Business Law Exam #2

A contract entered into by a minor is voidable at the option of either of the contracting parties.​

False

A promise to do what one already has a legal duty to do constitutes legally sufficient consideration.​

False

All contracts between adults and minors are void.​

False

An agent must keep confidential any information acquired through an agency during the term of the relationship, but can disclose it after the agency ends.

False

In contract law, "consideration" refers to the time that a party takes to evaluate a deal.​

False

One of the requirements of a valid contract is an adequate price.​

False

The doctrine of respondeat superior imposes liability for an agent's tort on a principal without regard to the personal fault of the agent.

False

The duties that an agent owes a principal must be set forth in the agency agreement because they do not arise by operation of law.

False

Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf. This power will terminate on

Miklos's death or incapacity.

Shannon signs a contract with Tevin, an unlicensed contractor, to build a deck and gazebo at the rear of her house. This contract is enforceable by​

No one

A bilateral contract comes into existence at the moment promises are exchanged.​

True

A promise by one party to pay another for refraining from an action that one has a legal right to undertake is enforceable.​

True

Under the mailbox rule, an acceptance becomes valid when it is dispatched.​

True

Diamonds & Gold LLC hires Elle to buy gems and precious metals from various sources on its behalf. In this relationship, Diamonds is

a principal.

Based on Nan's conduct, Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so. In this circumstance, Poppy has

apparent authority.

Frisco offers to buy a Gibson guitar owned by Hayden for twice what Hayden paid for it. She accepts and hands the guitar to Frisco. Her delivery of the guitar is​

consideration

Gary drives a truck as an employee for Hauling Inc. Gary would most likely be considered acting outside the scope of her employment if he

crashed into a car at the airport while off duty.

Dumont threatens physical harm to force Eddie to sell his business, Citywide Vending, Inc., to Dumont for a below-market price. This is​

duress

Ben manages a warehouse and its inventory for Coffee Roaster Inc. To operate this part of the business, Ben's authority can be inferred

from the position Ben occupies.

Jon contracts with Kino to buy a certain number of sheep for Kino's Animal Farm. Jon makes a deal with Lila for the sheep, but neither Jon nor Kino pays the price. Lila sues Jon for breach. Jon's right to hold Kino liable for any damages is the right to

indemnification

Nyoko signs a covenant not to compete with her employer, Midstates Distribution, Inc. The covenant will be enforced if it

is reasonable with respect to scope, geographic area and duration.

Clark hires Dell, a real estate broker, to sell his beach house. The house is destroyed in a storm before it can be sold. Dell is Clark's agent

no more.

William obtains a loan from a bank at 24.5 percent interest. The state where he obtains the loan has a usury statute that limits interest rates to a 21.5 percent maximum. William's contract with the bank is

not enforceable

Rafi offers a tour of Bay Harbor aboard his sailboat, Sea Siren, to Tiara's Travel Group for $500. Referring to the prices for similar tours, Tiara's says, "We'll pay no more than $400." Rafi's offer is

terminated.

Carl and Debra orally agree on the sale of Carl's Electrical Supplies Company to Debra and jot down the terms on the back of one of Carl's blank invoices, which they both sign. A written memorandum evidencing an oral contract that would otherwise be unenforceable must contain​

the essential terms

Clay offers to pay Dot $50 for a golf lesson for Erin. They agree to meet the day after tomorrow to exchange the cash for the lesson. These parties have​

​a bilateral contract

Mica, a minor, signs a contract to pay National Health Club a monthly fee for twenty-four months to use its facilities. Six months later, after reaching the age of majority, Mica continues to use the club. This act is​

​a ratification

Metro City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault. Coco's Chocolate Creations signs a lease with the mall that contains the clause. This is​

​an exculpatory clause

Flo tells Ginger during a phone call that she will buy her textbook from last semester for $65. Ginger agrees. These parties have​

​an express contract

In Simone's selling a 300-acre farm to Rural Investments, Inc., she tells the buyer that the land "will be worth twice as much by next year." This is​

​an opinion