CONTRACT LAW 1
Quiz II –
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Indicate theanswer choice that best completes the statement or answers thequestion.
The elements for a valid contract do NOT include:
a fair price.
2. An offer of a reward for the arrest and conviction of a criminalis an example of a:
3. An obligation to pay for the reasonable value of services renderedwhen there is no contract would be called:
A bilateral contract consists of a:
promise for an act.
promise for refraining from acting.
promise for a promise.
promise to contract.
A legally binding agreement that can be rejected at the option of one of the parties is called a(n):
Under the ___, acceptance of an offer takes place when a properly addressed postage paid mail acceptance is placed in the hands of US Postal Service.
mail carrier rule
acceptance by mail rule
An offer that is indefinite may be clarified by reference to another writing through:
A said to B, "I`ll give you $100 for that bracelet." B replied, "$135." A said, "No thanks." B then said that B accepted the $100, but A was no longer interested and said there was no contract. B insists there is a contract. Result?
A`s offer of $100 was open and accepted by B, thereby forming a contract.
B`s counteroffer of $135 terminated A`s offer of $100.
B`s statement, "$135" was a negotiating statement that did not terminate A’s original offer of $100.
A`s offer of $100 was irrevocable.
Under the Uniform Commercial Code (UCC), a firm offer applies to:
a written, signed offer by a merchant to buy or sell goods.
an unwritten but definite offer to buy or sell goods.
a written, signed offer by anyone to buy or sell goods.
an unlimited, stipulated period of time.
If an offeree accepts an offer before it is effectively revoked:
a void contract is formed.
a voidable contract is formed.
an unenforceable contract is formed.
a valid contract is formed.
Arthur made a bid at an auction by calling out the amount of $250. The auctioneer acknowledged Arthur`s bid. There were no higher bids, and before the fall of the auctioneer’s hammer, Arthur announced that he was withdrawing the bid. The auctioneer said that it was too late for Arthur to withdraw his bid, because the bid had already been acknowledged. What is the result?
Arthur`s bid is an ordinary offer that can be revoked.
Arthur`s bid is firm and cannot be withdrawn.
Since the auctioneer had in fact acknowledged Arthur’s bid, the bid became an option exercisable at the election of the seller.
Since the auctioneer had in fact acknowledged Arthur’s bid, a contract had been formed by way of offer and acceptance accordingly, Arthur’s subsequent attempt to withdraw his bid was ineffective.
If an offer requires that acceptance be communicated by a specific date and the acceptance is properly dispatched by the offeree on the final date,
no contract is formed, since the offeror will undoubtedly receive the dispatched acceptance after the deadline for acceptance.
a contract is formed, but the contract is voidable at the election of the offeror.
the acceptance is timely and a contract is formed, even though the offeror actually receives the acceptance well after the specified date has passed.
the acceptance is timely and a contract is formed, but only if the offeror actually receives the acceptance by the deadline specified for acceptance.
Jose visited a garage sale and found a baseball card collection which he believed was worth over $1,000. He bought the collection for $50.00 from Wanda. Later Jose discovered the collection was essentially worthless and demands his money back from Wanda. Must Wanda refund Jose’s money?
No, the contract is enforceable because Jose was operating under a unilateral mistake and Wanda did not know the value of the cards.
Yes, the contract is enforceable because Jose made a unilateral mistake of fact.
Yes, the contract is enforceable because of mutual mistake of fact.
No, the contract is enforceable because of mutual mistake of value.
Marquez agrees to buy Dale’s pickup truck so he can pull his trailer. Both Marquez and Dale believe that the truck is big enough to do the job. After they complete the deal, Marquez finds that the truck is not strong enough to handle the trailer. The contract between Marquez and Dale can be rescinded because of:
a unilateral mistake.
a defective acceptance.
a mutual mistake.
The obligation of a cosigner is discharged by:
the minority status of one of the parties.
the majority status of one of the parties.
the court`s declaration of the contract`s provision of necessaries.
the payment of the debt.
Judy, a widow, just sold a piece of property. She will live off that money during her retirement. Judy dotes on her son, Chris, who asks her to invest her money in his restaurant, which is faltering. He tells her that if she does not lend him the money she will never see him again. She is afraid of being alone and agrees to his request, but soon changes her mind and asks for her money back. Chris claims they have formed a binding contract. What is your conclusion?
