BUS-L201 Module 3 Exam - Contract Law

Contracts are typically between:

2 or more parties, landlord ad tenant, business entities

Which of the following would be covered by the UCC?

A bulk sale of inventory

Which is not a contract that falls under the writing requirement under the statute of frauds?

A contract for a $175 hair cut and hair color.

Which of the following is true regarding silence as acceptance?

An offeree's silence is considered acceptance when he/she indicates so.

Which of the following describes a stipulation?

An offeror's right to determine the manner of acceptance

If it is not indicated in the memorandum, where should the parties sign to make the document enforceable?

Any place on the memorandum

The Uniform Commercial Code's modified version of the mirror image rule is called the:

Battle of the Forms.

Which of the following is an exception to a consideration requirement?

Charitable subscription

Jules made an offer over the phone to Brian to purchase sixteen llamas for $500 a llama, acceptance by phone only within the next 48 hours. Which source of law requires the acceptance to be a "mirror image" of the offer in order to form a contract?

Common Law

Which of the following terms refers to legal value that is bargained for and given in exchange for an act or promise?

Consideration

Which of the following results when one party has superior bargaining power, leaving the other party with little choice but to accept its terms?

Contract of adhesion

If a court refused to grant a remedy for breach of a contract because it found the contract to be oppressively unfair, the court is employing which of the following doctrines?

Doctrine of unconscionability

_______ is a wrongful coercion that induces a person to enter or modify a contract.

Duress

When a person enters into a contract because of the threat against his or her economic interests, this is known as which of the following?

Economic Duress

Which of the following is admissible with respect to a partially integrated contract?

Evidence that resolves ambiguities in the contract

Which of the following clauses is a provision in a contract that purports to relieve one of the parties from tort liability?

Exculpatory clause

The age of majority in almost all states for contract purposes is 21. (T/F)

F

The law holds that the mere fact that a party to a contract had been drinking when the contract was formed affects his/her capacity to contract. (T/F)

F

Mr. Green creates a unilateral contract with his 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?

Get accepted into college

In which of the following circumstances are offerors free to revoke their offers?

In case of common law rule on revocation

Jim's contract with Frank obligated Jim to pay Frank $10,000. Frank properly assigns the contract to Abel. At that time, Abel notifies Jim about the assignment. Jim, however, forgets and pays the $10,000 to Frank. By this time, Abel is screaming for his money. However, by then, Frank goes into bankruptcy. In this case:

Jim is liable to Abel for $10,000.

Which of the following is used by the majority of courts when there is an acceptance that contains terms that are different from (not merely additional to) the terms of the offer?

Knock-Out Rule

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 with a quote for a higher amount than that mentioned by Milner Developers. Do the two parties have a binding contract?

No, because Wright's letter was a counteroffer to the original offer.

Grace offers to sell Misti her car for $5,000. Grace tells Misti, "If I don't hear from you in three days, I'll assume you're buying the car." Four days go by and Grace has not heard from Misti. Does Misti's silence amount to acceptance?

No, because an offeror cannot impose on the offeree a duty to respond to the offer.

Jimmy and Pat had a long-standing professional relationship. In 2008, 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 2013, Pat flew from Atlanta to New York to meet with Jimmy. Prior to Pat's flight, Jimmy's employee faxed copies of various construction contracts and correspondence relating to Jimmy's controversial projects for Pat to review. In late 2018, Pat billed Jimmy for a $40,000 balance that Jimmy owed on the alleged oral contract for consulting services. 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?

No, because it was a friendly advice and not an actual contract.

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 sister that she is willing to pay an amount of $50,000 for the house. Delighted to hear this, John's sister tells John the good news. John immediately calls Sue and accepts her offer. Is there a binding contract?

No, because the offeror did not communicate the terms of the offer to the offeree.

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 webpage. The "download now" page has a button that initiates the download process. You click that button without going to the licensing agreement page. You later learn that the licensing agreement contains an arbitration provision. Are you bound by this provision?

No, because you did not perform an action that indicated your assent to the licensing agreement

Joe promises to give his brother Bill a $30,000 new car for $50. Which of the following best describes the $50?

