Midterm review (multiple choice)

C. option

If an offeror receives something of value in return for a promise to hold the offer open, it is said to be a(n) ________, and this type of offer cannot be revoked. A. invitation to make an offer B. counteroffer C. option D. definite offer

C. promote competition among businesses.

The purpose of antitrust laws is to: ​A. promote restraint of trade within the state. ​ B. provide legal exceptions for businesses that are flourishing. C. promote competition among businesses. ​ D. promote a monopoly for flourishing businesses.

B. express warranty

The statement of the seller in which the article sold is warranted or guaranteed is known as an _____.​ ​A. unconditional warranty B. express warranty ​C. express guarantee ​D. universal warranty

C. the breach of the tortfeasor's duty to the injured party.

To recover for a tort based on negligence, the plaintiff must show: A. an act by the defendant. B. a duty of the plaintiff to the tortfeasor. C. the breach of the tortfeasor's duty to the injured party. D. an intention to cause the consequences of the act.

B. An agreement results whenever two people's minds meet on a subject, but a contract only exists when the parties intend to be legally obligated by the terms of the agreement.

What is the difference between an agreement and a contract? A. An agreement may be made for an unlawful purpose, whereas a contract must be made for a lawful purpose. B. An agreement results whenever two people's minds meet on a subject, but a contract only exists when the parties intend to be legally obligated by the terms of the agreement. ​ C. An agreement is binding for a shorter period of time than a formal contract. ​ D. An agreement must be put in writing, whereas a contract may be made orally.

A. The party with control over the goods bears the risk of loss.

What is the essential element in determining who bears the risk of loss of goods? ​A. The party with control over the goods bears the risk of loss. B. Contracts attempting to shift the risk of loss are void due to illegality. ​C. Risk of loss follows the cash in a transaction. D. The party producing the goods bears the risk of loss.

D. A business person can require an adult to join the contract as a cosigner.

What precaution can a business person take when contracting with a minor? ​A. A business person can prohibit a minor from disaffirming the contract. ​ B. A business person can require the contract to be a simple contract. ​ C. A business person can limit business to online business transactions. D. A business person can require an adult to join the contract as a cosigner.

D. formal

A _______ contract must be in a special form or be created in a certain way. ​A. sealed B. simple ​ C. implied D. formal

​A. precedent

A _______ is a court decision that determines the decision in a subsequent, similar case. ​A. precedent B. stare decisis ​ C. code ​ D. statute

A. Sarah can obtain good title to the property.

Kenneth, aged sixteen, sells his car to Robin, aged 49. Later, Robin sells the car to Sarah, an innocent third party, before Kenneth can disaffirm the contract. In this case, which of the following will hold true? A. Sarah can obtain good title to the property. ​ B. Robin will still be held as the legal owner of the property. ​ C. Kenneth can recover a portion of the property's value from Sarah. ​ D. Kenneth is a minor and thus cannot recover money from Robin.

B. Lily must consider the offer automatically revoked and void.

Maya, an elderly lady, wanted to sell her house. She offered the house to Lily, a friend. However, before the house deeds were transferred, Maya passed away. Which of the following scenarios is legally acceptable in such a case? A. Lily can claim that she was not aware of Maya's death and B. Lily must consider the offer automatically revoked and void. C. Lily is still entitled accept the offer through legal action. D. Lily can accept the offer within a period of ten days after Maya's death.

B. It prevents the unjust enrichment of a party.

Which of the following is true of quasi-contracts? A. It is an unenforceable contract. B. It prevents the unjust enrichment of a party. C. It generally offends ethical principles. D. It is always formed by an adult with a minor.

D. They handle cases that are first instituted in them.

Which of the following is true of state trial courts? A. They lack jurisdiction over criminal offenses against the state. B. They are also known as inferior courts. C. They are the highest courts of authority in the United States. D. They handle cases that are first instituted in them.

