BUL 3310 Exam 2
A 75-year-old widower with a diagnosis of dementia became increasingly forgetful. His son, who lived in another state, made arrangements for his care. One of the resources he arranged was a housekeeper he found through the Internet. He became unhappy with the housekeeper and tried to fire her, but his father would not allow it. The son later learning that his father had married the housekeeper and had added her name on his accounts as a joint tenant. The housekeeper drained the man's accounts and then left him. Further investigation revealed that the housekeeper used secrecy, a romantic relationship, and manipulation to get added to the man's accounts. In addition, she created dependency by feeding and bathing the client even though he did not need that level of care. She isolated him from his family and other professionals who were hired to help him, and convinced him that she was the only one who cared about him. The son used this information to sue the housekeeper to retrieve his father's funds. The court most likely ruled in favor of: a. the son on the basis of undue influence. b. the housekeeper since the father had the opportunity to fire her and refused. c. the housekeeper since the son made a unilateral mistake when hiring her. d. the son on the basis of duress.
a
Brandt and Jenni create a Web site to sell raffle tickets for $1 for a chance to win their house. They sell 250,000 lottery tickets. Andy buys a ticket and wins. Brandt and Jenni then change their minds and decide to not give Andy their house. If Andy sues Brandt and Jenni, the court: a. will find that the contract is illegal and will not enforce it. b. will enforce the contract and require Brandt and Jenni to transfer their house to Andy. c. will find that the contract is voidable, and that Brandt and Jenni have a right to disaffirm the contract. d. will enforce the contract, but only if they sold enough raffle tickets to equal the fair market value of their house.
a
Brandt and Jenni create a Web site to sell raffle tickets for $1 for a chance to win their house. They sell 250,000 lottery tickets. Andy buys a ticket and wins. Brandt and Jenni then change their minds and decide to not give Andy their house. If Andy sues Brandt and Jenni, the court: a. will find that the contract is illegal and will not enforce it. b. will enforce the contract and require Brandt and Jenni to transfer their house to Andy. c. will find that the contract is voidable, and that Brandt and Jenni have a right to disaffirm the contract. d. will enforce the contract, but only if they sold enough raffle tickets to equal the fair market value of their house.
a
Caroline tells her friend Mario that she's been having back problems. Mario offers to help put her back "into alignment" if she comes to him every week for a period of eight weeks. Though Mario is not a licensed professional, he "does this for his friends all the time." Caroline is between jobs and does not have health insurance, so she agrees to see Mario for a discounted fee. After the eight weeks, Caroline's back is worse. She is forced to see a doctor, who determines that Mario's ministrations have exacerbated the problem and made it necessary for Caroline to have surgery. Caroline sues Mario for her medical expenses. What will be the outcome? a. Because the licensing purpose in this case is one of public protection, the contract is unenforceable. Caroline, therefore, will not be able to recover from Mario. b. Because the licensing purpose in this case is to raise government revenues, the contract is unenforceable. Caroline, therefore, will not be able to recover from Mario. c. Because the licensing purpose in this case is one of public protection, the contract is enforceable. Caroline, therefore, will be able to recover from Mario. d. Caroline will recover from Mario because the contract between them was unconscionable.
a
Davis, a rare coin dealer and expert collector, buys a coin from Ellen's coin shop. Ellen tells Davis that it is a rare coin, one of only eight like it known to still be in existence. Ellen knows that this coin was actually minted one year after the rare variety and is worth little more than face value. This information is printed in many widely available coin guidebooks. Davis thinks this opportunity is almost too good to be true, but he doesn't want to pass it up, so he purchases the coin for a very high price. Later, Davis does some research and discovers that the coin is not worth what he paid for it. If he sues Ellen for fraudulent misrepresentation, is he likely to win? a. No, because he could not justifiably rely on Ellen's misrepresentation. b. No, because he made a mistake of value. c. Yes, because Ellen intended to deceive him. d. Yes, because he made a mistake of value.
a
Eric receives a mail-order catalogue featuring a new style of water shoes that look perfect for river kayaking. He is excited to see that the price is within his budget. He calls to order a pair and is told that they are all sold out. Eric can now: a. try somewhere else; an advertisement in a mail-order catalogue is not an offer. b. file a lawsuit because the catalogue listing constituted a valid offer. c. file a lawsuit for breach of contract. d. file a lawsuit because the catalogue company improperly revoked its offer
a
Judy is a widow who has just sold a valuable parcel of commercial real estate. The proceeds of the sale will keep her from being impoverished during her retirement. Judy dotes on her only son, Chris. Chris asks his mother to invest the proceeds in his restaurant, which is faltering, and lets his mother know that if she does not do so she will probably never see Chris again. Judy is unsure, but because she wants to please Chris, she agrees to his request. That evening, she has a change of heart and demands that Chris return the funds to her. Chris claims that they have formed a binding contract and will not return the funds. The contract may be voidable, though, because it was formed as a result of: a. undue influence. b. duress. c. fraudulent misrepresentation. d. a unilateral mistake.