Nominal consideration

A clause in a contract that prevents an employee from working for an employer's competitor after the employment relationship terminates for a specified time and in a specified geographic area is referred to as a(n):

Noncompete clause

Tony works for Rachel's CPA firm. As part of the employment contract, they agreed that if Tony left Rachel's employment, he would not be able to try to obtain clients from Rachel's to become his clients in another CPA firm. This is an example of which of the following?

Nonsolicitation agreement

Which of the following actions constitutes acceptance of an offer?

Offeree reflected assent to the terms of the offer in the requisite manner

Which of the following is an exception to the general rule that rejections terminate offers?

Option contracts

__________ evidence can be used to contradict the written terms of a partially integrated contract.

Parol

Sean made an oral promise to sell a piece of land to Manny. Manny took a huge loan from the bank by mortgaging everything he had. After taking almost half the money from Manny, Sean decides that he wants to sell the land to Jason who is offering a higher price for the property. Which of the following doctrines may Manny plead in order to implement his oral contract with Sean?

Part performance

Which of the following helps to prevent offerors from revoking their offers prior to acceptance when the offeree relies on it being kept open?

Promissory estoppel

__________ protects reliance on a promise from one party to another.

Promissory estoppel

Which of the following is true regarding bids?

Promissory estoppel can be used to prevent withdrawal of bids.

Which of the following is a doctrine by which courts imply, as a matter of law, a promise to pay the reasonable value of goods or services when the party receiving such goods or services has knowingly done so under circumstances that make it unfair to retain them without paying for them?

Quasi-contract

Quick Corporation has $270,000 of outstanding accounts receivable. On March 10, 1988, Quick assigned a $30,000 account receivable due from Pine, one of Quick's customers, to Taft Bank for value. On March 30, Pine paid Quick the $30,000. On April 5, Taft notified Pine of the March 10 assignment from Quick to Taft. Who is Taft entitled to collect the $30,000 from?

Quick Corporation only

_______ means that a person pursues some course of action because of his/her faith in an assertion made to him/her.

Reliance

The rules promulgated by the __________ often resemble the rules created by Article 2 of the UCC.

Restatement (Second) of Contracts

Smith and Benson make an oral contract for the sale of land at a price of $500,000. After paying Smith $400,000 of the purchase price, Benson takes possession of the land. One month later, Smith wants to boot Benson off the land. His argument is that the parties' oral agreement is unenforceable under the statute of frauds. Which of the following is most correct?

Smith is incorrect, because Benson paid part of the purchase price and took possession.

Which of the following describes the time period a person has to pursue any legal claim?

Statute of limitations

Which of the following would not be used to determine whether an acceptance was communicated by reasonable means?

Subjective beliefs

Donnie and Johnnie are negotiating a purchase of Donnie's doughnuts. Donnie makes Johnnie an offer for fifty cents a doughnut. Johnnie tells Donnie he will accept the offer but for forty-eight cents a doughnut. Donnie's offer is a counteroffer. Why does traditional contract law view any kind of an attempt by offerees to change terms as constituting a counteroffer?

Such an action implies a rejection of the offer by the offeree.

A claim of undue influence is generally not made among strangers. (T/F)

T

A person who is claiming damages based on a contract claim cannot recover damages for anything that he does after learning of the illegality of the contract. (T/F)

T

Mr. Green and Mr. Blue contract orally to transfer 500 widgets for $1,000. Mr. Blue sends Mr. Green a receipt one week after the agreement showing payment for the widgets. If Mr. Green now refuses to recognize the agreement, how would a court most likely find?

That a memorandum of agreement was created by the receipt sent by Mr. Blue and an enforceable agreement exists.

Which of the following is true regarding the approach taken by the Uniform Commercial Code toward the proper means of acceptance and the implications of using it or not using it?

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.

A newspaper advertisement for Cashmere Closet states "This Saturday 9 a.m., 1 Red Cashmere Scarf, worth $299.95... $10.00 First Come First Served." Which of the following statements is false?

The ad lacks intent to constitute an offer.

