Business Law Exam 3
In which of the following situations is a contract enforceable? (Check all that apply.)
-A contract that can perform legally -A contract with a legal subject matter
In order for a mutual mistake to interfere with legal consent, the following must be present. (Check ALL that apply.)
-A material effect on the agreement -An adverse effect on a party who did not agree to bear the risk of the mistake at the time of the agreement -A basic assumption about the subject matter of the contract
Which of the following is true of a contract? (Check all that apply.)
-A party can defend against the enforcement of a contract even if it has all four elements of a contract. -A contract that has all four elements of a contract may not be legally binding if it lacks genuine assent.
Which of the following is true about a bilateral contract? (Check all that apply.)
-A promise to perform has value. -A promise in exchange for a promise can be consideration.
Using the objective standard to establish contractual intent, courts are concerned with looking at which of the following? (Check all that apply.)
-Actions and behavior of the parties in public regarding the agreement -Words and documents in public from the parties regarding the agreement
Which of the following are exceptions to the statute of frauds? (Check all that apply.)
-Admission by one party to a contract -In an instance where promissory estoppel has been established -Partial performance on a contract
Which of the following is true? (Check all that apply.)
-After making an assignment, the assignor has no right left to the original contract. -After delegating performance, the delegator remains liable under the original contract if the delegatee fails to perform.
Which of the following is considered a false assertion of fact? (Check all that apply.)
-An incorrect assertion -A nondisclosure -An act of concealment
Andy is an artist and Jane runs a famous art gallery. Jane calls Andy and tells him she has seen some of his work and likes it. She tells him to bring his newest paintings to her gallery and says "I promise that if I like them, I will show them in my gallery." Which of the following is true? (Check all that apply.)
-Andy has no contract to compel Jane to show his paintings. -Jane made an illusory promise.
Anna promises Elsa that she will clean Elsa's house and Elsa promises Anna she will pay Anna $100 when Anna is done. Which of the following is true? (Check all that apply)
-Anna and Elsa have formed a bilateral contract. -Anna and Elsa's promises are an exchange of something of value. -Anna's promise in exchange for Elsa's promise is sufficient consideration.
Which of the following statements are true of legal consideration? (Check all that apply.)
-Any consideration, however small, will support a promise. -A court will not regulate the amount of consideration in the absence of fraud.
In general, what are the ways an offeree can manifest intent to enter into a contract? (Check all that apply.)
-By giving the offeror a return promise (e.g., promise to pay contract value) -By performance of the requested actions under the offer and contract
If the offer does not make it clear how the offeree should respond, in what way can the offeree respond under the contract? (Check all that apply)
-By giving the offeror a return promise as consideration -By performing the required acts of the contract
The most important sources of contract law are the: _______. (Check all that apply.)
-CISG -UCC -case law
What states do not allow the admission exception as part of the statute of frauds? (Check all that apply.)
-California -Louisiana
Identify the circumstances in which the Statute of Frauds applies. (Check ALL that apply.)
-Contracts involving secondary suretyships -Contracts related to an interest in land
What are the types of contracts that fall within the scope of the statute of frauds? (Check all that apply.)
-Contracts related to an interest in real property -Promises made in consideration of marriage
What are some of the exceptions to the parol evidence rule? (Check all that apply.)
-Contracts with ambiguous terms -Contracts that have been subsequently modified
Rick and Carol have entered a contract in which Rick has agreed to mow Carol's lawn each week for $100 a week. In exchange for $1,000, Rick transfers his interest in the contract to Daryl. Which of the following is true? (Check all that apply.)
-Daryl must now mow Carol's lawn each week. -Daryl is an assignee.
What conditions would legally cause an offer to be immediately terminated? (Check all that apply.)
-Death of the offeror -Offeror loses legal capacity to be in a contract
Don loans Betty $36,000 and Betty agrees to pay Don $3,000 a month for a year. Rodger agrees to pay Don the money Betty owes him. Which of the following is true? (Check all that apply.)
-Don is the creditor beneficiary. -Betty is the promisee. -Rodger is the promisor.
Which of the following are true about creditor beneficiaries and donee beneficiaries? (Check all that apply.)
-Donee beneficiaries and creditor beneficiaries are both third party beneficiaries. -If the promise is intended to release a party from an obligation, a creditor beneficiary is created. -If the promise is intended to grant a gift to a third party, a donee beneficiary is created.
Identify examples of a lack of genuine assent. (Check all that apply.)
-Duress -Fraud -Undue influence
Which of the following is a non-delegable duty? (Check ALL that apply.)
-Duty that is personal in nature -Contractually forbidden delegation
In the absence of a description in the offer of what form of communication must be used to form a valid acceptance, what methods of communication are generally accepted as reasonable? (Check all that apply.)
-Email communication -In person communication -Telephone communication
Identify the activities that are forms of gambling? (Check all that apply.)
-Horse tracks -State-run lotteries
When does the court look at the adequacy of consideration in a contract? (Check all that apply.)
-If the court believes fraud occurred -If the court thinks that undue influence was used
Which of the following statements is true of mistake of fact? (Check all that apply.)
-It consists of unconscious ignorance of a past or present material event. -It is an affirmative defense.
Which of the following is true about a unilateral contract? (Check all that apply.)
-It is a promise in exchange for performance. -It is a real contract because it is a mutual exchange of value.
Identify the true statements about past consideration. (Check all that apply.)
-It is enforceable to the extent necessary to avoid injustice. -It is enforceable if it was given with the expectation of future payment.
Which of the following statements is true about past consideration? (Check all that apply.)
-It is not a real consideration. -It refers to a situation where one party provides value before the promise is made
Katniss and Peeta enter into a contract that includes a poorly-worded antiassignment clause. Katniss assigned her rights to the contract to Haymitch. Which of the following is true? (Check ALL that apply.)
-Katniss had a right to assign her interest. -The assignment was effective.
The following transfer in interests in land fall within the statute of frauds? (Check all that apply.)
-Mortgage contracts -Lease contracts
What are the elements of a contractual offer? (Check all that apply.)
-Offer must contain definite terms -Intent by the offeror to be bound by the agreement -Offer must be communicated to the offeree
What are the conditions for promissory estoppel to occur? (Check all that apply.)
-One party makes a promise and knows the other party will rely on it. -To avoid an injustice, the promise must be enforced. -A party reasonably relies on another's promise.
Identify the factors that would result in rescission of a contract based on duress. (Check ALL that apply)
-One party threatens the other's economic interests, i.e., economic duress. -One party threatens physical harm or extortion to gain consent to a contract. -One party threatens to file a criminal lawsuit unless consent is given to the terms of the contract.
What are the reasons why a partial performance exception to the statute of frauds could be applied? (Check ALL that apply.)
-Partial payment for a contract involving an interest in land -Buyer has taken possession of a land interest as part of a contract
What are methods by which termination of a contractual offer can occur? (Check all that apply.)
-Revocation by the offeror -Counteroffer by the offeree
Identify examples of vested rights. (Check all that apply.)
-Right to inheritance on reaching maturity -Right to retirement savings
Which of the following are non-assignable rights? (Check ALL that apply.)
-Rights whose assignment is prohibited by contract -Rights whose assignment is prohibited by law -Rights that are personal in nature
Consideration, as a required contractual element, can be: ________. (Check all that apply.)
-Servive -Money
Under common law, what are the necessary elements of a valid contractual acceptance? (Check all that apply.)
-The acceptance will have the definite and certain terms of the offer. -The intent by the offeree to be bound by acceptance of contract.
A valid contractual offer must be communicated to what party? (Check all that apply.)
-The agent of the offeree who is acting on behalf of the offeree -The offeree
Which of the following is true about the relative legal strengths of different types of third party beneficiaries? (Check all that apply.)
-The incidental beneficiary is in the worst legal position. -The donee beneficiary is the second best legal position.
Identify the factors a party should consider before filing suit for breach of contract. (Check all that apply.)
-The likelihood of success -The possibility of getting a better or faster resolution through some form of alternative -The cost of litigation or some form of ADR as compared to the value of the likely remedy -The desire or need to maintain an ongoing relationship with the potential defendant
Factors that are considered by a court in undue influence claims include all of the following: _______. (Check all that apply.)