A. Individual states may make changes to the portions of the UCC that they have adopted.

Which of the following is true of the Uniform Commercial Code (UCC)? A. Individual states may make changes to the portions of the UCC that they have adopted. B. Portions of the UCC adopted by states cannot be modified by those states. C. The UCC is an ordinance, but not a statute. D. The UCC has not been enacted in all fifty states.

C. each obligor is bound for the performance of the entire obligation.

A joint contract is one in which:​ ​A. parties are not collectively entitled to the performance of another party. ​ B. not more than two parties can be involved. C. each obligor is bound for the performance of the entire obligation. ​ D. parties promise to do their individual part of the performance.

B. third-party beneficiary

A person not party to contract but whom parties intended to benefit is known as a(n) _____.​ ​A. incidental beneficiary B. third-party beneficiary ​ C. unintentional beneficiary ​ D. second-party beneficiary

B. warranty against encumbrances

A seller's warranty that the goods shall be delivered free from any security interest or any other lien of which the buyer at the time of making the sales contract had no knowledge is known as a _______. A. warranty of fitness for a particular purpose B. warranty against encumbrances C. warranty of conformity to a description, sample or model D. warranty of title

B. a restraining order.

A temporary order that is issued by a court with equity powers forbidding activities that would be detrimental to others is known as: ​A. an injunction. B. a restraining order. ​ C. a subrogation. ​ D. a writ.

B. complaint or petition

A written request to a court to settle a dispute is called a(n):. ​A. discovery B. complaint or petition C. plaintiff D. trial

D. implied warranty

A(n) _____ is one that the seller did not make but that is imposed by the law. A. express guarantee B. limited guarantee C. conditional warranty D. implied warranty

​A. per se violations

Activities that are illegal regardless of their effect are known as _____. ​A. per se violations B. antitrust violations ​ C. multiple-party violations ​ D. compensatory violations

B. The contract is enforceable against the adult but not against the minor.

An enforceable contract is made by an adult with a minor. Which of the following is most likely to hold true in this case? A. The contract is enforceable against the minor but not against the adult. B. The contract is enforceable against the adult but not against the minor. ​ C. The contract is enforceable against the adult only if the minor ratifies the contract. ​ D. The contract is not enforceable against either of the parties until the minor attains a majority.

D. a contract in which the terms have not been fully carried out by all parties.

An executory contract is defined as: A. a contract that may be set aside or avoided by one of the parties. B. a contract where the terms of the agreement are specified in words. C. a contract that is required to be created in a special form or manner of creation. D. a contract in which the terms have not been fully carried out by all parties.

D. tender of payment

An offer to pay money in satisfaction of a debt or claim when one has the ability to pay is a ____.​ ​A. substantial performance ​ B. tender of performance ​ C. time of performance D. tender of payment

C. counteroffer

An offeree's response that rejects an offer by varying its terms is known as a(n) _____. A. invitation B. circular C. counteroffer D. option

D. voidable.

Contracts made by people who have become so intoxicated that they cannot understand the meaning of their acts are: ​A. quasi-contracts. ​ B. valid. C. void. D. voidable.

C. Title

Documents that show ownership are called documents of _____. A. estoppel ​B. consignment C. title D. bailment

A. The injured party cannot recover any damages because it is partially negligent in the case.

In a situation where an injured party in an accident is partly to blame for the accident, which of the following is most likely to be true under a contributory negligence system? A. The injured party cannot recover any damages because it is partially negligent in the case. B. The plaintiff can claim for three times the damage if the defendant is the only one at fault. C. The injured party cannot claim damages unless the defendant consents to it. D. The injured party can recover damages only if his fault in causing the accident is 49% or less.

C. executed contract.

Judy promises to pay Ashley $50 to babysit her children. After Ashley babysits the children, Judy pays Ashley the $50; thus each party has completed performance of each part of the contract. This is an example of a(n): A. recognizance. B. quasi-contract. C. executed contract. D. executory contract.

C. felony

Kenneth was sentenced to six years in prison for forgery. In this case Kenneth has committed a(n) _____. A. misdemeanor B. infraction C. felony D. violation

C. allow a business to enter the field being regulated.

Regulatory agencies can use their licensing power to: A. determine whether the activity of the entity B. regulated is acceptable or not. regulate prices that a business may charge. C. allow a business to enter the field being regulated. D. enable a business to enlist in the stock exchange.

