Blaw test 3

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. For a proposal to be considered a contractual offer then the offeror must have what type of intent? A. Present intent to contract B. Future intent to contract C. No intent to contract D. Past intent to contract

. Ian Kendler makes Brian Hyson an offer for a plot of land. In the offer, Kendler stipulates that the acceptance of the offer must be sent by registered mail but Hyson mails his acceptance through the regular postal service. Which of the following is true? Assume that the Restatement (Second) of Contracts does not apply. A. There is no acceptance and no contract. B. A contract was formed at the time Hyson dispatched the letter. C. A contract was formed at the time Kendler received the letter. D. The acceptance is invalid because the contract does not relate to sale of goods.

. When the surrounding facts and circumstances indicate that an agreement has in fact been reached, a(n) _____ has been created. A. implied contract B. quasi-contract C. void contract D. unenforceable contract

A fundamental difference between a promissory estoppel and traditional contract principles is that a promissory estoppel protects: A. reliance. B. bargains. C. agreements. D. consideration

A person who commits fraud may be liable for punitive damages for the tort of: A. deceit. B. fraud. C. misrepresentation. D. assertion.

A person who seeks to recover damages for deceit has to establish, apart from the elements of rescission, an additional element of: A. Injury B. Injustice C. Fraud D. Materiality

Ads that limit the power of acceptance to one offeree or a small number of offerees, are highly specific about the nature and number of items offered for sale and what is requested in return is considered to be _____. A. offers B. invitations to negotiate C. invitations to offer D. obligations

An agreement in which a party promises to supply all the other party's needs for a particular commodity is called a(n): A. requirements contract. B. composition agreement. C. output contract. D. nominal consideration.

An offer which is unclear about the form of acceptance that is necessary to create a contract, is called a(n) _____ offer. A. ambiguous B. reasonable C. implied D. counter

Ann wants to download the Adobe Acrobat software from the Internet. Prior to downloading, a standardized online contract appears on the screen that requires her to click on an icon indicating agreement, before she can proceed in the program. Such contracts are called: A. clickwrap contracts. B. shrinkwrap contracts. C. click-off contracts. D. unenforceable contracts

Arthur offered to sell his house to Mike for $50,000. Even before Mike responded to the offer, Jack learnt of the offer and called up Arthur to accept the offer. Jack's action represents a(n) _____. A. offer B. promise C. notification D. acceptance

Bill is 25 years old. His uncle had promised in writing to pay him $2,000 if Bill would refrain from drinking alcohol for one year. Bill refrained from drinking alcohol for one year. However, his uncle now refuses to pay Bill as agreed-upon. The uncle claims that because Bill suffered no detriment by refraining from alcohol, his non-drinking does not constitute legal consideration and therefore no contract was formed. If Bill sues his uncle, Bill will: A. win because Bill had a legal right to drink alcohol. B. lose because consideration must have monetary value. C. win because no consideration is needed in this contract. D. lose because refraining from an action can never be considered legal consideration

Dan, President of BAZ Co., is happy with the extraordinary performance of Naomi, a BAZ Co. senior accountant. Dan informs Naomi that because of her superlative work in the past fiscal year, he is going to give her a 5 percent raise effective next month. Naomi, who has never heard of anyone at BAZ Co. getting a raise, is thrilled and thanks Dan. Later that day, Dan realizes that giving Naomi this raise might cause all senior accountants to demand salary increases. Dan decides not to give Naomi a raise after all. He believes that his promise to give her a raise is not legally binding. Dan is correct because: A. there was no bargained-for exchange for the raise. B. of the "preexisting duty" rule. C. past consideration is not an act or promise. D. past consideration is not liquidated.

Daniel owes Casey a debt, the amount of which is subject to a good faith dispute. The parties agree to settle the debt, with Daniel promising to pay Casey $15,000 and Casey promising to release Daniel on a $25,000 debt. The settlement agreement: A. is supported by consideration. B. lacks consideration because Casey is not giving Daniel any legal value. C. lacks consideration because Daniel is promising to perform a preexisting legal obligation. D. is binding under UCC section 2-209 even though there is no consideration.

David entered into a contract to sell Ruth a parcel of land fully aware that Ruth's intention of purchase was to construct a high-rise commercial building. David was also aware that the subsurface soil condition of the property would prevent such construction. The soil condition was not readily discoverable in the course of normal inspections or soil evaluations. David did not disclose the existence of the condition to Ruth, nor did Ruth make any inquiry of David as to the suitability of the land for the intended development. David's silence as to the soil condition: A. renders the contract voidable at Ruth's discretion. B. entitles Ruth only to monetary damages. C. makes the contract a case of a mutual mistake. D. does not affect the validity of the contract.

How does the presence of facts that constitute promissory estoppel make a difference in the law of offers and revocations? A. It makes an option enforceable, even without consideration. B. It does away with the requirement that rejections and revocations be communicated. C. It makes an offer automatically revocable at any time. D. It does away with the requirement that offers be definite

In a contract for the sale of land, how close must the terms of the acceptance be to the terms of the offer, in order to form a contract? A. They must be identical or almost identical. B. They must agree on the major terms of the transaction. C. They must indicate a definite intent to form a contract. D. They must be identical only with regard to the price quoted.

In determining whether an offeree accepted an offer, the court is looking for the same _____ on the part of the offeree that it found on the part of the offeror. A. present intent to contract B. inquiry regarding terms C. subjective standard D. silent acceptance

In order to recover on the tort of deceit a party would have to prove what? A. Economic injury by the injured party B. Profit by the offending party C. The Secretary of State was properly notified D. That there was a BFOQ that contributed to the offending party's behavior

In which of the following circumstances are offerors free to revoke their offers? A. In case of common law rule on revocation. B. In case of unilateral contracts. C. In case of the availability of an option. D. In case of a promissory estoppel.

James goes to a dentist to have a tooth extracted. James never signs a written contract for this service, and he and the dentist never made an oral agreement either. Later, the dentist bills James who refuses to pay. The dentist sues James. Which of the following is true? A. The dentist can recover under quasi-contract. B. The dentist cannot recover under an implied contract theory. C. The dentist can recover under the doctrine of promissory estoppel. D. The dentist cannot recover because there was no express contract here.

James owns Great Expectations, a trendy restaurant in Manhattan. He enters into a contract with Mary, who makes and sells pastries. The contract states that Mary will "supply all of Great Expectation's needs" for pastries for the next year. Is this contract enforceable? A. Yes, because this is a requirements contract. B. Yes, but only if James buys all of the pastries produced by Mary in the next year. C. No, because the promise fails to specify the quantity of goods to be purchased. D. No, because James might not need any pastries in the next year.

Judith George makes an offer to sell a plot of land using a normal letter and states no authorized means by which the offeree, Helga Holmes must respond if she accepts. If Helga accepts the offer using a normal letter, which of the following is true? A. The acceptance is effective upon dispatch. B. The acceptance is effective when it is received. C. The offer is invalid because it fails to stipulate the means of acceptance. D. The acceptance would be effective upon dispatch even if the means of acceptance is unreasonable.

Mr. Blue gave Mr. Green $1000 to help his family out. Later Mr. Blue entered into a sales contract with Mr. Green and wanted the consideration to be in part the $1000. What is the term for the $1000? A. Past Consideration B. Future Consideration C. Equitable exchange D. Present Intent

Mr. Green creates a unilateral contract with nephew Paul. Mr. Green promises to buy Paul a laptop if he gets accepted to college. In order for Paul to accept this contract what must he do? A. Get accepted into college B. Send a certified letter to Mr. Green agreeing to the terms of the contract C. Immediately call and orally accept the terms of the contract with Mr. Green D. Notify the Secretary of State's office that he accepts Mr. Green's contract

Mr. Green is a local mobster who makes Mr. Blue pay $100 not to have his business burned to the ground. What is the status of the contract between Mr. Green and Mr. Blue? A. There is no contract because Mr. Green gave inadequate consideration B. There is a contract as long as Mr. Green registers the contract with the Secretary of State C. There is a contract as long as $100 is a reasonable profit for not burning down the business D. There is a contract as long as a court reviews the terms within 30 days

Mr. White contracts with his wife Ms. White to watch their kids, Joe and Jimmy, for $50 for night. What is the status of the contract between Mr. Smith and Ms. White? A. There is no contract because Ms. White gave inadequate consideration B. There is a contract as long as Mr. White registers the contract with the Secretary of State C. There is a contract as long as $50 is a reasonable profit for watching the kids D. There is a contract as long as a court reviews the terms within 30 days

Mr. White enters into a contract to sell a car to Joe Jr. who is 15 years old and is considered a minor in the state where he lives. What is the status of the contract that Mr. White and Joe Jr. entered into? A. The contract is voidable, and is enforceable till Joe Jr. cancels it. B. The contract is void and unenforceable. C. The contract is enforceable and valid. D. If the contract is registered with the Secretary of State's office it will become enforceable.

Ms. White lost her puppy. She advertises a reward of $50 for the return of her puppy. What is the contractual nature of Ms. White's advertisement? A. An offer for a unilateral contract B. An invitation for an offer C. An invitation for a gift D. An acceptance on a bilateral promise

Patricia has requested extra payment because abnormal subsurface rock formations made excavation on the construction site far more costly and time-consuming than could have been reasonably expected. The court will: A. enforce such modifications in contract. B. allow the party to rescind such a contract. C. consider the contract voidable. D. consider the contract unenforceable.

