Business Law 2301 Review Two

An advantage that written contracts have over oral contracts is that they can be ascertained.

true

Which of the following is true of a binding contract?

it is created when an offeree makes a proposal to the offeror

Which of the following is true of Sunday contracts?

their laws are a result of statutes

A minor has the legal right to disaffirm a voidable contract at any time during minority.

true

If a party intentionally and without the consent of the other party alters a written contract, * the other innocent party is discharged.

true

If the intended acceptance varies or qualifies an offer, the counteroffer rejects the original offer.

true

If the supposed consideration consists merely of a promise to do what one is already legally obligated to do, consideration is invalid.

true

The contract and the memorandum required by the Statute of Frauds must set forth all the material terms of the transaction.

true

A debt that has been outlawed by a statute of limitations cannot be revived.

false

Performing or promising to perform what one is already obligated to do is a valid consideration.

false

A minor must ratify none or all parts of a contract.

true

A dentist who performs services without a license is entitled to sue to collect for the services.

false

Even if a minor does not have possession of property received under a contract, the contract can be disaffirmed.

true

Which of the following is true of contracts of minors?

an adult is bound by a contract is a minor wishes to treat the contract as valid

A firm offer can be best defined as:

an offer than cannot be revoked for a reasonable time if no time is stated

A contract is indivisible if it can be performed in ways other than as an entity.

false

To set aside or cancel

rescind

Consideration can constitute financial or non-financial items.

true

Consideration distinguishes mere agreements from legally enforceable obligations.

true

Contracts made by people who were intoxicated to such an extent that they would not have entered into it if they were sober, makes the contract voidable.

true

Contracts obstructing the administration of justice are unenforceable.

true

Which of the following is true of the doctrine of promissory estoppel?

it requires the promisor to reasonably expect the promise to induce action by the promisee

Which of the following is true of contracts that limit the freedom of marriage?

An agreement not to marry during minority is valid

Default refers to:

a breach of any contractual obligation

A force majeure clause in a contract is a contract provision that excuses performance by a party when:

an extraordinary event outside the party's control occurs

Amount of damages that are equal to the loss sustained.

compensatory

The usual remedy for breach of contract is to sue for:

damages

A valid offer is one that is indefinite.

false

Electronic signatures are legally unenforceable.

false

Pledges made by people to charitable associations have no binding power by law.

false

Ratification to a contract can be made any time before reaching majority.

false

The "mailbox rule" does not apply in situations where the offeror does not receive the acceptance.

false

Which of the following is true of the parol evidence rule?

it allows a written contract to be modified by oral testimony if there is evidence of fraud

Which of the following is true of the Statute of Frauds?

it applies only to executory contracts

Which of the following is true of a valid offer?

it is seriously intended

Failure to perform with ability and care normally exercised by people in a profession

malpractice

Which of the following statements is true of the ratification of a minor's contracts?

silence ratifies an executed contract after a minor attains majority

Sam and Martha sign a contract in which Sam agrees to pay a certain price and buy Martha's house. Later, Sam's brother states that Sam often has intervals of delusions and hence the contract is invalid because it has been made by an incompetent person. Sam has not been declared by the court as insane. In such a scenario, according to law, which of the following will entitle Martha to the price agreed upon in the contract?

Sam was in a sane frame of mind and understood the contract when he signed it

Mark owes $2,000 each to his business partners, Ryan, Bryan, and Karen. Since Mark is facing financial difficulties, his business partners agree to accept a total amount of $4,800 from Mark as a cancellation of the unpaid balance due to them. This type of an agreement is known as:

composition of creditors

Which of the following is true of the arrangement of composition of creditor's?

It occurs when multiple creditors settle in full for a fraction of the amount owed.

Maya, an elderly lady, wanted to sell her house. She offered the house to Lily, a friend. However before the house deeds were transferred, Maya passed away. Which of the following scenarios is legally acceptable in such a case?

Lily must consider the offer automatically revoked and void

Which of the following is true of gambling contracts?

They are transactions wherein the parties stand to win on to lose based on pure chance

Which of the following types of agreements, according to the Statute of Frauds, need to be in writing?

an agreement containing a promise in consideration of marriage

An offer to provide money in satisfaction of a debt when one has the ability to pay is a(n):

tender of payment

Which of the following is a requirement for the acceptance of an offer to valid?

the acceptance must be communicated by the offeree to the offeror

The term disaffirmation refers to:

the election to avoid a contract or set is aside

If a minor contracts for necessaries, the minor's liability is quasi-contractual in nature. This means that:

the minor is required to pay the reasonable value not the contract price

Which of the following is true of revocation of an offer?

the offer is terminated by the lapse of the time specified in the offer

Which of the following conditions is a prerequisite for any agreement to be legally enforceable?

the parties entering into the agreement must have the mental capacity to contract

When a party sues to enforce an alleged contract, the Statute of Frauds requires that:

there be a note in writing signed by the party against whom the claim for breach of contract is made

A check is not a proper tender

true

A person found guilty of a major criminal offense is called a convict.

true

After a discharge in bankruptcy, creditors' rights of action to enforce most of the contracts of a debtor are barred.

true

All contracts must be for a lawful purpose otherwise they would be considered void.

true

An attorney may contract to appear before a Senate committee meeting to encourage or oppose the passage of a bill.

true

An offer expresses the willingness of the offeror to enter into a contractual agreement.

true

As a general rule, the adequacy of the consideration is irrelevant because the law allows bargains.

true

Courts find that justice requires enforcement in a promissory estoppel case.

true

When a court orders for specific performance, it is exercising its equity powers.

true

Which of the following is an example of a contract contrary to public policy?

