L-201 Exam 4 Study Set

Noncompete Clause

A clause in a contract that prevents an employee from working for an employer's competitor after the employment relationship terminates for a specified time and in a specified geographic area is referred to as a:

Attempting to make changes in the terms of the offer

A counteroffer will be found to have arisen in which of the following actions?

False

A famous journalist predicted the result of an NBA match between LA Groves and LA Phantoms in favor of the Phantoms, based on the present form of Groves. Accordingly, Mark placed a huge bet on the Phantoms and lost heavily. This is an example of misrepresentation of a material fact of a contract.

Perform the contract

A minor entered into a contract with GAM & Co. when he attains the age of majority, he wishes to enforce the contract. The adult party must:

Every member of society has a duty to obey the law

A promisee's promise not to commit a crime can never be consideration because:

False Effective only when it is actually received by the offeree

A revocation is effective at the time it is dispatched by the offeror

True

Acceptances by instantaneous forms of communication are effective immediately upon communication to the offeror

Offer

Arthur offered to sell his house to Mike for $50,000. Even before Mike responded to the offer, Jack learned of the offer and called Arther to accept the offer. Jack's action represents a(n)

It will be unenforceable unless it is evidenced by writing

As demonstrated in Dynegy, Inc. v. Yates, the case in the text when a contract is determined to be collateral:

False The offeror must revoke the offer at any time prior to acceptance

As master of the offer, the offeror has the power to revoke any offer at any point in time.

Is enforceable under the "main purpose" or "leading object" exception to the statute Under this exception, no writing is required where the guarantor makes a collateral promise for the main purpose of obtaining some personal economic advantage. In this case, the oral contract would be treated like an original and an enforceable contract

Big Bank is a major creditor of Bonwill Department Store. A major loss in profits due to poor holiday sales, Big Bank decides to help keep Bonfill from bankruptcy. Big Bank orally promises Mary Tudor, a supplier of Bonwill's, that it will guarantee Bonwill's payment for goods that Mary sells to Bonwill. Most likely, Big Bank's oral agreement:

No, public officials cannot give consideration on duties they are already supposed to perform

Can a local businessman pay a police officer $50 a week to watch his business more closely?

False They are nonegotiable

Generally, the terms of a standardized contract are negotiable

Undue Influence

Hally took advantage of a confidential, trusting relationship with Gwyn when they entered into a contract. Now, Gwyn can seek remedy based on:

B Pass Case -- 1. language of the contract 2. nature of the business of the supplier of goods and services 3. the reason the parties entered into the contract 4. amounts paid for the rendition of the services and goods

In Audio Visual Artistry v. Tanzer, the case in the text, the court looked to the factors discussed in the Pass case when it applied the predominant purpose test. Which of the following was not one of those factors? A. The nature of the business of the supplier of goods and services B. The intention of the parties C. The reason the parties entered into the contract D. The language of the contract

18

In almost all states, the age of majority for contracting is:

True

In employment contracts, noncompetition clauses are one form of agreement that places restrictions on an employee's conduct after the employment is over

Signed by the "party to be charged" Contents of the memorandum must be signed by the "party to be charged" but it is advised that both sign

In order to satisfy the statute of frauds, the parties' writing must be:

Defendants in such cases cannot be allowed to use the illegality of their agreement as a way to avoid the consequences of their actions

In the case in the text, Gamboa v. Alcarado, what was the rationale for the court's decision?

Olmstead could not demonstrate that his free will was overcome. The court held that Olmsted could not demonstrate that his free will was overcome, and no evidence supported the allegation that the Strict made an unlawful threat.

In the case in the text, Olmstead v. Saint Paul Public School, the court held that:

Lu's claim was barred by the Statute of Frauds and under Utah's parol evidence rule, he could not testify to any pre-contract verbal agreement

In the case in the text, Yund-Kai Lu v. University of Utah, the court held that:

Voidable at Jane's option based on duress

Martin Nowark, an accountant, entered into a written contract with Jane Gibson to preform certain tax services for Jane. Shortly thereafter, Jane was assessed additional taxes and wanted to appeal the assessment. Jane was required to appeal immediately and the workpapers held by Martin were necessary to appeal. Martin refused to furnish Jane with the workpapers unless he was paid a significantly higher fee than was set forth in the contract. Jane reluctantly agreed in order to meet the filing deadline. This contract as revised is:

They had reasonable notice of

Modern courts stipulate that offerees are bound only by terms that:

Past Consideration

Mr. Blue gave Mr. Green $1,000 to help his family out. Later, Mr. Blue entered into a sales contract with Mr. Green and wanted the consideration to be, in part, the $1,000. Which of the following describes the $1,000?

