Exam 3

Which of the following represents a unilateral offer?

"I will pay you $50 if you mow my lawn."

What phrase explains how a requirements contract can be valid?

"in good faith"

A letter of intent summarizes progress made during business negotiations, but more importantly, it creates a binding contract.

False

A valid contract can legally be voided by either party.

False

All oral contracts are quasi-contracts until they are completely executed.

False

April put an advertisement in the newspaper advertising the sale of her computer for $500. Simultaneously, six people responded to the ad by mail with formal written acceptances. April is bound on all six contracts to sell her computer for $500.

False

Billy owes a liquidated debt of $3000 to Rayna, his personal weight trainer. Billy sends Rayna a check for $300 on which he has marked, "Payment in Full." If Rayna cashes the check she will not be able to successfully sue Billy for the remainder of the debt.

False

Contracts in which one party agrees to buy all his requirements of certain goods from the other party are generally unenforceable because there is no definite amount.

False

Courts enforce all promises in the interests of simple morality.

False

Courts normally require consideration to be approximately equal on both sides of the bargain.

False

Denton agreed to build a cedar deck for the Thrashers for $7,000. After he began the work, the Thrashers asked him to add cedar flower boxes at one side. Denton replied he would, but it would cost an additional $600. The Thrashers would not be obligated to pay the additional sum because the original agreement already obligated Denton to complete the deck for $7,000.

False

Nella offers to sell her crop of strawberries, which have just been picked, to Morgan's Market. Since Nella does not specify a time limit for acceptance, Morgan's can accept the offer at any point in time.

False

On Monday, Mick puts an offer in the mail to Sheri to sell his guitar for $50. Monday night when jamming with his buddies, he decides he will really miss his old guitar and has second thoughts about selling it. Tuesday morning he puts a revocation in the mail informing Sheri he has changed his mind and the guitar is no longer for sale. The revocation is effective on Tuesday morning.

False

Paid surrogacy contracts are viewed by the legislative majority in all states as immoral and illegal.

False

You have placed an antique sofa up for auction and the auctioneer has not made any special announcements about the sale. You can withdraw the sofa at any time before the auctioneer closes the sale by announcement or by the fall of the hammer.

True

If Crosby and Dash are in disagreement as to the exact amount of money that Crosby owes Dash, then they may choose to form a new agreement at a set amount. If they both perform the new agreement, their conduct would be an example of:

an accord and satisfaction.

Bailey Co. and Spryt Bros. enter into a contract for the manufacture and sale of 400 lawn chairs. If both parties agree that a modification is necessary:

an agreement to rescind the contract will terminate the contractual rights of Bailey Co. and Spryt Bros. if neither of them had completed their obligations.

Jerry offers to shovel the snow from Ben's driveway for $35. Ben replies "OK." This is an example of:

an express, bilateral contract.

"I'll sell you my car if I decide to sell it" is an example of:

an illusory promise.

The CAN-SPAM Act

applies to virtually all promotional e-mails, whether or not the sender has a pre-existing relationship with the recipient.

Under what circumstances is intrusion into someone's private life a tort?

if a reasonable person would find it offensive

You make an online purchase of a hooded sweatshirt with the logo of the Dallas Cowboys. The next time you log on, your screen has a banner ad for Dallas Cowboy hats and shirts. This banner ad is most likely the result of

tracking software.

What is spam?

unsolicited commercial email

Under the Electronic Communications Privacy Act

violators are subject to both criminal and civil penalties.

Miles purchased a lawnmower with an attached warning that said, "The manufacturer is not responsible in the case of an injury caused by the lawnmower." If Miles is injured because of a defect in the mower and sues the lawnmower manufacturer, he will most likely:

win, as this warning would be unenforceable.

What is not required to establish promissory estoppel?

A promise made by the plaintiff in response to the defendant's promise.

Courts may award damages called "quantum meruit":

All of the above.

Which of the following offers are considered to be irrevocable for a given period?

All of the above.

Which of the following statues requires that commercial email not have deceptive headings and clearly indicate if the email is an advertisement?

CAN-SPAM

When you surf the Internet, tracking tools collect information about you, often without your knowledge.

True

After Jan's boyfriend broke up with her, she posted unflattering pictures of him on her Facebook page and wrote about how he was a terrible boyfriend, calling him a liar and a cheater. Jan's actions are protected by the First Amendment to the Constitution.

True

Agreeing not to open a competing business could be consideration.

True

Travel Lines offered to sell 10 round-trip tickets to Elaine. Travel Lines stated that the acceptance must be in writing by USPS next-day service. Which of the following acceptances will create a contract between Travel Lines and Elaine?

