Business law test 2 pt2
136. Andrew owns a store in Duval County. His trade extends throughout Jacksonville, but not beyond the county limits. He sells his store to Betty and as part of the transaction agrees not engage in the same business anywhere in Jacksonville for a period of five years. a. The geographic restraint is reasonable. b. This geographic restraint is unreasonable. c. The agreement unduly interferes with the interest of the public. d. Two of the above, b and c.
A
150. Assume an offeree mails a rejection to the offeror on November 1. This rejection arrives at the offeror's place of business on November 5. In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November 6. Which of the following statements correctly describes the situation? a. There was no contract. b. There was a contract since the acceptance was mailed prior to the time the rejection was received. c. There was no contract because the rejection was mailed first. d. There was no contract because the acceptance was mailed more than three days subsequent to the rejection.
A
186. Contracts are governed primarily by: a. state common law. b. federal common law. c. statutory law. d. federal case law.
A
200. Donald, a minor, makes a contract to sell a motorcycle to Albert, an adult. One week later, Donald has his eighteenth birthday and shortly thereafter Albert picks up the motorcycle. a. Donald has expressly ratified the contract. b. The contract must be renegotiated, because Donald was a minor when it was made. c. Donald can change his mind and avoid the contract, because it was made when he was a minor. d. The contract is void ab initio, because Donald was a minor at the time it was made.
A
108. An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as: a. an output contract. b. a requirements contract. c. a firm offer. d. promissory estoppel.
B
176. Certain contracts have absolutely no effect and are not recognized under law. If two or more parties enter into such an agreement, it is a. valid. b. void. c. voidable. d. unenforceable.
B
183. Consideration is: a. the concern shown by the other contracting party. b. what is demanded by the promisor as the price for the promise. c. a stated number of dollars. d. the concern of both contracting parties for the protection of the environment.
B
188. Contractual capacity of the parties is a prerequisite to the formation of a binding agreement, but the consequences of different forms of incapacity vary. The contracts of a person are void if (s)he is a. a minor. b. under guardianship of a court. c. lacks the capacity to understand but has not been declared incompetent by a court. d. intoxicated.
B
190. D owes C an undisputed debt of $1,000. D writes a check to C for $700, and writes, "paid in full" on the check. C cashes the check. a. The entire obligation is paid because this was an accord and satisfaction. b. The creditor can still collect the $300 because there was no consideration given by the debtor for C's promise to accept the amount as paid in full. c. The remaining $300 is still due because paying a smaller sum than the amount claimed can never discharge a larger amount, even if there is a dispute. d. None of these answers is correct.
B
199. Don has an employment contract with Dunkirk Ice Cream. He sells ice cream and novelty ice cream products. He has nine children and doesn't make enough money, so decides to see if Sealtest will hire him, too. "After all," he reasons, "most stores carry four or five different brands." His employment contract prohibits him from competing. If Don sells for Sealtest, too, will he be in trouble under his contract? a. No, it is unenforceable as against public policy. b. Yes, it is likely to be enforceable during employment. c. No, it is enforceable only after he quits Dunkirk. d. Yes, it is mutually agreed upon exchange and therefore enforceable.
B
Bill and Mary are merchants. Bill orders 100 computers from Mary which she accepts. In the order he specifies that he wants model ABC. Mary, a long-time friend to Bill, knows what the computers will be used for and substitutes Model XYZ, computer with similar capabilities, but not exactly the same. Please refer to original preceding facts for each of the following four questions. 161. Bill objects within a reasonable period of time to the substitution as a material change. a. The contract is cancelled. b. Bill's original order must be filled. c. Mary may terminate the offer. d. Bill must accept the Model XYZ.
B
102. All of the following EXCEPT which one will terminate a contract offer? a. the death of the offeror b. communication of offeror's revocation to offeree c. an inquiry by the offeree as to size d. an acceptance by the offeree adding a term
C
105. An acceptance that materially deviates from the terms of the offer: a. is an acceptance if it reaches the offeror within a reasonable time. b. is an acceptance if it is a definite and seasonable expression of acceptance. c. is not an acceptance but a rejection. d. cannot be accepted by the offeror.