a
Laura agrees to purchase a house from Andrew. The one-page contract contains their names, addresses, and the legal description of the house, and is signed only by Laura. Laura changes her mind and decides not to purchase the house. Under the Statute of Frauds, this contract is: a. unenforceable, because it does not contain the essential terms. b. unenforceable, because it is signed only by Laura. c. enforceable, because it contains the essential terms. d. enforceable, because it is signed by Laura.
a
Lilly is contacted by telephone from an individual seeking investors to purchase 8-liner gaming machines that will be placed in bars around the country. She is told that the investment is perfectly legal, so she invests $5,000. She contracts with a broker to invest the last of her pension funds in the stock market. The year goes badly, and she loses $50,000. She is too ill to return to work and will be penniless if she cannot avoid the contract. Which of the following applies? a. She has no legal recourse. b. She can appeal to her governor for clemency. c. She can avoid the contract based on the general gambling rule. d. She can avoid the contract because stock market transactions are against public policy.
a
Marie contracts to buy coffee beans for her store from Owen. The contract price is $4.50 per pound of Costa Rican coffee. Owen breaches the contract and delivers no coffee. Marie's damages will be: a. the difference between the market price of coffee and the contract price. b. the amount Owen can afford to pay. c. the amount she seeks. d. paid by the coffee grower who was supposed to supply the beans to Owen.
a
Shem contracts with Karrina to ship dolls from his warehouse in Florida to her toy store in Ohio by September 17. Two days before the shipment is to go out, a hurricane hits the Florida coast, flooding Shem's warehouse and ruining his inventory. Shem is able to discharge the contract by: a. operation of law. b. agreement. c. failure of a condition. d. partial performance.
a
Steve is going away for three months and wants to rent his apartment to Jeff while he is away. They agree on terms and shake hands on the deal. Their township has a regulation stating that all housing rental agreements must be in writing. As a result, their contract is: a. unenforceable. b. void. c. executed. d. voidable
a
Tina receives an offer to buy music CDs in the mail. The letter says that she will begin receiving CDs immediately and that she will be billed for all CDs sent. She must send written notice within seven days of receipt of the letter if she does not want to begin receiving CDs. Tina does not send a letter. Tina's silence: a. does not constitute an acceptance of the offer. b. constitutes a counteroffer. c. constitutes a revocation of the offer. d. constitutes acceptance of the offer
a
Town Trust grants Marcia a loan at 20 percent interest. The state maximum interest rate is 8 percent. This is: a. usury. b. substantively unconscionable. c. a contract in restraint of trade. d. exculpatory.
a
Town Trust grants Marcia a loan at 20 percent interest. The state maximum interest rate is 8 percent. This is: a. usury. b. substantively unconscionable. c. a contract in restraint of trade. d. exculpatory.
a
Vicky contracts with Cyrus to have him build a new kitchen in her home. Vicky, however, changes her mind and breaches the contract before Cyrus can begin work. As a remedy for the breach, Cyrus can seek: a. expected profits from the contract. b. the entire contract price. c. the contract price plus interest. d. nothing. She breached before Cyrus began work under the contract.
a
A 1965 bargaining agreement between employees and Wheelabrator Corp. clearly stated that the company would pay the cost of health insurance for employees who had retired prior to 1959. Later bargaining agreements—the last of which expired in 1988, when the plant at which the employees worked was closed—also indicated that once employees reached the age of 65, Wheelabrator would pay for their health insurance and that when they died, their spouses would continue to receive supplemental health benefits at the company's cost. Wheelabrator withdrew the health benefits of retired employees in 1988, when it closed its plant and the last agreement expired. Kenneth Bidlack and other retired employees filed a lawsuit in a federal district court against the company to have their health benefits reinstated. The employees asserted that the agreements meant that they would be granted benefits for life. Wheelabrator contended that the benefits ran out when the agreements expired. Nonetheless, several retirees possessed letters from the company indicating that the company would pay the cost of the health insurance throughout the retirees' lives. On the question of whether the letters should have been allowed as extrinsic evidence at the trial, the court most likely held that the letters were: a. not allowable, because the language of the contracts was completely clear. b. allowable, because the contracts contained incomplete and ambiguous terms. c. not allowable, because extrinsic evidence can never be introduced if a contract is in writing. d. allowable, because courts consider all the evidence that is relevant to a case.
b
A-One Supermarket has agreed to use NatureMarket farms as its sole provider for melons for a three-month period. At the end of one month into the contract, NatureMarket has delivered eight shipments of melons, for which A-One has paid in full upon receipt. At this point, the contract is: a. void. b. executory. c. executed. d. unenforceable.
b
Blake is seeking to buy a mare that he can breed. Levi tells Blake about a horse that Levi wants to sell, stating that he (Levi) believes that the horse is extremely healthy and will be able to foal within eighteen months. After two years, the horse still has not foaled. The veterinarian informs Blake that the horse is physically incapable of breeding. In Blake's lawsuit to rescind the contract, it is: a. likely that a court will allow the rescission based on a unilateral mistake. b. likely that a court will allow the rescission based on a mistake of fact. c. unlikely that a court will allow rescission, because Blake made a mistake about market value only. d. unlikely that a court will allow rescission based on a mistake of fact.