Ron was employed by Mass Co. in 1970. At that time, he was given an employee handbook that described the particular steps that had to be taken before an employee could be fired. Later on, in 2000, Mass published a new handbook by which all workers status were changed to employment-at-will workers. Mass then fired Ron. Ron claimed he was terminated without cause and was not afforded procedures described in the 1970 handbook, such as an appeal or review of the decision. He sued Mass under breach of contract based upon the 1970 employee handbook. Will he succeed? A. Yes, because the modifications in 2000 were not by mutual consent and for consideration. B. No, because the employee handbook contains terms and conditions of the employment contract. C. Yes, because Mass Co. has arbitrarily terminated Ron. D. No, because Ron had acquiesced to the modification by not raising any objection

Sue wanted to purchase a car. She went to "Honest Bob's" used car sales. She was interested in a classic 1956 Jaguar XK 140 Roadster. Bob told her "this is a great car-it runs like a dream, it is a sweet ride." Bob's statements are legally considered to be: A. opinion statements. B. material representations. C. innocent misrepresentations. D. fraudulent, if they are false.

The UCC differs from the common law of contracts in that the UCC: A. is less concerned with technical rules. B. deals with the sale of intangibles. C. deals with service contracts. D. is less concerned with the "good faith" doctrine.

The main difference between concealment and nondisclosure is that: A. concealment is always regarded as an assertion of fact, while nondisclosure may or may not amount to such an assertion. B. a tort suit is possible in a concealment case, but not in a nondisclosure case. C. punitive damages are available in a nondisclosure case, but not a concealment case. D. nondisclosure is always regarded as an assertion of fact, while concealment may or may not be an assertion of fact

The term for when both parties are mistaken about the same fact to a contract is called? A. Mutual mistake B. Mutual duress C. Unilateral mistake D. Unilateral duress

Under the common law, an offer for a unilateral contract: A. is accepted by full performance of the act requested by the offer. B. is accepted either by an appropriate act or an appropriate promise. C. is accepted by whatever means are reasonable under the circumstances. D. is accepted by making the promise requested by the offer

What does "present intent to contract" mean? A. Intent to enter the contract upon acceptance B. Intent to negotiate in case of rejection of offer C. Intent to set contractual conditions D. Intent to engage more than one partner in the deal

What legal effect does death or insanity of the offeror have on the offer? A. It terminates the offer automatically. B. It terminates only the last contract that has been formed with that offeror. C. It has no legal effect unless and until the offeree is notified of the death of the offeror. D. It makes the offer voidable

What section of the UCC states that an order to a manufacturer requesting shipment of goods may be accepted by a prompt shipment of the goods? A. 2-206 B. 9-301 C. 1-105 D. 2-345

What term references threats or coercion that is used by one party to a contract to force another to agree to a contract? A. Duress B. Undue influence C. Breach D. Power of Attorney

What type of transactions are governed by the Uniform Commercial Code? A. Contracts for the sale of goods. B. Contracts for services. C. Contracts for the sale of land. D. Any commercial contract, whether for goods, services, or land

When negotiations occur through email or mail, there is usually a time limit put on what? A. The time the offeree has to accept the offer B. The time the offeror has to register the contract with the state C. The time the offeror has to register the contract with the federal government D. The time to have a judge approve the contract

Which of the following characterizes definiteness standards under the common law? A. Courts are contract enforcers. B. Contracts need to contain all the terms. C. Courts should be able to provide "gap fillers" in contracts. D. Courts can take a "hands-on" approach to contracts.

Which of the following describes a stipulation? A. An offeror's right to determine the manner of acceptance B. An offeree's right to determine who to contract with C. The court's right to provide gap-fillers in a contract D. Additional terms in a contract in order to make it binding

Which of the following is often used by agreements that try to make gratuitous promises look like true bargains? A. Nominal consideration B. Past consideration C. Composition agreement D. Requirements contract

Which of the following is true regarding promissory estoppel? A. It requires reasonable reliance on the promisor's promise. B. It requires a written promise. C. It requires consideration. D. It applies only when one party is a merchant

Which of the following statements about standardized form contracts is false? A. Frequently, the terms of standardized contracts are negotiable. B. They are used both online and offline. C. They are contracts that are preprinted by one party and presented to the other party for signing. D. In most situations, the party who drafts and presents the standardized contract is the party who has the most bargaining power in the transaction.

Which of the following will be legally binding on all the parties despite the lack of consideration? A. A promise to donate money to a charity which was relied upon by the charity in incurring large expenditures. B. An oral employment agreement for a term of nine months from the date the agreement was formed. C. An irrevocable oral promise by a merchant to keep its offer open for 60 days. D. A material modification signed by the parties to a contract to purchase and sell a parcel of land.

Which party to contract negotiations is the master of the offer and can specify what behavior is necessary to constitute a valid acceptance? A. The Offeror B. The Offeree C. The Secretary of State D. The court

Which source of law requires the acceptance to be a "mirror image" of the offer in order to form a contract? A. Common Law B. Constitutional Law C. Natural Law D. Theocratic Law

Why do the Restatements of Contracts not have the force of law? A. It was the product of a private organization. B. It had conflicting perspectives. C. It was deemed significantly inferior to the common law. D. It was deemed significantly inferior to the UCC.

Why does Article 2 hold merchants to a higher standard than nonmerchants? A. Because buyers tend to place more reliance on merchants. B. Because merchants are not required to observe reasonable commercial standards of fair dealing. C. Because the Code gives more weightage to technical requirements such as consideration. D. Because the Code does not recognize the concept of an unconscionable contract between a merchant and a buyer.

. Debbie Jones and Bill Schneider exchanged standard order forms to formalize their contract for a batch of goods and realized that their standard forms do not agree on material terms. Under UCC section 2-207, when will there be a contract? Assume that Bill did not make its acceptance conditional on Debbie's assent to any additional or different terms. A. Only when Debbie and Bill are merchants. B. When Bill's form is a definite and seasonable expression of acceptance. C. When the conduct of one party recognizes the existence of a contract. D. When the offer expressly limits acceptance to its own terms

. In general, the mailbox rule is beneficial to: A. the offeror. B. the offeree. C. the courts. D. third-party beneficiaries.

. On May 1, Ida makes a written offer to Miranda for the sale of Ida's car. On May 2, Ida mails Miranda a letter revoking the offer. On May 3, Ida telephones Miranda to tell him that he is revoking the offer. On May 4, Miranda learns that Ida has sold the car to Chris. On May 5, Ida's letter finally gets to Miranda. Ida's offer terminated on: A. May 2. B. May 3. C. May 4. D. May 5.

. The original offeree is one who: A. first makes the offer and determines its terms and conditions. B. has the legal power to accept an offer and create a contract. C. hears of the contract indirectly and has an intent to accept. D. first accepts the additional terms presented by the offeree

. What can an offeror do to minimize the risk posed by the mailbox rule? A. Include separate additional terms B. Include a receipt stipulation in the contract C. Select only known parties as original offerees D. Revoke the offer before acceptance

. Which of the following helps to prevent offerors from revoking their offers prior to acceptance when the offeree relies on it being kept open? A. Option B. Promissory estoppel C. Unilateral contracts D. Firm offer

. Which of the following is true regarding bids? A. They are considered to be unilateral contracts. B. Promissory estoppels can be used to prevent withdrawal of bids. C. Bids for governmental contracts are covered under contract principles. D. Those submitting a bid are called offerees.

A bilateral contract is accepted by when the offeree: A. performs the requested act. B. makes the promise requested by the offer. C. accepts the offer in silence without prior indication. D. makes additional inquiries regarding the terms.

A contract in which the parties have not yet fully performed their obligations is called a(n): A. executed contract. B. executory contract. C. quasi-contract. D. bilateral contract

A contract is _____ when all of the parties have fully performed their contractual duties. A. void B. executed C. contingent D. ineffective

A contract must be between parties who have _____ to contract. A. knowledge B. capacity C. resources D. intention

A contract whose formation is induced by duress is an example of a contract that is: A. void. B. voidable. C. unenforceable. D. executory

A fact is considered to be material in a misrepresentation case when: A. the misrepresentation is considered to be innocent. B. it plays an important role in inducing a person to enter into a contract. C. it is relied upon by a person, even though it could not possibly be true. D. it is similar to an opinion or promise about some future happening.

A newspaper advertisement made to the general public: A. usually is an offer. B. can be revoked by using a similar newspaper advertisement. C. can only be rejected by using a similar newspaper advertisement. D. is a firm offer that cannot be revoked.

A(n) _____ is a separate contract in which an offeror agrees not to revoke her offer for a stated time in exchange for some valuable consideration. A. offer B. option C. bid D. advertisement

Alana, who runs a flower shop, sells Jose a shotgun. Jose is unemployed, and Alana has never before sold a firearm in her life. Which of the following is true? A. Article 2 of the UCC applies because Alana is a merchant. B. Article 2 of the UCC applies because a shotgun is a movable thing. C. Article 2 of the UCC does not apply because Alana is not a merchant with respect to shotguns. D. Article 2 of the UCC does not apply because Jose is not a merchant

An accident on a state highway rendered Jill in comatose state for nearly a month. There was an old nurse who used to take care of her then. After her recovery, Jill felt so indebted to the nurse that she contracted to transfer all her assets to her to fulfill her (Jill's) moral obligation. Although this contract lacks ______, it can be enforced. A. value B. consideration C. acceptance D. capacity

Ashburn had a big ranch in Georgia. One day Pamela stated, "I'd like to buy your sheep for $50. They're so cute!" to which Ashburn immediately replied, "Sure. That's a deal!" This cannot be enforced as a contract because of lack of: A. consideration. B. definiteness. C. communication to offeree. D. present intent to contract.