C
107. An agreement is an essential element of a contract. Ordinarily, the required mutual assent is achieved by means of an offer and an acceptance. Acceptance a. requires a subjective intent to accept. b. is never accomplished by silence. c. requires manifestation of an intent to accept. d. may ordinarily be made by anyone with knowledge of the offer.
C
111. An announcement that an auction sale is to be conducted "without reserve," means that the: a. persons attending the auction are not required to register in advance of the auction. b. auctioneer can withdraw any article if not satisfied with the amounts of the bids. c. seller cannot withdraw the goods if the bids are too low. d. items are sold in any order the auctioneer desires.
C
119. An offer is effective when it is a. dispatched by offeree. b. received by the postal service. c. received by the offeree. d. dispatched by the offeror.
C
126. An offer which does not specify when it will terminate remains open: a. forever. b. for as long as the offeree wants it to remain open. c. for a reasonable period of time, depending on the circumstances. d. until the offeror notifies the offeree that the offer is revoked.
C
130. An oral contract that is covered by the statute of frauds is: a. voidable. b. void. c. unenforceable. d. executory.
C
133. Anna by mistake delivers to Bob a plain, unaddressed envelope containing $50 intended for Cora. a. Bob can keep the money. b. Bob is under a contractual obligation to return the money. c. Bob's obligation to return the money is quasi contractual. d. Bob's obligation to return the money is implied in fact.
C
149. As a general rule, the acceptance must be the mirror image of the ____________. a. consideration b. contract c. offer d. none of the above
C
160. Big Bucks, Inc. entered into a contract with Albert Agent under the terms of which Albert would receive $20,000 if he stole trade secrets from the leading competitor of Big Bucks. Albert performed his end of the agreement by delivering the trade secrets. Big Bucks now refuses to pay Albert for his services. a. Albert may recover based upon the express contract of the parties. b. Albert may recover based upon a quasi contractual theory in order to prevent the unjust enrichment of Big Bucks. c. Albert will be unable to recover, because this is an illegal contract. d. Albert will be able to recover based upon promissory estoppels, because he has detrimentally relied upon the promises made by Big Bucks.
C
169. Bill sends Carla an offer by express mail. Carla receives it at 10 a.m. on Tuesday. At 11 a.m. on Tuesday, Carla delivers an acceptance to Post Office express mail, but due to an error, the letter is not sent out by the Post Office until Wednesday at 8 a.m. At what time does the law consider the acceptance to be effective? a. at 10 a.m. on Tuesday b. at 11 a.m. on Tuesday c. at 8 a.m. on Wednesday d. at the time Bill receives the letter
B
171. Bob picks up a bag of pretzels off the counter at the hot dog stand, opens it up and begins eating pretzels. He has made: a. an express contract to pay for the pretzels. b. an implied contract to pay for the pretzels. c. no contract because he did not agree to pay either orally or in writing. d. a formal contract because of his conduct.
B
172. Brian makes a material misrepresentation of fact regarding his horse to Rosalind while out riding one day. Later that day, Rosalind makes an offer to buy the horse. Brian accepts without correcting his earlier misrepresentation of fact. a. Brian may avoid the contract. b. Rosalind may avoid the contract. c. Either or both Brian or Rosalind may avoid the contract. d. Neither Brian nor Rosalind may avoid the contract.
B
173. Cara offered to pay Peter to paint a house located at 103 Canton Street, and he accepted. However, Peter incorrectly wrote down the address as 108 Canton Street. As a result, he painted the wrong house. Fred Fibs, the owner of 108 Canton Street, say Peter painting his house but said nothing. When the job was completed, Peter tried to collect the contract price. He will be able to recover from a. Cara under the theory of unilateral contract. b. Fibs under the theory of quasi-contract. c. Neither Cara nor Fibs because of his unilateral mistake. d. Neither Cara nor Fibs because of lack of consideration.