What is the usual remedy for a contract entered into because of an innocent misrepresentation?

The contractual remedy for innocent misrepresentation is rescission.

Mr. Green has a month-to-month lease for an apartment owned by Mr. Blue. The lease between Mr. Green and Mr. Blue is oral. If the issue of enforceability arises, how will the court handle the lease?

The court will recognize and enforce the lease.

Which of the following is true of contracts of adhesion?

The person presented with such a contract has no opportunity to negotiate the terms of the contract.

Under the United Nations Convention on Contracts for the International Sale of Goods (CISG), a proposal will be considered an offer if it meets three requirements. Which of the following is not one of those requirements?

The proposal clearly explains the obligations of the parties.

Which of the following circumstances would not terminate an offer?

The subject matter of the offer was destroyed by fault of the offeror

Which of the following is a uniform state law designed to "remove barriers to electronic commerce by validating and effectuating electronic records and signatures"?

Uniform Electronic Transactions Act (UETA)

In determining whether an offeree accepted an offer and created a contract, a court will look for evidence of three factors. Which of the following is not one of those factors?

Whether the offeree understood the terms of the offer

Yasmin offers to landscape Bert's property for $2,000. Two days after making the offer, Yasmin changes her mind and mails Bert a letter revoking her offer. The next day, Bert, who has not received Yasmin's letter, calls Yasmin and accepts her offer. Does a contract exist?

Yes, because Bert was not notified of Yasmin's revocation at the time he accepted.

Abel enters into an oral contract to work for Carr for an indefinite period of time at a rate of $50,000 per year. Is this agreement exempt from the statute of frauds?

Yes, because the agreement is for an indefinite period of time.

Jamie has borrowed money and made advances to Julie's Tacos for over 5 years. Jamie would like to collect on the money owed but is unsure of the exact amount. Jamie and Julie decide on $10,000 in full and final settlement of any monies owed. The settlement of an unliquidated debt is called a(n):

accord and satisfaction.

Most states' statutes of frauds do not require land leases to be in writing unless they:

are for one year or more.

Like a false statement of fact, _______ can be the basis for a claim of misrepresentation or fraud.

concealment

If the promisor's performance is intended to satisfy a legal duty that the promisee owes to a third party, the third party is a(n):

creditor beneficiary.

A contract is said to be _______ if the legal part can be separated from the illegal part.

divisible

A __________ beneficiary of a contract can recover under that contract.

donee

Ratification of a voidable contract _______.

ends the right of a person to rescind a contract.

An agreement is considered to be _______ when it threatens public policy.

illegal

The assignor ____________ warrants to the assignee that the claim assigned is valid.

impliedly

A third party who is unable to establish that the contract was made with the intent to benefit her is called a(n):

incidental beneficiary.

Hailey contracts with Construction Inc. to build a valuable structure on her land. The performance of the contract would constitute a benefit to Connie, Hailey's next-door neighbor, by increasing the value of Connie's land. In this situation, Connie is a(n):

incidental beneficiary.

A merger clause is also known as an:

integration clause.

Advertisements for the sale of goods at specific prices are considered to be:

invitations to offer.

In regards to the statute of frauds, the Uniform Commercial Code is different from the common law as it:

is easier to satisfy.

In case of a misrepresentation, a person seeking to rescind the contract must prove that the fact asserted was _______

material

According to contract law, a(n) _______ is a belief about a fact that is not in accord with the truth.

mistake

The term for when both parties to a contract have an erroneous assumption about the same fact is _______

mutual mistake.

A delegator can be discharged from his/her obligation to perform his/her duty to the original promisee by a contract of:

novation.