Assuming that the economic condition of the country is progressing, Peter entered into a contract with John for the sale of substantial amount of shares of his company for consideration of $1,000,000. However, due to a slump in the market in the next few months, Peter lost heavily. This would lead to: A. avoidance of the contract. B. enforcement of the contract. C. rescission of the contract. D. reformation of the contract.

Bob's threat to breach an existing contract unless Lauren makes another contract with Bob is considered: A. an element of duress, because breach of an existing contract violates a criminal statute. B. an element of duress, depending mainly on the coerciveness of the threat. C. not an element of duress, because it does not involve physical force. D. not an element of duress, because breaking a contract normally does not violate a criminal statute

Can a local businessman pay a police officer $50 a week to watch the business more closely? A. Yes, as long as the contract is registered with the Secretary of State B. No, Public Officials cannot give consideration on duties already supposed to perform C. Yes, as long as $50 is reasonable amount to watch the business D. Yes, as long as a court reviews the contract within 30 days

Consideration can be a(n) _____ in the case of a bilateral contract. A. act B. promise C. exchange D. gift

Dawson entered into a contract with Jensen for the sale of Dawson's boat. Which set of legal rules governs this transaction? A. Contract rules of the common law B. Contract rules of the Uniform Commercial Code C. Equity rules that ensure fairness in transactions D. Marine law

Greg signed a contract to work as an auto-parts manager for Jones Chevrolet. This contract is governed by: A. Article 2 of the UCC. B. state common law. C. the doctrine of promissory estoppel. D. the law of quasi-contract

In which of the following circumstances is a debt settlement a binding contract? A. Where the amount of the debt is uncertain or subject to dispute. B. Where the amount of the debt is certain and undisputed. C. Where the only consideration the creditor gives the debtor is his promise not to sue the debtor on the original debt. D. Where the settlement is part of a composition agreement

Jerry owns a parcel of land. Nate, one of Jerry's closest friends and an attorney, has persuaded Jerry to sell the land to Nate at a price substantially below fair market value. At the time Jerry sold the land, he was resting in a nursing home recovering from a serious illness. If Jerry desires to set aside the sale, which of the following causes of action is most likely to be successful? A. Duress B. Undue influence C. Fraud D. Misrepresentation

Jim, the CEO of Maple Inc., had to sign a few papers that Amanda, his secretary, presented to him. Unknown to Jim, Amanda had carefully slipped in a contract for the sale of Jim's home to her in the papers which he signed. If Amanda seeks to enforce the contract, Jim's best defense to have the contract declared void would be: A. innocent misrepresentation. B. fraud in the execution. C. mistake. D. duress.

Joe and Jack have a written contract whereby Joe agrees to sell Jack a plot of land for $100,000. Later, without terminating the first contract, the parties modify the deal so that Joe sells Jack the same plot of land for $125,000. The second agreement is not a contract because: A. the first contract was not terminated. B. there is no consideration for Jack's promise. C. Joe's promise is illusory. D. written contracts for the sale of land cannot be modified.

John promised the other co-owners of the ship Sea Fairy that he would insure the ship for an upcoming voyage. However, John fails to insure the ship. The ship is shipwrecked in a turbulent sea. The co-owners sue John for breach of contract. Will they succeed? A. Yes, because there was a valid and binding contract between the co-owners. B. No, because it was a purely gratuitous promise. C. No, because an intervening cause absolved John's liability. D. Yes, because of promissory estoppel.

Kyle sent Tara a letter offering to sell Tara his car. Tara left the letter on her desk, where her roommate, Maggie, saw it. After reading the letter, Maggie wrote to Kyle and stated that she (Maggie) wanted to accept Kyle's offer. Which of the following is true? A. Kyle must sell Maggie his car unless Kyle is a merchant under the UCC. B. There is no contract between Kyle and Maggie because Kyle did not communicate the offer to Maggie. C. Kyle and Tara have a contract for the purchase of Kyle's car. D. Maggie's letter is a valid acceptance of Kyle's offer

Linda wanted to replace the old carpet in her home. She entered into a contract with Carpet Co., for the purchase and installation of a new carpet. The price of the carpet was $3,000 and the cost of the labor to install the carpet was $150. Later, Linda became dissatisfied with this transaction and now wants to sue Carpet Co. Linda wants to apply the contract rules of the UCC, but Carpet Co., wants to apply the contract rules of the common law. Which source of law should govern this case? A. The contract rules of the UCC apply, because the contract included the sale of goods. B. The contract rules of the UCC apply, because the predominant purpose of the contract was sale of goods. C. The contract rules of the common law apply, because the contract included services, which are governed by the common law. D. The contract rules of the common law apply, because all contracts are governed by the common law.

Martin Nowak, an accountant, entered into a written contract with Jane Gibson to perform certain tax services for Jane. Shortly thereafter, Jane was assessed additional taxes and she wanted to appeal the assessment. Jane was required to appeal immediately and the workpapers held by Martin were necessary to appeal. Martin refused to furnish Jane with the workpapers unless he was paid a substantially higher fee than was set forth in the contract. Jane reluctantly agreed in order to meet the filing deadline. The contract as revised is: A. voidable at Jane's option based on undue influence. B. voidable at Jane's option based on duress. C. void on the ground of undue influence. D. void on the ground of duress

Milner Developers proposed an offer to Henry Wright, an independent contractor, offering to hire him for their next project. They offered him a certain rate and specified the contract details along with describing the stipulated mode of acceptance but received no response. Wright responded to the offer after a delay of two months with a quote for a higher amount than that mentioned by Milner Developers. Do the two parties have a binding contract? A. No, because the offer made by Milner Developers was ambiguous. B. No, because Wright's letter was a counteroffer to the original offer. C. Yes, because Milner Developers did receive a response from Wright. D. Yes, because Wright's silent signaled his acceptance of the offer

Mr. Green enters into a contract with Mr. Blue who is a crab fisherman. Mr. Green and Mr. Blue know that Mr. Blue has already caught the number of crabs allowed for the season. But Mr. Green and Mr. Blue agree to a contract to exceed the quota. What is the status of the contract between Mr. Green and Mr. Blue? A. The contract is voidable, and is enforceable till Mr. Blue cancels it B. The contract is void since it attempts to contract for services that are illegal C. The contract is valid and enforceable D. The contract will be valid if registered with the Secretary of State

Mr. Yellow delivers a stack of newspapers to Mr. Green's store to see if he wants them. A note attached indicates the stack of papers is $50. Mr. Green without communicating an acceptance sold the entire stack of papers to his customers. What is the status of the agreement between Mr. Yellow and Mr. Green? A. There is no contract because Mr. Green did not expressly accept the offer B. There is a contract because Mr. Green accepted by implied action C. There is no contract because the goods are treated as gifts to Mr. Green D. There is no contract because the Secretary of State was not notified

Offers that fail to provide a specific time for acceptance are: A. considered to be illegal. B. are valid for a reasonable period for time. C. are valid but unenforceable. D. can be used to penalize the offeror

On Thursday, Trista Dylan receives a letter from Charlie Holmes offering to sell her a diamond ring and stating that: "if you choose to accept, you must do so prior to 2:00 p.m. tomorrow." Trista had a telegram of acceptance dispatched well before 2:00 p.m. on Friday but it is delivered to Charlie's home only at 2:15 p.m. Do Trista and Charlie have a binding contract? A. No, because Trista's purported acceptance was delayed. B. Yes, because Trista dispatched the telegram prior to 2:00 p.m. C. No, because Trista's use of a telegram was not stipulated in the offer. D. Yes, unless Charlie is not home to receive the telegram.

Paco Corp., a building contractor, offered to sell Roy several pieces of used construction equipment. Roy, engaged in the business of buying and selling equipment, accepted the offer. Paco's written offer had been prepared by a secretary who typed the total price as $10,900, rather than $109,000, which was the approximate fair market value of the equipment. Paco learned of the error in the offer and refused delivery of the equipment unless Roy agreed to pay $109,000. Roy has sued Paco for breach of contract. Which of the following scenarios is the likely outcome? A. Paco will not be liable because there has been a mutual mistake of fact. B. Paco will be able to rescind the contract because Roy should have known that the price was erroneous. C. Roy will prevail because Paco is a merchant. D. The contract is enforceable because Roy had accepted it.

Sigmund enters into a contract with Carl. The terms are that Sigmund will purchase all the gasoline that he wants to purchase in 2011, at a price of $2.50 per gallon, and Carl agrees to sell on those terms. This is an example of a(n): A. valid contract. B. illusory contract. C. voidable contract. D. implied contract.

Sue Sandon and Joe Rhine have concluded their agreement in all substantial matters of their contract for goods offer like price, quantity, and mode of delivery but the formal written agreement has not been signed yet. Is there a binding contract at present? A. Yes, because an oral contract should suffice. B. Yes, because a contract is formed at the time the agreement is concluded. C. No, because the minor terms also need to be taken care of. D. No, because the agreement is not yet signed and thus, legally unenforceable

The Code empowers courts to deal fairly with a contract that is grossly unfair or one-sided by recognizing the concept of: A. good faith. B. unconscionable contract. C. quasi-contract. D. implied contract.

The outer limit on a firm offer is: A. 1 month. B. 3 months. C. 6 months. D. 1 year.