B. offeror

Ryan, a college student, intends to sell his car. He contacts his friend Luiz and inquires whether he is interested in buying the car. Luiz finds the quoted price reasonable and buys the car from Ryan. In this scenario, Ryan is the _____. ​A. acceptor B. offeror C. claimant D. summoner

D. Bill of Rights

The _____ consists of ten amendments to the U.S. constitution specifically designed to protect the civil rights and liberties of citizens and the states. ​A. Magna Carta ​ B. Charter of Rights ​ C. Mayflower Compact D. Bill of Rights

A. a sale involves an immediate transfer of title from one party to another while a contract to sell does not.

The difference between a sale and a contract to sell is that: A. a sale involves an immediate transfer of title from one party to another while a contract to sell does not. B. a contract to sell involves the immediate transfer of title from one party to another while a sale does not. C. a sale always requires the price to be paid up front by the seller while a contract does not. D. a contract to sell involves the immediate transfer of cash to the seller while a sale does not.

C. ​breach of contract.

The failure of a party to perform the obligations assumed under a contract is known as a(n):​ ​A. misrepresentation ​ B. intrinsic fraud. C. ​breach of contract. ​ D. negative pledge.

B. that is applied when no rate is specified.

The legal rate of interest is a rate: A. that is over and above the rate that is lawfully allowed. B. that is applied when no rate is specified. C. that is higher than the contract rate. D. at which no interest is charged.

B. It requires the promisor to reasonably expect the promise to induce action by the promisee.

Which of the following is true of the doctrine of promissory estoppel?​ ​A. It holds enforcement to be proper if the promisee would not be harmed if the promise were not enforced. B. It requires the promisor to reasonably expect the promise to induce action by the promisee. C. It permits the promisor to claim lack of consideration when the promisee acts in reliance on his promise. D. It requires that promises made should be supported by consideration.

B. It refers to a person in a special relationship causing another's action contrary to free will.

Which of the following is true of undue influence? A. It occurs when one party threatens to cause physical harm to another. B. It refers to a person in a special relationship causing another's action contrary to free will. C. It takes place between people who are not known to each another. D. It refers to one party injuring another financially to influence him to enter into a contract.

B. warranty of title

Which of the following warranties applies to all sellers? A. warranty of fitness for normal use B. warranty of title C. warranty of merchantability D. warranty against infringement

D. void.

​A contract must be for a lawful purpose, which must be achieved in a lawful manner, otherwise the contract is: ​A. voidable. ​ B. ratified. ​ C. rescinded. D. void.

B. who is a third-party beneficiary and for whom performance is a gift.

An donee beneficiary is best described as a person:​ ​A. who unintentionally benefits from performance of contract. B. who is a third-party beneficiary and for whom performance is a gift. ​ C. to whom the promisee owes an obligation or duty. ​ D. whom parties intended to benefit.

C. If the price term is not expressly stated, it will be held to be the reasonable price for the same goods in the market.

How are sales contracts handled when terms are missing? A. When a contract includes the supply of both services and goods, the contract is considered to be a contract for the sale of goods only if the terms expressly state it is subject to the UCC. B. If a sales contract does not state the price of goods that will be sold to the buyer, the contract is considered invalid. C. If the price term is not expressly stated, it will be held to be the reasonable price for the same goods in the market. D. If parties indicate that the price of goods must be fixed at a later date, and no price is thus fixed, the goods must be supplied at whatever price the seller sets.

C. the election to avoid a contract or set it aside.

The term disaffirmation refers to: A. willingness by a person to be bound by the terms of a contract B. the process of executing terms of a contract in an unscrupulous manner. C. the election to avoid a contract or set it aside. D. the indication by an adult that a contract made while a minor is binding.