B
143. Arthur mails an offer to Brian on June 15. Brian receives the offer on June 16. Arthur mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18. Brian receives the revocation on June 19. Was a contract formed? a. Yes, on June 16. b. Yes, on June 17. c. Yes, on June 18. d. No, the offer was revoked before acceptance.
C
145. Article 2 of the UCC does not apply to a sale of: a. ball bearings. b. wheat that has been harvested. c. real estate. d. a new car.
C
151. Assume an offeree mails an acceptance on November 1. This acceptance arrives at the offeror's place of business on November 6. In the meantime, on November 4, the offeree sends the offeror a rejection which arrives on November 5. Which of the following statements correctly describes the situation? a. There was no contract because the rejection arrived before the acceptance. b. There was a contract on November 6. c. There was a contract on November 1. d. There was no contract as the offer terminated on November 4 when the rejection was sent.
C
159. Before granting an injunction enjoining a former employee from competing in a described territory, the courts insist that the employer demonstrate that the restriction is ___________ to protect the employer's legitimate interest. a. exculpatory b. unconscionable c. necessary d. usurious
C
170. Bingo is a. not gambling if it takes place in a church. b. legal, so anyone may run a bingo game. c. a form of gambling. d. legal and unregulated if controlled by a non-profit organization.
C
182. Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia agrees never to open a hair salon in the state. Which of the following best describes this contract clause? a. Void as illegal primary restraint b. Valid as a reasonable restraint on trade c. Unenforceable d. Binding as fair protection
C
187. Contracts made by severely intoxicated people: a. are void rather than voidable. b. cannot be disaffirmed until the person has regained his mental faculties. c. cannot be ratified until the person has regained his mental faculties. d. are always binding, because the law does not want to reward drug or alcohol abuse.
C
192. Dad wants to give his daughter, Priscilla, a new BMW 540i (worth perhaps $50,000) upon her graduation from high school. Priscilla says: "Let's make it a contract, Dad." So Dad promises to give Priscilla 540i when she graduates, in exchange for Priscilla's promise to pay Dad $1. There is no contract here. Why? a. Because $1 is inadequate consideration for a $50,000 automobile b. Because Priscilla's promise is illusory c. Because a genuine bargained-for exchange is not present here d. Because Dad is making a promise to perform a pre-existing legal obligation.
C
193. Dan Doan negligently injured Paul. Paul told Doan that he would agree not to sue Doan if Doan promised to pay $1000. a. If Paul later learns the injuries are much, much greater than he had thought, he can sue Doan for his injuries successfully. b. Doan's consideration to Paul was inadequate; therefore, Paul can avoid his promise. c. Paul is bound by his promise since he received consideration for his promise not to sue. d. None of these answers is correct.
C
195. Denise Smolen hired David Vause to construct an exercise center in her home. After completing the job, he sent her a bill for $3,000. Based on the cost of similar work done for several of her neighbors, Smolen stated that $2,000 was a fair price. Vause said that the market rate for quality work was $3,000, but that he would accept $2,500. Smolen agreed and remitted a $2,500 check in full payment of the debt. The parties have a. compromised a liquidated debt. b. concluded a composition with a creditor. c. reached an accord and satisfaction. d. reached an accord without satisfaction.
C
109. An agreement to refrain from a particular trade or business is a. enforceable, if the purpose is to serve a legitimate business purpose. b. unenforceable, to protect a property interest. c. unenforceable, as a restraint of trade. d. voidable, by the individual subject to it.
A
114. An incompetent person who lacks understanding of a contract and its consequences can avoid it even if the other party has no reason to know of the incompetent's mental condition. a. True b. False
A
118. An offer for a unilateral contract: a. is accepted by full performance of the requested act. b. may be accepted either by an appropriate act or an appropriate promise. c. may be accepted by whatever means are reasonable under the circumstances. d. must be accepted by a promise rather than by performance.
A
121. An offer may be accepted by: a. the person to whom it is made. b. the widow(er) of the person to whom it is made. c. the partner of the person to whom it is made. d. all of the above.
