LAW Quiz 3.2

What legal limitations are imposed on parties to assignments and delegations? Choose 3 answers.

-A contract cannot prevent an assignment of the right to receive funds. -The assignee obtains only the rights that the assignor had under the contract. -Contracts that are for a service that depends on a particular skill or talent may not be delegated.

What factors must be present to prove fraudulent misrepresentation in a contract? Choose 3 answers.

-There has been an intent to deceive. -A misrepresentation of a material fact has occurred. -The innocent party has justifiably relied on the misrepresentation.

A partially integrated contract means:

-a contract contains only some terms, to which the parties agree but not others.

Which of these types of contracts must be in writing under the requirements of the Statute of Frauds? Choose 3 answers.

-collateral promises to pay the debt of another person -contracts for the sales of land -promises made in consideration of marriage

Non-compete agreements which limit an employee's right to obtain employment elsewhere upon leaving are only valid if: (Select two)

-they are reasonably necessary for the protection of the employer -they are limited in time and geographic scope

The following types of contracts are generally unenforceable: (Choose 2 answers)

-unconscionable contracts -exculpatory clauses for intentional torts

If Ramona changes her will at age 88 to leave the bulk of her fortune to her home health care nurse instead of her children, what factor will the courts consider in judging whether or not her will is valid?

-undue influence

In determining whether a third-party is an intended or incidental beneficiary, a court may consider: (Select two)

-whether the party is able to control any details of the performance. -whether the party is directly named in any part of the contract

Under the Uniform Electronic Transactions Act (UETA) an electronic signature can be used for: (Choose 3 answers.)

-wholesale purchase of alcoholic beverages for resale. -sales of real estate. -obtaining a business license.

Which of the following contracts violate public policy?

A contract for the sale of a kidney

Which statement is true about the ability of minors to enter into contracts?

A minor may enter into any contract an adult can, except for contracts that are expressly prohibited for minors.

Alexander is a resident of Utah, where gambling is illegal. Alexander visits Goldstrike Casino in Reno, Nevada, and loses all the money he brought with him. Frustrated with his losses and determined to win his money back, Alexander writes a check to Goldstrike drawn on his bank in Utah for $5,000 to obtain more cash so that he can keep gambling. Goldstrike also requires him to sign an agreement guaranteeing that he will repay any money advanced to him. Fortunately, Alexander's luck turned; he walks away from Goldstrike with $35,000 in his pocket. As soon as he gets home, Alexander issues a stop payment order on the $5,000 check. If Goldstrike files suit against Alexander in Utah to collect its money:

Goldstrike will lose because gambling is illegal in Utah.

Will a valid delegation relieve the delegator from the contract?

No, an obligee can sue either the delegatee or the delegator for non-performance.

May a writing consistent of multiple separate documents?

Yes, if they are attached together in some manner.

Which of the following is an intended beneficiary to a contract?

a beneficiary of an insurance contract

Third-party beneficiaries are those who:

are not party to a contract but benefit from it.

A contract for a purpose that causes the parties to violate a law is:

illegal and void.

When a contract has been assigned, what rights does the original contract holder (assignor) still have?

none

What is the primary purpose of the Statute of Frauds?

requiring written evidence of agreements concerning important transactions

Marla offers to sell Kennedy her property on Lake of the Ozarks for $90,000. Marla drafts a written agreement that contains the property description and price, and has places for both Kennedy and Marla to sign. Marla sends the agreement to Kennedy to review. Kennedy signs the agreement and sends it back to Marla, who never signs it. Marla then has second thoughts about the deal and refuses to complete the transaction. If Kennedy tries to enforce the contract against Marla, Kennedy:

will be unsuccessful, because Marla never signed the agreement.

What must be included in a contract to satisfy the requirement that it be in writing? Choose 3 answers.

-All of the parties to the contract must be named in the writing. -The subject matter of the contract must be identified. -Consideration to be paid must be defined in the contract.

Tyler entered into a contract with Leah to provide supplies for her business. What form can the writing of the contract take? Choose 3 answer choices.

-An email -An invoice -A check

Which mistake is likely to be voidable?

-Bilateral mistake

Which of the following third-party beneficiaries have the right to enforce a contract? (Select all that apply)

-Donee beneficiary -Creditor beneficiary

What are the possible remedies for a contract formed under duress? Choose 3 answer choices.

-Make the contract voidable. -Allow duress as a defense for breach of contract. -Rescind the contract.

If the terms of an agreement seem to be very one-sided, which public policy could it be violating? Choose 2 answer choices

-Restraint of Trade -Substantive Unconscionability

What factors may overturn a minor's right to disaffirm a contract? Choose 3 answers.

-The contract is for necessaries. -The minor misrepresented the minor's age while engaging in business as an adult. -The minor ratifies the contract after reaching the age of majority.