B. The parties entering into the agreement must have the mental capacity to contract.

​Which of the following conditions is a prerequisite for any agreement to be legally enforceable? ​A. The agreement must be signed in the presence of a third party who witnessed the proceedings. B. The parties entering into the agreement must have the mental capacity to contract. ​ C. The parties entering into the agreement must be over the age of thirty-five. ​ D. The agreement must be made in a court of law.

​A. Joe is entitled to keep the car because the contract is valid.

Allen enters into a contract with Joe to sell his car. However by mistake, he undervalues his car. Though the actual value of the car is $6000, he sells it to Joe for $3000. During the purchase, Joe is aware of the actual value but does not communicate this fact to Allen. Which of the following is likely to be true in such a scenario? ​A. Joe is entitled to keep the car because the contract is valid. ​ B. Allen is entitled to cancel the contract because he was not aware of the actual value. ​ C. Joe must pay the difference to Allen in order to validate the purchase. ​ D. Allen is entitled to compensation through a court of law.

A. An obligation of record such as a judgment

As a general rule, a promise must be supported by consideration. Which of the following is an exception to the rule? A. An obligation of record such as a judgment B. A promise to refrain from doing what one has no right to do C. An act performed prior to the promise made by the promisor D. A non-charitable enterprise financed by the subscriptions of individuals

A. A buys a spare USB charger for his phone.

As per the UCC's definition of sale, in which of the following transactions has a sale taken place? A. A buys a spare USB charger for his phone. B. A pays B to repair his car. C. A sublets an apartment for the summer from B. D. A purchases the digital license to new software for his computer.

C. ​novation

Blake agreed to renovate Jane's house, and they drafted a written contract. However, Blake was unable to complete the renovation due to an accident. Blake's friend, Tom, agreed to complete the job, and Jane agreed to release Blake from the contract. The terms of the old contract remained the same. This process of substitution of a contract is known as a(n) _____. ​ ​A. rescission ​ B. counteroffer C. ​novation ​ D. option

C. ​Because the contract specified what would happen in the case of a mistake, the sale price will not be altered.

Mary contracts to sell Rachel her violin for $10,000, based on an appraisal of the instrument. Their contract provides that even if the appraisal is later found to be mistaken, the sale price will not be altered. One month after the sale, Rachel learns that the violin is only worth $5000. Which of the following is true: A. The contract is unenforceable, because the appraisal was mistaken. B. The contract is void, because the sale is fraudulent. C. ​Because the contract specified what would happen in the case of a mistake, the sale price will not be altered. ​ D. Mary must refund Rachel $5000, because the appraisal was mistaken.

C. They interpret and apply the law from whatever source to a given situation.

​What is the chief function of the courts? ​A. They draft and pass legislation. ​ B. They execute laws enacted by legislative bodies. C. They interpret and apply the law from whatever source to a given situation. ​ D. They regulate particular matters through licensing and tariffs.

D. ​It is the right of ownership of property or evidence of ownership.

​Which of the following best describes the term "title"? ​A. It is the right to inherit property in the future. ​B. It is the temporary transfer of possession of personal property. ​C. It is the transfer of possession of goods for the purpose of sale. D. ​It is the right of ownership of property or evidence of ownership.

B. the minor is not required to pay the contract price but will be required to pay a reasonable amount to avoid unjust enrichment.

If a minor contracts for necessaries, the minor's liability is quasi-contractual in nature. This means that: A. the minor's parent or spouse needs to pay the reasonable value of what was received. B. the minor is not required to pay the contract price but will be required to pay a reasonable amount to avoid unjust enrichment. C. the minor must pay the contract price to prevent the firm from being unjustly enriched. D. the firm does not need to pay the minor because the contract is voidable.

D. To be enforceable, there must be added features in the new contract benefiting both parties.

When parties to a contract mutually agree to cancel an old contract and replace it with a new one, which of the following is true? ​A. The new contract is void. ​ B. Neither party has a right to make changes to the original contract. C. One party's past performance under the original contract is sufficient consideration for the new contract. D. To be enforceable, there must be added features in the new contract benefiting both parties.