b
Carrie contracts with Tyler to buy a car through an online auction service. All of their negotiations and transactions are conducted electronically. None of their communications ever mentions the Uniform Electronic Transactions Act (UETA), which was adopted by their state in 2001. Their contract is: a. not covered by the UETA. b. covered by the UETA. c. covered by the UETA only if the transaction occurred after 2004. d. covered by the UETA only if their contract involves computer information.
b
Chloe buys a product from the website of Good Times, Inc. The website lists various terms and conditions and has an "I agree" box on the webpage immediately below. Chloe clicks on an "I agree" box, receives the product, and then decides it is defective and sues Good Times. The terms: a. automatically made the contract void. b. automatically became part of the contract. c. were not a part of the contract because Good Times had not expressly agreed to them. d. were not a part of the contract because Chloe had not expressly agreed to them.
b
Dave offers to buy Melanie's scooter for $30. Melanie responds by asking Dave if that is his best offer. A reasonable person would conclude that: a. Melanie has accepted Dave's offer. b. Melanie can still accept and bind Dave to his offer. c. Melanie has now given Dave the power of acceptance. d. Melanie rejected the original offer.
b
Dillon struggles with his algebra class and, in July, decides that he is going to arrange for a tutor for the upcoming school semester. He eventually persuades Vonda to tutor him. They discuss Vonda's fee and hours and decide that their arrangement will last for the entire school semester. Under the Statute of Frauds, this contract: a. must be in writing based on the one-year rule. b. does not need to be in writing. c. must be in writing because it is collateral. d. must be in writing under the UCC.
b
Dillon struggles with his algebra class and, in July, decides that he is going to arrange for a tutor for the upcoming school semester. He eventually persuades Vonda to tutor him. They discuss Vonda's fee and hours and decide that their arrangement will last for the entire school semester. Under the Statute of Frauds, this contract: a. must be in writing based on the one-year rule. b. does not need to be in writing. c. must be in writing because it is collateral. d. must be in writing under the UCC.
b
Division West Chinchilla Ranch began a television advertising campaign encouraging viewers to pay $2,150 for one male and six female chinchillas to start their own chinchilla ranches. The advertisements claimed that anyone could succeed at chinchilla ranching and that it could be easily done in the basement or a spare room. The ads also claimed that chinchilla ranching was a profitable pastime that could "explode into a five-figure income." Based on these representations, Adolph Fischer purchased chinchillas from Division West. It soon became apparent that raising chinchillas required proper training and a carefully controlled environment. In addition, statements made by Division West's sales representatives regarding the value of the pelts were untrue. Fischer lost money over a period of three years. He then filed a lawsuit seeking to rescind the contract and recover his money on the basis of Division West's fraudulent misrepresentations. At the trial, Division West representatives testified that raising chinchillas is "an art." The court most likely held that Fischer: a. could not rescind the contract, because courts do not look to the fairness of a bargain. b. could rescind the contract, because Division West knew that its representations about chinchilla ranching were untrue. c. could not rescind the contract, because Division West did not intend to deceive viewers. d. could rescind the contract, because it was unconscionable.
b
Gerald, a multi-millionaire, marries Audrey, a waitress at his favorite coffee shop. Gerald tells Audrey that in the event of their divorce, he will give Audrey $150,000 per year for life. To seal the deal, he gives her $1.5 million up front, which she accepts. Gerald and Audrey divorce, and she sues for alimony of $500,000 per year. Gerald claims they have an agreement for $150,000. Is Gerald correct? a. No; this is an unconscionable contract. b. No; this was an oral agreement, and to be enforceable, it must be in writing. c. Yes; there is partial performance. d. Yes; the court will likely decide in Gerald's favor because he provided consideration
b
Gerald, a multi-millionaire, marries Audrey, a waitress at his favorite coffee shop. Gerald tells Audrey that in the event of their divorce, he will give Audrey $150,000 per year for life. To seal the deal, he gives her $1.5 million up front, which she accepts. Gerald and Audrey divorce, and she sues for alimony of $500,000 per year. Gerald claims they have an agreement for $150,000. Is Gerald correct? a. No; this is an unconscionable contract. b. No; this was an oral agreement, and to be enforceable, it must be in writing. c. Yes; there is partial performance. d. Yes; the court will likely decide in Gerald's favor because he provided consideration.
b
Marianne Jett, accompanied by her realtor, Daniel Shay, was on a tour of Beth Little's house, which was for sale. Little joined them in the sitting room, where Jett said she loved the grand piano that sat in the corner of the room. Little said that the piano had belonged to her late husband and that she didn't want to move it. She offered to leave it in the house for Jett, and Jett agreed. Later, when Jett agreed to buy the house, the piano was not included in the contract. When it came time to move, Little found herself feeling emotional about the piano and decided to take it. When Jett gained possession of the house and found the piano missing, she sued Little. At the trial, Jett's lawyer called her realtor, Shay, as a witness because he had heard Little agree to give Jett the piano. Which of the following is true? a. Jett will prevail in the lawsuit because something as big as a grand piano is considered real property and would already be included in the contract to land. b. Shay will be barred from testifying about the piano under the parol evidence rule. c. Shay's testimony will prove that Little violated her oral contract by taking the piano. d. Because the terms of the contract were ambiguous, the parol evidence rule does not apply.