Which of the following contracts would be enforceable?

A contract with an unlicensed retail clothing store

Huseyin and Ashish are negotiating the details of a new garage that Ashish plans to build on Huseyin's property. They agree on the building specs, the delivery date, and a price of $25,000. Ashish draws up the contract and sends it to Huseyin to sign. Huseyin reviews the contract and notices the price is listed as $2,500 instead of $25,000. Elated at the unbelievably low price, Huseyin quickly signs the contract and sends it back to Ashish, who signs it as well. If Ashish later tries to rescind the contract due to the mistaken price:

Ashish will be successful, because it is a mathematical mistake that Huseyin was aware of.

Adina owns Yogi's Yogurt in Fort Smith, Arkansas. Adina sells the yogurt shop to Dagmar. The contract for the sale of the business includes a clause that prohibits Adina from owning or working in any restaurant in Arkansas for two years from the date of the sale. One year after the sale is completed, Adina opens a steakhouse in West Memphis, Arkansas, which is 300 miles from Fort Smith. If Dagmar sues Adina for breaching the terms of the contract:

Dagmar will probably lose because the covenant not to compete is too restrictive.

Melissa felt pressured into signing a contract that released her employer from any liability if she is injured on the job. What prohibited behavior under public policy could this be?

Exculpatory Clause

What rights does a third-party beneficiary to a contract hold in regard to that contract?

If the third party is an intended beneficiary of the contract, the third party has the right to sue either the promisor or the promisee.

Which of the following may sue on a contract, to which they are not a party?

Intended beneficiaries

Midwest Life Insurance sells a life insurance policy to Thiago. Under the terms of the contract between Thiago and Midwest Life, Thiago will pay $75 per month for the policy, and, upon Thiago's death, Midwest Life will pay $100,000 to Laurelei. Four years later, Thiago dies, and Midwest refuses to pay under the terms of the policy. The party entitled to sue Midwest for its failure to honor the terms of the contract is:

Laurelei, because she is a donee beneficiary.

Selma wants to buy Matilda's house. Selma has been admiring the house for a long time and has asked Matilda repeatedly to sell the house to her, but Matilda has always refused. Finally, Selma tells Matilda that if Matilda does not sell Selma the house, Selma will kill Matilda's daughter. Afraid for her daughter's life, Matilda signs the contract to sell the house to Selma. If Matilda later tries to rescind the contract:

Matilda may rescind the contract on the grounds that she signed the contract under duress.

Before surgery a doctor makes a patient sign a contract with an exculpatory clause. Will it be enforceable if the doctor is negligent?

No, because non-negligent medical care is in the public's best interest.

Daphne contracts with Speedy Builders Inc. to construct a six-foot fence around her yard. Daphne's neighbor Rando is delighted because Daphne's fence will border the north side of his property. This means he can enclose the rest of his property for a much lower price. Before construction begins, however, Speedy Builders receives an offer for another, more lucrative project, and refuses to perform the contract with Daphne. Who can sue Speedy Builders for breach of contract?

Only Daphne can sue.

Which of the following contract rights may be assigned?

Payment of $500

What is an exception to the statute of frauds?

Promissory Estoppel

Ruby, a seventeen-year-old, purchases a car from Smitz Used Auto Sales and agrees to pay for it over a period of twenty-four months. Ruby makes the payments for four months but then decides the car payment is too much for her limited budget. Ruby tells Smitz that she wants to stop making payments and that she wants out of the contract completely. The contract between Ruby and Smitz can be canceled by:

Ruby, because she is a minor, but Ruby must return the car.

What happens when a party with the right to avoid a contract chooses to not avoid it?

The contract is ratified.

What is the result of a contract in which both parties are wrong about a material fact of the contract?

The contract is voidable.

What is the test for whether a contract is governed by the Statute of Frauds because of the one-year rule?

The contract must be objectively impossible to perform within one year.

Which of the following elements are required of ALL intended beneficiaries?

The contracting parties were aware of the third-parties existence and position at the time of making the contract

When might a contract made by a mentally incompetent person be enforceable?

The incompetent person was lucid at the time the contract was made.

Nadine visits Urban Air, a trampoline park. Before Nadine can enter the trampoline park, Urban Air requires her to sign a release stating that Urban Air will not be held responsible for any injury of any kind that Nadine incurs while on Urban Air property, no matter what the cause of the injury is. While Nadine is jumping on a trampoline, her boyfriend Trevor joins her. Trevor's ex-girlfriend Valarie, who is an Urban Air employee, becomes enraged and pushes Nadine off the trampoline. Nadine breaks an arm in the incident. Who can Nadine sue for her injuries?

