) this is a contract B) the offer has been conditionally tendered C) the offer has not been communicated D) the offer violates the UCC's rule against third-party interveners in quasi contracts
C) the offer has not been communicated
According to the Uniform Commercial Code (UCC), _____. A) the sale of goods between two parties is always legal B) the doctrine of promissory estoppel will always overrule a written contract C) the sale of goods costing $500 or more is not enforceable without a writing or other specified evidence D) there is no need for the formality of writing during sales transactions
C) the sale of goods costing $500 or more is not enforceable without a writing or other specified evidence
Which of the following is a reason for voiding a contract based on illegality? A)Both of the parties are ignorant of the facts that made the bargain illegal. B)It is in violation of the Code alone, not the common law. C)It is contrary to public policy. D)The court does not allow the recovery of damages.
C)It is contrary to public policy.
Which of the following is true about contracts that pertain to sales of real estate? A)The seller gets the benefit of caveat emptor whenever a lack of information dispute arises. B)The Truth in Lending Act puts the burden on the buyer to discover defects and holds that fraud by silence should be looked out for by the buyers. C)Many courts today recognize that caveat emptor produces unfair results. D)Courts nowadays are increasingly protecting developers, sellers, and their agents.
C)Many courts today recognize that caveat emptor produces unfair results.
The failure to obtain a license required by a statute for revenue-raising purposes: A)affects the legality of the unlicensed person's agreements and it will be considered void. B)results in generally unenforceable contracts. C)does not affect the legality of unlicensed persons' agreements. D)automatically declares the contract void for the protection of the public.
C)does not affect the legality of unlicensed persons' agreements.
All the elements of misrepresentation and the fact that the misrepresentation was knowingly made with an intent to deceive, have to be established to prove _____. A)undue influence B)duress C)fraud D)a unilateral mistake
C)fraud
A key point of differentiation between duress and undue influence lies in the: A)net worth of the contract in question. B)time at which the contract was signed. C)relationship between the parties at the time of the contract. D)type of property in question.
C)relationship between the parties at the time of the contract.
When a person has been adjudicated insane, _____. A)the contract is considered voidable if he or she entered a binding contract during a lucid moment B)most states hold that the contracts of such persons are not voidable C)the court appoints a guardian or conservator for the person's estate D)the court says that such a person is not liable for any value of necessaries
C)the court appoints a guardian or conservator for the person's estate
In case of duress, there is no voluntary consent if: A)either party rescinds at any time. B)there is a confidential relationship between the parties. C)the plaintiff's free will was overcome. D)a material fact has been intentionally misrepresented.
C)the plaintiff's free will was overcome.
In most states, the statute of frauds makes oral contracts that come within its provisions _____. A)void B)illegal C)unenforceable D)valid
C)unenforceable
Which of the following statements is true of consideration? A) Consideration always has a monetary value regardless of a legal value. B) A promisee can be forced by the courts to keep his or her promise. C) Consideration enforces gratuitous promises. D) A promisee's consideration may be an act or a promise.
D) A promisee's consideration may be an act or a promise.
Which of the following must be present for an offer to have a legal effect? A) Invitation to offer B) Communication of the intention C) Invitation to negotiate D) Definiteness
D) Definiteness
Kamal places an ad in the local newspaper as follows: "$500 reward for the return of my gold ring." Mira finds the ring and returns it to Kamal, but he refuses to pay her the $500. Which of the following statements is true regarding this case? A) As the ad was merely a solicitation of offers, there was no contract until Kamal accepted Mira's offer to find the ring. B) Mira may not recover the money because she did not contact Kamal before she began her search. C) As Mira did not pay Kamal to keep the offer open, he is free to revoke the offer and not pay her anything. D) Mira accepted the ad as an offer for a unilateral contract by returning the ring and hence, Kamal is bound to pay her the $500.
D) Mira accepted the ad as an offer for a unilateral contract by returning the ring and hence, Kamal is bound to pay her the $500.
Which of the following statements is true about the Uniform Commercial Code (UCC)? A) The main purpose of the UCC was to enable private parties to enter into commercial transactions regulated by tariffs and government restrictions. B) The most obvious purpose of the UCC was to establish a uniform law to govern commercial transactions that often take place within the state. C) The drafters were successful in achieving complete uniformity. D) The UCC is adopted by all states except Louisiana, which has adopted only part of the code.