b
Nancy's stepson Jarred tells Nancy that he is going to lock her in a closet for a week unless she gives him a check for $20,000. Nancy is old and feeble. If she gives Jarred the check and then has second thoughts about having done so, she can: a. do nothing; it's too late. b. seek to avoid the contract on the basis of duress. c. seek to avoid the contract on the basis of undue influence. d. claim that she was defrauded.
b
Nicole is a senior accounting major at ABC University with two semesters to go before she graduates. She decides to look for an internship with a small accounting firm to gain experience prior to graduating, and obtains an internship with a two-person accounting firm. Her responsibilities are assigned as follows: (1) Assists with administrative work; (2) Assists with client contact; and (3) Provides administrative support to the accountants and staff. Approximately a week after beginning her internship, one of the accountants approaches her with a seven-page document and asks her to sign it. He states that it is a requirement for all individuals working for the accounting firm. She notices the title of the document: "Non-Compete Agreement." She vaguely remembers reading something about a non-compete agreement in her business law class, but does not have an idea of what it really is. The owner, noticing her hesitation, tells her, "This is just to protect the firm." With that, she signs the agreement and goes back to her work. After graduation, she obtains a job at another accounting firm as an accountant. The accounting firm where she interned sends her a letter claiming that she breached her non-compete agreement by working for another accounting firm and is threatening to sue her. A court would most likely hold that the non-compete agreement is: a. unenforceable, because it is an illegal agreement. b. unenforceable, because it is an unreasonable restraint on trade. c. unenforceable, because it violates a licensing statute. d. unenforceable, because it is a usurious agreement.
b
One afternoon, over a couple of cold beers, Charles tells Mark that he can have a right-of-way to cross his land so that Mark can get to a fishing pond. Two weeks later, while he is walking across Charles's land, Mark hears Charles yelling "Get off my property, you trespasser!" Mark has: a. a valid oral contract. b. no contract. c. a voidable oral contract. d. a contract that is void because it is unconscionable
b
One afternoon, over a couple of cold beers, Charles tells Mark that he can have a right-of-way to cross his land so that Mark can get to a fishing pond. Two weeks later, while he is walking across Charles's land, Mark hears Charles yelling "Get off my property, you trespasser!" Mark has: a. a valid oral contract. b. no contract. c. a voidable oral contract. d. a contract that is void because it is unconscionable.
b
The Kindle family moved across country and could not take all of their belongings with them. They did not have the time to sell them, so they transferred the ownership of these items to their friend Sam. Sam kept some of the items, but he did not need the car, so he sold it to Marissa. She later discovered that it had been in a serious accident and was not as road-worthy as she believed when she purchased it. If Marissa sues Sam for fraud, will she likely be successful? a. Probably, under the claim of scienter b. Probably not, as there is no indication that Sam intended to deceive. c. Probably not, as there is a mutual mistake of value. d. Probably, as there is misrepresentation by silence.
b
Whitney pulls her car into her favorite gasoline filling station and tells the attendant to fill her tank. The attendant asks Whitney what octane level she wants, and she tells him, "regular." The attendant properly fills her tank. At this point, the contract between the station and Whitney is: a. executed. b. executory. c. void. d. unenforceable.
b
A doctor makes an agreement with a charitable organization to turn over her unused medicine samples to them for shipment to people in need in developing countries. After the agreement is made, a law is passed making this drug transaction illegal. The contract: a. is unconscionable. b. will likely be reformed by the court. c. is discharged by law. d. is still valid because it was made before the law was passed.
c
Allison tells Rachel, "I think I'll sell that camping gear I bought for hiking the Pacific Trail for around $250. I'm never going to make that trip." This constitutes a: a. agreement to agree. b. counteroffer. c. statement of future intent. d. valid offer.
c
Bob owns a local consulting business and wants his employees to sign a covenant not to compete. Which of the following situations would be considered reasonable for a covenant not to compete? a. Employees cannot work for any other business consultants in the U.S. b. The covenant prevents the employees from working for any client or vendor with whom the consulting business has a relationship. c. The employees cannot start a competing consulting business in the same city for one year. d. The covenant not to compete is in effect for 10 years.
c
Daniel tells Jonathan that he will sell him one of his motorcycles at some time in the future. Jonathan eagerly accepts. Do they have a valid contract? a. Definitely not, because Daniel failed to communicate the offer to the offeree. b. Definitely not, because the offeree did not accept the offer. c. Probably not, because the terms are not definite. d. Probably so.
