LEGL 3000 - Chapter 9
a
A bargain is unconscionable if it is grossly unfair. a. True b. False
b
A contract involving an unlicensed practitioner is generally illegal and unenforceable. a. True b. False
a
A contract to commit a tortious act is unenforceable. a. True b. False
d
A contract with an unlicensed practitioner is generally illegal and unenforceable if the purpose of the licensing statute is to: a. increase diversity in the professional field. b. limit the number of practitioners in the professional field. c. raise government revenues. d. protect the public from unauthorized practitioners.
b
A covenant not to compete included in the sale of an ongoing business is always unenforceable. a. True b. False
b
A covenant not to compete is enforceable only if it is necessary to restrain trade. a. True b. False
a
A covenant not to sue does not always bar further recovery. a. True b. False
b
A judge can apply the doctrine of quasi-contract to a dispute a.only if there is a valid contract covering the area in question. b.only if there is not a valid contract covering the area in question. c.whether or not there is a valid contract covering the area in question. d.under no circumstances.
a
A minor has a reasonable time, after the minor reaches the age of majority, to disaffirm a contract. a. True b. False
b
A person who is intoxicated can avoid liability on any contract due to the intoxication. a. True b. False
a
A promise made in return for an act or event that has not yet taken place can be fully enforceable. a. True b. False
a
A release bars any further recovery beyond the terms stated in the release. a. True b. False
b
A usurious contract involves the purchase and sale of usable goods. a. True b. False
a
Ace Sales Corporation plans to move to a new office. Ace offers to sell its office furniture to Beta Marketing, Inc., but does not specify a time for Beta to respond. The offer expires a.after a reasonable period of time. b.after thirty days. c.after thirty minutes. d.never.
b
Adults who enter into contracts with minors can avoid their contractual duties just as the minor can. a. True b. False
a
An illusory promise is an unenforceable promise. a. True b. False
a
Because persons are assumed to be reasonably intelligent, courts rarely come to their aid just because they have made foolish bargains. a. True b. False
b
Central Construction Company (CCC) begins building a restaurant for Diners' Cafe Corporation, but after two months demands an extra $100,000. Diners' agrees to pay. If CCC offers no reason for the extra $100,000, but says only that it will otherwise stop construction, the agreement is: a. enforceable because of unforeseen difficulties. b. unenforceable due to the preexisting duty rule. c. enforceable as an accord and satisfaction. d. unenforceable as an illusory promise.
b
Chuck decides to try to sell his vintage cars in an auction "with reserve." If Chuck changes his mind, he can withdraw his cars a.only before the auction begins. b.anytime before the auctioneer announces that the cars are sold. c.only before the auctioneer delivers the cars to the buyers. d.only after the auction.
a
Contracts in restraint of trade are contrary to the public policy that favors competition in the economy. a. True b. False
b
Contractual capacity includes the financial ability to pay for the benefits of a contract. a. True b. False
a
Courts generally assume the existence of contractual capacity. a. True b. False
a
Cross-Country Trucking Company contracts with Baldwin to transport crated goods to a certain destination for $5,000. Cross-Country delivers the crates, but Baldwin does not pay. Cross-Country learns that the crates contained stolen goods. Cross-Country can: a. recover $5,000 from Baldwin. b. recover the goods or the $5,000 from Baldwin. c. do nothing with respect to the contract. d. recover the goods but not the $5,000 from Baldwin.
d
Dex and Carmen are in an auto accident. Dex offers Carmen $2,000 if she promises not to pursue her potential legal claim against Dex. Carmen agrees. Later, Carmen discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury. The agreement between Dex and Carmen is: a. an accord and satisfaction. b. promissory estoppel. c. a covenant not to sue. d. a release.
a
Essentially, adequacy of consideration concerns the fairness of the bargain. a. True b. False
d
Eve and Frank enter an express contract for the construction of an office building. Express contract terms are given a.less priority than the parties' prior dealing. b.less priority than the trade usage in that particular industry. c.less priority than the parties' course of performance. d.greater weight than the prior dealing, the course of performance, or trade usage.