-The non-dominant party was isolated from advisers at the time of the agreement. -The dominant party gained undue enrichment from the agreement. -The dominant party rushes the other party to consent.
Identify the rights to assign that cannot be denied by an antiassignment clause. (Check all that apply.)
-The right to receive payment -The right to receive damages for a breach of contract to sell goods or services
Which of the following is true of severable contracts? (Check all that apply)
-Their legal portion can be enforced by the court. -They can be partially voided by the court.
In order for the courts to find a nondisclosure of a material fact to be equated with and have the same legal effect as a false assertion, the following elements must be present. (Check all that apply.)
-There is a failure to correct assertions of fact that are no longer true. -A relationship of trust exists between the parties to the contract. -There is a statute that requires disclosure.
Identify a true statement about integrated contracts. (Check all that apply.)
-They are considered complete. -They are in written form.
Which of the following is true about obligees? (Check all that apply.)
-They have agreed to receive something from the other party. -They can assign their duties in the contract to a third party. -They can transfer their rights in the contract to a third party.
Which of the following is true of secondary obligations? (Check all that apply.)
-They involve a party outside a primary agreement. -They fall within the statute of frauds.
Which of the following is true of anticompetitive agreements? (Check all that apply.)
-They restrain trade. -They are against public policy.
Which of the following statements is true of equitable remedies? (Check all that apply.)
-They were typically unique solutions specifically crafted to the demands of the situations. -They grew out of the English court's authority to fashion remedies when the existing laws did not provide any adequate ones.
Identify exceptions to the preexisting duty rule. (Check all that apply.)
-UCC Article 2 (sale of goods) -Unforeseen circumstances -Additional work required to fulfill the promised obligation
Chef Luigi is a graduate of Voch-Tech High School where he first learned to cook. Luigi is now a famous celebrity chef and is going to donate $100,000 to Voch-Tech to build a state-of-the-art teaching kitchen. Which of the following is true? (Check ALL that apply.)
-Voch-Tech students are incidental beneficiaries of the donation. -Voch-Tech teachers are incidental beneficiaries of the donation.
Parol evidence is admitted to determine whether a contract is ______.
-Void -Voidable
When can a minor be given full legal capacity to enter into contracts? (Check all that apply.)
-When the minor moves out of the parents' house and begins supporting himself or herself -When the minor marries -When the minor's parents or legal guardians give up their right to exercise legal control over the minor
A valid offer under common law requires which of the following elements? (Check all that apply.)
-You need the intent to be bound by an acceptance. -The offer must be properly communicated to the offeree. -There must be definite and certain terms.
Under the parol evidence rule, oral testimony is inadmissible to prove certain terms or agreement if it comes: _______. (Check all that apply.)
-before the existence of a written contract. -at the same time as the execution of the written contract.
Secondary obligations are also known as:_______. (Check all that apply.)
-collateral promises -suretyship promises
Under common law, a valid contractual offer will be:_______. (Check all that apply.)
-definite in its terms -certain in its terms
The means by which the offeree can communicate a valid acceptance to the offeror may be: _______. (Check all that apply.)
-expressly stated in the offer -implied from the facts and circumstances surrounding the communication of the offer to the offeree
If multiple interpretations are possible, the court should adopt the interpretation that makes the contract: _______. (Choose all that apply.)
-reasonable -operative -definite -lawful
Today, how many states will still enforce contract under seal even if it is not supported by consideration?
10
How many exceptions to the parol evidence rule are there?
8
If a business does inadvertently cash a "paid-in-full" check, it has _______ days to offer the debtor repayment in the same amount.
90
What is not a valid exception to the statute of frauds?
A contract that is unprofitable to all parties
Which of the following clauses seeks to blend other agreements either into a final agreement or into something explicitly identified as being outside the final agreement?
A merger clause
Which of the following is a correct statement regarding a minor's obligations on disaffirmance?
A minor's obligations on disaffirmance vary from state to state.
Identify a scenario where the parties have agreed that the silence will be considered acceptance.
A person has a library subscription that is renewed automatically unless he or she explicitly asks to stop the subscription.
Which of the following is not an type of consideration?
A promise to accept a gift
Which of the following is a correct statement regarding a promise to refrain from doing something you are legally entitled to do?
A promise to not do something you are legally entitled to do is sufficient consideration for a contract.
Which of the following statements is most accurate regarding a restrictive covenant made in conjunction with the sale of an ongoing business?
A restrictive covenant made in conjunction with the sale of an ongoing business is enforceable.
In a bilateral contract, the offeror is expecting what action from the offeree?
A return promise
Abigail was shopping in an antique store and was drawn to what appeared to be an antique plate. The antique dealer said the plate was created in the 1800s in England. In reality, the plate was made in China in 2000. The plate was stamped with this information on the bottom. Abigail bought the plate, but then later sued for fraudulent misrepresentation. The court will not rescind the contract because: _______.
Abigail did not have justifiable reliance since she could have easily discovered the falsity of the seller's claims
Parties to a contract can agree before hand that the silence is a form of ______.
Acceptance
A(n) ______ contract is an agreement presented on a take-it-or-leave-it basis.
Adhesion
A(n) ______ is a statement made in court, under oath, in which one party against whom charges have been brought admits that an oral contract existed, even though the contract was required to be in writing.
Admission
Which of the following is an incorrect statement?
After making a delegation, the delegator is relieved of his duty to perform.
Which of the following is a legally-recognized way to expressly ratify a contract?
After reaching majority, a person states orally or in writing that he or she intends to be bound by the contract entered into as a minor.
Albus has a contract to mow Severus's lawn once a week for $50 a week. Albus's business is so busy that he hires Draco to mow Severus's lawn. Which of the following is true?
Albus delegated his duty to mow Severus's lawn to Draco.
What constitutes a valid admission under the statute of frauds?
An admission is a statement under oath or as part of a legal process in which a party being sued admits the existence of a contract.
If no means of communicating an acceptance is specified, what means will be accepted?
Any reasonable means including telephone, mail, fax, email and in person communication.
If a contract is for the sale of goods, the law that governs the contract is: _______.
Article 2 of the UCC, which governs contracts for the sale of goods
A(n) ______ is when a party to a contract transfers his or her rights under the contract to a third party.
Assignment
Robert sells some land next to a residential neighborhood to Christie, who is going to build a supermarket on the land. Which of the following is true?
At best, residents in the neighborhood are incidental beneficiaries of the contract.
Which of the following statements is correct regarding the legality and enforceability of contracts?
Both a contract that requires an illegal act for performance and a contract for an illegal purpose are unenforceable.
What happens if a legal contract is formed and its subject later becomes illegal under a new statute?
Both parties are discharged from their obligations.
A(n) ______ occurs whenever a party fails to perform her obligations under the contract.
Breach
What occurs whenever a party fails to perform his or her obligations under the contract?
Breach
Identify the state that does not allow the admission exception as part of the statute of frauds.
California
Alyssa was a severe schizophrenic who had to be institutionalized. Alyssa's cousin, Marlene, told Alyssa that she would buy her house for $10,000. Alyssa agreed and Marlene gave her the $10,000. Just as she was going to take possession of the house, Alyssa's brother stepped in and claimed that there was no contract between Alyssa and Marlene. The matter went to court and the court agreed with Alyssa's brother, stating that there was no contract due to one missing element. The missing element is: _______.
Capacity
Elsa hires the world famous hair stylist, Cinna, to style her hair for the Grammy Awards. Cinna delegates his duties to his young apprentice Flabio. Which of the following is true?
Cinna's duties were personal in nature and should not have been delegated.
A party seeking equitable relief must prove that he or she has "______ ______," that is, has not been deceitful or done anything in breach of contract.
Clean hands
Which of the following terms refers to a situation when performance is still objectively possible, but would be extraordinarily injurious or expensive to one party?
Commercial impracticability
The law of contracts is primarily ______ law.
Common
If a contract involves the sale of goods, it is governed by the Uniform Commercial Code (UCC). All other contracts are governed by: _______.
Common law
The law of contracts is made up mainly from: _______.
Common law
In the context of contractual offers, if an offeree changes his or her mind after dispatching a rejection by certified mail, what can the offeree do to ensure that the contract is formed?
Communicate acceptance by another mode of communication before rejection reaches the offeror.