D) The UCC is adopted by all states except Louisiana, which has adopted only part of the code.
The offeror who makes a firm offer and promises to hold it open for six months: A) could revoke after three months, assuming the offeree has not already accepted the offer. B) could revoke after three months, even if the offeree has already accepted the offer. C) could revoke after six months, even if the offeree has already accepted the offer. D) cannot revoke the offer under any circumstances unless the offeree consents to the revocation.
D) cannot revoke the offer under any circumstances unless the offeree consents to the revocation.
Advertisements for the sale of goods at a specified price are considered by the courts as: A) giving everyone who sees the ad the power to bind into a contract. B) acceptance of an offer. C) an unfair offer. D) invitations to negotiate.
D) invitations to negotiate.
The doctrine of promissory estoppel: A) makes the contracts unenforceable. B) does not make promises enforceable. C) protects bargains, not reliance. D) protects reliance, not bargains.
D) protects reliance, not bargains.
As used in the Uniform Commercial Code (UCC), the concept "reasonable": A) is a practical standard used to gauge what people really do in the marketplace. B) is a theoretical concept based on the "reasonable person standard" of tort law. C) refers to the capacity to contract. D) refers to what a reasonable person would do in the marketplace.
D) refers to what a reasonable person would do in the marketplace.
When parties fail to expressly agree on the terms of a sales contract, A) the contract is automatically void. B) the contract will fail if the court finds that the parties are acting as though they have a contract and it is impossible to point to a particular moment in time when the contract was created. C) the contract will not be enforceable under the Uniform Commercial Code (UCC). D) the contract will not fail if the court finds that the parties intended to make a contract and that their agreement is complete enough to allow the court to reach a fair settlement of their dispute.
D) the contract will not fail if the court finds that the parties intended to make a contract and that their agreement is complete enough to allow the court to reach a fair settlement of their dispute.
Miriam makes an oral agreement with John to sell him 200 acres of prime farmland for a mere $500. Their agreement is: A) enforceable and not voidable in accordance with the statute of frauds. B) covered by the statute of limitations. C) enforceable only if promissory estoppel applies. D) unenforceable as real estate contracts need to be in writing.
D) unenforceable as real estate contracts need to be in writing.
If an offeree dispatches both an acceptance and a rejection to an offer, _____. A) the acceptance is effective as soon as it is dispatched and a contract is created B) the rejection is effective as soon as it is dispatched and no contract can be created C) both the acceptance and the rejection are not effective and another response must be issued D) whichever response reaches the offeror first will determine whether a contract is created
D) whichever response reaches the offeror first will determine whether a contract is created
Which of the following is true of misrepresentation in contracts? A)A mere untrue assertion is sufficient for proving misrepresentation. B)Misrepresentation cannot result from an honest mistake or negligence. C)Statements of opinion serve as a basis for rescission. D)A victim has to show detriment from misrepresentation to cancel a contract.
D)A victim has to show detriment from misrepresentation to cancel a contract.
A clothing store has opened a credit account in which Judy, a college student, gets Alice, her older sister, to agree to pay the amount owed on the account if Judy fails to do so. Which of the following statements is true of this scenario? A)Judy is the obligor, and she is secondarily liable to the clothing store. B)Alice is the guarantor, and she is primarily liable to make the payments. C)Judy is the obligor, and she is contractually liable to the guarantor. D)Alice is the guarantor, and Alice's contract must be in writing to be enforceable
D)Alice is the guarantor, and Alice's contract must be in writing to be enforceable
Which of the following is true about the exception to the parol evidence rule? A)A party can always introduce proof of an oral agreement made before the writing was created. B)Oral testimony that attempts to show that the contract is illegal is not allowed. C)A party is allowed to use oral terms to alter, vary, or contradict the written terms of the contract. D)If the terms of the writing are unclear, oral testimony can be introduced to aid the court in interpreting the writing.
D)If the terms of the writing are unclear, oral testimony can be introduced to aid the court in interpreting the writing.