Valarie and Urban Air

In what situation is a minor most likely to be able to terminate a contract?

When a minor orders books for school

Frank purchases a $100,000 life insurance policy from Mutual of Omaha Insurance Co. The insured party is Frank's wife Cheryl. Frank lists Cheryl's daughter Katy as the beneficiary on the policy. Two years later, Cheryl dies, and Katy tries to collect on the insurance policy. Mutual of Omaha refuses to pay. Can Katy sue Mutual of Omaha to enforce the contract?

Yes, Katy can sue Mutual of Omaha because Katy is a donee beneficiary.

When a contract duty is legally delegated, must the obligee accept performance from the delegatee?

Yes, and the delegatee is obligated to perform as the delegator would have.

Which of the following is a void contract?

a contract for prostitution

Which of the following is a voidable contract?

a contract in which the parties made a mutual mistake about the terms

A donee beneficiary is:

a third-party intended beneficiary of a contract who is not a creditor.

Reginald hires Sophia to deliver pizzas for his restaurant. All goes well at first. But one night, Sophia decides to go to a concert instead of delivering pizzas. She delegates her delivery tasks to Rosemary, who accepts the delegation and agrees to deliver the pizzas. However, instead of delivering the pizzas, Rosemary takes the pizzas home to her family. At the end of the evening, Reginald has many unhappy customers, and wants to sue for breach of contract to recover the income he lost for the evening. Reginald should be able to sue:

both Sophia and Rosemary.

Ralph and Lydia plan to be married soon, so Ralph drafts a prenuptial agreement for them. Lydia reviews the prenuptial agreement and decides that everything looks fine. Lydia signs the prenuptial agreement electronically using Adobe E-Signature. After Ralph and Lydia have been married for two years, Ralph sues Lydia for divorce. Ralph wants to enforce the terms of the prenuptial agreement, but Lydia objects. Lydia's best argument for invalidating the prenuptial agreement is that:

e-signatures cannot be used on prenuptial agreements.

Marie and Molly enter into a written contract to sell Marie's home to Molly. At the time the contract is executed, Marie tells Molly that for the last six months she has been sharing the home with a family of extraterrestrial beings. Marie states that she has asked the extraterrestrials to move out, but they won't; therefore, she is selling the family home to get rid of them and is willing to sell the home to Molly for well below market price. After the sale of the home is complete, Marie's children challenge the sales contract on the grounds that Marie did not have the mental capacity necessary to enter into a contract, even though Marie has not been declared incompetent by the courts. The contract between Marie and Molly can be rescinded:

if Marie's children can prove that Marie lacked the mental capacity to comprehend the nature, purpose, and consequences of the contract.

If a law requires a person to have license to operate, any contract with an unlicensed person will be:

illegal if the license is designed to protect the public.

An assignment is the transfer of:

rights.

Usury laws prohibit:

the charging of excessive interest on loans.

An insurance contract may be unlawful if:

the person taking out the policy does not have an insurable interest in the subject of the contract.

A contract for an illegal purpose is:

void.

What type of contract exists when at least one party has the option of canceling it?

voidable

What is the result if parties agree to a contract orally, but it is a contract that must be in writing under the statute of frauds? Choose 2 answer choices.

-The parties can complete the contract. -The contract is voidable.

Forcing a party to agree to the terms of a contract through the use of threats or blackmail is called:

duress.

What type of contract is created by an agreement that is oral when it is required by the Statute of Frauds to be in writing?

voidable

What must a plaintiff prove to show duress in the formation of a contract? Choose 2 answer choices.

-The plaintiff was incapable of voluntarily agreeing to the contract. -The defendant committed a wrongful or illegal act.

Which act provides that no contract, record, or signature may be "denied legal effect" solely because it is in electronic form?

-the Electronic Signatures in Global and National Commerce Act (E-SIGN Act)

Assuming there is no contract language prohibiting delegations, which of the following acts could likely be delegated? (Select two)

-the mowing of grass in a residential neighborhood to another landscaper -painting the exterior of a house to another house painter

Which is NOT an exception to the parol evidence rule?

Jayden wants to present evidence that Jignesh verbally promised he would include the trailer with the boat he sold to Jayden.

Alvin's Department Store agrees over the telephone to purchase $1,000 worth of blankets from Blanket Emporium. Blanket Emporium sends an invoice for the blankets before shipping them, and Alvin's Department Store refuses to go forward with the deal, saying their deal is not a valid contract. The oral agreement between Blanket Emporium and Alvin's Department Store for the purchase of $1,000 worth of blankets:

violates the statute of frauds, and is, therefore, unenforceable.

Samuel has mental competency issues. Samuel entered into a contract with Beth, but now Samuel is petitioning the court to terminate the contract. What options does the court have in ruling in the case? Choose 2 answer choices.