When a person undertakes an obligation that is not conditioned on the default of another person, and the debt is his own rather than that of another person, his obligation is said to be __________, not collateral.

original

Maddie agrees to buy all black and blonde hair wigs that Julie is able to produce for the Fall salon training season. 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):

output contract

To meet the requirements to form a contract, the parties must have __________ intent to agree and form a contract.

present

Unfairness in the bargaining process of an agreement is referred to as "_______" by courts.

procedural unconscionability

Article 2 of the UCC never applies to __________ contracts.

real estate

If the purpose of a statute is to protect the public against dishonest or incompetent practitioners, it can be called _______ in nature.

regulatory

A __________ is sufficient to form the basis of authenticity of a written contract.

signature

An oral contract within the Uniform Commercial Code's __________ can be enforced without a writing only if it involves the sale of specially manufactured goods.

statute of frauds

An example of _______ unconscionability includes a situation in which a party to the contract bears a disproportionate amount of the risk because of the terms of the contract itself.

substantive

A third party is categorized as a donee beneficiary when:

the promisee's primary purpose in contracting is to make a gift of the agreed-on performance to the third party.

Like duress, undue influence involves wrongful pressure exerted on a person during the bargaining process. In _______, however, the pressure is exerted through persuasion rather than through coercion.

undue influence

Courts have held that a beneficiary's rights cannot be lost by modification or discharge. This is known as:

vesting.

Duress involves _______

wrongful coercion.

As leasing became a more common way of executing and financing transactions in goods, a separate UCC article, Article 2A, was developed to govern the lease of goods. Roughly __________ of the states have adopted Article 2A.

1/3

An otherwise valid contract whose enforcement is barred by the applicable statute of limitations is an example of a(n):

unenforceable contract

A(n) __________ contract creates no obligation and is not enforceable by any party.

voidable contract

A contract where formation was induced by duress is an example of a contract that is:

voidable.

When an auction is advertised as being __________, the seller is treated as having made an offer to sell the goods to the highest bidder.

without reserve

In an assignment/delegation, which party remains secondarily liable on the obligation that has been delegated?

Assignor/delegator

_______ differs from concealment in that there is a failure to volunteer information.

Nondisclosure

Which of the following is a type of substituted contract in which the obligee agrees to discharge the original obligor and to substitute a new obligor in his/her place?

Novation

The term __________ means written or spoken statements that are not contained in the written contract

"parol evidence"

The outer limit on a firm offer's irrevocability is:

3 months

Aaron promises to sell his boat to Matt, and Matt promises to buy it from Aaron. What type of contract is this?

A bilateral contract

King, a circuit board manufacturer, called Foster, a computer storeowner, and offered to sell him 500 circuit boards for $20,000. Foster accepted the offer over the telephone that same day. King immediately sent Foster a signed memorandum confirming the deal they made orally. Which of the following statements concerning the contract is correct under the statute of frauds?

A contract was formed unless Foster objects to the memorandum within 10 days of receiving it.

Which of the following statements about gratuitous assignments is false?

A gratuitous assignment will not be revoked upon the assignor's death or incapacity.

Apart from the elements of rescission, what must a person who seeks to recover damages for deceit establish?

Actual economic injury

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?

After a "reasonable time"

Which of the following is adequate consideration?

Agreement to settle an unliquidated debt

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 they agreed, Mr. Blue accepted the shipment and paid for them. According to the UCC, what do Mr. Blue and Mr. Green have?

An enforceable contract

What must a contract contain to be enforceable?

An offer and acceptance

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?

An offer for a unilateral contract

Which of the following is the first critically important step in the contract formation process?

An offer in definite terms

Why does Article 2 hold merchants to a higher standard than nonmerchants?

Because buyers tend to place more reliance on merchants

__________ is what distinguishes enforceable agreements from gratuitous promises.

Consideration

Dawson entered into a contract with Jensen for the sale of Dawson's boat. Which set of legal rules governs this transaction?

Contract rules of the Uniform Commercial Code

Mr. Blue is in a contract with Mr. Brown for the repair of Mr. Blue's roof for $9,000. Mr. Blue tells Mr. Brown that Ms. White will pay him the $9,000 for the work performed. Ms. White's role in the contract is called what?

Delegation

Which of the following statements about delegable duties is false?

Delegations are always enforceable, even if they violate public policy.

If it appears that the parties had concluded their negotiations and reached agreement on all the essential aspects of the transaction, most courts would probably find a contract at the time agreement was reached, even though no formal agreement had been signed. Which of the following is an exception to this rule?