c
In 2009, Hardy Salt Co. hired William Schmalz under an employment contract that granted him six months' severance pay if he was laid off, but not if he left voluntarily or was terminated for cause. In mid-2011, Schmalz was asked to resign after having an affair with the chairman's executive secretary. Schmalz was told that if he did not resign he would be fired, but that if he did resign the company would keep him on the payroll for six weeks. Schmalz resigned and signed an agreement releasing Hardy Salt from the terms of the employment contract. Schmalz then claimed that he had signed the release under duress and sued Hardy Salt for the six months' severance pay provided for in his contract. The court most likely held that Schmalz: a. had not signed the release under duress, because Hardy Salt breached the contract. b. had signed the release under duress, because he was under great economic need at the time he signed it. c. had not signed the release under duress, because he was not threatened with a wrongful act. d. had signed the release under duress, because Hardy Salt dominated their relationship.
c
Jerome is hired by a manufacturing company that requires him to sign an employment contract. The contract states that the company will not be liable for any injuries Jerome sustains on the job, regardless of whether the injury is caused by the company's negligence. Which of the following is true? a. This contract is an example of procedural unconscionability. b. This contract will likely be reformed by a judge. c. This part of the contract is unenforceable due to the unconscionable exculpatory clause. d. This contract is enforceable because Jerome is a member of a protected class.
c
Jessica offers to pay Kevin $50 for his used business law textbook. Kevin agrees to sell it for that amount. They agree to meet one week later to exchange the money for the book. Kevin and Jessica have formed: a. an implied contract. b. a quasi contract. c. an express contract. d. no contract.
c
Kelly makes a contract with Ashley agreeing to come to her house twice a month to provide therapeutic massage. Kelly later decides she doesn't have time for the travel and refuses to perform on the contract. Which of the following is true if Ashely wants to force Kelly to perform the contract? a. The court will order Kelly to pay contributory damages to Ashley. b. The court will order Kelly to perform the massage per the contract. c. The court will not order Kelly to perform the massage. d. Ashley cannot force Kelly to perform unless she takes action to mitigate the damages.
c
Larry and Leah have a disagreement as to whether they have formed a contract, and a lawsuit is filed. What will the court look to in determining whether a contract was formed? a. Both Larry's and Leah's beliefs b. Larry's intent c. The reasonable person standard d. Leah's intent
c
Luis contracts with Greenfield to buy several of Greenfield's dairy cows. Greenfield delivers the cows, but Luis doesn't pay for them. Greenfield may be able to have his cows returned if he seeks the remedy of: a. reformation. b. novation. c. restitution. d. specific performance.
c
Mitch mails an offer to sell Cody his all-terrain vehicle on Monday and requests acceptance to his offer in the same mode of authorization as the offer. Cody receives the offer in the mail on Tuesday at 3 P.M. At 5 P.M., Cody sends Mitch a letter accepting his offer and places it in the mailbox. At 7 P.M., Mitch changes his mind and personally hand-delivers a letter to Cody terminating the offer. Is the contract terminated? a. Yes, because Cody should have used a different mode of acceptance. b. Yes, because Mitch terminated the offer before he received Cody's acceptance. c. No, because Cody accepted the offer before the offer was terminated. d. Yes, because Cody should have notified Mitch of his acceptance in person, not by mail.
c
MobileFon enters into a cell phone contract with Allison, who is a freshman in high school. This contract is likely: a. void. b. unenforceable. c. voidable. d. valid.
c
Pam's car was hit while it was parked. Pam calls A-1 Towing, tells the dispatcher about the problem, and gives her location. Pam never discusses a price and leaves before the tow truck arrives, so she does not talk with the driver nor sign any documents. Pam: a. does not owe the company for towing her car, because she did not know that she would have to pay. b. owes the company for towing her car under an express contract. c. owes the company for towing her car under an implied contract. d. does not owe the company for towing her car, because she did not have a chance to reject its services.
c
Randall signed a one-year lease agreement with Thomas for rental of an apartment at a cost of $1,000 per month. After four months of paying rent, Randall moves out of the apartment and breaks the lease. Although Thomas's apartment is in a high-demand area and could have rented the apartment out to someone else immediately, he declines to rent it out for the remainder of the year, and seeks damages from Randall for lost rent. Thomas will be able to obtain from Randall: a. the remaining eight months of rent plus punitive damages. b. the remaining eight months of rent. c. no additional rent. d. the entire twelve months of rent. Hide Feedback
c
Sonja buys a tropical bird from Ramon's rare bird store. Sonja asks Ramon about the bird's origins, and Ramon tells her, "It is from the rainforests of Brazil, and it is extremely rare." Sonja asks Ramon if the bird is on the endangered species list. Even though he knows that the bird is on the list, he tells her that it is not. When government officials come and take her bird away, Sonja is told that she has illegally purchased a bird that is on the endangered species list. In order to recover the price of the bird and the fines levied against her for buying an illegal bird, Sonja can file a lawsuit against Ramon for: a. undue influence. b. mistake. c. fraudulent misrepresentation. d. negligence.
c
The Kramers contract with Arley Builders to build their new home. The contract calls for a premium grade of piping. Arley is not able to acquire the specified piping and instead uses piping of a slightly lower grade. This constitutes: a. breach of contract. b. rescission. c. substantial performance. d. complete performance.
c
To download software for his Internet connection, Nelson had to click on several boxes at the Web site that stated "I agree" or "I accept." Nelson did not read the accompanying text before clicking on the boxes. In the event of a dispute between Nelson and the service provider, the contract terms will: a. be enforced only if the service provider shows that Nelson read them. b. become proposals for the terms of a binding contract. c. be considered the terms of a binding contract. d. not be enforced.