The settlement of an unliquidated debt is called a(n): A. forbearance to sue. B. accord and satisfaction. C. past consideration. D. moral obligation

The term for the person who makes an offer as part of a contract formation is called? A. Offeree B. Offeror C. Leasor D. Incorporator

What is the term for "a manifestation of assent to the terms made by the offeree"? A. The Offer B. The Acceptance C. The Consideration D. Revocation

What is the term for being equitably prevented from raising a legal defense? A. Quid pro quo B. Estoppel C. Breach of Contract D. International Subsidy Agent

When an auction is advertised as being _________, the seller is treated as having made an offer to sell the goods to the highest bidder. A. without intent B. without reserve C. without price D. without offer

When can the offeror effectively revoke his/her offer? A. Only after an effective acceptance. B. Only before an effective acceptance. C. Only before payment for goods or services has been made. D. Only before the parties have completed their obligations under the contract.

When is the revocation of an offer effective? A. When received by the offeror B. When received by the offeree C. When sent by the offeree D. When sent by the offeror

Which of the following is a ground for avoidance of contract based on a unilateral mistake? A. Both parties are mistaken about a fact. B. Nonmistaken party caused the mistake. C. The mistaken party had reason to know of the mistake. D. Person affected by the mistake does not bear the risk for it.

Which of the following is a relevant consideration? A. A preexisting duty B. Agreement to settle an unliquidated debt C. A preexisting moral obligation D. Nominal consideration

Which of the following is an exception to a consideration requirement? A. Bargained-for exchange B. Charitable subscription C. Nominal consideration D. Adequacy of consideration

Which of the following is most likely to constitute undue influence? A. A firm demanding more in terms of pricing by withholding essential supplies. B. A clergyman using a parishioner's emotional susceptibility to get the parishioner to contract with the clergyman. C. Threatening to commence a frivolous criminal prosecution against someone, in order to get them to contract with you. D. Grabbing someone's hand and forcing them to sign on a contract you have prepared.

Which of the following is often taken to be the equivalent of an assertion? A. Oversight B. Concealment C. Reliance D. Materiality

Which of the following is the first step in the contract formation process? A. Signing the agreement B. An offer in definite terms C. Selection of partners D. Drafting the agreement

Which of the following is true of a sales contract under the UCC? A. The courts cannot fill any "gaps" in the contracts. B. The court needs to find if the parties intended a contract. C. An intent to contract exists even if the parties were unable to reach an agreement. D. All terms of contract need to be clear for the court to decide the case

Which of the following is true regarding silence as an acceptance? A. Contract law explicitly recognizes silence as constituting acceptance. B. An offeree's silence is considered acceptance when he/she indicates so. C. An offeror can impose on the offeree a duty to respond to the offer. D. The Code explicitly recognizes silence as constituting acceptance.

Which of the following offers terminates earliest? Assume that there is no time limitation on the offer unless the offer says otherwise. A. An offer for the sale of land. B. An offer to purchase stock on a stock exchange. C. An offer that says that it will stay open for one week. D. An offer with a valid five-day option attached to it

Which of the following statements, if false, is most likely to create liability for fraud or misrepresentation? A. "This rare antique chair probably is worth $10,000." B. "This crane will lift a 10,000-pound load." C. "This car is a perfect gem." D. "In my opinion, this car is in flawless mechanical condition."

Which of the following will be legally binding on all parties despite lack of consideration? A. An irrevocable oral promise by a merchant to keep an offer open for 60 days. B. A promise to donate money to a charity which the charity relied upon in incurring large expenditures. C. A promise to pay for the college education of the child of a person who saved the promisor's life. D. A signed modification to a contract to purchase a parcel of land

Which of the following would indicate a rejection under the mirror image rule? A. Inquiry regarding terms B. Material changes to offer C. Grumbling acceptance D. Present intent to accept

Why is past consideration not a consideration in a present promise? A. It falls under exceptions to consideration. B. It does not pertain to the present exchange. C. It is not covered under the UCC codes for consideration. D. It involves an issue of moral obligation

X and Y have a contract which obligated X to sell Y 100 boxes of screws for $100. The parties orally modify the contract so that X will sell Y the same 100 boxes of screws for $125. The second agreement is: A. binding because it is due to unforeseeable situation. B. binding by virtue of being mutually agreed on. C. not binding because it is an outputs contract. D. not binding due to the promise of performing a preexisting legal obligation.

. Jack went to the ABC Casino to gamble. ABC offers its customers one free spin of the Million Dollar Wheel if they fill out an application form. Jack filled out the form, spun the Million Dollar Wheel, and won. However, now ABC refuses to pay, claiming that because Jack did not purchase his chance at the Million Dollar Wheel, Jack gave no consideration and therefore, no contract was formed. Identify the accurate statement. A. No contract was formed because Jack paid no money for his chance at the Million Dollar Wheel. B. No contract was formed because ABC did not sign any written contract as an obligation to do so. C. A contract was formed because filling out an application can constitute legal consideration. D. A contract was formed because no consideration is needed when a customer takes advantage of a "free" offer

. Which of the following actions constitutes the acceptance of an offer? A. Offeree made material alterations to the terms of the offer B. Offeree intended to enter the contract only if requisite changes were made C. Offeree reflected assent to the terms of the offer in the requisite manner D. Offeree suggested addition of new terms that were earlier not addressed in the offer

A computer manufacturer offered to sell sophisticated computer equipment to another country. Two days later, before the offer was accepted, Congress placed an embargo on all sales to this country; and therefore, the offer was terminated by the embargo. This is an example of: A. promissory estoppel. B. destruction of subject matter. C. intervening illegality. D. revocation.

A contract in which one or more of the parties have the legal right to cancel their obligations under the contract is called a(n): A. void contract. B. valid contract. C. voidable contract. D. unenforceable contract

A firm offer differs from an option in that, a firm offer: A. is a separate contract by itself. B. is irrevocable for a certain period of time. C. does not require a consideration in exchange for the offer. D. is not covered under the UCC.

A party to a contract who seeks to rescind the contract because of that party's reliance on the unintentional but materially false statements of the other party will assert: A. reformation. B. actual fraud. C. misrepresentation. D. constructive fraud.

A reaffirmation promise has to be made prior to the date of the bankruptcy discharge and gives the debtor the right to revoke his promise within 30 days after it becomes enforceable. This is the requirement of: A. charitable subscriptions. B. promises to pay debts barred by statutes of limitations. C. promises to pay debts barred by bankruptcy discharge. D. promissory estoppels.

A void contract is: A. a contract that one or both parties can cancel at their convenience. B. a contract, even though the courts will not enforce it. C. an agreement that creates no legal obligations. D. created by operation of law rather than by the agreement of the parties.

Aaron promises to sell his boat to Matt, and Matt promises to buy it from Aaron. What type of contract is this? A. A unilateral contract B. A quasi-contract C. A bilateral contract D. A promissory estoppel contract

Able borrowed $10,000 from Baker, promising to return it with $1,000 interest on January 1, 2006. There is no dispute that Able owes Baker $11,000 due on January 1, 2006. On that day, Able gave Baker a valid check in the amount of $10,500 marked "payment in full for loan due January 1, 2006." Baker accepted that check and deposited it into his account. If Baker then sues Able for the unpaid $500, what would the result be? A. Able wins, because Baker accepted the lesser payment. B. Able wins, because Baker made an implied promise to accept $10,500 as full payment, thereby forgiving $500 of the loan. C. Baker wins, because Able gave no consideration in exchange for Baker's promise to forgive $500 of the loan. D. Baker wins, because marking "payment in full" can never relieve a party of its original obligations under a contract.

According to contract law, a(n) _____ is a belief about a fact that is not in accordance with the truth. A. assertion B. concealment C. mistake D. material

According to the classical contract law, courts are: A. contract makers. B. contract breakers. C. contract enforcers. D. contract negotiators

Advertisements for the sale of goods at specific prices are considered to be: A. bids. B. unenforceable contracts. C. invitations to offer. D. unilateral contracts

An online agreement that presents contract terms and conditions but does not require readers to click to indicate agreement is called a: A. clickwrap agreement. B. shrinkwrap agreement. C. browsewrap agreement. D. minimum contracts agreement

An oral contract that is covered by the statute of frauds is: A. voidable. B. void. C. unenforceable. D. executory

April Roberts ordered hundred 19-inch color television sets from Carl Soans and requested for a prompt shipment of the goods. Carl promptly shipped fifty 21-inch color television sets and fifty 19-inch color television sets without informing April that the shipment of nonconforming television sets was an accommodation. Which of the following is true? A. There is no acceptance because Carl's shipment materially differed from the terms of the offer. B. There is an acceptance and April is bound to pay the reasonable value of the fifty 21-inch television sets she did not ask for. C. There is an acceptance but Carl has breached the contract by shipping nonconforming television sets. D. There is a new offer that Carl has made by sending the nonconforming goods which April can accept or reject.