During the negotiation process, the parties gave a clear expression of intent that prevents the formation of a contract until both parties have signed.

Which of the following is not a theory of recovery in contract law?

Enforce promise

An exculpatory clause imposes strict tort liability on both the parties involved in the contract. (T/F)

F

Which of the following characterizes an auction "without reserve"?

Goods cannot be withdrawn after a call for bids.

Which of the following statements about governmental contracts is true?

Governmental contracts are generally covered by statute.

Which of the following is NOT considered a primary class of people who lack capacity for contract purposes?

Individuals who do not understand English.

_______ is a ground for lack of capacity only when it is so extreme that the person is unable to understand the nature of the business at hand.

Intoxication

Amy bought Mississippi State Lottery tickets. Several days later, she learned that someone 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 presented 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?

No, because the rules of the contract prescribed that the ticket must be shown to claim the money. Amy accepted that rule when she entered into the contract and thus she is now precluded from claiming the prize money.

__________ estoppel can be applied in the case of the absence of a binding consideration.

Promissory

Which of the following is true of a revocation?

Promissory estoppel is used to prevent revocations.

Basic assumptions about contracts include the identity, existence, quality, or quantity of the subject matter of the contract. (T/F)

T

Contracts induced by misrepresentation or fraud are considered voidable. (T/F)

T

Procedural unconscionability indicates the lack of voluntariness as shown by a marked imbalance in the parties' bargaining positions. (T/F)

T

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?

The Bankruptcy Reform Act

Which of the following statements about The United Nations Convention on Contracts for the International Sale of Goods (CISG) and acceptance is false?

The CISG adopted the Uniform Commercial Code's Battle of the Forms.

Linda wanted to replace the old carpet in her home. She entered into a contract with Carpet Company 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 Company. Linda wants to apply the contract rules of the UCC, but Carpet Company, wants to apply the contract rules of the common law. Which source of law should govern this case?

The contract rules of the UCC apply, because the predominant purpose of the contract was for the sale of goods.

It is important to promptly notify the obligor that an assignment has occurred. Why?

The obligor might perform to the assignor rather than the assignee.

If both parties are merchants, additional terms contained in the offeree's standardized forms become part of the contract unless an exception applies. Which of the following is not one of those exceptions?

The offer was for the sale of goods under $500.

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 certified mail, return receipt requested, 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.

There is no acceptance and no contract.

In the case in the text, Trapani Construction Company v. Elliot Group, Incorporated, the court held that:

There was a contract implied in fact because the circumstances and behaviors of the parties demonstrated a general course of dealing and a mutual intent to contract.

Debbie and Bill 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 Uniform Commercial Code section 2-207, when will there be a contract? Assume that Bill did not make his acceptance conditional on Debbie's assent to any additional or different terms.

When Bill's form is a definite and seasonable expression of acceptance

On Thursday, Trista receives a letter from Charlie 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 at 2:15 p.m. Do Trista and Charlie have a binding contract?

Yes, because Trista dispatched the telegram prior to 2:00 p.m.

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

Yes, because Uncle Jordan stated the words "I accept."

Sue and Joe concluded their agreement in all substantial matters of their contract for goods, such as price, quantity, and mode of delivery. But the formal written agreement has not been signed yet. Is there a binding contract at present?

Yes, because a contract is formed at the time the agreement is concluded.

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?

Yes, because this is a requirements contract.

Chanyel, a women's clothing store, held a "prize drawing" for a $500 shopping spree on Saturday that it advertised throughout the week. Participation in the drawing required being at the store by noon and completing an online application on site that included personal information. The information would then be merged 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?

Yes, she came to the store and gave information that was for the store's use.

A bargain is considered to be void if, at the time of formation of the bargain, _______

a court had already adjudicated one or more of the parties mentally incompetent.

Mike has a three-year lease on the apartment he occupies. He has lived there one year. He now wants to leave and go to Aspen, Colorado to be a ski instructor. However, Mike's landlord will not release him from the lease, and threatens to sue him if he breaks his lease. Mike finds Paul to take over the last two years of the lease, but Mike is worried that Paul might cause damage or in other ways inflict loss and that he, Mike, might be held financially responsible. In order to assure Mike that he will be completely discharged from all obligations under his lease, Mike should attempt to bring about:

a novation.