a
Even in states that permit certain types of gambling, courts often find that gambling contracts are illegal. a. True b. False
a
Exculpatory clauses release a party from liability in the event of monetary or physical injury no matter who is at fault. a. True b. False
a
Executed contracts are presumed ratified. a. True b. False
b
Federal Oil Company and Great Apartments, Inc., sign a contract in which Federal agrees to deliver heating oil in exchange for Great's promise to pay for it. Federal delivers the oil. The contract is a.executory on the part of Federal. b.executory on the part of Great. c.fully executed. d.neither executed nor executory on the part of either party.
b
Freedom of contract is absolute. a. True b. False
c
Hineki buys an expensive tablet device to celebrate his seventeenth birthday. Two weeks later, his father insists that he return it. Hineki's attempt to return the tablet will: a. be unsuccessful unless he obtains court approval. b. be unsuccessful because he waited too long. c. be successful because he acted within a reasonable time.
a
If a contract is divisible into legal and illegal portions, a court may enforce the legal portion but not the illegal one, so long as the illegal portion does not affect the essence of the bargain. a. True b. False
a
If a minor disaffirms a contract, he or she must disaffirm the entire contract. a. True b. False
a
If a person has been determined by a court to be mentally incompetent, any contract entered into by that person is void. a. True b. False
a
If a purchaser later wants to void a contract based on the fact he was intoxicated when he bought the item, he will need to prove that: a. he lacked the mental capacity to enter into the contract. b. the store clerk knew that he was intoxicated. c. his capacity to act would be classified as "legally unstable."
a
If a sixteen-year-old purchases a piece of expensive jewelry, but decides a few months later that it was unwise to spend the money, she: a. can return the jewelry and get all of her money back. b. can return the jewelry, but will only receive fifty percent of what she paid for it. c. can disaffirm this contract only if she has turned eighteen.
b
If an employer asks a current employee to sign a noncompete agreement, his or her employment is sufficient consideration for the agreement. a. True b. False
b
If an illegal contract is executory, either party can always enforce it. a. True b. False
a
If any insurance company violates a statute when selling insurance, the purchaser can still enforce the policy and recover from the insurer. a. True b. False
d
In deciding whether a valid contract was formed, a court will not look at a.the circumstances surrounding the alleged contract. b.the parties' conduct at the time of the alleged contract. c.the parties' statements at the time of the alleged contract. d.the parties' subjective beliefs at the time of the alleged contract.
a
Jay tells Kim that he will buy her lawbook from last semester for $80. Kim agrees. Jay and Kim have a.an express contract. b.an implied-in-fact contract. c.an implied-in-law contract. d.a quasi contract.
b
Jennifer freely and voluntarily sells her brand new car to Katie for five dollars. Later Jennifer changes her mind and sues to get her car back. What is the likely result? a. Jennifer will get her car back only since the deal lacks fairness. b. The court likely would not question the adequacy of consideration. c. Jennifer will get her car back since a new car is worth more than five dollars. d. Since Jennifer freely and voluntarily entered into the contract, she would get the car back since there was not adequacy of consideration.
b
Legal sufficiency of consideration is the same as adequacy of consideration. a. True b. False
d
Local Delivery Service, Inc., offers to deliver computers to Micro Store's customers for a certain price. Local's intent to extend a serious offer to Micro is determined by reference to Local's a.assumptions. b.beliefs. c.intentions. d.words and conduct.
c
Maya sincerely believes that she was born on another planet. She goes to a car dealership and buys a KIA Sorrento, telling the salesperson that she is going to beam the car back to her home planet. Later, if she wants to avoid her contract she must: a. prove that a court had previously judged her to be incompetent. b. prove that the salesperson talked her into buying the car. c. prove that she lacked adequate mental capacity when she bought the car.
b
Nick represents himself as a contractor in Ohio, but he is not licensed in that state. A contract between Pat and Nick by which Nick agrees to build a warehouse for Pat in Ohio is: a. enforceable only if Pat knows that Nick is unlicensed. b. not enforceable. c. enforceable only if Pat does not object after learning of Nick's status. d. enforceable only if the outcome is successful.