Elaine sends a letter by USPS next-day service to Travel Lines stating that she will buy the tickets.

Alex promises to pay $100 to anyone who finds his lost watch. Kate finds and returns the watch to Alex after hearing of the reward money. Alex and Kate have an enforceable unilateral contract.

True

At issue in Verizon v. Federal Communications Commission was the Open Internet Order and the treatment of ISPs as common carriers.

True

Section 2-306 of the UCC expressly disallows output contracts in the sale of goods.

False

Strawly Corp. runs an "adult bookstore" in Metro City, leasing the building from MegaCorp. Then, Metro City passes an ordinance prohibiting the sales of the types of merchandise found in "adult bookstores." Strawly is still bound to the contract.

False

The European Union does not view privacy as a fundamental right of its citizens and the EU's policies toward privacy are limited.

False

The principle of net neutrality asserts that all information contained on the Internet should be regulated equally among each of the fifty states.

False

Upon the recommendation of a friend, Hope hires Joey to rewire her kitchen and he completes the work within the time agreed. Then Hope finds out that Joey is not a licensed electrician, and she refuses to pay him for the work. A court will enforce the agreement because otherwise Hope would be unjustly enriched.

False

Valerie promises Teresa that she will pay Teresa $75 if Teresa will clean Valerie's house by noon on Saturday. If Teresa cleans the house by noon on Saturday and Valerie pays the $75, then this is an implied, bilateral, executory contract.

False

When Olga asks Sven if he wishes to sell his Harley motorcycle, he replies that he would not sell it "for less than $2,000." Olga replies, "I accept," and hands him $2,000. A contract exists.

False

When Myrtle comes home from work one evening, she finds that her yard has been mowed and trimmed. Later, a man comes to collect for the yard work done. Myrtle refuses to pay for the work since she has never seen the man before and did not hire him to do her yard work. Which of the following answers is most accurate?

Myrtle would not have to pay for the yard work.

Police Officer Paul apprehends a wanted criminal and then demands the $10,000 reward offered by Crime Stoppers. Which of the following statements is true?

Police Officer Paul is not entitled to the reward because he was under a pre-existing duty to make the arrest.

Which of the following regulates deceptive practices regarding a company's privacy policy?

Section 5 of the FTC Act

Musical Productions has a privacy policy posted on its website but it does not follow the provisions contained within it. Musical Productions is in violation of

Section 5 of the FTC Act.

The Plaza Hotel contracts with EZ Lawn to have EZ mow the grass on the Plaza grounds for the next 10 years. However, there is a clause in the contract that states if the hotel chooses, the contract may be terminated provided Plaza pays EZ $2,000 on termination. Which of the following is correct?

The contract is enforceable because the option to cancel clause is supported by consideration.

Shelly offers to sell Jane goods both parties know are stolen. Jane accepts the offer, and agrees to pay for the goods. Later, Jane refuses to accept or pay for the goods. If Shelly sues Jane for breach of contract, what is the probable result?

The law would not enforce Jane's promise, as it does not have a lawful purpose.

Floyd offers to sell his 1967 Ford Mustang convertible to Tim. Before they conclude their negotiations, Floyd dies. Which of the following is true?

The offer terminates automatically upon Floyd's death.

David and George have a contract wherein George agrees to buy sporting goods and equipment. Since the goods are not to be delivered for several months, they left the price open. Under the UCC, which of the following will be true?

The price will be the reasonable price based on the market value of the goods at the time of delivery or a price established by a neutral party or agency.

Robert, a minor, buys a stereo from Jane for $200. State law allows a minor to disaffirm contracts within a reasonable time after turning 18. Robert disaffirms the contract the day after turning 18 and returns the stereo.

This contract was a voidable contract, Robert can disaffirm

Which of the following statements regarding the Foreign Intelligence Surveillance Act (FISA) is true?

To spy on people located in the United States who are communicating abroad, the government must obtain permission from a secret Foreign Intelligence Surveillance Court.

Boris sky dives out of a plane and gets hung up in a tree, hopelessly suspended and swinging precariously in his parachute from the branches of the tree. Natasha sees that he is in trouble and comes to his rescue. Once Boris is safely on the ground, he gratefully promises to give Natasha half of his life savings. When he changes his mind, Natasha will probably be unsuccessful in enforcing his promise.

True

Hilda owes Lex $3,000, which is an undisputed amount. If she offers him her car in full settlement of the debt and he accepts, the agreement is binding and he can no longer claim she owes him anything on the original debt.

True

If the offer does not specify a type of acceptance, the offeree may accept in any reasonable manner and method.