Article 2 of the UCC does NOT apply to a sale of: A. baseball bats. B. harvested wheat. C. corporate stock. D. a new car

Calvin tells Sara that he will sell her his car for $5,000. Sara agrees. The exchange is to take place in 10 days. The contract between Calvin and Sara is now: A. unilateral, executory, and valid. B. bilateral, executed, and voidable. C. bilateral, executory, and express. D. bilateral, executory, and implied

Chica, a women's clothing store, held a "prize drawing" for a $500 shopping spree on Saturday that it had advertised throughout the week. Participation in the drawing required being at the store by noon and completing an application form that included personal information and placing it in a box. The information would then be put into a database for marketing purposes. Fashion consultants offering merchandise for sale greeted customers arriving at the store on Saturday morning. Joy was the winner of the drawing. Has she given consideration for the prize? A. No, she gave no legal value to Chica. B. No, unless she purchased an item from one of the fashion consultants. C. Yes, she came to the store and gave information that was for the store's use. D. Yes, unless the store was conveniently located

Consideration can be a(n) _____ in the case of a unilateral contract. A. security B. guarantee C. act D. promise

Contracts are typically between one party and who? A. The federal government B. The state government C. Another private party D. An international agency on commerce

Contracts in which one party to the agreement agrees to buy all of the other party's production of a particular commodity is called a(n): A. requirements contract. B. composition agreement. C. output contract. D. nominal consideration.

Daniel is a senior at State University. Brian, Daniel's father, is concerned about Daniel's study habits, given that Daniel spends most of his evenings at the campus pub instead of the library. Brian promises Daniel that he will send him on an expense-paid trip to Europe after his graduation if Daniel spends at least five evenings a week studying in the campus library for the remainder of his senior year. After returning home from his graduation, Daniel asks Brian about the European trip. Brian replies, "Your education was your reward. I don't owe you a trip to Europe." Brian is: A. correct; Daniel has already gained the benefit of the bargain. B. correct; Daniel did not give anything of legal value. C. incorrect; Brian owes Daniel a trip to Europe because Daniel's acts are consideration. D. incorrect, but only if Daniel's acts are adequate consideration for such an expensive trip.

Gift promises are not generally enforceable because they lack: A. legality. B. capacity. C. consideration. D. agreement

Hally took advantage of a confidential, trusting relationship with Gwyn when they entered into a contract. Now, Gwyn can seek remedy based on: A. duress. B. unconscionability. C. undue influence. D. fraud in the execution.

Helen worked for ABC Motors for 25 years. The president of ABC said to her: "In consideration of your past service for 25 years, I promise to give you a new car next week." However, he did not give the car. Is this promise legally enforceable? A. Yes, a contract was formed. B. Yes, promissory estoppel requires enforcement of the promise. C. No, legal consideration is absent. D. No, legal capacity is absent

How can an offeree impliedly reject an offer? A. By indicating that he will not accept it B. By asking for more time to think C. By making a counteroffer D. By writing his nonacceptance

How can courts prevent an offeror from revoking a unilateral contract once the offeree has started performance? A. By providing additional terms according to the Code's gap-filling provisions B. By holding that the offeree's acceptance has curtailed the power of revocation C. By holding that the offeree's performance has made it a bilateral contract D. By making material changes in the terms of the original contract

Ian, a lawyer, sent an offer to Raymond on October 1 offering to sell Ian's car for $5,000. The offer did not contain a provision stating when it would terminate. Under these circumstances, when will that offer terminate? A. After 5 days, as per the "5 day rule." B. After 10 days, as per the "10 day rule." C. After a "reasonable" period of time. D. When either Ian or Raymond terminates it.

In order to satisfy the consideration requirement to form a contract, the consideration exchanged by the parties must: A. have a monetary value. B. conform to the parties' subjective intent. C. be legally sufficient. D. have approximately the same value

Jimmy and Pat had a long-standing professional relationship. In 2001, Jimmy's business began experiencing financial strain. The two friends discussed Jimmy's personal problems and financial difficulties, and Pat was concerned about his friend's depressed mental state. In 2003, Pat flew from Atlanta to New York to meet Jimmy. Prior to Pat's flight, Jimmy's employee had faxed copies of various construction contracts and correspondence relating to Jimmy's controversial projects for Pat to review. In late 2005, Pat billed Jimmy for a $40,000 balance that Jimmy owed on the alleged oral contract. In a letter to Pat, Jimmy stated: "I have paid you plenty and will not pay you any more. I have not called for any professional advice since then." Pat filed suit against Jimmy for breach of contract. Will Pat succeed? A. Yes, because Pat was offering his friend professional consultation. B. Yes, because there is a valid contract formed, since Jimmy had sought Pat's advice. C. No, because it was a friendly advice and not an actual contract. D. No, because Pat never entered into an oral contract and only written contracts are enforceable

Joe sells his business to Shirley. During the negotiations, Joe negligently tells Shirley that the business has earned a profit for the last five years. In reality, the business operated at a loss for each of those years. However, Shirley did not hear Joe's misstatement. Shirley cannot rescind the contract because: A. Joe's false statement was negligent rather than intentional. B. Joe's misstatement was not material. C. Shirley did not actually rely on Joe's misstatement. D. an untrue assertion of fact was made.

Mark, an attorney, accepts an offer for an attorney position at The Firm. Prior to Mitch's first day at work, Harold, a managing partner, sends Mark an Employment Policy Manual which contains policies regarding attendance and confidentiality. Harold includes a note advising Mark to carefully review the manual as he would be expected to adhere to its policies. During his first week at The Firm, Mark is seen leaving the office at noon with copies of files tucked under his arm. He is also observed giving the copied files to a man not associated with The Firm. At the end of the week, Mark is terminated for violating the terms of the Employment Policy Manual. Which of the following is true? A. Mark may recover his moving expenses under the doctrine of promissory estoppel. B. The Firm breached its express contract with Mark by terminating him. C. The Employment Policy Manual is part of the implied contract between Mark and The Firm. D. The Firm may recover Mark's salary under the doctrine of quasi-contract

On May 6, Robbie entered into a signed contract with Ed, whereby Robbie was to sell Ed a painting having a fair market value of $350,000 for $130,000. Robbie believed the painting was worth only $130,000. Unknown to either party, the painting had been destroyed by fire on May 4. If Ed sues Robbie for breach of contract, Robbie's best defense is: A. risk of loss had passed to Ed. B. lack of adequate consideration. C. mutual mistake. D. unconscionability.

Reggie went to the Napa Valley Harvest Festival, when he stopped at Tracy's booth where she was selling paintings of vineyards. Reggie admired a painting of vineyards, which did not appear to be for sale. Reggie said to Tracy, "I will give you $200 if you give me that painting right now." Tracy said nothing in response, but she gave Reggie the painting, and Reggie gave her $200 in cash. This is an example of a contract that is now: A. bilateral and executed. B. bilateral and executory. C. unilateral and executed. D. unilateral and executory.

Sue offers to buy a house from John and they were negotiating the price of the house. In the meantime, Sue confides in John's wife that she is willing to pay an amount of $50,000 for the house. Delighted to hear this, John's wife tells him the good news. John immediately calls up Sue and accepts her offer. Is there a binding contract? A. Yes, because there is valid consideration. B. Yes, because a third party has communicated the terms of Sue's offer to John and that John had accepted the same. C. No, because the offeror had not communicated the terms of the offer to the offeree. D. No, because the contract is still not signed by both the parties

The general common law rule on contract modifications holds that an agreement to modify an existing contract requires a(n): A. necessary increase in the value of the exchange. B. inclusion of a new party to the contract. C. new and independent consideration. D. economic exchange of substantial value

The shipment of nonconforming goods intended as an accommodation to the buyer is a(n) _____. A. ambiguous offer B. prompt shipment C. counteroffer D. inquiry regarding terms

To distinguish an offer, courts first look at: A. the communication to the offeree. B. the definiteness of terms. C. the present intent to contract. D. a description of the parties involved.

To establish a cause of action based on fraud in the inducement, one of the elements the plaintiff must generally prove is that: A. it is impossible for the plaintiff to fulfill the terms of the contract. B. the contract is unconscionable. C. the defendant made a false representation of a material fact. D. there has been a mutual mistake of a material fact by the plaintiff and defendant.

Under the mailbox rule, the acceptance of an offer is effective at the time the acceptance is dispatched unless: A. both the offeror and offeree are merchants. B. the offer proposes a sale of real estate. C. the acceptance is not in the authorized mode of communication. D. the acceptance is lost or never reaches the offeror.

What is the legal status of an improperly dispatched acceptance that was sent by a means of communication that was nonauthorized by the offeror? A. It is valid but unenforceable. B. It is invalid but enforceable. C. It is effective when received. D. It leads to an immediate revocation.

What is the test frequently used to determine "hybrid" contracts? A. Determining the value of the contract. B. Determining the party to benefit. C. Determine which element predominates. D. Determining the validity of the contract.

When the offeror, as the master of the offer, specifies the precise time, place, and manner in which acceptance must be communicated, it is termed as _____. A. documentation B. authentication C. stipulation D. notification

Which is the only state to have adopted the Uniform Commercial Code (UCC) only partially? A. Arizona B. Connecticut C. Louisiana D. Wisconsin

Which of the following actions is considered to reflect a counteroffer? A. A grumbling acceptance B. An inquiry regarding terms C. A demand for additional terms D. A silent acceptance

Which of the following characterizes an auction "without reserve"? A. Bidders must necessarily be merchants B. Sellers must necessarily be merchants C. Goods cannot be withdrawn after a call for bids D. Buyers are treated as having made an offer to sell

Which of the following characterizes the Code's standards of definiteness? A. It sees courts as contract enforcers. B. It requires a high degree of definiteness in contracts. C. It can create contractual liabilities. D. It cannot fill in gaps in contracts

Which of the following conditions can prevent additional terms from becoming a part of a contract formed between parties who are merchants? A. There is a grumbling acceptance by both parties. B. The contract is regarding the sale of goods. C. The offer expressly limits acceptance to its own terms. D. There additional terms would not materially alter the contract.