A
127. An offeree is generally under what legal duty to reply to an offer? a. No legal duty b. A reasonable duty c. A great legal duty d. An implied duty
A
131. An output and requirement contract is a. usually enforceable. b. usually not enforceable. c. voidable. d. void.
A
132. An output or requirement contract is a. usually enforceable. b. usually not enforceable. c. voidable. d. void.
A
142. Arthur has offered to take Bob into his accounting firm as a partner upon payment of $5,000 cash. In response, Bob says, "I'll give you $3,000 cash now and I will pay you the remainder in two months after I see whether things are working out as a partnership." a. Bob has made a counteroffer and hence there is no contract. b. Bob has rejected the terms of the original offer, but there is still a contract. c. Under Article 2 of the UCC, Arthur is a merchant making a firm offer. Hence there is a contract. d. Any indefinite provisions in the contract between Arthur and Bob will be supplied by Article 2 of the UCC.
A
144. Arthur offers to sell some land to Bill and says that he will keep the offer open for two weeks if Bill will pay him for the privilege. Bill pays $10. A/An ____________ contract has been formed. a. option b. implied in fact c. unilateral d. formal
A
148. As a general rule, disaffirmance must come either during a minor's minority or within a reasonable time after he reaches majority. a. True b. False
A
152. At an ABC University Alumni meeting, Carl and the others at his table signed a subscription form, on which he agreed to donate $5,000 to ABC University. In most states, Carl's promise: a. would be enforced. b. would not be enforced, because the university has not given consideration. c. would not be enforced, because a university is not considered a charity. d. both b and c above.
A
167. Bill Businessman obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years. a. The manufacturer is obligated to use his best efforts to supply the goods even if no such clause appears in the written franchise agreement. b. The manufacturer has no obligation to Bill Businessman. c. Under the UCC, such an agreement lacks consideration. d. Two of the above, b and c.
A
112. An auction at which the auctioneer may not withdraw an article put up for sale is said to be held: a. with reserve. b. without reserve. c. explicitly. d. unilaterally.
B
125. An offer under Article 2 of the UCC that is irrevocable even though no consideration is given to keep it open is known as a/an: a. option. b. firm offer. c. requirements contract. d. output contract.
B
137. Anita saw an ad for Marlin's Department Store in which the store advertised word processors for $5. When she went to the store to buy one, the salesclerk told her that the ad was a misprint and should have indicated the price to be $500. a. Marlin's has made a firm offer and must sell the word processor for $5. b. Anita is making an offer to buy the word processor. c. A contract exists under which Marlin's has agreed to sell the word processor for $5. d. Two of the above - a and c, are correct.
B
138. Ann, a minor, disaffirmed her agreement to buy $127 worth of cosmetics from Mary Kay Company. She had used up all the eye shadows, lipsticks and powders. The general rule is that: a. she may disaffirm, but she must pay the asking price of the cosmetics used. b. she may disaffirm but she has to return the makeup that is not used up. c. she may not disaffirm without paying the value of used makeup. d. she may not disaffirm because she has used the property.
B
141. Arthur contracts to build a garage for Bob for a price of $6,000. Because of an increase in the cost of labor and materials, Arthur refuses to perform. Bob wants the garage, so he agrees to pay an additional $500. a. Bob must pay the additional $500. b. Arthur has given no additional consideration, and under the common law must perform at the agreed upon original price. c. The substitute agreement is an illusory contract. d. The debt is a disputed one, and therefore Bob is obligated to pay the additional money.
B
146. Article 2 of the Uniform Commercial Code deals with what type of property? a. Real b. Personal c. Intangible d. Business
B
157. Barnes was holding an annual auction at his farm to sell tools, animals, and leftover crops. Adams showed up at the auction and saw a plow among the merchandise. Adams bid $50 for the plow, and no one bid against her. The auctioneer did not accept Adams' bid and stated that the plow would not be sold for such a low price. a. Adams' bid constituted an acceptance which formed a valid contract. b. Adams' bid was only an offer. c. The plow could not be withdrawn from the auction. d. There must be two bids before property can no longer be withdrawn from an auction.