True Example of a counteroffer

Mr. White contracts with Mr. Green for 100 black coffee mugs. Mr. White decides he needs the mugs faster than the time allotted in the contract and asks for a rush shipment. Mr. Green notifies Mr. White that he will ship 100 coffee mugs, but that the only ones available are red. A court will not find that shipment of red mugs under the UCC is not a breach of the original agreement.

Paco will be able to rescind the contract because Roy should have known that the price was erroneous.

Paco Corp, a building contractor, offered to sell Roy several pieces of used construction equipment. Roy, engaged in the business of buying and selling equipment, accepted the offer. Paco's written offer had been prepared by a secretary who typed the total price as $10,900, rather than $109,000, which was the approximate fair market value of the equipment. Paco learned of the error in the offer and refused delivery of the equipment unless Roy agreed to pay $109,000. Roy sued Paco for beach of contract. Which of the following scenarios is the likely outcome?

False

Pratt, an owner of an appliance store, has a garage sale at his home where he sells old furniture and books. He sells a set of books to his neighbor, Stacey. Pratt is considered a merchant under Article 2 of the UCC in selling the books to Stacey.

Yes, because a contract is formed at the time the agreement is concluded.

Sue Sandon and Joe Rhine concluded their agreement in all substantial matters of their contract for goods, such as price, quantity, and mode of delivery. But the formal written agreement has not been signed yet. Is there a binding contract at present?

Disaffirmance

The right of minors to avoid a contract as a means of protecting themselves against their own improvidence and against overreaching adults is called:

True

The rules promulgated by the Restatement (Second) of Contracts often resemble the rules created by Article 2 of the UCC

True

To rescind a contract means to cancel it

The minor ONLY

When a minor enters into a contract, who can disaffirm the contract?

Is outside the Statute of Frauds

When the consideration given in exchange for the collateral promise is something the guarantor seeks primarily for his own benefit rather that for the benefit of the primary debtor, the contract:

The terms of which the offeree had actual or reasonable notice

Which terms of the offer are typically binding on the offeree who accepts it? Focus only on the rules regarding offers.

D A former minor's acceptance or retention of benefits given by the other party for an unreasonable time after he/she reached majority can constitute implied ratification. Also, a former minor's continued performance of his/her part of the contract after reaching majority has been held to imply his/her intent to ratify the contract.

Which of the following is most likely to constitute ratification of a contract made by a minor? A. Making an oral statement that "I will ratify the contract" B. Not performing one's duties under the contract after reaching the age of majority C. Nonperformance of the other party to the contract after the age of majority D. Failing to disaffrim a completely executory contract with one month after the age of majority.

C A bilateral, executory contract that cannot be performed fully within one year, is within the statute of frauds and must be evidenced by a writing

Which of the following is true of a bilateral contract that cannot be performed within one year from the day on which it comes into existence? A. It is broadly construed by courts B. It considered to be unenforceable. C. It must be evidenced by a writing D. It is outside the Statute of Frauds

An offeror that agreed to keep an offer open without considerations

Which of the following offerors is free to revoke his offer?

Output contracts are generally illusory because they tend to fail to specify a quantity of goods to be produced or purchased (false) *A party's quantity needs must be made in good faith *A party may not use an output contract to exploit the other party *A party's quantity needs cannot be unreasonably disproportionate to any normal prior output

Which of the following statements about output contracts is false?

Frequently, the terms of standardized contracts are negotiable (false) * In most situations, the party who drafts and presents the standardized contract is the party who has the most bargaining power in the transaction * They are contracts that are preprinted by one party and presented to the other party for signing * They are used both online and offline

Which of the following statements about standardized form contracts is false?