c
Tracy owns a 2012 Toyota Camry that has been driven 24,000 miles and, to her knowledge, has no mechanical problems. She offers to sell the car to her friend Tami for $12,000. Tami accepts Tracy's offer. Tracy and Tami have: a. no agreement. b. an understanding. c. an agreement. d. an agreement to agree.
c
A salesman convinced Juan to purchase a product on the terms that all sales are final. Juan found that the product did not live up to his expectations. In addition, it is clear that the salesman made a misrepresentation about the product, he intended to deceive Juan, and Juan justifiably relied on the salesman's statements. Juan now wants to rescind the contract--return the product and get his money back. In order to do so, a court would probably: a. require a showing of injury. b. require proof of undue influence. c. require proof of duress. d. not require a showing of injury.
d
Adam files a lawsuit against Larry, a landowner on whose property Adam was injured. Larry believes that Greg is a lawyer and hires Greg to defend him in the lawsuit. Greg is not a lawyer, so the contract between Larry and Greg: a. will be enforced despite Greg's winning or losing. b. will be enforced unless Greg loses the case. c. will be enforced only if Greg wins. d. will not be enforced
d
Adam files a lawsuit against Larry, a landowner on whose property Adam was injured. Larry believes that Greg is a lawyer and hires Greg to defend him in the lawsuit. Greg is not a lawyer, so the contract between Larry and Greg: a. will be enforced despite Greg's winning or losing. b. will be enforced unless Greg loses the case. c. will be enforced only if Greg wins. d. will not be enforced
d
Cindy offers to pay Johnny's way through college if he will give her one of his kidneys in return. Johnny is a perfect donor match and accepts Cindy's offer, signing a contract. Their contract is: a. voidable. b. formal. c. executed. d. void.
d
Darrel is moving to another state, so Raj and Darrel make an oral agreement that Raj will buy Darrel's house. Raj gives Darrel a down payment and agrees to make monthly payments to Darrel. Raj moves his family from India, and they move into the house. He enrolls his children in school, buys all new furniture, and builds a shed on the property. Six months later, Darrel moves back into town and informs Raj that he wants his house back. Raj refuses, and Darrel sues. The court will likely decide that the oral agreement is: a. enforceable because it is a collateral promise. b. not enforceable because it pertains to land. c. not enforceable because it pertains to goods worth over $500. d. enforceable due to partial performance.
d
Darrel is moving to another state, so Raj and Darrel make an oral agreement that Raj will buy Darrel's house. Raj gives Darrel a down payment and agrees to make monthly payments to Darrel. Raj moves his family from India, and they move into the house. He enrolls his children in school, buys all new furniture, and builds a shed on the property. Six months later, Darrel moves back into town and informs Raj that he wants his house back. Raj refuses, and Darrel sues. The court will likely decide that the oral agreement is: a. enforceable because it is a collateral promise. b. not enforceable because it pertains to land. c. not enforceable because it pertains to goods worth over $500. d. enforceable due to partial performance. Hide Feedback
d
Dory and Kelvin sign a contract in which Dory agrees to buy 10 acres of land from Kelvin. The land includes a house and shed. When Dory moves into the house, she finds that Kelvin has removed all of the furniture. Dory objects. Which of the following is true? a. Because the furniture is considered real property, it may be removed from the land. b. Because the furniture is considered personal property, it must remain with the land. c. Because the furniture is considered real property, it must remain with the land. d. Because the furniture is considered personal property, it may be removed from the land.
d
Dory and Kelvin sign a contract in which Dory agrees to buy 10 acres of land from Kelvin. The land includes a house and shed. When Dory moves into the house, she finds that Kelvin has removed all of the furniture. Dory objects. Which of the following is true? a. Because the furniture is considered real property, it may be removed from the land. b. Because the furniture is considered personal property, it must remain with the land. c. Because the furniture is considered real property, it must remain with the land. d. Because the furniture is considered personal property, it may be removed from the land.
d
Gary made a contract with Vince to paint Gary's 1,000-square-foot house for $2,000, which they both sign. When Vince arrived at Gary's house, he found that it was actually 2,000 square feet. This contract: a. is valid because it is in writing. b. is an exception to the UCC because it applies to a customized service. c. is not enforceable because it does not state the essential terms. d. would be an exception to the parol evidence rule.
d
Gary made a contract with Vince to paint Gary's 1,000-square-foot house for $2,000, which they both sign. When Vince arrived at Gary's house, he found that it was actually 2,000 square feet. This contract: a. is valid because it is in writing. b. is an exception to the UCC because it applies to a customized service. c. is not enforceable because it does not state the essential terms. d. would be an exception to the parol evidence rule.
d
Heather agrees to work for Noah for one year in his law office. Noah writes an employment contract that states that Heather is to earn $20 per hour and to work forty hours per week. Noah terminates Heather's employment after six months. Heather sues to recover what she claims are her losses. At trial, both parties discover that the contract says that Heather's hourly wage is $0.20 per hour. What can Heather and Noah do about the error? a. They are bound by the writing under the Statute of Frauds. b. They can ask the court to rewrite the contract. c. They can offer evidence of the consideration that supported their contract. d. They can offer parol evidence to clarify the clerical error.