B
158. Beatrice purchased a rocking chair from the ABC Furniture Store. It was agreed that the store would deliver the chair to Beatrice's apartment. Beatrice lived in apartment number 4B. However, the chair was delivered to Beatrice's neighbor, Pamela, who lived in apartment number 4D. Pamela knew the rocking chair was meant for Beatrice, because Beatrice's name was on the invoice, but Pamela decided to keep the chair and not pay for it. If the ABC Furniture Store sued Pamela, it would: a. win a lawsuit on the ground that Pamela breached the contract between the store and Beatrice and would recover the contract price as damages. b. win a lawsuit for quasi-contract and recover the reasonable value of the rocking chair. c. would lose a lawsuit for either breach of contract or quasi-contract, because there can be no recovery when a benefit is conferred on a person by mistake. d. would lose a lawsuit for either breach of contract or quasi-contract, if Pamela can show that it was the store's fault for negligently delivering the chair.
B
165. Bill Businessman agrees to sell two different goods to his friend, Ron Retailer. One item is legal, and one item is illegal. The contract price is $2,000. a. Bill may not recover payment for either of the goods if delivered. b. Bill may recover for the legal item, but he may not recover for the illegal item. c. This is an unconscionable contract under the UCC. d. If neither party is aware of the illegality, the contract is nevertheless enforceable.
B
166. Bill Businessman bets his friend Al Attorney $100 that the Jaguars will win the next Super Bowl. a. This is an unconscionable contract and therefore illegal. b. This is an illegal wagering agreement. c. This is an agreement to obstruct justice and therefore illegal. d. This is an illegal restraint of trade.
B
197. Divided Parcel Service includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through the fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to Bulova Co. to be repaired anyway. The watch is destroyed which the DPS driver uses the package for a ball and tosses it to his buddy. Mary is a. out of luck because the clause was communicated to her. b. out of luck because she should have insured the package. c. likely to collect from DPS since exculpatory clauses generally violate public policy. d. out of luck because she agreed to the provision by sending her package DPS.
C
110. An agreement to refrain from a particular trade or business is enforceable if: a. the purpose of the restraint is to protect a property interest of the promisee. b. an agreement induced by criminal conduct will be enforced. c. the restraint is no more extensive than is reasonably necessary to protect that interest. d. a and c are correct.
D
113. An implied contract is a contract that: a. refers to the legal meaning of the words used by the parties in their agreement. b. refers to limitations imposed by trade customs. c. refers to the meaning that the parties have given the terms in their prior dealings. d. is inferred or deduced from the conduct of the parties.
D
115. An item considered a necessary is a. lodging. b. medicine. c. food. d. all of the above.
D
116. An obligation imposed by law where there has been no agreement or expression of assent by word or act on the part of either party involved is a(n): a. implied in fact contract. b. express contract. c. void contract. d. quasi contract.
D
117. An obligation which is either contested as its existence or as to its amount is considered a ___________ debt. a. void b. voidable c. liquidated d. unliquidated
D
124. An offer to sell a tract of real property is terminated at the time the a. buyer mails a counter-offer. b. seller mails his/her revocation if the original offer was made by mail. c. buyer mails a rejection of the offer, if the original offer was received by mail. d. buyer learns of the sale of the property to a third party.
D
129. An option is a. a bid. b. a gratuitous promise. c. an offer. d. a contract.
D
153. At an auction sale, each bid is: a. a counteroffer to the auctioneer's offer of the merchandise. b. an acceptance of the auctioneer's offer. c. an invitation to negotiate. d. an offer.
D
154. Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if quits smoking for a month. If Robbie does, is there a binding contract? a. No, because Robbie gave no benefit to Aunt Ellie. b. No, because Robbie did not suffer any detriment. c. Yes, because stopping smoking will benefit Robbie's health. d. Yes, because Robbie gave up a legal right.
D
155. Baker Corporation sent a letter to Sampson Company in which Baker offered to purchase 10 acres of certain real estate from Sampson for $4,000. Sampson responded that it would sell 8 of these acres for that price. Baker and Sampson have created a. a contract for sale of 8 acres for $4,000. b. a contract for sale of 10 acres for $4,000. c. a contract to sell 8 acres for $3,200. d. no contract in this connection.