a
Ordinarily, minors can disaffirm contracts even when they have misrepresented their age. a. True b. False
b
Owen announces that he plans to sell his business, Payroll Service Company (PSC), at a price below its market value. Quality Bookkeeping, Inc., gives Owen a check for the stated amount. Owen a.is bound to sell PSC to Quality Bookkeeping. b.may refuse to accept the check because he only expressed an intent to do something in the future. c.must accept the check because he expressed an opinion as to the worth of the business. d.must accept the check, because he expressed a willingness to discuss a possibility of entering into a potential contract.
a
Parties are usually free to bargain as they wish. a. True b. False
a
Promissory estoppel requires: a. that justice be better served by enforcement of the promise. b. an indefinite promise. c. a signed writing explaining the promise.
c
Quality Vehicles, Inc., offers to sell a truck to Regional Delivery Company. Before accepting the offer, Regional learns that the truck has been sold to StateTrucking, Inc. Quality is a.liable to Regional for breach of contract. b.liable to State for breach of contract. c.not liable, because the sale revoked the offer to Regional. d.not liable, if Quality offers a substitute truck to Regional.
b
Rescission is the remaking of a contract so as to enrich one party at the expense of the other. a. True b. False
b
Risks ordinarily assumed in business constitute consideration for the modification of a contract. a. True b. False
b
Ronald suffers from dementia, which impacts his brain function, but he also has healthy periods of time when his mind is fully functioning. During one of these healthy periods, Ronald enters into a contract that he later seeks to avoid. In a majority of states, the contract will not be enforced because of Ronald's dementia. a. True b. False
a
Sam and Tiffany enter into an implied-in-fact contract. The parties' conduct a.defines the contract's terms. b.finds the contract's facts. c.terminates any unintended consequences. d.undercuts any terms based on the facts.
b
Something must have direct economic or financial value to be considered legally sufficient consideration. a. True b. False
a
Standard Insurer, Inc., insures Techno Corporation's assets under a policy that states any "modification" must be approved by Standard and signed by Techno's president. In renewing the policy, Standard insists on a "modification" excluding coverage for terrorist acts. A Techno employee signs the modification. If a terrorist act occurs a.Standard must pay Techno because the modification does not meet the policy's conditions. b.Standard must pay Techno because the policy predates the. c.Techno must suffer the loss because the modification meets the policy's conditions. d.Techno must suffer the loss because the policy predates the modification.
d
The categories contracts are placed involve legal distinctions as to a.enforceability only. b.formation only. c.performance only. d.enforceability, formation, and performance.
a
The courts are usually not concerned if one of the wrongdoers in an illegal contract is unjustly enriched at the expense of the other. a. True b. False
d
The elements of a contract do not include a.consideration. b.contractual capacity. c.legality. d.practicality.
b
To be legally sufficient, consideration must be evidenced by something tangible. a. True b. False
c
Topp Properties, Inc. (TPI), offers to sell its warehouse to U-Store-It Center for a certain price. This offer is irrevocable a.if there are no other potential buyers. b.if TPI does not advertise the offer generally. c.if U-Store-It pays to have the offer held open. d.under no circumstances.
b
Under the doctrine of promissory estoppel, a promise will not be enforced unless it is supported by consideration. a. True b. False
a
When a debtor offers to pay, and a creditor accepts, a lesser amount than the creditor originally claimed was owed, the agreement is called: a. an accord and satisfaction. b. an accord. c. a satisfaction.
b
When a minor who has entered into a contract opts to avoid that contract, she or he can choose the particular portions of the contract to disaffirm. a. True b. False
a
When one party has no reason to know that a contract is illegal, that party can often recover any benefits conferred in a partially executed contract. a. True b. False
c
Which of the following would NOT be considered an exculpatory clause that a court would hold was contrary to public policy, and therefore unenforceable? a. Exculpatory clauses in residential property leases. b. Exculpatory clauses in contracts with employees. c. Exculpatory clauses in bungee jumping contracts. d. Exculpatory clauses in rental agreements for commercial property.