True

Jorgeson Co., on its website, promised the company would not give a customer's personal information to third parties without the customer's consent, but then gave out such information anyway. This practice violates Section 5 of the FTC Act.

True

Mary goes into Honest Harry's Electronics and purchases a TV. Mary agrees to pay for the TV in 30 days on the store's "30 days same as cash" plan. This is an executory contract.

True

Nunnsky's Retail sent out newspaper inserts advertising wool suits for $50. In fact, the store had only two, out-of-style suits for sale at this price. Their other wool suits started at $175. This constitutes bad faith in its advertising, so consumers may have protection through state consumer protection statutes.

True

One purpose of contract law is to make business matters more predictable.

True

Some of the elements of a contract are acceptance, consideration, legality, and capacity.

True

The Internet was started in the 1960s as a project to link military contractors and universities. The World Wide Web was created as a subnetwork of the Internet.

True

Vivian goes to an auction and sees a rare antique lamp that is an identical match to one she already has. At the proper time she bids on the lamp and is the highest bidder. Even though she is the highest bidder, the auctioneer refuses to accept her bid and withdraws the lamp from the auction. Can the auctioneer do that?

Unless otherwise stated, the auctioneer had the right to withdraw the item before the fall of the hammer.

Wally owns 200 acres of land. Wally offers to sell the land to Robert for $1,500 per acre. Robert replies that he does not need 200 acres of land but would like to buy 40 acres at $1,500 per acre. Wally agrees to sell but does not identify which 40 acres. Later, Wally refuses to sell any land to Robert. What is the result?

Wally wins; this agreement is too indefinite since it does not identify which 40 acres are to be sold.

Zero, Inc. agreed to build Millie a storage building for $8,000. After beginning the project, Zero realized that it could not complete the job and make a profit. Zero demanded $9,500 to complete the building. Millie agreed to pay the $9,500. When the project was complete, Millie tendered $8,000 to Zero for the job. If Zero sues Millie for the remaining $1,500:

Zero will lose because there was no legal consideration to support the additional $1,500.

One of the factors leading courts away from a laissez-faire approach to contract law was:

a change in relative bargaining power between parties to contracts.

Jennifer has offered to sell her laptop computer for $750 to Jack. She tells Jack that the computer is only six months old but, in fact, it is three years old, and Jennifer wants to unload the lemon. Jack agrees to buy the computer based on Jennifer's representations. This contract is:

a voidable contract, one that Jack can void.

An agreement to pay a lesser amount to settle an unliquidated debt is:

enforceable, as there is consideration.

Which term refers to whether an offeree accepts an offer by promising, by making a down payment or by performing?

manner of acceptance

Under the Uniform Commercial Code, an agreement modifying a contract:

may not require consideration.

Hensley and Boyer have been negotiating for several months over issues related to the purchase and sale of some real estate. They draft a letter of intent that

may or may not be an offer, depending on the exact language and whether the document indicates that the parties have reached an agreement.

Noncompetition agreements are:

more common today than they were in the past, although policy issues they raised in the 1700s have never gone away.

If Becky promises not to drink alcohol until she becomes a legal adult in exchange for Ben's promise of $1,000, the agreement is:

not enforceable because Becky does not have a legal right to drink alcohol.

John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky Derby. Prince Charming came in last, much to John's frustration and embarrassment. John exclaims in a loud voice, "I'm selling that horse to the first person who hands me $100!" John has

not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer.

If Rudy offers Oscar $200 for his laptop valued at $600 and Oscar agrees, a court will probably:

not set aside the agreement based on the adequacy of the consideration.

Jaime offered to buy Kevin's bike. Jamie is the

offeree.

Contracts that do not arise from mutual agreement but are created by courts to avoid unjust enrichment are:

quasi-contracts.

Mary owes $3,800 on her credit card. She sends the credit card company a check for $800 with the notation "payment in full" on the check. If the credit card issuer cashes the check:

the check may be subject to a UCC exception to the general rules for accord and satisfaction cases involving checks.

John enters into a contract to paint Chad's house. When Chad decides on a color, John will buy the paint and paint the house for the price of $2,500. This contract is governed by:

the common law of contracts governs because the predominant factor of the contract is for the sale of services and not goods.

If an offer specifies no time limit in which to accept,

the offeree has a reasonable period during which to accept.

What is net neutrality?

the principle that all information which flows on the Internet must receive equal treatment.

A seller's form clearly states no warranty is included. The buyer's form states that the seller warrants the goods for one year. In this case

the warranty term is a "different term," and the majority of states hold that a contract can be formed but the contradictory terms cancel each other out.

The intent of the offeror to extend an offer to the offeree is generally determined by reference to

the words and conduct of the offeror.