B agrees to appoint D as deputy sheriff, provided he helps him win the local elections

Which of the following is an example of valid consideration?

C promises to sell paint to B when the shipment arrives

Which of the following is true of offers and invitations?

Circulars are invitations to the recipients to make an offer.

If an act is legal at the time of entering a contract but is subsequently made illegal, the contract is discharged.

true

The legal rate applies when parties are silent as to the rate.

true

The parol evidence rule assumes that a written contract represents the complete agreement.

true

The rescission of a contract releases an aggrieved party from all obligations that are yet to be performed.

true

The safest way to contract with minors is to have the minor's guardian join in the contract as a cosigner.

true

AB Developers sign a contact with CL Corp., agreeing to build a $20 million office for the corporation. The construction contract was substantially performed. There were, however, a few minor breaches of the contract by AB Developers that made CL Corp. incur damages worth $10,000. Which of the following is most likely to be true in this scenario?

CL needs to pay the full price under the contract less the damages suffered by CL

Patrick and Ken entered into a contract in which Ken sells his farm to Patrick. According to the contract, Patrick needs to pay $500 to Ken every month for the next ten years in order to settle the purchase. Later, it is found that Ken purposely caused Patrick to become drunk so that he would enter into the contract. Which of the following is most likely to be a consequences of this case?

Patrick will not need to pay Ken because the contract will held invalid

Under the ____, it is unlawful to discriminate in price between competing buyers if the goods are of like grade, quantity, and quality.

Robinson-Patman Act

Kenneth, aged sixteen, sells his car to Robin, aged 49. Later, Robin sells the car to Sarah, an innocent third party, before Kenneth can disaffirm the contract. In this case, which of the following will hold true?

Sarah can obtain good title to the car

In which of the following situations is a state most likely to enforce a usury law?

X sells a plot of land at a rate higher than the maximum contract rate.

In a written contract, Sheldon agreed to tutor the children of Mrs. Smith for a certain period of time. However Sheldon, prior to starting classes, announced that he would not be able to tutor the children due to other commitments. In this case, there has been a(n):

anticipatory breach

An offeree' s response that rejects an offer by varying its terms is known as a(n):

counteroffer

According to the Statute of Frauds, an agreement of an executor to pay the debts of the estate from the executor's personal funds, needs to be an oral contract.

false

An agreement not to marry certain named individuals is valid.

false

Contracts which are designed to limit competition are acceptable by law.

false

A lease of real property for less than one year must be in writing in order to be binding.

false

If a merchant displays a coat at a particular price, he has a binding requirement to sell at that price.

false

If a written contract appears complete, the parol evidence rule will permit modification.

false

If an adult purchases personal property from a minor, the minor has only a voidable title to the property.

false

If performance in a contract becomes extremely difficult after the contract is formed, it automatically discharges the contract.

false

Many state statutes made Sunday contracts illegal. Most states have repealed those laws.

false

The Statue of Frauds states that the memorandum must contain more essential terms than the written contract.

false

The Statute of Frauds does not apply when the promisor promises the debtor that the promisor will pay the debt owed to the third person.

false

The UCC states that when a contract for the sale of goods is modified by agreement of the parties, consideration is necessary to make it enforceable.

false

When an offeree is not aware of the insanity of the offeror and communicates assent to an offer, it is considered as accepted.

false

When charitable enterprises are financed by voluntary subscriptions of many people, the promise of each person is generally not held to be enforceable.

false

Which of the following statements is true of statutes of limitations?

for open accounts, accounts receivable, and ordinary loans, the statute of limitations varies from 4 to 20 years

When one refrains or promises to refrain from doing something, this conduct is known as:

forbearance

Which of the following best describes the term "consideration"?

it indicates what the promisor demands and receives as the price for the promise

Which of the following statements best defines a tender of performance?

it is an offer to perform an obligation in satisfaction of the terms of a contract

Damages fixed by a contract.

liquidated

A small amount of damages awarded when there is a technical breach but no injury.

nominal

Parol evidence refers to:

spoken words

Ryan, a college student, intends to sell his car. He contacts his friend Luiz and enquires whether he is interested in buying the car. Luiz finds the quoted price reasonable and buys the car from Ryan. In this scenario, Ryan is the ____

offeror

Compelling a party to carry out the terms of a contract

specific performance

Blake has subscribed to a local charitable association where he needs to make a monthly payment of $100. However, a few months later, Blake stops paying this amount. Which of the following exceptions to the requirement of consideration will enforce that Blake pays the amount?

voluntary subscriptions

Which of the following is true of contracts?

written evidence, composed in clear language, is more reliable than oral