Which of the following contracts are agreements that create no legal obligations and for which no remedy is given? A. Valid contracts B. Unenforceable contracts C. Void contracts D. Voidable contracts

Which of the following elements establishes a case of duress? A. An assertion was made with knowledge of its falsity. B. There is an untrue assertion of a fact. C. The contract was induced by improper threat. D. There is a mistake about the basic assumption of the contract.

Which of the following is NOT covered by Article 2 of the UCC? A. Vehicles B. Appliances C. Stocks D. Books

Which of the following is most likely to constitute a misstatement that can give rise to fraud or misrepresentation liability? A. A broker says to his client, "I think that this car's engine has been overhauled." B. A customer sales representative of the most popular brand of car says to the customer, "This is the highest selling car in town." C. An owner of a house gets his ceiling painted to conceal a leaking roof and says, "I got the ceiling painted recently." D. The owner of an unencumbered horse states, "I am selling the horse to raise funds for my ranch."

Which of the following is true of a revocation? A. The power of revocation of an offer lies with the offeree. B. Death or insanity cannot be reasons for revocation. C. Promissory estoppels are used to prevent revocations. D. Offers that fail to state a specified time period are considered invalid.

Which of the following is true of consideration? A. A promise cannot be deemed a consideration in a bilateral contract. B. The legal value of a consideration must be equal to the actual value in a consideration. C. Gross inadequacy of consideration can give rise to an inference of fraud for setting aside a contract. D. A preexisting moral obligation is deemed a consideration

Which of the following is true of preexisting contractual duties and their modification under the UCC? A. There is no provision of modifications due to unforeseen circumstances. B. No modifications can be made to an existing contract that is binding. C. Modification requires "mere agreement" on the part of those involved. D. Rules for contractual modifications are different for the UCC and the CISG.

Which of the following is true of the remedies for misrepresentation and fraud? A. All states allow a victim of fraud to rescind and sue for damages. B. A person can claim punitive damages for fraud under the tort of misrepresentation. C. The contractual remedy for innocent misrepresentation is rescission. D. Ratification enables the right to rescind a contract

Which of the following meets the requirements of consideration? A. A promise not to engage in a crime or tort B. A promise without a binding obligation C. A promise that involves the exchange of a legal value D. A promise to do a preexisting duty

Which of the following must a person prove to rescind a contract if the misrepresentation was innocent. A. That the fact was asserted B. That the fact was disclosed C. That the fact was material D. That the fact was ratified.

Why does a rejection by the offeree terminate his power to accept the offer? A. It indicates his inability to perform the contract. B. It indicates that the offeree is uninterested. C. It allows the offeror to approach a different offeree. D. It indicates a lack of intent making any future contract illegal

Why does traditional contract law view any kind of an attempt by offerees to change terms as constituting a counteroffer? A. A material change to an original offer is disfavored by traditional contract law. B. It changes the degree of the offeror's interest to contract. C. Such an action implies a rejection of the offer by the offeree. D. It puts the offeree in a dominant position which is contrary to traditional contract laws.

You wish to download free software from the Internet. The download procedure includes a page titled "download now" that asks you to "please review" the licensing agreement that is available to you on another web page. The "download now" page has a button that initiates the download process. You click that button without going to the licensing agreement page and find that it contains an arbitration provision. Are you bound by this provision? A. Yes, because the "please review" statement in the "download now" page informed you of the licensing agreement. B. Yes, because when you clicked the button to initiate the download process you agreed to the provisions in the licensing agreement. C. No, because you did not perform an action that indicated your assent to the licensing agreement. D. No, because laws relating to Internet privacy consider silence to be an acceptance of the offer

A contract that involves obligations on the part of manufacturers and distributors is called a(n): A. requirements contract. B. composition agreement. C. output contract. D. exclusive dealing contract.

Abby orally offers to sell Carl 100 premium-grade fountain pens but neglects to state the price. Such pens typically sell for $1 each. Carl orally accepts. Immediately thereafter, Abby tries to back out of the deal. At this point in time, which of the following is most likely to be true? A. There is no offer and no contract because the offer is indefinite. B. There is no offer and no contract because the offer must be in writing. C. There is a contract, if the parties intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy. D. There is a contract, because the offer contained all material terms

Able Co. entered into a contract with Baker Co. for the sale of goods. Both parties are merchants under the UCC and each party used its own form as an offer and acceptance. On the reverse of each form, there were minor terms that conflicted with each other. What is impact of these minor differences in terms in the forms on the contract? A. There is no contract here because there is a discrepancy between the standard forms used by the two companies. B. There is no contract here because there is no "meeting of the minds." C. A contract does exist and is favorable to the third party beneficiaries who can take advantage of the situation. D. A contract does exist and it includes the terms agreed upon plus gap-fillers from the UCC.

According to the Code, when there is an acceptance that contains terms that are different from the original terms of the contract, the contract will consist of _____ and the appropriate gap-filling presumptions of the Code. A. an inquiry regarding terms B. notifications to prevent breach of conduct C. counteroffers from either party D. terms on which the parties' writings agree

Amy bought Mississippi State Lottery tickets. Several days later, she learned that someone had won the lottery but that the winner had not yet come forward. She searched for her ticket to see if she had selected the winning numbers, but was unable to find it. Although the lottery ticket was gone, Amy still possessed the play slip she had used when she purchased the ticket. She checked the numbers on the play slip and discovered that she had the winning numbers for the lottery. Reasoning that the play slip would satisfy the Lottery office, Amy laid her claim. The Lottery Office took the position that Amy needed to produce the actual winning ticket as per the rules, and hence denied her claim. Amy sued the Lottery Office for breach of contract and unjust enrichment. Will she succeed? A. Yes, because the play slip should be proof enough to substantiate her claim on the prize money. B. Yes, because this is a good faith claim and the Lottery office should accept Amy's play slip as proof of her winning the lottery. C. No, because Amy had made a mistake in losing the original ticket. D. No, because the rules of the contract prescribed the ticket must be shown to claim the money. Amy had accepted that rule when she entered into the contract and thus she is now precluded from claiming the prize money.

An ambiguous offer may be accepted in any manner that is _____ in light of the circumstances. A. stipulated B. authorized C. recognizable D. reasonable

An executed contract is one that has been: A. terminated by operation of law. B. terminated by the parties' voluntary agreement. C. fully performed by one or both parties. D. fully performed by both parties

An important difference between duress and undue influence is that: A. duress occurs in a relationship of trust, while undue influence employs improper threat. B. duress involves physical compulsion, while undue influence involves economic compulsion. C. the scope of duress has contracted since the 19th century, while the scope of undue influence has expanded since the 19th century. D. duress is wrongful coercion, while undue influence is unfair persuasion

An otherwise valid contract whose enforcement is barred by the applicable contract statute of limitations is an example of a(n): A. voidable contract. B. quasi-contract. C. bilateral contract. D. unenforceable contract.

Ashley says to Ford, "I'd like to buy your house," and Ford responds, "You've got a deal." This exchange lacks _____. A. partners B. communication C. object D. specificity

Austen Construction, a general contractor, advertised for bids from subcontractors on the electrical work for the renovation of one of State University's parking structures. The advertisement announced that the contract will be awarded to the lowest responsible bidder. Bronte, a responsible electrical subcontractor, submitted the lowest bid to Austen for the electrical portion of the work. Austen informed Bronte that she should begin work immediately. Bronte then stated that she is "withdrawing" her bid from Austen. Which of the following statements is most accurate? A. Austen should not rely on Bronte's offer to do the electrical work. B. Austen has accepted Bronte's offer, thereby forming a contract. C. Austen is not bound by Bronte's bid until he informs her of his intent to accept. D. Bronte has accepted Austen's offer by submitting the lowest bid

Fun Foods fraudulently induces Holly to buy a household products franchise by grossly misstating the average revenues of its franchisees. She discovers the misrepresentation after she has resold some products that she has received but before she has paid Fun Foods for the products. Holly wants to cancel the franchise contract on the basis of the fraud. What is the remedy available to her? A. Promissory estoppel B. Duty of good faith C. Executory contract D. Quasi-contract

Geometry Co. manufactures microchips for electrical products. Jojoba monopolizes the supply of gallium arsenide, which is used heavily in the manufacturing of microchips. Because of this monopoly and the demand for microchips, Geometry enters into a long-standing agreement with Jojoba for 20 years. For the first couple of years, due to the huge demand for the microchips, Geometry insisted on timely delivery of the raw material. However, once the demand slumped, Geometry asserted economic duress to avoid the contract. Will Geometry be successful? A. Yes, because Geometry was forced to enter the contract due to Jojoba's monopoly over the supply of the raw material. The consent was not free. B. No, because the facts prove that Jojoba had not caused any undue duress. C. Yes, because there was economic duress and thus the contract is voidable at Geometry & Co.'s discretion. D. No, because Geometry has already taken benefits under the contract for two years

How have the drafters of the Code tried to promote fair dealing and higher standards in the marketplace? A. By applying stringent technicalities to contracts. B. By recognizing void contracts. C. By discriminating between merchants and nonmerchants. D. By imposing the doctrine of good faith.