_____ are generally defined as those things that are essential to a minor's continued existence and general welfare. A)Considerations B)Emancipations C)Forbearances D)Necessaries
D)Necessaries
Which of the following statements is true for duress? A)The reason behind the idea of duress is that mistakes may prevent the "meeting of the minds" required by contract law. B)The basic idea behind duress is to protect the old, the timid, and the physically or mentally weak from those who gain their confidence and attempt to take advantage of them. C)The term duress is used in contract law to describe the situation in which one or both of the parties to an agreement acted under an untrue belief about the existence or nonexistence of a material fact. D)The courts have generally held that the threat of a well-founded civil suit is not duress.
D)The courts have generally held that the threat of a well-founded civil suit is not duress.
A restraint that is merely ancillary to a contract may be legal if: A)it attempts to relieve one party from liability for willful misconduct. B)its purpose is to restrict trade indefinitely. C)its purpose is to recover punitive damages. D)it is designed to protect interests created by the contract.
D)it is designed to protect interests created by the contract.
Most of the cases in which undue influence is charged involve: A)force or threat of injury resulting in economic damages. B)misstatements about the content or legal effect of something usually contained in a form or preprinted contract .C)unilateral or mutual mistakes resulting in serious injustice. D)longtime advisors of elderly or sick people, who are alleged to have gotten the victim to make gifts/sales at unfair prices.
D)longtime advisors of elderly or sick people, who are alleged to have gotten the victim to make gifts/sales at unfair prices.
When a person whom a regulatory statute seeks to protect enters into an agreement in violation of the statute, the protected person: A)is only allowed to enforce the agreement. B)cannot recover in quasi contract for benefits conferred on the other party. C)cannot recover for any loss but may enforce the agreement. D)may either enforce the contract or recover any consideration he or she has parted with.
D)may either enforce the contract or recover any consideration he or she has parted with.
The equitable doctrine of _____ allows some parties to recover under oral contracts that the statute of frauds would have ordinarily rendered unenforceable. A)estoppel by representation of fact B)estoppel by record C)proprietary estoppel D)promissory estoppel
D)promissory estoppel
T or F: According to the Uniform Commercial Code (UCC), if one or both parties are nonmerchants, additional terms proposed by the offeree automatically become part of the agreement unless the offer expressly limited acceptance to its own terms.
False
T or F: If possible, the courts interpret an offer as proposing a unilateral contract.
False
T or F: The idea behind minors' incapacity is that a minor may not be able to bargain effectively with older, more experienced persons. The courts responded to this idea by making minors' contracts void.
False
T or F: The minor who does not disaffirm within a reasonable time after attaining majority is held to have rescinded the contract.
False
T or F: When determining the legality of an agreement, the courts do not presume the parties intended a legal result.
False
True or False: An agreement that calls for the commission of a crime is illegal, while an agreement that calls for the commission of a tort is not illegal.
False
True or False: The Uniform Commercial Code has achieved complete uniformity of the laws governing commercial transactions.
False
T or F: If the offer does not state a time for acceptance, it is valid for thirty (30) days.
False, it is open for a reasonable period or until revoked.
T or F: According to Article 2 of the Uniform Commercial Code (UCC), a sales contract can be created in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of a contract.
True
T or F: An offeror can minimize problems with the timing of acceptances since he or she has the power to control the conditions under which the offer can be accepted.
True
T or F: If either party entering a contract lacks the capacity to contract, the contract is void or voidable, depending on the kind of incapacity involved.
True
T or F: If the offer or circumstances do not indicate otherwise, the means the offeror used to communicate the offer is the impliedly authorized means for accepting.
True
T or F: Many states require contracts to pay a commission on the sale of real estate to be evidenced by a writing.
True
T or F: Many states require contracts to pay debts barred by a bankruptcy discharge or the statute of limitations to be evidenced by a writing.
True
T or F: Minors are generally held liable on a quasi contract basis for the reasonable value of necessaries furnished to them.
True
T or F: Taking action to conceal a fact indicates scienter.
True
T or F: The courts generally infer an intent to deceive from the fact that the defendant knowingly made a misstatement to a plaintiff who was likely to rely on it.
True
T or F: The term mistake is used in contract law to describe the situation in which one or both of the parties to an agreement acted under an untrue belief about the existence or nonexistence of a material fact.
True