What are the most frequently awarded damages in a breach of contract lawsuit?
Compensatory
A written agreement under the parol evidence rule is presumed to be: _______.
Complete
An indivisible contract requires ______ performance by both parties, even if it appears to contain multiple parts.
Complete
Which of the following occurs when all aspects of the parties' duties under the contract are carried out perfectly?
Complete performance
______ refers to the active hiding of the truth about a material fact.
Concealment
______ conditions occur when each party's performance is conditioned on the performance of the other.
Concurrent
What kind of contract has an event or occurrence that must occur before the contract can be executed?
Condition precedent contract
_______ contracts contain conditions affecting performance obligations of the parties.
Conditional
Which of the following damages are foreseeable damages that result from special facts and circumstances arising outside the contract itself, and must be within the contemplation of the parties at the time the breach occurs?
Consequential
A promise to refrain from doing something is sufficient: _______.
Consideration
Generally, today contracts do not require that contracts be under seal. However, ten states still allow a contract without ________ to be enforced if it is under seal.
Consideration
Liza and Maryann were at a flea market. Liza had an antique vase that caught Maryann's eye. Maryann said to Liza that she would give Liza the antique necklace she had in exchange for the vase. Liza agreed. The antique vase and the antique necklace are called: _______.
Consideration
The bargained-for exchange or what each party gets in exchange for his or her promise under a contract is known as: _______.
Consideration
Almost all business relationships are formed by a(n): _______.
Contract
Capacity is an element of a legally binding: _______.
Contract
Rob promised Rupert that he would paint the inside of his house for $5,000. Rupert agrees to Rob's offer. If Rob fails to perform, a court could enforce the promise or award damages to Rupert. The enforceable promises between Rob and Rupert are known as a(n): _______.
Contract
Which of the following is an accurate statement regarding intended and incidental beneficiaries?
Contracting parties do not intend to benefit an incidental beneficiary.
What must be done in relation to contracts involving an interest in land?
Contracts involving an interest in land are covered by the statute of frauds, and as such, must be in writing.
_____ refers to the legal ability to enter into a binding agreement.
Contractual capacity
Which of the following is a correct statement regarding contractual rights whose assignment would increase the obligor's risk?
Contractual rights whose assignment would increase the obligor's risk are not assignable.
Identify the legal exception whereby loans may exceed the predetermined maximum in a state despite usury statute.
Corporate loans for facilitating business transactions
Justin informs Joseph that he will not be able to accept the contract for doing woodwork for the winter at Joseph's farm because of prior commitments. A day later, Justin calls up Joseph and tells him the original terms of the contract is acceptable to him and he can take up the offer. However Joseph tells Justin he would indeed like Justin to do the work however her will pay on $15/hour rather than $18/hour mentioned in the original contract. This proposal made by Joseph illustrates a _____.
Counteroffer
What is the term for an offer made by the offeree to the offeror proposing a substituted bargain differing from the original proposed offer?
Counteroffer
Identify a true statement about contracts with unilateral mistakes.
Courts are hesitant to void them.
The ______ beneficiary is in the strongest legal position because he can sue both the person who made the contract on his behalf and the person who was supposed to perform for him.
Creditor
Ben contracts with Dan to fix his car. In exchange, Dan will pay Ben's debt. Which of the following is true?
Dan is the promisor.
A(n) ______ is when a party to a contract transfers his duty to perform to a third party.
Delegation
Which of the following is not a type of contractual condition?
Deterrent condition
Promissory estoppel requires what major element in order to exist?
Detrimental reliance by the injured party
Promissory estoppel requires what form of contractual mindset?
Detrimental reliance on the offer
Which of the following refers to termination of a party's obligations under a contract?
Discharge
Philip is badgering his elderly Uncle Al to sell Al's house to Philip. Philip gets so aggravated when his uncle refuses to sell that Phillip threatens to beat his uncle if he does not sign the bill of sale for the house. Philip's threat is known as: _______.
Duress
When one party is forced into an agreement by the wrongful act of another party, it is known as: _______.
Duress
Sheila tells Ed that if Ed fixes her air conditioner by the end of the day, Sheila will pay Ed $500. Which of the following is true?
Ed and Sheila have entered into a valid unilateral contract.
Which of the following occurs when a minor's parents or legal guardians give up their right to exercise legal control over the minor?
Emancipation
Specific performance is sometimes called specific ______.
Enforcement
A minority of states have adopted the ______ rule, which states that the first assignee to give notice of assignment to the obligor is the party with rights to the contract.
English
What type of remedies are typically unique solutions specifically crafted to the demands of the situations?
Equitable
Which of the following terms refers to a clause that releases one of the contracting parties from all liability, regardless of who is at fault or what injury is suffered?
Exculpatory
When a contract has been fully performed, we call it a(n): _______.
Executed contract
Which of the following is not a type of monetary damages available in a successful breach of contract lawsuit?
Existential
A(n) ______ ratification occurs when, after reaching the age of majority, the person states she intends to be bound by the contract entered into as a minor. (Select BEST answer)
Express
The terms of ______ contracts are all clearly set forth in either written or spoken terms.
Express
What type of conditions are explicitly stated in a contract?
Express
Susan contracted with the owner of a local clothing shop to sell her knitted hats and gloves. All terms -- delivery date, quantity, selling price, etc., -- were clearly specified. When terms are clearly specified in the contract, this is known as a(n): _______.
Express contract
Ratification may be either ______ or ______.
Express or implied
True or false: If the offeree makes a mistake and sends the acceptance to the wrong address, there is acceptance on dispatch.
False
Negotiable instruments are an example of ______ contracts.
Formal
When there are requirements to the manner and look of a contract, then it is considered a(n) ______ contract.
Formal
Contracts that have a special form or must be created in a specific manner are known as a(n): _______.
Formal contracts
According to the statute of ______, if a contract can possibly be performed within one year, the contract does not need to be in writing in order to be enforceable.
Frauds
In some cases, if past consideration was given with the expectation of ______ payment, the court may enforce the promise.
Future
______ refers to agreements in which parties pay consideration for the chance, or opportunity, to obtain an amount of money or property.
Gambling
Industry officials prefer to use the term ______, rather than gambling, to refer to agreements in which parties pay consideration for the chance, or opportunity, to obtain an amount of money or property.
Gaming
William tells his neighbor George that he will give George a job as his butler if George promises to drop out of college. Which of the following is true?
George's promise to refrain from going to college is consideration.
Article 2 of the Uniform Commercial Code (UCC) governs contracts for the sale of: _______.
Goods
Which of the following is not a recognized purpose of licensing statutes?
Government protection of the public's constitutional rights
Which of the following is not a recognized purpose of licensing statutes?
Government retribution
In a conflicting versions of a contract, a(n) ________ contract will prevail over a typed contract.
Handwritten
Rachel and Chandler enter into a contract in which Rachel will sell her car to Chandler for $5,000. Chandler assigns his rights to the contract to Phoebe. Which of the following is true?
If Phoebe fails to pay Rachel, Chandler must pay Rachel.
Which of the following is a correct statement regarding a minor's power to disaffirm or void a contract?
If a minor chooses to disaffirm a contract, he or she must void the entire contract.
In which of the following situations is parol evidence contradictory to the final terms admissible?
If the oral agreement was made subsequent to the creation of the contract
Covenants not to compete in connection with the sale of a business are generally: _______.
Illegal
When a court determines that there was a contract between two parties in a situation where there was no opportunity to negotiate payment, the contract between the parties is known as a(n): _______.
Implied Contract
Darla was experiencing a great deal of pain. The pain was so bad that she went to the emergency room where she underwent emergency surgery for the removal of her appendix. The kind of contract that requires her to pay for the services she received, even though there was no prior negotiation of payment, is known as a(n): _______.
Implied contract
Which of the following occurs when a former minor takes some action after reaching the age of majority consistent with the intent to ratify a contract?
Implied ratification
What type of contract is formed when the offeree receives the benefits of offered services with a reasonable opportunity to reject them and knows that some form of compensation is expected, yet remains silent?
Implied-in-fact
Under what circumstances will an offeror not be able to rescind a unilateral contract offer?
In instances where the offeree has already started to perform under the contract
In the context of justifiable reliance on a false assertion, which of the following is true of the modern contract law?