D
156. Barbara Baker, a wealthy widow, promises the pastor of her church that she will donate $10,000 to the church to help pay off its mortgage, if the stewardship committee can obtain enough pledges for the balance of the $30,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around the world cruise instead. a. There is no consideration for Barbara's promise to pay $10,000. b. The promise to pay $10,000 is a promise to give a gift and is therefore not enforceable. c. Barbara's promise is enforceable. d. Two of the above, a and c.
D
177. Cesare offers to sell a gram of arsenic to Lucrezia for $50. Lucrezia says, "No." However, a moment later she changes her mind and tells Cesare that she accepts his offer: a. there is no contract because Lucrezia made a counteroffer. b. there is a contract as long as Cesare has not withdrawn his offer. c. there is a contract since Cesare did not sell to anyone else. d. there is no contract because of Lucrezia's rejection.
D
179. Cheryl Cheerleader, a 16-year-old high school junior, orders a new dress to wear to the high school prom. She agrees to pay $200 when the dress arrives. Before the dress comes in, she has a fight with her boyfriend and calls the store to cancel the order. a. This is an executory contract. b. The dress is a necessary item. c. Cheryl will have to pay $200 for the dress. d. Two of the above, a and b.
D
181. Cindy Smith, age 16, buys a Chevy Camaro from Mike Mason, age 23, for $4,000. Cindy's parents, who give her everything she wants, loaned her the money for the car. The reason for Cindy's purchase is that all her friends have cars and she feels left out without one. One week after buying the car, however, Cindy changes her mind and told Mike that she wants to disaffirm the contract. When Mike comes to pick up the car and give Cindy her money, though, Cindy changes her mind again, telling Mike that "I'll stick by the deal." But when Cindy's parents gave her a new car for her seventeenth birthday, she finally decides to disaffirm once again. Which of the following is true? a. Cindy cannot disaffirm because the car is a necessary. b. Cindy cannot disaffirm because she ratified the contract by saying, "I'll stick by the deal." c. Cindy cannot disaffirm because we have a sale of goods and Article 2 of the UCC says that 16 is the age of contractual capacity. d. Cindy can still disaffirm.
D
185. Contract law is significant in that it is basic to other fields of law such as: a. sales of personal property. b. commercial paper. c. secured transactions. d. all of the above.
D
191. Dad promises to pay Junior $100,000, in exchange for Junior's promise to refrain from smoking until he reaches the age of 21. This agreement is: a. not binding, because Junior has not conveyed any legal value to Dad. b. not binding, because refraining from smoking is inadequate legal value for $100,000. c. not binding, because there is no genuine bargained-for exchange here. d. binding, if all the other elements of a contract are present, because there is consideration here.
D
194. Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so. a. This is an illusory contract, because Darla doesn't know whether she will receive the money for sure. b. The consideration moving from Edward to Darla is the transfer of title to the car. c. The consideration moving from Darla to Edward is the promise of $6,000 subject to a condition. d. Two of the above, b and c.
D
103. A(n) ___________ contract is one in which the terms have been definitely and specifically stated and agreed upon. a. express b. implied c. written d. formal
A
Bill and Mary are merchants. Bill orders 100 computers from Mary which she accepts. In the order he specifies that he wants model ABC. Mary, a long-time friend to Bill, knows what the computers will be used for and substitutes Model XYZ, computer with similar capabilities, but not exactly the same. 163. If Bill did not limit acceptance to the original offer, and did not object to the substitution, a. contract formed for Model XYZ. b. contract formed for Model ABC. c. no contract formed. d. Mary made a counter-offer.
A
123. An offer need not take any particular form to have legal validity. To be effective, however, it must: a. be spoken directly to the offeree. b. always contain the price of the product or service offered. c. always contain the place of delivery. d. be communicated to the offeree.