Ian Sanders offered to sell his car to Beth Jones for $5,000 with Beth's agreement. Subsequently, Beth demanded that he provide new seat covers for the car as she was paying a rather heavy price for the car. Beth's response represents a(n) _____. A. inquiry regarding terms B. rejection of the offer C. conditional acceptance of the offer D. additional term

Identify the difference between a case involving intentional fraud and innocent misrepresentation. A. The contractual remedy of rescission is not available in a misrepresentation case. B. A person committing innocent misrepresentation is liable for punitive damages for the tort of deceit. C. Reasonable reliance of the complaining party is not required in a fraudulent case. D. Materiality is not required in a fraudulent case

In deciding whether consideration necessary to form a contract exists, a court must determine whether: A. the consideration given by each party is of roughly equal value. B. the consideration conforms to the subjective intent of the parties. C. the consideration has sufficient monetary value. D. there is mutuality of consideration.

In order for a purchaser of land to avoid a contract with the seller based on duress, it must be shown that the seller's improper threats: A. were due to his relationship with the purchaser. B. actually induced the purchaser to assent to the contract. C. were due to his position of dominance with the purchaser. D. influenced the purchaser to assent as there were no reasonable alternatives.

In order to reduce creditor attempts to pressure debtors to reaffirm, which of the following acts requires that a reaffirmation promise be made prior to the date of the discharge and gives the debtor the right to revoke his promise within 30 days after it becomes enforceable? A. The National Labor Relations Act B. The Bankruptcy Abuse Prevention and Consumer Protection Act C. The Uniform Debt-Management Services Act D. The Bankruptcy Reform Act

In which of the following cases can the remedy of rescission be invoked by the affected party? A. Mistake of tort B. Mistake of contract C. Mistake of law D. Mistake of fact

James has entered into a contract to sell his house to Mikhael. James knows that the house has a bad termite infestation that significantly reduces the value of the house. However, the topic of termites never came up and James did not volunteer any information about the termites. Mikhael is not aware of the termite problem. Under the law of most states, has legal misrepresentation occurred here? A. No, because James made no statement that was false. B. No, because a seller does not have a duty to reveal all faults. C. Yes, because a seller must always inform a buyer about defects that are not obvious. D. Yes, because James is concealing the termite infestation from Mikhael.

Jean agrees to lease Steven the fourth floor of his house. Jean himself resides on the second floor. The person typing the contract strikes the wrong key, and the contract reads the leased portion as the "second floor." Neither Jean nor Steven notices this error when they read and sign the contract. What will the courts do in the case of a dispute? A. Avoid the contract B. Rescind the contract C. Enforce the contract D. Reform the contract

Morton Reeves, a building subcontractor, submitted a bid for construction of a portion of a highrise office building. The bid contained material errors in computation. Lago Corp., the general contractor, accepted the bid with the knowledge of Reeves' errors. Reeves: A. must perform the contract unless he can show that Lago acted fraudulently. B. must perform the contract according to the stated terms since his errors were unilateral. C. can avoid liability on the contract only if his errors were not due to his negligence. D. can avoid liability on the contract since Lago knew of his errors.

Rex Garner recently made an offer to Harry Barns for the sale of his shop using a registered letter. The offer says that Harry "may accept by registered letter" and this detail is an example of a _____. A. contract B. notification C. rejection D. stipulation

Sara tells Kate that she will give her $50 to clean her garage. When Kate is halfway done, Sara decides to revoke her offer. Is this a valid revocation? A. Yes, because Sara is the master of the offer here. B. Yes, because Sara can revoke the offer any time she feels like. C. No, because this is a valid contract that cannot be revoked. D. No, because this is now a bilateral contract.

The CISG: A. provides uniformity for transactions among contracting parties in different states in the United States. B. applies only to consumers, not commercial parties. C. applies only to services, not sales of goods. D. does not have provisions to cover every contract problem that might occur.

The primary distinction between an action based on innocent misrepresentation and an action based on common law fraud is that, in the former, a party need not allege and prove: A. that there has been a false representation. B. the materiality of the misrepresentation. C. reasonable reliance on the misrepresentation. D. that the party making the misrepresentation had actual or constructive knowledge that it was false.

To qualify as a contract, a set of promises must be based on a voluntary agreement, which is made up of an offer and a(n) _____ of that offer. A. understanding B. writing C. assumption D. acceptance

What bodies of law govern contracts in the United State? A. Article 2 of the UCC B. Common law related to contracts C. The United Nations Declaration on Human Rights D. Both A & B

What does the term 'grumbling acceptance' mean? A. Accepting the offer by maintaining one's silence B. Making material changes to a contract when accepting it C. Inquiring about the terms of the offer without rejecting it D. Accepting an offer while complaining about the terms

Which of the following conditions characterizes a firm offer regarding the sale of goods? A. It must be verbally communicated. B. It can be revoked by the offeror prior to acceptance. C. It must be made in the presence of a government official. D. It must be made by an offeror who is a merchant

Which of the following considers a properly dispatched acceptance sent by a reasonable means of communication within a reasonable time to be effective on dispatch? A. Traditional contract laws B. UCC C. CISG D. Restatement (Second)

Which of the following is an element of a promissory estoppel? A. The promisee should reasonably expect to induce reliance B. Reliance on the promise by the promisor C. A promise to pay liquidated debts D. Injustice to the promisee as a result of alliance

Which of the following is an exception to the general rule that rejections terminate offers? A. Unilateral contracts B. Bilateral contracts C. Firm offers D. Option contracts

Which of the following is true regarding the approach taken by the UCC toward the proper means of acceptance and the implications of using it or not using it? A. If the offer authorizes a certain means of acceptance, the offeree must use that means or else there is no acceptance. B. If the offer authorizes a certain means of acceptance and the offeree uses another means, a contract is formed, but never before the offeror receives the acceptance. C. Where the offer stipulates a certain means of acceptance, any reasonable means of acceptance will create a contract. D. The UCC does not change the traditional rule that, where the offer stipulates a certain means of acceptance, the offeree must use that means or there is no contract.

_____ is a wrongful coercion that induces a person to enter or modify a contract. A. Deceit B. Mistake C. Fraud D. Duress

A person who rescinds a contract is entitled to the return of what? A. Everything that person has given the other party B. 50% of the items that the person has given the other party C. 75% of the items that the person has given the other party D. Nothing is returned to the person from the other party

Contracts that are induced by misrepresentation are considered: A. Voidable. B. Enforceable C. Material D. Fraudulent.

In order for the consideration requirement in contracts to be met: A. the consideration given by each party must be of roughly equal value. B. each party must give consideration. C. the consideration must have monetary value. D. the consideration must consist of some form of property

One of the differences between fraud and misrepresentation is that: A. there is a requirement of materiality in fraud cases. B. in fraud cases, the injured party has the option of suing for monetary damages. C. misrepresentation requires scienter. D. a false statement of opinion cannot be the basis for a claim of misrepresentation.

Which of the following ends the right to rescind a voidable contract? A. Acquiescence B. Ratification C. Concealment D. Assertion

Historically free made promises were not enforced unless they had what supporting them? A. Witnesses of good character B. A signed statement of the Secretary of State C. Consideration D. Affidavits of profit attached to the promise

Which of the following is NOT a basic element of a contract? A. Offer B. Consideration C. Capacity D. Goods

A contract in which one party to the agreement agrees to buy all of the produced goods of the other party is called a requirements contract. True False

A famous journalist predicted the result of an NBA match between the LA Groves and LA phantoms in favor of the Phantoms, based on the present form of Groves. According, Mark placed a huge bet on the Phantoms and lost heavily. This is an example of misrepresentation of a material fact of a contract. T/F

A firm's offer for the sale of goods requires consideration to be given in exchange for the offeror's promise to keep the offer open. True False

A party who has the right to rescind a contract may do so at any time. True False

A promise not to sue another party is not consideration, because the promise does not convey any legal value to the other party. True False

A promissory estoppel cannot be applied in the case of the absence of a binding consideration. True False

A revocation is effective at the time it is dispatched by the offeror. True False

A voidable contract creates no obligation and is not enforceable by any party. T/F

According to the provisions of UCC, an exclusive dealing contract imposes a duty only on the distributor to use his/her best efforts to sell the goods. True False

All terms of contracts, even "fine-print" terms of standard form contracts, are always part of the parties' deal and binding on them, because parties have an obligation to read their contracts and are assumed to have done so. True False

Article 2 of the UCC never applies to mixed goods-services contracts; instead, it treats them as pure service contracts. T/F

Contracts must always be in writing to be enforceable T/F

Courts look at parties' outward manifestations of intent as a requirement to enforce a contract. This is called the subjective standard of intent. True False

Generally if there is good faith dispute over a matter, a person's threat to file a lawsuit to resolve that dispute is considered to be improper. T/F

Generally speaking, advertisements are considered to be offers. True False

Generally, the terms of a standardized contract are negotiable. T/F

Gross inadequacy of consideration is by itself a sufficient reason to set aside a contract. True False

In order to meet the requirements to form a contract the parties must have a future intent to agree and form a contract. True False

Mr. Green is a general contractor and is accepting bids from subcontractors for the building of a new hotel. Mr. Blue submits a bid for his work associated with the project. Mr. Green placed an offer which Mr. Blue accepted with his bid. True False

Offers that fail to provide a specific time for acceptance are invalid because they are deemed to be indefinite. True False

Pratt, owner of an appliance store, has a garage sale at his home where he sells old furniture and books. He sells a set of books to his neighbor, Stacey. Pratt is considered a merchant under Article 2 of the UCC in selling the books to Stacey. T/F

Speaking generally, a quasi-contract applies where there has been foreseeable reliance on an express promise. T/F

The Uniform Commercial Code sufficiently addresses the concerns that parties have when contracts are made to create or distribute information. T/F

The legal term for innocent misrepresentation is "scienter." True False

The mutual agreement necessary to create an express contract is evidenced by writing. T/F