Increasing responsibility is given to the person who made the erroneous assertion.
Which of the following contracts requires complete performance by both parties, even if it appears to contain multiple parts?
Indivisible
Which of the following terms refers to a contract that must be enforced or rejected in its entirety?
Indivisible
A(n) ______ is an order either forcing a person to do something or prohibiting a person from doing something.
Injuction
What type of contract is intended to be a complete and final representation of the parties' agreement?
Integrated contract
The ______ beneficiary need not be named in the contract, as long as the terms of the contract or events occurring after its creation make it clear who she is.
Intended
When two parties enter into a contract with the purpose of benefiting a third party, that third party is called an ______ beneficiary.
Intended
The creation of a valid contractual offer requires what elements?
Intent of the offeror for an agreement, definite terms and offer communicated to offeree
What form of intent must an offeror have in creating a contractual offer?
Intent to be bound by the offeree's acceptance
Jeff was shopping for a good used car. He met Seth, the salesperson, and asked Seth many questions about the car. Seth told Jeff that the car Jeff was asking about had very low mileage and that he knew that himself since he had processed the sale of the car from the former owner. In reality, Seth had personally set back the odometer in the car. What kind of scienter did Seth have?
Intent to deceive
What should a judge do if a contract contains ambiguity?
Interpret the contract against the interests of the drafter.
What is the court most likely to do when ambiguous language, such as "I assign the contract," makes it unclear what is being assigned or delegated and it cannot clearly tell what the parties intended?
It considers the assignment to be of both rights and duties.
Which of the following statements best describes a negotiable instrument?
It is an acceptable medium for exchanging value from one person to another.
What is a tender?
It is an offer by a contracting party to perform, along with being ready, willing, and able to perform, a duty outlined in a contract.
What is an injunction?
It is an order either forcing a person to do something or prohibiting a person from doing something.
If a contractual offer becomes illegal, what is status of the offer?
It is immediately terminated.
The statute of frauds is found in what federal code?
It is not found in any federal code, but rather is encompassed in state statutes and state common law.
Which of the following statements describes the promisee in a third-party beneficiary contract?
It is the party that owes the promisor something in exchange for the promise made to the third-party beneficiary.
In the context of contractual offers, which of the following statements best describes express authorization?
It is the specific mode of communication of acceptance that is stated in the offer.
Which of the following statements is true of the parol evidence rule?
It prevents evidence that substantially contradicts the agreement in its written form.
Death of an offeror will have what effect on a contractual offer?
It will cause the offer to be terminated.
Joan teaches Bobby how to shoot an outside jump shot in basketball. Bobby becomes such a good basketball player he gets a full scholarship to college and becomes highly sought after by professional teams. Just before he signs a contract with a pro team, Bobby tells Joan, "I promise I'll give you $500,000 when I sign that contract. I owe you for teaching me that jump shot." Which of the following is true?
Joan's work with Bobby in the past is not consideration to enforce Bobby's promise.
Julie, a 16-year-old student, enters a three-year modeling contract with a local ad agency. After two months, she realizes that the modeling schedule is too hectic and interferes with her school and other activities. She does not want to continue modeling. Which of the following statements is true in the given scenario?
Julie can void the contract immediately.
Rick buys a life insurance policy from MegaLife Insurance Co., and he names his wife Kesha as his beneficiary. Which of the following is true?
Kesha is a donee beneficiary.
Identify a defense to the enforcement of a contract.
Lack of genuine assent
Rob loans Laura $10,000 and Laura agrees to pay Rob back $1,000 a month for the next ten months. The loan agreement includes an antiassignment clause. Rob assigns his interest in the contract to Sally. Which of the following is true?
Laura must now pay Sally the $1,000 per month.
Once a person reaches the age of majority, she may ratify, or ______ contracts made as a minor.
Legally affirm
An agreement by the issuer to pay another party a sum of money on receipt of an invoice and other documents is called a(n): _______.
Letter of credit
Which of the following is a type of legal capacity a person suffering from a mental illness may have, depending on the nature and extent of their deficiency?
Limited
Nathan enters a contract to renovate Marjorie's boutique by a certain date. At the time of the creation of the contract, Nathan and Marjorie add a clause stating the amount Nathan will pay Marjorie as damages if he is not able to complete the renovation by the date mentioned in the contract. Which type of damages does the given scenario exemplify?
Liquidated damages
Which of the following states allows casino gambling?
Louisiana
Patty and Mario dispute whether Patty owes Mario $1,000. Patty asks Mario if she can give him her gold necklace, worth $500, in full payment of the debt. Mario agrees and takes the gold necklace. Which of the following is true?
Mario taking the necklace constitutes an accord and satisfaction.
Under common law, what types of terms must be included in a valid contractual offer?
Material terms, all major items necessary for mutual consent that are clearly laid out
Which of the following is a correct statement regarding minors and contracts?
Minors may enter into only voidable contracts.
A pharmaceutical company was marketing a new drug which had been tested for its effectiveness in curing headaches. The drug was very good at curing headaches, but that was all it did. However, the executives wanted to raise the sales of the drug by also claiming that it provided a cure for hair loss. There was absolutely no proof of this, but the pharmaceutical company advertised the drug as a headache cure and a hair loss cure. Soon there were complaints that the drug did not work as a hair loss cure. The pharmaceutical company is guilty of: _______.
Misrepresentation
If there is something in addition to a promise to marry as part of a marriage agreement, then the agreement: _______.
Must be in writing
________ _________refers to a situation in which parties agree that they simply wish to discharge each other from their mutual obligations and therefore cancel the contract.
Mutual Rescession
Peter contracted with Abe to buy his motorcycle. Peter thought he had bought the 2011 motorcycle, but Abe had intended to sell his 1990 motorcycle. Since both parties were mistaken about a material term of the contract, this is called a(n) ____.
Mutual mistake
Which of the following refers to a situation in which parties agree that they simply wish to discharge each other from their mutual obligations and therefore cancel the contract?
Mutual rescission
The authors of the Uniform Commercial Code (UCC) are the: _______.
National Commissioners on Uniform State Laws and the American Law Institute
Charlie offers Aaron $5,000 for some medical marijuana which is legal in the state. Aaron agrees, but the following day, the state legislature passes a law which basically makes any sale of marijuana, even for medicinal purposes, illegal. Does Aaron have to perform the contract?
No, because the object of the contract is no longer legal.
______ is a failure to provide pertinent information about the contract.
Nondisclosure
If intoxication causes a person to exercise poor judgment in making a contract, the contract is ______ unless the other party unfairly capitalized on the impaired judgment.
Not voidable
The assignee should always give ______ to the obligor as soon as possible after receiving the assignment.
Notice
Sometimes the parties to the agreement want to replace one of the parties with a third party. This substitution of a party is called a(n) ______.
Novation
Which of the following terms refers to a situation where contracting parties replace one of the parties with a third party?
Novation
Which of the following terms means that it is, in fact, not possible to lawfully carry out one's contractual obligations?
Objective impossibility
What is the standard that courts use to interpret contracts?
Objective standard
Which of the following is an element in the formation of a contractual offer?
Offer must include serious intent by the offeror to be bound to an agreement
If it is not clear whether the ______ wants performance or a return promise, the offeree has the option of either performing or making a return promise.
Offeror
When one party makes an offer to enter into a contract, we call this party the: _______.
Offeror
Which party to a contract can revoke an offer at any time?
Offeror
Which party to a contract is said to be the "master of their offer"?
Offeror
Who has the power to decide by what means an offer can validly be accepted?
Offeror
Omar has a contract in which he receives $50 a week from D'Angelo in exchange for washing D'Angelo's car. Omar transfers his interest in the contract with D'Angelo to Avon. Which of the following is true?
Omar was the assignor while Avon was the assignee.
Who can accept a valid offer that will create a binding contract?
Only the offeree or his or her agent
Sometimes a contract may be discharged not by anything the parties do but, rather, by ______.
Operation of Law
What type of contract allows the offeree a fixed amount of time to consider an offer without the offeror being able to revoke the contract during that fixed period of time?
Option contract
Whenever a written agreement contains a serious and obvious typographical error, ______ evidence is admissible to demonstrate it was an error, as well as to set forth the proper term.
Parol
A court will allow what type of evidence to prove a subsequent modification of a written contract?