D
174. Carl Contractor and Ron Roadbuilder are both engaged in road construction work. They know that several jobs are going to be up for public bids, and agree between themselves that Carl will bid on one job and Ron will bid on the other, so that they both have work for the summer. When the bids are opened, Carl realizes that Ron has bid on both jobs. Ron is awarded both contracts. Carl now wants to sue Ron for breach of contract. a. Carl has detrimentally relied upon Ron's representation that he would not bid. b. Since Carl is less at fault than Ron, the court will likely award Carl damages. c. This is an agreement in violation of public policy that will not be enforced by the courts. d. This is an agreement obstructing the administration of justice that will not be enforced by the courts.
C
178. Charlie thought that he would need $5 to buy a concert ticket, so he entered a contract with Laura to mow her lawn for $5. When Charlie was almost finished mowing the lawn, his friend Tony came by and told Charlie that the cost of the concert ticket would be $10. Charlie stopped mowing the lawn and told Laura that he would not finish unless Laura agreed to pay him $10. If Laura agrees, and Charlie finishes the job: a. Charlie may collect $10, because he suffered legal detriment when he finished mowing the lawn. b. Charlie may collect $10, because his need for the extra money was an unforeseen circumstance. c. Charlie may not collect more than $5, because he had a contractual duty to mow the lawn for $5. d. Charlie may not collect $10, unless $10 is a reasonable price for mowing Laura's lawn.
C
120. An offer may be accepted a. by an assignee of the designated offeree. b. only by a specific individual named in the offer. c. by anyone who learns of its existence prior to acceptance by the designated offeree. d. only by the designated offeree.
D
122. An offer may terminate by a. revocation. b. rejection. c. death of either party. d. all of the above.
D
101. All of the following are essentials of an offer to contract except a. the offer must be communicated to the offeree. b. the offer must be sufficiently definite and certain. c. the offer must manifest an intent to enter into a contract (using the objective test). d. all terms of the contract must be included in the offer.
D
104. An acceptance is generally effective at what point? a. When received by the offeree b. When received by the offeror c. When picked up by the agent of the offeror d. When dispatched
D
106. An ad in a newspaper or a circular describing goods and stating prices would generally be considered a(n): a. firm offer if made by a merchant. b. offer if made by a merchant, but not a firm offer. c. offer irrespective of who made the offer. d. invitation to buyers to make an offer to buy goods.
D
139. Ann Mayer wrote Tom Jackson and offered to sell Jackson a building for $200,000. The offer stated it would expire 30 days from July 1. Mayer changed her mind and does not wish to be bound by the offer. If a legal dispute arises between the parties regarding whether there has been a valid acceptance of the offer, which of the following is correct? a. The offer cannot be legally withdrawn for the stated period of time. b. The offer will not expire prior to the 30 days even if Mayer sells the property to a third person and notifies Jackson. c. If Jackson phoned Mayer on August 1 and unequivocally accepted the offer, a contract would be formed, provided Jackson had no notice of withdrawal of the offer. d. If Jackson categorically rejects the offer on July 10th, Jackson cannot validly accept within the remaining stated period of time.
D
147. As a general principle of contract law: a. a promise cannot constitute consideration. b. an act cannot constitute consideration. c. the court evaluates the adequacy of consideration. d. the courts do not evaluate the adequacy of consideration.
D
128. An option differs from the ordinary offer in that a. options must always be in writing. b. offers need not be. options do not terminate upon death of the offeree; offers do. c. options do not terminate upon insanity; offers do. d. options can't be terminated by revocation; offers can. e. b, c, and d are correct.
E
168. Bill Cratchett leased an apartment from Grendel. Cratchett was a person of limited means in a locality where low-income housing was scarce. Shortly after signing the agreement, he fell in an unlit stairwell when a step unexpectedly gave way. In a suit for damages, Grendel relied on a clause in the lease stating, "Tenant agrees to hold Owner harmless from any claims for damages no matter how caused." Cratchett should a. win because the exculpatory clause was unenforceable as a violation of public policy. b. win because the lease was a contract of adhesion. c. lose because nothing indicates that the lease was unconscionable as a whole. d. lose because exculpatory clauses are usually upheld in the interest of freedom of contract.