Ratification of a contract entered into by a minor can only be done _______

after the minor reaches the age of majority.

A party not equally in the wrong of an illegal agreement will generally be _______

allowed to recover what she has parted with.

On August 1, Neptune Fisheries contracted in writing with West Markets to deliver to West 3,000 pounds of lobsters at $4 a pound. Delivery of the lobsters was due October 1 with payment due November 1. On August 4, Neptune entered into a contract with Deep Sea Lobster Farms which provided as follows: "Neptune Fisheries assigns all the rights under the contract with West Markets dated August 1 to Deep Sea Lobster Farms." The best interpretation of the August 4 contract would be that it was:

an assignment of rights and a delegation of duties by Neptune.

Offers that fail to provide a specific time for acceptance:

are valid for a reasonable time.

Mr. Blue is in a contract with Mr. Brown for the repair of Mr. Blue's roof for $9,000. Mr. Brown has already performed the work, but contacts Mr. Blue that he should pay his cousin Joe Jr. the amount owed. Joe Jr.'s status under the contract is called what?

assignee

The transfer of a right under a contract is called a(n):

assignment.

What type of contract is not legally enforceable? a) Sale of home with all the fixtures inside the home b) Supported by adequate consideration that is not money c) Sale of cocaine where buyer does not pay and retains the goods d) All of the choices are correct.

c) Sale of cocaine where buyer does not pay and retains the goods

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(n) __________ agreement, and such agreements generally are binding contracts.

composition

If it is supported by some form of __________, a contract to give an offeree the exclusive power of acceptance for a period of time is enforceable as an independent, complete option contract.

consideration

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

consideration

Mr. Blue gave his favorite nephew Jim Jr., who is a mechanic, $1,000 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 __________ for the contract.

consideration

Emily and Keira are sisters and are very close. Emily offers Keira $50 a week for walking to work so Keira starts to lose weight. After Keira loses a considerable amount of weight and improves her health dramatically, she asks her sister for the money promised. Gift promises are not generally enforceable because they lack:

consideration.

A person who commits fraud may be liable for punitive damages under the tort of _______

deceit.

Denise contracts with Long Life Insurance Company, agreeing to pay premiums in return for which the company agrees to pay $500,000 to Denise's husband Barn when Denise dies. Barn is a(n):

donee beneficiary.

Antiassignment clauses in contracts generally are:

enforceable but read narrowly.

Ward is attempting to introduce oral evidence in an action relating to a written contract between Ward and Weaver. Weaver has pleaded the parol evidence rule. Ward will be allowed to introduce parol evidence if it:

explains an ambiguity in the written contract, proves that the contract was subject to a condition, or proves that the contract is void, voidable, or unenforceable.

In Sogeti USA LLC v. Scariano, 606 F. Supp. 2d 1080 (D. Ariz. 2009), the case in the text, the court held that:

express consent of an employee is not required before an employer's contractual rights can be assigned to, and enforced by, a successor company.

The mutual agreement necessary to create a(n) __________ contract must be evidenced by a writing.

express contract

Prior to the enactment of the UCC, common law courts often refused to enforce both output contracts and requirements contracts because they:

failed to specify the quantity of goods to be produced or purchased.

John need some legal documents drafted for his family by Lawyer. In exchange, John will re-drywall Lawyer's garage. To satisfy the consideration requirement to form a contract, the consideration exchanged by the parties must:

have legal value.

In the case in the text, Mid-American Salt, LLC v. Morris County Cooperative Pricing Council, 964 F.3d 218 (3d Cir. 2020), the court held that the agreement was:

illusory

Mel promises to buy all the video games he wants from Bart. This promise is:

illusory

Sigmund enters into a contract with Carl. The terms are that Sigmund will purchase all the gasoline that he wants to purchase in 2020 at a price of $2.50 per gallon, and Carl agrees to sell on those terms. This is an example of a(n):

illusory contract.