d
Jackson enters into a contract with Celia. Knowing that Celia is new to the country and only has a basic grasp of English, Jackson writes the contract with inflated language and complicated legal jargon. When Celia fails to uphold her part of the contract, Jackson sues for breach. The court will find the contract: a. unenforceable for substantive unconscionability. b. enforceable regardless of its fairness. c. executory and therefore unenforceable. d. unenforceable for procedural unconscionability.
d
Jason enters into an insurance contract with SafeWest Insurance Co. in order to insure his home and personal property in Oklahoma. Unbeknownst to Jason, the insurance contract violates an Oklahoma state statute that regulates the sale of insurance. Soon after, his home is damaged by fire and Jason files a claim with SafeWest. SafeWest refuses to pay on the insurance claim. The contract: a. is enforceable because the contract violates only one Oklahoma state statute. b. is unenforceable because the insurance contract violates Oklahoma state law and is thus illegal. c. is unenforceable because the insurance contract is usurious and is thus illegal. d. is enforceable because Jason is a member of a protected class that permits enforcement of a contract in violation of a statute.
d
Kevin and Mike make a bet on a boxing match. Mike has the match fixed so that he wins the bet. Kevin sues Mike for breach of contract. What will be the outcome? a. The judge will likely order reformation of the contract. b. The court will consider this an adhesion contract and find in favor of Kevin. c. Kevin will prevail; this is an example of substantive unconscionability. d. Because this is an illegal contract, it is considered void. The court will not aid Kevin, regardless of the fault involved
d
Kevin and Mike make a bet on a boxing match. Mike has the match fixed so that he wins the bet. Kevin sues Mike for breach of contract. What will be the outcome? a. The judge will likely order reformation of the contract. b. The court will consider this an adhesion contract and find in favor of Kevin. c. Kevin will prevail; this is an example of substantive unconscionability. d. Because this is an illegal contract, it is considered void. The court will not aid Kevin, regardless of the fault involved.
d
Leonard wants to open a convenience store in a residential neighborhood, as he thinks it would be a great business opportunity. Carly has a piece of property for sale in the ideal location for Leonard's store. Carley has no idea whether the property is zoned for commercial or residential development, but tells Leonard, "according to town law, I'm pretty sure the property is zoned for commercial development." Leonard purchases the property, makes plans to build his store, and then discovers that Carly misstated information to him. Can Leonard avoid the contract? a. No, because there was a mutual mistake of value. b. Yes, because Carly defrauded him. c. Yes, because Carly made a misrepresentation of fact. d. No, because Carly made a misrepresentation of law.
d
Li and Carlo have a disagreement as to whether they have formed a contract, and a lawsuit is filed. Carlo argues that he never accepted the terms of the offer made by Li. According to Carlo's position, what element is lacking that would support the contention that no contract was formed? a. Consideration b. Capacity c. Legality d. Agreement
d
Mark Van Wagoner, a real estate investment attorney, and his wife Katherine were interested in buying property from Carol Klas. When the Van Wagoners asked about the appraised value of the property, Klas replied that there were several appraisals, all ranging from $175,000 to $192,000. Without looking at any appraisals in writing, the Van Wagoners agreed to purchase the property for $175,000. Klas then provided a written appraisal listing the value of the property as $165,000. When the Van Wagoners refused to go through with the deal, Klas sued the Van Wagoners to recover the difference between the agreement price and the price for which the house was later sold. The Van Wagoners claimed that the contract should be rescinded on the basis of their mistaken assumption as to the value of the house. The court most likely: a. did not allow the rescission, because Klas did not exert undue influence. b. allowed the rescission, because a bilateral mistake occurred. c. allowed the rescission based on fraudulent misrepresentation. d. did not allow the rescission, because a unilateral mistake of value does not provide a basis for avoiding a contract.
d
Mark agrees to buy Dale's one-half-ton truck so that he can pull his trailer. Both Mark and Dale believe that the truck is large enough to do the job. After they complete the deal, Mark hitches the truck to the trailer and attempts to pull the trailer, but without success. The contract between Mark and Dale can be rescinded because of: a. a unilateral mistake. b. an allowable mistake. c. a beveled mistake. d. a mutual mistake.
d
Mark agrees to buy Dale's one-half-ton truck so that he can pull his trailer. Both Mark and Dale believe that the truck is large enough to do the job. After they complete the deal, Mark hitches the truck to the trailer and attempts to pull the trailer, but without success. The contract between Mark and Dale can be rescinded because of: a. a unilateral mistake. b. an allowable mistake. c. a beveled mistake. d. a mutual mistake.