A
175. Carson Corp., a retail chain, asked Alto Construction to fix a broken window at one of Carson's stores. Alto offered to make the repairs within 3 days at a price to be agreed on after the work was completed. A contract based on Alto's offer would fail because of indefiniteness as to the a. price involved. b. nature of the subject matter. c. parties to the contract. d. time for performance.
A
180. Chuck, a farmer, has 20 breeding cows. He writes to Pete offering to sell "one of my best breeding cows for $4,000." The cattle are of a variety of breeds. Chuck certainly did not intend to include his number one breeder, El Champeen, worth around $60,000. Pete writes back stating, "accept your offer and will be over this Saturday to pick up my choice, El Champeen." a. There is no contract because there is no mutual assent. b. There was an offer since there was sufficient definiteness. c. There is neither a bilateral or unilateral, executed or executory contract, but there is a contract implied in fact. d. There is a valid contract, and Chuck must deliver El Champeen to Pete if Pete honestly and in good faith thought he had the right to purchase it.
A
184. Consideration that involves the promise to refrain from doing an act is called: a. forbearance. b. revocation. c. formal release. d. forfeiture.
A
189. Courts treat contracts of incompetents and intoxicated persons essentially the same, except they are stricter with intoxicated persons because of its voluntary nature. a. True b. False
A
196. Destruction of the subject matter has what effect on the offer? a. The offer is terminated. b. The offer is delayed until additional subject matter can be located. c. This creates an impossibility of fact that does not terminate the offer. d. The offer is merely delayed under the "Hardship Rule."
A
198. Don, a minor, contracts to sell 100 acres of land to Jerry who is also a minor. Don reaches the age of 18 as does Jerry. Don takes no action to avoid the contract for several months. Which of the following most accurately describes the status? a. Don has ratified the contract. b. Don has not ratified the contract. c. The contract remains executory. d. There is no contract, so there is no legal obligation owed by either party.
A
134. Andrew agrees to paint Betty's house for $500. Two days after he starts the job, he decides that As a general rule, a written promise to pay a debt barred by the statute of limitations: a. may not be enforced by the creditor, because his or her consideration is past consideration. b. may not be enforced by the creditor, because he or she has not suffered legal detriment. c. is enforceable. d. both a and b above.
C
135. $500 isn't enough money. He refuses to finish the job, unless Betty agrees to pay him $100 more. What law applies to this fact situation? a. The acceptance of additional money to settle a disputed claim is supported by consideration. b. A past obligation is sufficient consideration for a new promise. c. Andrew was already obligated to paint the house. He gives no additional consideration in return for Betty's promise to pay more money. d. Betty has made a promise in exchange for a forbearance.
C
140. Anna is 88 years old and under the legal guardianship of her daughter. One day Anna receives a telephone call from a health insurance salesman and purchases a $400 a month Medicare-gap insurance policy. a. This contract is valid. b. This contract is voidable. c. This contract is void. d. This contract is unenforceable.
C
Bill and Mary are merchants. Bill orders 100 computers from Mary which she accepts. In the order he specifies that he wants model ABC. Mary, a long-time friend to Bill, knows what the computers will be used for and substitutes Model XYZ, computer with similar capabilities, but not exactly the same. 162. If Bill had stated in the original offer "no substitutions will be accepted" a. Mary's acceptance would be considered a rejection. b. Mary's acceptance would be treated as a counter-offer. c. Mary is bound to the contract and must provide Bill with Model ABC computers. d. Mary may fulfill her obligation by supplying Model XYZ computers.
C
Bill and Mary are merchants. Bill orders 100 computers from Mary which she accepts. In the order he specifies that he wants model ABC. Mary, a long-time friend to Bill, knows what the computers will be used for and substitutes Model XYZ, computer with similar capabilities, but not exactly the same. 164. If Bill and Mary were NOT merchants, a. contract formed for Model XYZ computer. b. contract formed for Model ABC computer. c. Mary's acceptance was not an acceptance, but a counter-offer. d. offer has been revoked.
C