Parol Evidence
What is the common law rule that bars the admission of oral testimony to prove agreement to certain terms if there is a written contract between the parties after the oral testimony occurs?
Parol evidence rule
The exception to the statute of frauds that is applicable when a buyer of land has paid a portion of the sales price to prove the existence of a contract is: _______.
Partial performance
Discharge by ______ refers to parties discharging their obligations by doing what they respectively agreed to do under the terms of the contract.
Performance
Compensatory damages are designed to put the ______ in the position she would have been in had the contract been fully performed.
Plaintiff
Which of the following is not a situation in which a contract may be discharged by operation of law?
Prefatory absolution
In an agreement for the sale of goods over $500, only the _____ needs to be stated.
Quantity
An implied _______ occurs when a former minor takes some action after reaching the age of majority consistent with intent to ratify a contract.
Ratification
Which of the following terms refers to the situation where a court allows a contract to be rewritten because the document does not reflect the parties' actual agreement?
Reformation
Suppose Joseph calls Justin and says, "Justin, I've found someone else to do my woodwork for the winter, and I won't be needing you." A day later Joseph changes his mind and calls Justin and wants to hire him based on the previously discussed terms. This is a valid: _______.
Rejection
What constitutes the termination of a contract?
Rescission
______ is the termination of the contract, while _______ is the return of any property given up under the contract.
Rescission, Restitution
If an offer is for a unilateral contract, the offeree can accept only by providing the requested performance. Suppose Bill offered to pay $500 to anyone who returned his lost dog to him. Mary could accept by:______.
Returning the dog
Harold buys a car from Neil and tells Neil to deliver it to Harold's daughter, Rosita, as a graduation present. Which of the following is not true?
Rosita is a promisee.
Promissory estoppel and contracts under ______ are two exceptions to the common law rule requiring consideration.
Seal
The concept that comes to mind most often when people think about a formal contract is a contract under: _______.
Seal
What section of the UCC requires contracts in excess of $500 to be in writing?
Section 2-201
Which of the following terms refers to a contract that may have both illegal and legal portions, allowing a court to void the illegal portions and enforce the rest?
Severable
What does a minor need to do to disaffirm a contract?
Show an intention by words or action to rescind the contract
As a general rule, what effect does silence have in formation of contracts?
Silence cannot be used to form a contract.
A contract that does not require any formalities in making the contract is known as a(n): _______.
Simple contract
Consequential damages are also referred to as _____ damages.
Special
Which of the following is an order requiring that the breaching party fulfill the terms of the agreement?
Specific performance
Which of the following terms refers to a situation in which it would be very difficult to carry out the contract?
Subjective impossibility
Which of the following is not a common equitable remedy?
Subrogation
______ unconscionability occurs when an agreement is overly harsh or lopsided.
Substantive
Which of the following terms refers to an agreement that is overly harsh or lopsided?
Substantive unconscionability
Which of the following terms indicates mutual consent by contracting parties to replace an old agreement with a new one?
Substituted contract
______ terms to a contract will be interpreted as understood by persons in the profession using the contract.
Technical
Through ______, parties discharge their duty by making an offer to perform and being ready, willing, and able to perform.
Tender
Discharge refers to ______ of a party's obligations under a contract.
Termination
What allows for the use of parol evidence to clear ambiguity in a written contract by looking at past business dealings?
The UCC
Phil tells Gloria that if she works for him full time, he'll pay her $1,000 a week. As a result and based on Phil's promise, Gloria quits her job at the department store and puts a down payment on a car. When Gloria shows up at Phil's to start work, Phil tells her he's changed his mind about the full time job. What are Gloria's options?
The best way to enforce Phil's promise is to assert promissory estoppel.
Which of the following is a correct statement regarding a competent party's recourse against a minor who disaffirms when the consideration the minor received is damaged or destroyed?
The competent party has no recourse against the minor.
Once an offeree rejects an option contact (a contract open for a predetermined period of time), what happens?
The contract is immediately terminated.
If there is a property interest attached to a marriage contract, then what is true about the contract?
The contract must be in writing.
What will a court use to determine if a contract is void or voidable?
The court will admit parol evidence to determine if a contract is void or voidable.
Walter contracts to purchase Marie's mansion and estate for $50,000. Marie's mansion and estate has a property tax value of $1 million. There is no fraud or undue influence involved in the transaction. Which of the following is an incorrect statement regarding the enforcement of this contract?
The court will find the $50,000 an insufficient amount of consideration and cancel the contract.
Which of the following is true about a partial payment of a liquidated debt?
The debt remains outstanding.
In the context of a breach of contract by the buyer, in which situation is the seller most likely to be entitled to the contract price as damages?
The finished goods cannot be sold elsewhere.
Identify an exception to the need to have the secondary obligation in writing.
The main-purpose rule
Forrest hires Nadine to turn his basement into a family room for $50,000. About halfway through, Nadine discovers for the first time that the wood in the floor of the basement was riddled with mold and all the wood had to be removed and replaced. Nadine tells Forrest that it will cost him an additional $10,000 for this work. Which of the following is true?
The mold was an unforeseen circumstance to the basement work, and it was lawful for Nadine to charge Forrest for the additional work.
If the subject matter of a contractual offer is destroyed, then what is the status of the offer?
The offer is immediately terminated.
If an offer states that it is good for thirty days, what happens in thirty days if the offeree has not responded?
The offer terminates immediately.
If there is no stated period when the offeree must accept or reject an offer, when will the offer expire?
The offer will expire after a reasonable period of time.
Which of the following is not a basic common-law requirement for a valid acceptance?
The offeree's written acceptance, dispatched by certified mail, to the offeror
In the context of contractual offers, which of the following statements is true of unilateral offers?
The offeror must give the offeree a reasonable time to complete it if the offeree has begun performing.
What is one way in which parties can create an integrated contract?
The parties can include a merger clause in the written contract.
Bobby built a dog house for Rhonda and Rhonda agreed to pay Bobby $1,500. Rhonda sends Bobby a check for $1,000 with a note that says "this is all I can pay you." Bobby cashes the check. Which of the following is true? (Check all that apply.)
There is no dispute that Rhonda owes Bobby $1,500. Rhonda does have to pay Bobby the remaining $500. The $1,500 is liquidated debt.
Sam takes photos at the Callie's wedding. Sam thinks Callie owes him $1,000 for the wedding, while Callie think she only owes Sam $750. Callie sends Sam a check for $750. Which of the following is true?
This is an unliquidated debt.
Identify a purpose of the statute of fraud.
To ease contractual negotiations by requiring sufficiently reliable evidence to prove the existence and specific terms of a contract
Which of the following statements is correct regarding the legal exceptions to usury statutes?
To facilitate business, most states with usury statutes allow corporations to borrow at rates exceeding the maximum.
Some types of agreements that are not illegal per se, are nevertheless unenforceable because courts deemed them to be against public policy.
True
True or false: A judge should interpret a contract so as to give effect to the parties' intentions at the time they entered into the contract.
True
Which of the following terms refers to an agreement so unfair that it is void of conscience?
Unconscionable
Justin had contracted with Acme Construction Company to build a huge chicken coop adjacent to his house. Acme discovered that if they built the chicken coop, they would be violating the local zoning laws. Acme refused to perform the contract. The court also refused to make Acme honor the contract, since to do so would mean they had to order Acme to violate the zoning laws. Such a contract is considered to be: _______.
Unenforceable
The National Conference of Commissioners on Uniform State Laws and the American Law Institute drafted a set of commercial laws that could be applicable to all states. This effort was called the: _______.
Uniform Commercial Code
According to ______, parol evidence is admissible for the sake of clarification if it addresses prior dealings between the parties or usages of trade in the business they are in.
Uniform Commercial Code (UCC)
What occurs when a party gives a loan at an interest rate exceeding the legal maximum?
Usury
Jack and Jill entered into a contract with Farmer Dell to fetch pails of water from his well to the barn. For each pail of water they delivered down the hill and to the barn, they were to be paid $10 per pail. The contract specified that they were to work five days a week for a whole month. During the last week, Farmer Dell failed to pay Jack and Jill. The matter went to court, and the court ordered Farmer Dell to pay Jack and Jill because the contract was: _______.