The offeror's death automatically terminates an offer, but the offeree's death does not. True False

The only manner in which a request for prompt or current shipment of goods can be honored is by a prompt or current shipment of the goods to the buyer. True False

Threats to institute legal actions cannot be considered improper threats that constitute duress. T/F

To accept an offer for a bilateral contract, the offeree must perform the requested act. True False

To accept an offer for a unilateral contract, the offeree must make the promise requested by the offer. True False

Transfer of title deeds is a function wherein silence signals acceptance of the offer. True False

Unlike the UCC, the CISG requires new consideration to modify a contract. True False

When Carol Whittaker makes an offer to a contractor Jacob Phelps directing him to inform her of his acceptance through registered letter mail, she is making an ambiguous offer. True False

When an offer is unclear about the form of acceptance it requires, ideally it must not be accepted. True False

When contracting, one party is entering into an agreement with the federal government to enforce behavior on another party. T/F

When determining the presence of the intent to accept, a subjective standard is used. True False

Where an offer stipulates a certain means of acceptance, the offeree's acceptance is effective upon dispatch even if it uses means other than those specified in the offer. True False

While economic pressure may amount to undue influence, it cannot constitute duress. T/F

. Mr. White sends his acceptance for a business contract to Mr. Green. But Mr. White put insufficient postage on the envelope. One day later Mr. Green revokes the offer through the mail. Mr. White upon receipt of the undelivered acceptance, Mr. White overnighted the acceptance letter to Mr. Green. The court will find if it applies the UCC rule that a valid acceptance occurred and subsequent contract is now created between Mr. White and Mr. Green. True False

A contract may be voidable even if the person making the misrepresentation believes in good faith that what he/she says is true T/F

A creditor who fails to file suit to collect a debt within the time prescribed by the appropriate statute of limitations loses the right to collect it. True False

A mistake in the principle of law will not justify a recession in a contract T/F

A party injured by fraud in a contract for the sale of goods can both rescind the contract and sue for damages. True False

A promise to refrain from smoking can be legal consideration because refraining from a legal right, the right to smoke, can be consideration. True False

Abby promises to pay Brian $50 if he mows her lawn. Brian does not promise to mow Abby's lawn; however, later that day, Brian completely and satisfactorily does mow Abby's lawn. This is an example of a unilateral contract. T/F

Acceptances by instantaneous forms of communication are effective immediately upon communication to the offeror. True False

Alan and Ben have a contract. Alan has performed 100% percent and Ben has performed 50% of it. This contract is now executory. T/F

An acceptance is assent to a proposal by the offeree to the offeror. True False

An advertisement offering a reward for the return of lost property is usually treated as an offer for a unilateral contract. True False

An offer is the first step in the contract formation process. True False

Bob offers to sell his bike to Sue for $100, and promises to keep his offer open for five days. Sue thanks him and leaves. At this point, Bob still has the power to revoke his offer. True False

CISG applies only to sale of goods and commercial parties. T/F

Concealment involves the active hiding of a fact, whereas nondisclosure is the failure to volunteer information. T/F

Consideration can be a promise for another promise. True False

Consideration is what distinguishes enforceable agreements from gratuitous promises. True False

David, a debtor, owes debts to creditors Paul, Mark, and Gary. Paul, Mark, and Gary agree with each other and with David to release him from his debts, in exchange for his promise to pay Paul, Mark, and Gary 75 percent of the amount he owes each of them. This is called a composition agreement, and such agreements generally are binding contracts. True False

Duress involves threats and coercion while undue influence involves persuasion to susceptible individuals. T/F

Generally speaking, the UCC's rules for the definiteness of an offer make it easier to form a contract than traditional common law rules. True False

If a term is left open in a sale of goods contract, that open term or "gap" can be filled by inserting a presumption found in the UCC's "gap-filling" rules. True False

If no Code rule applies to an issue regarding sale of goods contract, the common law rules apply. T/F

If the offeree accepts the offeror's terms while complaining about them, it is called a grumbling acceptance. True False

In determining whether consideration exists, the law is not concerned with any disproportion in value between the things exchanged in a contract. True False

In order for an unilateral mistake to make voidable, either the non mistaken party must have caused or had reason to know the mistake, or enforcement of the contract must be unconscionable. T/F

In recent times, the mirror-image rule is applied such that only a material difference between offer and acceptance creates a rejection of the offer. True False

In return for services Charles performed for Richard in the past, Richard promises to pay Charles $1000. There is no consideration for Richard's promise. True False

John promises to pay Robert $100 per week, in exchange for Robert's promise not to beat John up. There is no consideration for John's promise. True False

Kevin offered to mow the lawn for his Uncle Jordan's for $100. To his offer, Uncle Jordan replied by saying "I know you're taking advantage of me but I accept." Uncle Jordan has indeed accepted the offer made by Kevin. True False

Michael and William contracted for Michael to mow William's lawn once a week for 20 weeks, at a price of $20 per week. Later, without terminating the first contract, the parties modify the contract as follows: Michael will mow William's lawn in exactly the same way for exactly the same time period, in exchange for William's promise to pay Michael $22 per week. There is no consideration for William's promise. True False

Misrepresentations can either be innocent or fraudulent. T/F

Mr. Blue and Mr. Green are in negotiations for a regular delivery of newspapers to Mr. Blue's business. Mr. Blue did not formally announce his acceptance to the offer. But when Mr. Green sent a shipment of newspapers as had been agree, Mr. Blue accepted the shipment and paid for them. According to the UCC Mr. Blue and Mr. Green have an enforceable contract. True False

Mr. Blue enters into negotiation with Mr. Green to build a house. Both parties expected a written and signed purchase agreement. After agreeing on terms, Mr. Green is told by his subcontractors that some of their prices have gone up. Mr. Blue objects and indicates that there was a contract when the parties agreed to the original terms orally. A court will find that indeed no contract existed since the parties expected acceptance to be in written form. True False

Mr. Blue gave his favorite nephew Jim Jr, who is a mechanic, $1000 in January. Later that year he needed his car repaired. In the sales contract Mr. Blue indicated that the amount owed should be deducted from the money already paid. A court will find that Mr. Blue failed to give proper consideration for the contract. True False

Mr. Green agrees to an offer to drive Ms. White to the airport for $20, but "only if I feel like it". Mr. Green has failed to give sufficient consideration to create a contract with Ms. White. True False

Mr. Green agrees to purchase a lawn mower from Ms. White for $300. The act of payment of $300 by Mr. Green is consideration for the act of passing ownership of the lawn mower from Ms. White to Mr. Green. True False

Mr. White contracts with Mr. Green for 100 black coffee mugs for a party. Mr. White decides he needs the mugs faster than the time allotted in the contract, and asks for a rush shipment. Mr. Green notifies Mr. White that he will ship 100 coffee mugs but that the only ones available are red. A court will find that the shipment of red mugs under the UCC is not a breach of the original agreement. True False

Ms. Pink offers to landscape Mr. Green's yard for $100. Mr. Green is planning to say yes but before he has a chance to communicate with Ms. Pink he receives a text message from Ms. Pink indicating she has rescinded her offer due to her being too busy. Ms. Pink has effectively revoked her offer. True False

Ms. White hired Mr. Blue to steal from Ms. Yellow. Ms. White is upset with how everything turned out and wants to sue Mr. Blue for breach of contract. But the curt will refuse to recognize the contract and subsequently a breach of it because it is a contract for an illegal activity. T/F

Mutual mistake is more likely to make a contract voidable than is unilateral mistake. T/F

Not ever promise is legal enforceable T/F

Promissory estoppel protects reliance on a promise from one party to another. T/F

Ratification ends the right to rescind a contract. True False

Reliance means that an individual acts because of an assertion of another party. T/F

Sellers at a public auction are treated as makers of an invitation to offer. True False

Sometimes, Article 2 of the UCC holds merchants to standards different from the standards it applies to nonmerchants. T/F

Strictly speaking, a contract has nothing to do with the personal intent of the parties. True False

The UCC imposes a duty of good faith on the performance and enforcement of every contract it covers. T/F

The UCC often creates contractual liability in situations where no contract would have resulted at common law. True False

The UCC section 2-207 allows a contract to be formed even though the terms of the offer and the terms of the acceptance differ. True False

The essence of a contract is a legally enforceable promise or set of promises. T/F

The intent to accept is objectively demonstrated by words or conduct or a combination of the two. True False

The intention to accept an offer must be a present intent to contract. True False

The offeror is said to be the "master of the offer." This means that offerors have the power to determine the terms and conditions under which they are bound to a contract. True False

The only person with the legal power to accept an offer and create a contract is the original offeree. True False

The rule on adequacy of consideration reflects the laissez-faire assumption of freedom of contract. True False

The rules promulgated by the Restatement (Second) of Contracts often resemble the rules created by Article 2 of the UCC. T/F

The term rescind means to end a contract. True False

The threat to institute a criminal prosecution against another party in order to focus that part into a contract is almost always duress. T/f

The three requirements for a valid offer are: present intent to contract, definiteness, and communication to the offeree. True False

Threatening to breach a contract unless the party agrees to modify the terms of a contract is example of economic duress T/F

UCC covers accord and satisfaction by the use of an instrument called "full payment" check. True False

Undue influence cases often involve a relationship of trust and confidence between the contracting parties. T/F

When one of the parties offers a disproportionately small amount of money in settlement of a debt and refuses to pay more, it is a form of economic duress. T/F

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