The case in the text, Domingo v. Mitchell, 257 S.W.3d 34 (Ct. App. Tx. 2008), demonstrates that:

important terms of a contract can be implied under certain circumstances.

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:

incorrect; Brian owes Daniel a trip to Europe because Daniel's acts are consideration.

Kevin offers Gabe $500 to paint 5 of Kevin's barns. Gabe begins to paint the barns. Under the common law, an offer for a unilateral contract:

is accepted by full performance of the requested act.

Big Bank is a major creditor of Bonwill Department Store. After a major loss in profits due to poor holiday sales, Big Bank decides to help keep Bonwill from bankruptcy. Big Bank orally promises Mary Tudor, a supplier of Bonwill's, that it will guarantee Bonwill's payment for goods that Mary sells to Bonwill. Most likely, Big Bank's oral agreement:

is enforceable under the "main purpose" or "leading object" exception to the statute of frauds.

A fully "integrated" contract under the parol evidence rule is one that:

is intended by the parties to be the complete and final statement of their agreement.

June offers to buy Kevin's car for $5000. She gives Kevin $2500 as a down payment until she gets paid on Friday when she will pay the remaining half of the balance. A bilateral contract is accepted when the offeree:

makes the promise requested by the offer.

The marriage provision in the statute of frauds is inapplicable to agreements that involve:

mutual promises to marry.

A(n) _______ is something which is essential for the minor's continued existence and general welfare and has not been provided by the minor's parents or guardian.

necessary

In employment contracts, _______ clauses are one form of agreement that places restrictions on an employee's conduct after the employment is over.

noncompete

An innocent representation is also known as _______

not intentionally deceptive.

Ted Nix purchased two acres of land from Sally Pine. Nix paid 15 percent at the closing and gave his note for the balance secured by a 30-year mortgage. Five years later, Nix found it increasingly difficult to make payments on the note and finally defaulted. Pine threatened to accelerate the loan and foreclose if Nix continued in default. Pine told Nix either to get the money or obtain an acceptable third party to assume the obligation. Nix offered the land to Quick Company for $4,000 less than the equity Nix had in the property. This was acceptable to Pine and at the closing, Quick paid the arrearage, executed a new mortgage and note, and had title transferred to its name. Pine surrendered Nix's note and mortgage to him. The transaction in question is a(n):

novation.

A(n) __________ is a proposal by one person to another that is intended to create legal relations on acceptance by the person to whom it is made.

offer

Advertisements that (1) limit the power of acceptance to one offeree or a small number of offerees, (2) are highly specific about the nature and number of items offered for sale and what is requested in return, and (3) leave nothing further to be negotiated are considered to be:

offers

A contract 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) __________ contract.

output

A reaffirmation promise has to 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. This is the requirement of:

promises to pay debts barred by bankruptcy discharge.

The "confirmatory memorandum" exception to the Uniform Commercial Code's statute of frauds provision:

requires that both parties to the contract be merchants.

When a contract is made with someone who is not properly licensed, if the statute requiring the license is _______- that is, the purpose of the legislation is to collect money rather than protecting the public against dishonest or incompetent practitioners, the contract will generally be enforceable.

revenue-raising

Once an assignment occurs, the assignee acquires:

same rights as the assignor had prior to assignment.

In order to satisfy the statute of frauds, the parties' writing must be:

signed by the "party to be charged."

Under the mailbox rule, the acceptance of an offer is effective at the time the acceptance is dispatched unless:

the acceptance is not in the authorized mode of communication.

As mentioned in the case in the text, Steinberg v. U.S., 90 Fed. Cl. 435 (U.S. Ct. Fed. Cl. 2009), in deciding whether consideration to form a contract exists, a court must determine whether:

the benefit was bargained for.

Once a court has decided what promises are included in the contract, the court is faced with interpreting the contract. The court will first attempt to determine:

the parties' principal objective.

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:

there is no consideration for Jack's promise.

Section 2-302 of the UCC was designed to correct abuses of superior bargaining power allowing courts to refuse to enforce a contract if it is _______

unconscionable.