Valid
When a contract has all of the required elements and is enforceable, it is known as a(n): _______.
Valid contract
A mistake can be of two types. One is a mistake of fact about the deal. The other is a mistake of the ______ of what is being exchanged.
Value
Virge tells Ken, "I will buy your coin collection for $100." Based on this scenario, match the individuals (in the left column) with the corresponding terms (in the right column). Instructions
Virge- the offeror Ken- the offeree
A contract overturned for illegal subject matter or for being illegal to perform is generally declared: _______.
Void
A(n) ______ contract is not a contract at all, and either its object is illegal or it has some defect so serious that it is not a contract.
Void
Don put out a contract to a hit man to knock off a business competitor. This kind of contract would be defined as a(n): _______.
Void contract
Generally, contracts made by intoxicated persons are ______.
Voidable
If there is no legal assent, a contract may be: _______.
Voidable
Wanda works for Humongous Corporation. Part of her job, for which she was hired 10 years ago, is to prepare a monthly report of all transactions in her department. After 10 years, Wanda tells Humongous that she wants another $500 a month to prepare the reports. Which of the following is true?
Wanda has an existing contractual duty to prepare the report.
Jose gives Colleen his priceless stamp collection and tells her to give the stamp collection to his son Eric when Eric turns 30 years old. When does Eric's right to the stamp collection vest?
When Eric turns 30
In the context of exceptions under UCC, which of the following contracts is enforceable even if it is an oral contract?
When a merchant sells goods to another merchant
In which of the following situations are covenants not to compete enforceable?
When it is in conjunction with the sale of a business
Under the common law mirror-image rule, when is a counter offer formed?
When the offeree's acceptance does not include all of the terms of the offeror's offer
When is it reasonable to assume that the offeree's silence constitutes acceptance?
When the previous course of dealings between the parties have established such a pattern of behavior
Which of the following is not a factor a party should consider before filing suit for breach of contract?
Whether the potential defendant violated a duty of care and proximately caused damages to the party as a result
An improperly worded antiassignment clause will have what effect?
Will not limit a party's ability to assign the contract
If one party promises something to another party as part of an offer of marriage then the contract must be ______ to be enforceable.
Written
In the context of the statute of frauds, contracts in which one party promise(s) something in exchange for another's promise to marry must be ______ to be enforceable.
Written
Josh contracted with a railroad company to have his order of lumber delivered by the train the company called Westward. Actually, there were two trains that were named Westward. They were identical trains, but had different delivery times. Josh thought his goods were being delivered by Westward I which delivered goods at the end of October. Westward II had a delivery date of February. Josh thought he was contracting for Westward I and the railroad company thought he wanted Westward II. Will the court void or rescind the contract due to mutual mistake?
Yes, since all of the required elements are present for mutual mistake.
Which of the following is an element for the creation of a valid contractual offer in common law?
You need the intent to be bound by an acceptance of the offeree.
In the context of equitable remedies, reformation refers to a situation in which ______.
a contract is rewritten because it does not reflect the parties' actual agreement
In the event that a revocation of the offer is sent, but the offeree communicates acceptance to the offer before the revocation is received,
a valid contract has been formed.
If the offer merely authorizes certain modes of acceptance, but does not condition acceptance on the use of those modes, use of an unauthorized means of acceptance is: _______.
acceptable
If there is a an obvious typo in a written contract, the court will: _______.
admit parol evidence to correct the typo
If a written agreement has missing parts, the court will: _______.
admit parol evidence to fill in missing parts
If oral evidence is being offered to clarify an ambiguous term in a written contract, then the court will: _______.
admit the oral evidence
If a contract is not a formal contract, it is considered to be: _______.
an informal contract
Agreements that restrain trade, called ______ agreements, are viewed as being harmful to consumers and against public policy.
anticompetitive
According to the Restatements of Contracts, if no mode of communication is specified in the offer, then ______.
any reasonable means of acceptance is valid
Irwin enters into a contract with Bill to build a house that everyone in Irwin's family can use as a vacation home. Irwin's family members: _______.
are intended third party beneficiaries
When a party to a contract transfers his rights to a third party, the party who receives the transfer is the ______ and is now entitled to enforce the rights of the ______.
assignee; assignor
A judge has to decide how to interpret a contract that was a bit ambiguous in its terms. One general rule of interpretation is that the terms should reflect the intentions of the parties: _______.
at the time the contract was made
Without being asked, Johan washed his neighbor Bill's car every Saturday for a month. At the end of the month, Johan demanded payment of $100 from Bill for his services. Bill refused. If Johan sues for breach of contract, Johan will likely lose because there was no ______ exchange.
bargained-for
A contract was under review because it had multiple interpretations of its terms. According to a general rule of contract interpretation, the judge should recognize the interpretation that makes the contract lawful, operative, definite, reasonable, and capable of: _______.
being carried out
In a(n) ______ contract, the offeror makes a promise in return for a promise from the offeree. (Check the BEST answer)
bilateral
Candy was bidding on a piece of jewelry that was for sale on eBay. At the end of the bidding process, Candy was the highest bidder, so in exchange for her promise to pay, the seller will send her the merchandise. This kind of contract is known as a(n): _______.
bilateral contract
The type of contract in which the offeror wants a promise from the offeree to form a binding contract is called a(n): _______.
bilateral contract
Public policy involves: _______.
both the government's concern for its citizens and the beliefs people hold regarding the proper subject of business transaction
For a contract to be enforceable under the statute of frauds, the signature ______.
can be an initial as long as it is intended as a signature
Under the Restatement (Second) of Contracts, if no mode of communication is specified in an offer, then acceptance: _______.
can occur through any reasonable means
Under the UCC, writing "paid in full" on a check for less than the full amount of the debt owed will not be an accord and satisfaction unless the creditor inadvertently cashes the check and waits longer than 90 days to offer the debtor repayment in the same amount, or unless the
check is sent to a special address for disputed amounts per the creditor's request.
If the written contract has ambiguous terms, the court allows oral evidence for the purpose of ______.
clarifying the contract
The active hiding of the truth about a material fact is legally known as: _______.
concealment
Contracts containing conditions affecting the performance obligations of the parties are called ______ contracts.
conditional
The four types of formal contracts are: _______.
contracts under seal, recognizance, letters of credit and negotiable instruments
The partial performance exception to the statute of frauds deals with: _______.
contracts with a property interest
The legal ability to enter a contract is known as: ________.
contractual capacity
Under the common law mirror-image rule, if an offer and acceptance do not have the exact terms in the contract, then the acceptance is treated as a(n) _______.
counter offer
A ______ is a third party that benefits from a contract in which the promisor agrees to pay the promisee's debt.
creditor beneficiary
Under exceptions under the UCC, oral contracts for ______ are enforceable even if they would normally have to be in writing.
customized goods
A prenuptial agreement involves a contract before marriage: _______.
dealing with property rights
Negligent misrepresentation occurs when someone makes a statement of material fact that he or she thinks is true, but he or she could have known the truth by using reasonable care to: _______.
discover or reveal the truth
A severable contract is also known as a(n) ______ contract.
divisible
Discharge by performance refers to parties discharging their obligations by: _______.
doing what they agreed to do
The essential element of undue influence is the existence of a ______.
dominant-subservient relationship
In a case of fraudulent or negligent misrepresentation, a victim can _______.
either rescind the contract or keep the contract and sue for damages
Covenants not to compete in connection with the sale of a business are generally: _______.
enforceable
A party seeking ______ relief must prove that there is no adequate legal remedy available.
equitable
The most common ______ remedies include rescission and restitution, orders for specific performance, and injunctions.
equitable
Usury occurs when a party gives a loan at an interest rate ______ the legal ______.
exceeding; maximum
Stella told Jozsef that if he would pick up her mail when she was on vacation, she would pay him $30. Jozsef did as he promised and was paid $30. Since all of the terms were fully executed, this contract has been fully: _______.
executed
The public policy argument in favor of supporting the enforceability of a restrictive covenant regarding the sale of a business involves the ______.
fairness of the sale
A _______ does not have to be an actual statement; it may also be an act of concealment or nondisclosure.
false assertion of fact
An intentional and knowing false representation of a material act that is intended to mislead the other party is known as a(n): _______.
fraudulent misrepresentation
Katie offered to buy Jonathan's set of trading cards. Although Jonathan was reluctant to sell the cards to Katie, Katie threatened to physically hurt him if he did not sell. Jonathan reluctantly agreed and Katie gave him the money she had promised. Jonathan later changed his mind and went to court to try to get his trading cards back. Jonathan's best argument to have the contract voided is that there was no: _______.
genuine assent
Sometimes the offeror convinces the offeree to accept the offer using improper means, such as fraud. If any party does not enter freely into the contract it is said to lack
genuine assent.