d
Peggy offers to sell Shelby a purebred Scottish terrier puppy for $800. Shelby and Peggy do not discuss the dog's ancestry, but Shelby believes that the dog came from champion lines and agrees to the price. Shelby later discovers that the puppy is worth only $200. Can Shelby rescind the contract based on her mistake? a. Probably so, because Shelby made a mistake about an immaterial fact. b. Yes, because Shelby had a duty to investigate. c. Yes, because the dog was clearly not worth $800. d. Probably not, because Shelby made a mistake about the dog's value, not a mistake about a material fact.
d
Print Quik, Inc., seeks punitive damages in a suit against Reddy Supply Company. Generally, punitive damages may be recovered in a breach of contract: a. in almost all cases. b. only if the contract involves a sale of goods or a sale of land. c. when a person's actions results in liquidated damages. d. in almost no cases.
d
Regan contracted to loan Ray $10,000 so that Ray could place a bet on next Sunday's football game with his bookie. Ray lost the entire amount and refused to repay Regan on the loan contract. Regan then filed a lawsuit in a Kentucky state court against Ray for breaching the contract. Ray claimed that he did not have to repay the loan because gambling was illegal in Kentucky and therefore their contract was void. The court most likely found that the contract was: a. void, because Regan has not registered as a bookie. b. void, because Regan did not get the contract in writing. c. void, because the contract is unconscionable. d. void, because the contract was for an illegal purpose.
d
Rico, Mike, and Julie go to a steakhouse for dinner. One of the menu items is a two-pound steak. Rico offers to pay for Julie's dinner if she orders and eats the entire two-pound steak. Julie is not interested, but Mike says that he accepts the offer. In this situation: a. Mike offered unequivocal acceptance. b. Mike made a counteroffer. c. Rico must honor the contract with Mike. d. no contract is formed
d
Sara and Ann form a contract under which Sara agrees to sell Ann 500 copies of a book. The contract price is $3.50 per book. Sara breaches the contract by not delivering the books to Ann. At the time of the breach, the books are available directly from the publisher for the wholesale price of $4.50 each. If Ann has to purchase her books from the publisher and sues Sara for the original cost of the books ($1,750) plus the additional $1 per book she paid to obtain the books through the publisher ($500), the additional $500 in damages would be considered: a. punitive damages. b. consequential damages. c. specific performance. d. compensatory damages.
d
Sheila contracts to do work for her friend's business if she doesn't get into college. If Sheila does get into college, the contract is discharged by: a. performance. b. operation of law. c. agreement. d. failure of a condition.
d
Tracy agrees to do contract work for Fun Time Children's Publishers. Fun Time sends her a PDF agreement via e-mail, and Tracy adds a signature into the PDF and e-mails it back. This contract: a. will be enforceable against Fun Time whether or not they signed it because it is in electronic form. b. must also be signed by hand and faxed or mailed by Tracy. c. is invalid because it is not properly signed. d. is valid under the Uniform Electronic Transactions Act.
d
Webster wants to borrow $1,000 from Rachel to help pay his fees and deposits at his new apartment. Rachel says she will agree to the loan only if Webster promises to repay her within six months and if Betty promises to pay if Webster fails to do so. If Betty agrees to the arrangement, Betty's promise is called a: a. mutual promise. b. unified promise. c. limited promise. d. collateral promise
d
Webster wants to borrow $1,000 from Rachel to help pay his fees and deposits at his new apartment. Rachel says she will agree to the loan only if Webster promises to repay her within six months and if Betty promises to pay if Webster fails to do so. If Betty agrees to the arrangement, Betty's promise is called a: a. mutual promise. b. unified promise. c. limited promise. d. collateral promise.
d
William Young formed an oral contract with Edward Drury to buy several carloads of tomatoes. Afterward, Drury wrote a memorandum on his own letterhead for his personal records. The memo contained all the terms of the agreement, including Young's name, but it was not signed by either party. Drury stored the memo in his home safe. Subsequently, Drury wrote Young a letter stating that he would not sell the tomatoes as agreed. Young filed a lawsuit in a Maryland state court seeking to enforce the contract. Drury contended that the contract was subject to the Statute of Frauds and that because it was not in writing, it could not be enforced. Young claimed that the memo and letter together constituted writings sufficient to satisfy the Statute of Frauds. The court most likely held that the Statute of Frauds was: a. satisfied by the writings, because they did not contain Young's signature. b. not satisfied by the writings, because Young did not have a chance to sign the documents. c. not satisfied by the writings, because the writings were not in the proper form. d. satisfied by the writings, because the court was not concerned with the form or custody of the writings.
d
William, a 27-year-old with a third-grade reading level, buys a used 32" LCD flat-screen TV from a local pawn shop for $1,750. Because he has limited funds as a welfare recipient, the pawn shop agrees to finance the purchase with a 42% interest rate and a $100 monthly payment. William makes five payments and then stops on the advice of a friend. A court would find that the contract is: a. valid. b. void. c. voidable. d. unconscionable
d
William, a 27-year-old with a third-grade reading level, buys a used 32" LCD flat-screen TV from a local pawn shop for $1,750. Because he has limited funds as a welfare recipient, the pawn shop agrees to finance the purchase with a 42% interest rate and a $100 monthly payment. William makes five payments and then stops on the advice of a friend. A court would find that the contract is: a. valid. b. void. c. voidable. d. unconscionable
d