BLAW Quiz 2

Which of the following subjects of a contract breach would most likely result in a court order of specific performance?

A 19th century coin collection

Modern courts have held that repudiation occurs in which of the following ways?

An action by the promisor that renders her contract performance impossible

What type of damages compensate the nonbreaching party for foreseeable indirect losses not covered by compensatory damages?

Consequential

A valid contract has four basic required elements: unilateral assent, consideration, legality of purpose, and capacity.

False

If a party does or promises to do what she is already legally obligated to do, the law generally does not recognize this as a legal detriment and, thus, the contract is unenforceable. This is called the forbearance rule.

False

If one party to a contract uses any form of unfair coercion to induce another party to enter into or modify a contract, the coerced party may avoid the contract on the basis of fraud.

False

In contract law, a classic example of information symmetry is misrepresentation.

False

Nominal consideration is any type of consideration that is expressed as a financial number (for example, $10,000).

False

Since minors, mental incompetents, and intoxicated persons lack the full legal capacity to make legally binding contracts, a promise made by such a person is void.

False

Sometimes parties add a clause that contemplates uncontrollable acts that will impede performance under the contract. These clauses are referred to as res ipsa loquitur clauses.

False

The broad underlying requirement of an enforceable contract is unilateral consent.

False

The legal exhortation to "drive with care" is an example of a "bright-line" rule.

False

There are three types of contractual conditions: precedent, subsequent, and conducive.

False

Timothy, age 17, purchased a necklace for his girlfriend, Bouakham. He bought the necklace on a three-year installment credit plan from Heart-Shaped Box Jewelers, Inc. After Timothy turned 18, he continued to make installment payments on the necklace according to the terms of his credit plan. What is the likely legal outcome if Timothy seeks to end his contract with Heart-Shaped Box Jewelers, Inc.?

Heart-Shaped Box Jewelers, Inc. will prevail, since Timothy ratified the contract.

Which of the following is true regarding breach of contract?

Money damage awards are one of the ways the law provides to compensate the nonbreaching party for losses suffered.

Based on a handshake, Tommy has agreed to purchase Jeff's classic 1965 Mustang for $27,000. Is this agreement legally enforceable? -Yes, because Tommy and Jeff confirmed the agreement with a handshake, which represents a mutual manifestation to be bound by the terms of the contract. -No, because the contract is for the sale of a good for $500 or more. -Yes, because oral contracts are generally enforceable as a matter of law. -No, because oral contracts are generally unenforceable as a matter of law.

No, because the contract is for the sale of a good for $500 or more.

What is the common sense and conscience of the community extended and applied throughout the state to matters of public morals, health, safety, and welfare?

Public policy

Which of the following contract sections explains why the parties are entering into the agreement?

Recitals

What typically happens if a contract contains an ambiguous term?

The ambiguity is construed by the court against the interest of the side that drafted the agreement.

Which of the following is generally true regarding courts that support freedom of contract principles?

They will enforce valid contracts against parties absent evidence of fraud, mistake, oppression, or lack of legal purpose.

A lack of genuine assent occurs in cases of misrepresentation.

True

Equitable relief comes primarily in the form of specific performance, injunctive relief, or reformation.

True

If neither party has fully performed, the parties may agree to cancel the contract. This cancellation is known as rescission.

True

In order to prevail in a substantial performance case, the party trying to enforce the contract must show that she acted in good faith and that any deviation from the required performance was not material.

True

The age of majority is a "bright-line" rule.

True

Suppose that the minimum wage in North Carolina is $7.25 per hour. (North Carolina recognizes the minimum wage established by federal law, and has not established a higher state minimum wage). Noah, a 18-year-old cook at Cheap Eats, LLC, a Greensboro, North Carolina restaurant, has agreed to work for his employer for $6.75 per hour. (He lives at home with his parents, has minimal expenses, and is just looking for something to occupy his time more than earn income). This agreement is: -conditionally void, depending on whether Noah was the victim of undue influence. -void. -voidable at Noah's election. -voidable at Cheap Eats, LLC's election.

Void

Donnie Howell, Jr. is a very wealthy individual, having accumulated $30 million dollars in net worth over the course of his career in the transportation industry. Donnie has met a flight attendant, Melanie, while traveling to a conference last month, and theirs has been a "whirlwind" courtship. Donnie would like to make Melanie his fourth wife (his previous three marriages have ended in divorce), but he would also like to protect his assets with a prenuptial agreement. Must such an agreement be in writing to be enforceable? -No, since the agreement does not involve a contract for the sale of goods transaction. -Yes, contracts made in consideration of marriage must be in writing to be enforceable. -Yes, since Donnie's net worth exceeds $1 million, federal law requires a prenuptial agreement to be in writing in order to protect the interests of both parties to the marriage. -No, since the relationship may end in less than one year.

Yes, contracts made in consideration of marriage must be in writing to be enforceable.

Typically, contracting parties reach mutual assent using a combination of __________. -an offer and an acceptance -an invitation to negotiate and an offer -an offer and promissory estoppel -an invitation to negotiate and an acceptance

an offer and an acceptance

Anticipatory repudiation is also called __________.

anticipatory breach

In a __________ contract, the legal detriment is incurred through the mutual promises the parties make to each other.

bilateral

When a party to an agreement owes a duty to perform and fails to fulfill her obligation, she has __________ the contract. -revoked -breached -executed -nullified

breached

In a contract claim, money damages are primarily limited to __________.

compensatory damages, consequential damages, restitution, and liquidated damages

Suppose Laura Menendez, a tenant at Ashley Forest Apartments in Durham, North Carolina, moves out of town with nine months remaining on her lease term. Laura is contractually obligated to pay $1,500 per month in rent. Durham has a 98 percent apartment occupancy rate (meaning that 98 percent of all apartments in the city are occupied by tenants). Ashley Forest Apartments will most likely not be able to recover $13,500 in remaining rent from Laura due to its __________. -duty to mitigate damages -promissory estoppel -implied warranty of habitability -duty to substantially perform

duty to mitigate damages

If the parties have formed a valid contract, the legal analysis then turns to the issue of __________.

enforceability

Every contract is premised on the notion of __________ dealing.

good faith

A court order to refrain from performing a particular act is known as __________.

injunctive relief

For most contracts, the remedy at law will be __________. -specific performance -substantial performance -equity -money damages

money damages

The first step in determining whether a valid offer exists is analyzing the offeror's __________.

objective intent

In terms of contractual capacity, deciding whether an adult is intoxicated is a(n) __________.

open-ended standard

In terms of contractual capacity, deciding whether an adult is lucid is a(n) __________.

open-ended standard

if contracting parties perform their obligations completely, this is known as __________.

perfect performance

A condition __________ requires that an event must occur before performance under a contract is due. -absolute -subsequent -precedent -concurrent

precedent

Equitable relief comes primarily in the form of __________.

specific performance, injunctive relief, or reformation

A condition __________ stipulates an event that occurs after performance under the contract and discharges the parties' obligations. -subsequent -absolute -concurrent -precedent

subsequent

From a practical perspective, the main difference between misrepresentation and fraudulent misrepresentation is __________.

the legal remedy available to the innocent party

Even if the required elements of a contract are present, the contract must still be the product of genuine assent in order for it to be legally enforceable.

true

In a majority of states, contracts made by an incompetent are __________. -rescinded per se -ratified per se -voidable -void

voidable