B. Civil law deals with the enforcement or protection of private rights, whereas criminal law deals with offenses against society.

Which of the following best describes the difference between civil law and criminal law? A. Penalties under civil law are more severe than penalties under criminal law. B. Civil law deals with the enforcement or protection of private rights, whereas criminal law deals with offenses against society. C. The standard of proof required to convict a defendant is greater in a civil case than in a criminal case. ​ D. In civil law, a defendant is entitled to an attorney, regardless of his or her ability to pay for one, whereas criminal defendants do not have a right to legal representation.

​A. It indicates what the promisor demands and receives as the price for a promise.

Which of the following best describes the term "consideration"?​ ​A. It indicates what the promisor demands and receives as the price for a promise. ​ B. It refers to the record of a case sent for review to a higher court. ​ C. It signifies a promissory note given by the promisor as a token of the transaction. ​ D. It refers to the promisor refraining from meeting a promise.

D. A promise to refrain from doing an act that can be lawfully done

Which of the following constitutes valid consideration? ​A. A promise to do what one is already obligated to do B. Past performance C. A promise to refrain from doing an illegal act D. A promise to refrain from doing an act that can be lawfully done

A. The existence of a contract cannot be denied if it is in writing.

Which of the following is an advantage of a written contract over an oral one? A. The existence of a contract cannot be denied if it is in writing. B. Putting a contract in writing eliminates all mistakes. C. Written contracts are always enforceable. D. All contracts of importance must be in written form.

D. A agrees to appoint B as sheriff, provided he helps him win the local elections.

Which of the following is an example of a contract contrary to public policy? A. A agrees to give $100 to B if he wins the lottery. B. A purchases a motorcycle from B at a price much lower than its real value. C. A agrees to sell 1000 tonnes of rice to the local government. D. A agrees to appoint B as sheriff, provided he helps him win the local elections.

D. ​A new law makes the contract illegal.

Which of the following is an example of a contract discharged by impossibility of performance?​ ​A. Performance will require additional time, making it impracticable for a party to perform under the contract. ​B. An event occurs that reasonably parties should have anticipated. ​C. The cost of raw materials rises slightly, making it more expensive for a business to perform under the contract. D. ​A new law makes the contract illegal.

D. Automobile accidents

Which of the following is most likely to be a tort based on negligence?​ A. Commercial disparagement ​ B. Assault C. Battery D. Automobile accidents

D. A quasicontract

Which of the following is not a true contract and has been imposed by law in order to prevent one party benefiting unfairly at another's expense? A. An informal contract B. A voidable contract C. A unilateral contract D. A quasicontract

A. It is created when an offeree accepts an offer that has been properly communicated.

Which of the following is true of a binding contract? A. It is created when an offeree accepts an offer that has been properly communicated. B. It allows an offer to be revoked once the contract is formed. C. It is created when the offeror clearly shows an intention to make an offer. D. It is considered valid when the offer made is indefinite in nature.

D. The title and risk of loss pass to the buyer when the goods are delivered to the carrier.

Which of the following is true of a shipment contract? ​A. The title and risk of loss pass to the buyer when the payment is made by the buyer. B. The carrier is liable for the goods while they are in transit from the seller to the buyer. C. The seller has an insurable interest in the goods until they are delivered to the buyer. D. The title and risk of loss pass to the buyer when the goods are delivered to the carrier.

C. It is seriously intended.

Which of the following is true of a valid offer?​ ​A. It is instituted by the offeree to the offeror. ​ B. It can be accepted by anyone who hears about it. C. It is seriously intended. ​ D. It is indefinite in nature.

D. Warranty of merchantability relates only to the fitness of the product made or sold.

Which of the following is true of a warranty of merchantability? A. It imposes the duty to employ a particular design, on the merchant, for safety reasons. B. Unless otherwise excluded or modified, merchants do not make an implied warranty of merchantability. C. Warranty of merchantability exists even after the risk of loss has passed to the buyer. D. Warranty of merchantability relates only to the fitness of the product made or sold.