The purpose of a merger clause is to: _______.
give direction to a judge that the written contract is intended to be the final and complete statement of the agreement
When an assignor assigns two or more parties the same right, states that follow the first-assignment-in-time rule ______.
give the contractual right to the first party granted the assignment
An obligor is best defined as the party in a contract that: _______.
has agreed to perform something for the other party
Barry was interested in buying a house. He has worked with his real estate agent, Rita, for two years now. His real estate agent found the exact type of house that he was looking for except that she failed to disclose that the house had a severe infestation of termites that had left the structure of the house compromised and in danger of collapse. The state required both the agent and the owners to disclose any apparent or latent defect in the house, but both parties failed to tell Barry about the damage. Barry entered a bid and the owners accepted his bid. Barry had a house inspector inspect the house and when he was told of the termite infestation, he sued to rescind the contract based on nondisclosure. The court will find that this nondisclosure: _______.
has the same effect as a false assertion and will act to rescind the contract
Unlike creditor beneficiaries, donee beneficiaries ______.
have limited ability to enforce contracts
In order to receive damages as a result of fraudulent misrepresentation, the plaintiff must demonstrate that: _______.
he or she was injured or harmed by the misrepresentation
If a unilateral mistake has been made about a material fact of the contract, the courts are: _______.
hesitant to void the contract
When a person promises that they may do something if they want to, they have made an ______ promise. Such a promise is not sufficient consideration.
illusory
A substituted contract ______ discharges the parties from their obligations under the old contract and replaces those obligations with the new obligations imposed by the substituted contract.
immediately
In case of the death of the offeror, the offer terminates ______.
immediately
In this case, a(n) _______ contract is created when the offeree is silent but receives a legal benefit.
implied-in-fact
Ed and two of his friends created a lawn service business. All the neighbors knew of the business and several of them had used the service in the past. Ann, a neighbor of Ed's, was aware of the service and knew how much Ed charged for cutting the lawns of the various neighbors. One day, she was complaining to Ed that she was tired of cutting her own grass. Ed asked her if she would like him to cut her grass. Ann did not say a word, but smiled at the suggestion. Ed proceeded to cut Ann's lawn and then asked Ann for payment. Ann refused, saying that she had not formed a contract with Ed. The matter went to court and the court found that there was a contract and Ann must pay Ed. The court said that any reasonable person would have expected payment as Ed had expected. Such a contract is known as a(n)
implied-in-fact contract.
Quasi-contracts are sometimes called: _______.
implied-in-law contracts
Intent to deceive occurs when the party making the false statement ______.
implies having personal knowledge of its accuracy.
Commercial ______ is used when performance is still _________ possible, but would be extraordinarily injurious or expensive to one party.
impracticability; objectively
Sybil and Mary had drawn up a contract about Sybil selling some dresses to Mary. The original contract was handwritten. It was then copied to a printed form. However, one of the terms was in conflict with the original handwritten contract. A judge would use the rules of interpretation and say that the prevailing term would be
in the handwritten contract.
A(n) ______ contract must be enforced or rejected in its entirety.
indivisible
A false statement about a material fact that was based on an innocent belief that the false statement was true is a(n): _______.
innocent misrepresentation
Jonathan was a sales person at a hardware store. The store had run a promotion for the past week which would give any customer who bought a lawnmower a free leaf blower. The promotion had ended the previous day, but Jonathan thought the promotion ran through the next day. Jonathan's customer had agreed to buy a lawnmower and Jonathan put a leaf blower in his cart thinking that it would be free due to the promotion. However, the check-out person rang it up as a charge against the customer. Jonathan's assertion that the customer would get a free leaf-blower with the purchase of the lawnmower is an example of: _______.
innocent misrepresentation
In a third-party beneficiary contract, two parties enter into a contract with the purpose of benefiting a third party, called the ______.
intended beneficiary
A(n) ______ beneficiary has the right to enforce the contract, while the ______ beneficiary does not have the right to enforce the contract.
intended; incidental
The partial performance exception to the statute of frauds covers contracts: _______.
involving property interest
In order to have promissory estoppel, the agreement: _______.
is not otherwise an enforceable contract
Gabe and Nelson entered into a contract where Gabe agreed to buy a sword owned by Nelson for $300. Gabe thought he was buying the Japanese sword owned by Nelson, but Nelson intended to sell the French rapier. Obviously, the two parties committed a mistake of fact which results in a(n): _______.
lack of assent
Adhesion contracts are : _______.
legal
If there is a misrepresentation in a contract, the court allows the parties to rescind the contract because the contract lacks ______.
legal assent
A ______ is a binding document that a buyer obtains from his or her bank to guarantee that payment for goods will be made to the seller.
letter of credit
If there is no dispute that money is owed, then the debt is ______. (Choose the BEST answer)
liquidated
Damages specified as a term of a contract, before a breach of contract occurs, are called ______.
liquidated damages
For a(n) ______ debt, if the debtor offers to pay less money than is owed as full payment and the creditor agrees, there is not a(n)______, and even if the debtor pays the money agreed to, the creditor may nevertheless sue for the balance it believes is owed.
liquidated; accord
Trey was a pilot for a large airline. He also spent his spare time selling his homemade vitamins. These vitamins were capsules filled with cod liver oil, but Trey told his customers that these vitamins were a cure for cancer. Trey knew that the cod liver oil in the vitamins would never cure cancer, but he made the claim anyway. He promised that if his customers would invest in a month-to-month delivery plan for these vitamins that the purchaser would never be plagued with cancer again. Suppose that Paul bought the vitamins and then got cancer. If Paul sues Trey for fraudulent misrepresentation, Paul will: _______.
lose, because he should not have relied on Trey's representation
The ______ rule states that an acceptance is valid when mailed and a revocation is only effective when received.
mailbox
One of the benefits of the statute of frauds is that it: _______.
makes contractual negotiations easier by ensuring all the specific terms of a contract are written and aware to all parties
A(n) ______ explicitly states that the written contract is intended to be the complete and final version of the contract between the parties and that other possible agreements between the parties, besides the one in question, are not part of the final written agreement.
merger clause
Tiffany went to a jewelry store with her fiance to pick out her engagement ring. The jeweler showed her a tray of diamond engagement rings and Tiffany picked out the one she liked. The jeweler told her that the ring was a genuine diamond ring, but the jeweler knew for a fact that it was really cubic zirconia. The jeweler's statement about the ring being a diamond instead of being cubic zirconia is a(n): _______.
misrepresentation
The parties to a contract typically have a particular understanding as to the good or service they are giving or receiving. If one or both parties are under the wrong impression of that good or service, we say that a(n): _______.
mistake has occurred
Whenever possible, courts award _______ damages rather than some form of _______ relief.
monetary, equitable
In order to be considered exempt from the statute of frauds, a contract: _______.
must be possibly performed in one year, even if the performance is highly unlikely
If Ron makes a statement that he believes is true, but Ron could have known the truth about a material fact if he used reasonable care to find the truth, then the statement that was made is known as: _______.
negligent misrepresentation
An unconditional written promise to pay the holder a specific sum of money on demand or at a certain time is known as a(n) _______.
negotiable instrument
Suppose Jeremy offers a job to Carol but states in the offer, "I must receive your acceptance by email before 5:00PM September 5" Carol puts her signed acceptance in the mail September 3rd but the acceptance does not arrive until September 7th. Jeremy and Carol have: _______.
no agreement, because Carol did not accept in the manner and time specified in the offer
If an acceptance is sent to the wrong address and never arrives at the correct address, then there is: ______.
no contract
The failure to provide pertinent information about the projected contract is known as: _______.
nondisclosure
Leslie sold Tom her house for $5,000, but lied to Tom because she did not actually own the house. The court is likely to: _______.