-The contract is void if Samuel has been previously determined to be mentally incompetent. -The contract is voidable if Samuel was incompetent at the time the contract was formed.

What remedies are available in the case of a unilateral mistake in making a contract? Choose 2 answers.

-rescission -reformation

Bryan owns Snow Country, a business that leases out snow cone stands. Kaylee agrees to lease one of the snow cone stands for $500 per month. Kaylee and Bryan sign a written contract that states the monthly lease amount is $5,000. When Kaylee refuses to pay the $5000 for the first month's rent, Bryan sues for breach of contract. If Kaylee tries to introduce evidence in court that shows that the amount stated in the written contract is incorrect:

Kaylee will be allowed to introduce the evidence under the parol evidence rule.

Dora has been in a nursing home for three years and rarely has visitors. Vanita works at the nursing home and regularly takes care of Dora. Vanita and Dora have become very close, and Dora depends on Vanita to help her with decisions about her finances. Just before Dora dies, Vanita and Dora enter into a contract to sell Dora's family home to Vanita for $20,000. The home is worth $100,000. If Dora's children try to void the contract between Vanita and Dora:

the children may be able to void the contract based on undue influence.

Sophia just moved into her first apartment and has no furniture. Sophia visits The Furniture Showcase and finds some great bedroom and living room furniture. Sophia does not have the money to purchase the furniture, so the sales clerk presents Sophia with a retail installment sales contract. The contract calls for monthly payments until the purchase price is paid in full, and also includes annual interest at a rate of seventeen percent. Sophia knows that interest rates in her state are capped at ten percent by law, but she really needs the furniture so she signs the agreement. If Sophia later contests the amount of interest and wins, The Furniture Store may forfeit:

the illegal interest, all interest, or, in some states, the entire loan.

Which of these contracts would be enforceable, despite the existence of a mistake? Choose 2 answer choices.

-Christopher agrees to sell his washer and dryer to Ella in "as is" condition. Ella thinks the set is in excellent condition and is willing to take a chance on buying it. Neither works after a few weeks of use. -Christopher agrees to sell his washer and dryer to Ella. Ella thinks the dryer uses gas instead of electricity, but she is incorrect.

What evidence outside of the written contract is a party allowed to present? Choose 2 answer choices.

-Evidence showing a change to the contract after it is signed -Evidence to prove agreement on an essential element of the contract

Substantive unconscionability in a contract means the contract:

-has terms that are unfairly one-side.

A party normally cannot present any evidence of which of the following if that evidence contradicts or varies the terms of the written contract? Choose 3 answers.

-oral agreements that happened at the same time as contract formation -agreements prior to contract formation -negotiations prior to contract formation

What is the term for evidence of communication between parties to a contract that is not included in the contract?

-parol evidence

Elvis agrees to provide guitar lessons to Angela's niece for three months for $600. Angela decides her niece really is not interested in guitar lessons, and assigns her rights under the contract to Jose, so Jose can use the lessons for his daughter. When Jose contacts Elvis to set up the first guitar lesson for his daughter:

Jose cannot enforce the contract against Elvis because the contract is for personal services.

Marco hires Franco to burn down a clothing store that belongs to one of Marco's competitors. Marco pays Franco $1,000 upfront and promises another $3,000 when the job is done. Franco burns down the clothing store and then asks Marco for the rest of the payment. Marco just laughs at Franco and walks away. If Franco sues Marco for payment under the contract:

Marco will not have to pay because the subject matter of the contract is illegal.

Which type of lack of capacity is easiest to prove?

Minor status

Are gambling contracts illegal?

Yes, unless they are specifically authorized by state statute.

Harold offers to sell Emma his farmland in Bryson County. After discussing the sale at length in front of their friends Nicole and Jackson, Harold and Emma orally agree on a price of $120,000 for the land. The next day, Emma goes to the bank and withdraws $120,000 to pay Harold for the land. When Emma presents the $120,000 to Harold, Harold tells Emma he was just joking and does not wish to sell the land. Emma tries to enforce the deal, and Harold continues to refuse by saying that the deal was not in writing, and, therefore, it is unenforceable. The contract between Harold and Emma for the sale of the land:

is not enforceable because it violates the statute of frauds.

Isabel is 17 years old and wants to stop paying for the use of the local gym, but wishes to continue teaching classes. Her contract with the company includes terms regarding her employment and use of the facility. What must she do to properly disaffirm the contract? Choose 2 answer choices.

-Isabel must disaffirm both the gym membership obligations and the employment terms in the contract. -Isabel must let gym staff know she is terminating the contract.

What is required for a writing to be legally sufficient to form a contract? Choose 2 answer choices.

-The UCC requires that the quantity be included -The writing must provide evidence of agreement