B. They can become specialists in a particular area of regulation.

Which of the following is true of administrative agencies? ​A. They are always administered by a committee. B. They can become specialists in a particular area of regulation. C. ​They have the power to regulate but not implement laws. ​ D. They can be run only by a single administrator.

​A. The decision of the appellate court is binding on lower courts.

Which of the following is true of appeals made to higher courts? ​A. The decision of the appellate court is binding on lower courts. ​ B. They make it mandatory for appellate courts to hear the testimony of witnesses. C. The complete transcript of trial court proceedings is offered by the defendant directly to the jury. ​ D. The attorneys for each party put forth verbal arguments instead of filing written briefs.

C. They are a type of existing goods.

Which of the following is true of identified goods? A. Identified goods refer to goods that are yet to be manufactured by their seller. ​ B. They are not yet existing. C. They are a type of existing goods. D. They are goods in the designing stage.

​A. It has appellate jurisdiction in cases based on the U.S. Constitution.

Which of the following is true of the United States Supreme Court? ​A. It has appellate jurisdiction in cases based on the U.S. Constitution. ​ B. It has the sole power to establish inferior courts. C. It is mandatory for the Supreme Court to hear all appeals that come before it. ​ D. It has original control in cases that are based on a federal law or a treaty.

C. It will generally not invalidate a contract.

Which of the following is true regarding parties who make mutual mistakes of law? A. One of the parties can annul the contract stating that it is a mistake of law. B. Both parties can claim relief and compensation through a court of law. C. It will generally not invalidate a contract. D. The contract becomes null and nonbinding on the parties.

D. Laws are rules that are enacted by the government.

Which of the following statements best describes a difference between rules and laws? A. Laws may not be modified while rules can be modified at any time. B. Rules carry a penalty for violation while laws do not. C. Rules prescribe a code of civil conduct while laws do not. D. Laws are rules that are enacted by the government.

​A. It is a contract where two or more people individually agree to perform an obligation.

Which of the following statements best describes a several contract?​ ​A. It is a contract where two or more people individually agree to perform an obligation. ​ B. It is a contract in which individual agreements are contained in separate documents. ​ C. It is a contract in which express words cannot be used to show that the contract is intended. ​ D. It is a contract entitling two individuals together for performance.

B. ​It refers to the carrying out of the specific terms of a contract.

Which of the following statements best describes specific performance?​ ​A. It refers to the payment of compensatory damages by a party as a remedy for breach of contract. B. ​It refers to the carrying out of the specific terms of a contract. ​C. It refers to the payment of liquidated damages by a party as a remedy for breach of contract. ​D. It refers to carrying out of terms that were not specified in a contract in order to compensate for damages.

​A. It is the conveyance of rights in a contract to a person who is not a party.

Which of the following statements best describes the term "assignment"? ​A. It is the conveyance of rights in a contract to a person who is not a party. ​ B. It is the termination and replacement of an old contract. ​ C. It is the transfer of duties alone without a transfer of rights. D. It consists of an assignee who is the party making the assignment.

​A. Cases in common law are decided on the basis of precedents.

Which of the following statements is true of common law? ​A. Cases in common law are decided on the basis of precedents. ​ B. It is primarily based on statutes enacted by the legislature. ​ C. It is based on the legal system that originated in the courts of medieval Spain. ​ D. Judgments in common law generally take the form of a restraining order or an injunction.

D. In the case of running accounts, such as purchases from department stores, the statute starts from the date of the last purchase.

Which of the following statements is true of statutes of limitations? A. Even if a promisor leaves the state, the statute continues to run while the promisor is beyond the jurisdiction of the court. B. Statutes of limitations are uniform for all kinds of debts and suits. C. For open accounts, accounts receivable, and ordinary loans, the statute of limitations is always one year. D. In the case of running accounts, such as purchases from department stores, the statute starts from the date of the last purchase.

D. Duress

_____ is a means of destroying another's free will by one party obtaining consent to a contract as a result of a wrongful threat to do the other person or family members some harm. A. Misrepresentation B. Undue Influence C. Passive fraud D. Duress