not enforce the contract
When a court determines a restraint on trade is reasonable and the restraint is part of a subordinate, or ancillary, clause in a contract, the restraint is typically allowed. Such restraints are known as a ______.
not to compete covenant
Knowing the proper classification is important -- whether the contract is bilateral or unilateral -- because it determines when the: _______.offeree is legally bound to perform
offeree is legally bound to perform
Promissory estoppel is the contractual concept that: _______.
one party reasonably relied on another's promise and due to that reliance, the court won't allow the revocation of the offer now
In a case of an innocent mistake, a victim can: _______.
only request rescission of the contract
If a contract resulted from duress, the innocent party can: _______.
opt to void the contract
Courts can allow ______ evidence to ______ the missing parts, while not modifying the written agreement in any substantial way.
parol; fill in
Complete performance occurs when all aspects of the parties' duties under the contract are carried out: _______.
perfectly
As a general rule, covenants not to compete in employment contracts are: _______.
permissible
A contract for land was under scrutiny in the court. There appeared to be a disagreement as to what the term "corner property" actually meant. If the court only looks at the words and they are clear and unambiguous, and the court will only interpret the terms using the agreement itself, the court is said to use the: _______.
plain-meaning rule of interpretation
One of the best known rules of contract interpretation states that if a writing, or a term in question, appears to be plain and unambiguous on its face, we must determine its meaning from just the four corners of the document, without resorting to outside evidence and give the words their ordinary meaning. This rule is known as the
plain-meaning rule.
A condition ______ is a particular event that must occur in order for a party's duty to arise.
precedent
When a contract is based on a future event occurring first, then that future event is called a condition ________.
precedent
Performance of a duty you are obligated to do under the law is not good consideration. This is known as the ______ duty rule.
preexisting
A prenuptial agreement is an agreement made by two parties _____ regarding ownership rights to property.
prior to their marriage
Through recovery based on ____________-contract, the court may impose a contract-like obligation on a party to prevent an injustice from occurring.
quasi
When an enforceable contract does not, in fact, exist, the court may grant recovery based on ______-contract.
quasi
In order to prevent one party from being unjustly enriched at the expense of another party, the courts impose contractual obligations on one of the parties as if that party had entered into a contract. This is known as a(n): _______.
quasi-contract
The remedy that is most appropriate when a mutual mistake has occurred is: _____.
recission
A(n) ______ arises when a person acknowledges in court that he or she will perform some specified act or pay a price upon failure to do so.
recognizance
Bart had to post $500 bond to ensure that he would show up for his trial in two months. This kind of contract is known as a(n): _______.
recognizance
An exculpatory clause releases one of the contracting parties from all liability: _______.
regardless of who is at fault
To find that there is an implied contract or an implied-in-fact contract, the court must deem that (1) the plaintiff provided some property or service to the defendant, (2) the plaintiff expected to be paid for such property or service, and (3) the defendant had an opportunity to
reject the property or service, but did not.
The courts insist on a "meeting of the minds" to have a valid contract and even if a misrepresentation was innocent and without intent, the court will: _______.
rescind the contract
A contract that is voidable can be ______, where the person canceling the contract is required to return everything she gave the other party and return anything the other party gave to her.
rescinded
A court ordered that a contract was voidable due to the lack of legal assent. The court also ordered that both parties must return what the other party had given to them. This scenario exemplifies the: _______.
rescission of a contract
A covenant not to compete is also known as a(n): _______.
restrictive covenant
If a person had no knowledge of a claim's falsity, we say that he or she lacked: ________.
scienter
In false misrepresentation, the party knows that the misrepresentation is false, yet still makes the representation to another party. This indicates that the party making the misrepresentation has: _______.
scienter
The Latin term for knowledge is: ______.
scienter
A divisible contract is also known as a(n) ______ contract.
severable
An injured party has no justifiable claim of fraud after relying on assertions whose falsity: _______.
should have been obvious
As a general rule, ______ cannot be used to form a contract.
silence
Concurrent conditions exist when the parties are to perform their obligations for each other: _______.
simultaneously
In order to meet the written requirements of the statute of frauds, a document needs: _______.
some form of mark as long as it was meant as a signature
In the context of contracts related to an interest in land, the statute of frauds covers ______.
some transfers of interest in land
The term "parol" means: _______.
speech or words outside of the written contract
A condition ______ is a future event that terminates the obligations of the parties when it occurs.
subsequent
LAW FIRM LLP agrees to hire Joe if he maintains an active law license. This would be an example of a condition ________ agreement.
subsequent
In the context of the circumstances in which the Statute of Frauds applies, contracts involving secondary obligations are included under _____.
suretyship
Assume that an offer merely authorizes certain modes of acceptance, but does not condition acceptance on the use of those modes. In such a situation, if the offeree uses an unauthorized means of acceptance: _______.
the acceptance creates a valid contract upon receipt by the offeror
If the main purpose for taking on a secondary obligation is personal benefit, then
the agreement does not fall under the statute of frauds and does not have to be in writing.
According to the Uniform Commercial Code, if the seller breaches the contract, the compensatory damages are calculated as ______.
the difference between the contract price and the market price on the day the goods were supposed to be delivered
A rule of contract interpretation is that the judge should interpret an ambiguous contract against the interests of: _______.
the drafter of the contract
The injured party has two responsibilities in a case of false assertion. The first is that there is no claim of false assertion if the falsity is obvious, and the other is that there is no claim of false assertion if: _______.
the falsity could have been discovered by inspecting the item
In the context of contracts, the legal capacity of a party refers to ______.
the mental ability to understand his or her rights
Basing the existence of a contract on the parties' outward manifestations of intent and basing the interpretation of that intent on how a reasonable person would interpret it is known as: ________.
the objective theory of contracts
The assignee should give notice to the obligor as soon as possible after receiving the assignment so: _______.
the obligor knows who he must perform for
As a general rule, a revocation of an offer is effective when ______.
the offeree receives it
In the context of the objective theory of contracts, the existence of a contract is based on ______.
the parties' outward manifestations of intent
The word parol in the "parol evidence rule" refers to ______.
the spoken words outside of the original writing of a contract.
In the context of a contractual offer, silence by the offeree can be interpreted as acceptance when ______.
the two parties have a long-standing relationship where rejection is immediately communicated by the offeree
The title "statute of frauds" is misleading because: _______.
there is not one statute, but rather the statute of frauds is a general collection of concepts that has been incorporated at the state level
A contract before the court needed interpretation. The contract contained many technical words. A general rule in interpreting technical terms is that the court should interpret technical words as
they are usually understood by persons in the profession.
In an option contract, the offeree gives consideration to the offeror: _______.
to have an offer that cannot be revoked by the offeror for a period of time
When a contract consists of both written and oral elements, judges tend to ______.
treat it as nonfinalized contract
Judges will typically handle an agreement that consists of both written and oral elements by: _______.
treating the contract as not finalized and assuming the parties do not intend to have the written part represent the entire agreement
The common law would not enforce contracts the courts deemed ______.
unconscionable
Under common law, a(n) ______ contract is unenforceable.
unconscionable
Heavily one-sided agreements are known as ______.
unconscionable contracts
Special relationships in which one person takes advantage of a dominant position in a relationship to unfairly persuade the other and interfere with that person's ability to make his or her own decision to enter into a contract is known as: _______.
undue influence
Carol was the favorite niece of her aunt Esther. Esther had always loved to pamper her niece and usually indulged her in almost anything. Carol had a lot of sway over her aunt and convinced her to invest in a land development project. If Carol persuaded her aunt to sign a contract for the land deal, Carol would be given a $50,000 bonus. Carol pressured her aunt to come to a decision about the contract and prevented her aunt from consulting her attorney. Aunt Esther would normally never have engaged in such a contract, but her judgment was affected by her relationship with Carol. Carol had: _______.
undue influence over Aunt Esther
A contract where the object of the contract is illegal or against public policy is: _______.
unenforceable by the courts
All contracts are either bilateral or: _______.
unilateral
If the parties disagree about the amount of money owed, the debt is ______.
unliquidated
The enforceability of covenants not to compete in employment contracts: _______.
varies from state to state
Under the mailbox rule, acceptance is valid: _______.
when it is mailed by the offeree
As a general rule, a revocation is effective: _______.
when offeree receives the revocation