The contract is voidable based on duress.
The contract is valid because it was a unilateral mistake.
The contract is voidable based on undue influence.
The contract is voidable based on fraud.
Assume Harvey buys a bull from Mike for the purpose of breeding, and Mike was aware of Harvey’s purpose in purchasing the bull. Later, the bull was discovered to be sterile, although at the time of sale both Harvey and Mike believed the bull was not sterile. The contract is:
voidable based on fraud.
voidable based on misrepresentation.
voidable based on bilateral mistake.
voidable based on economic duress.
the concern shown by the other contracting party.
what is demanded by the promisor as the price for the promise.
a stated number of dollars.
the concern of both contracting parties for the protection of the environment.
Promissory estoppel does NOT require
a signed writing explaining the promise.
a clear and definite promise
that justice be better served by enforcement of a promise
that a promisee has justifiably relied on the promise
Courts will consider the adequacy of the consideration when:
one party clearly has the better side of the deal.
one party has more business experience than the other.
one party claims to have been defrauded.
one party shows a much lower price nationally-advertised on television.
A contract in which one party agrees to purchase goods from another contingent upon the purchaser`s ability to locate suitable financing is said to:
result from undue influence.
contain a waiver.
contain a conditional promise.
Ordinarily, a promise to perform an existing legal obligation is:
binding if the promisor promises to perform with extra care.
binding if the promisor promises to perform to suit the personal satisfaction of the promisee.
binding if the promisee would experience substantial loss due to breach of the promise.
Which of the following is not consideration for a present promise?
a good faith adjustment
compromise and release of claims
the promise to pay one’s child support obligation, consistent with a pre-existing court order.
the performance of a requested act
When a debtor tenders a check stating “paid in full” and the creditor cashes the check, the debt:
is always discharged.
may be discharged if it is a liquidated debt.
may be discharged if it is a unliquidated debt.
is never discharged.
Which of the following is not a necessary element of promissory estoppel?
The promisor and the promisee must engage in a bargained-for exchange.
The promisor must intend or should reasonably expect that the promisee will rely on the promise.
The promisee must in fact rely on the promise in some definite and substantial manner.
Enforcement of the promise is the only way to avoid injustice.
Even if a contract appears legal on its face, it may be unenforceable if:
the illegal contract has not been performed.
the contract has been partially performed.
the contract has been fully performed.
the contract has an illegal purpose.
Illegal agreements are:
enforceable if one party acted in good faith.
voidable by one of the parties.
voidable by either party.
Dealing honestly, reasonably, and in good faith means all the following except:
these are implied duties in every contract for services.
these are implied duties in every contract for the sale of goods.
the parties will not injure each other.
these are express duties in every contract for services.
Sales promotion schemes calling for the distribution of property according to chance among the purchasers of goods are:
legal, as long as they are called raffles.
illegal as lotteries.
legal, whether the contract is wise or foolish
legal, because the contract spreads the risk equally over all the parties.
All of the following agreements represent an unreasonable restraint of trade except:
a combination to create a monopoly.
an agreement to obtain a “corner” on a market.
an association of merchants to increase prices.
a valid restrictive covenant.
An oral contract to sell a house is binding if:
the agreement is witnessed by a member of the clergy.
there is a tape recording of the agreement.
the buyer paid the price and received the deed of conveyance.
the seller is a merchant.
Any of the following could satisfy the requirement of a writing under the statute of frauds except:
The parol evidence rule:
applies to complete written contracts.
prevents proof of fraud.
applies to incomplete contracts.
is not designed to preserve the integrity of written contracts.
A contract is interpreted to give effect to:
the intent of the parties.
what the court believes is a fair contract.
what the defendant thought the contract meant.
what will be best for the economic life of the community.
A contract is created by which the terms are stated to be for consideration in the amount of $3,000. If typewritten in the contract is the term "four thousand dollars," while the amount of $3,000 is printed within the form:
the contract will be interpreted to be for $3,000.
the contract will be interpreted to be for $4,000.
there is a contract but the courts will not specify the dollar amount, as a conflict exists.
a compromise settlement amount of $3,500 will be used.
An oral understanding is not binding if:
the services performed were not to the satisfaction of the other party.
the amount agreed to be paid for services rendered was not a fair and reasonable amount.
the parties intended to formalize their understanding with a written agreement.
the understanding may be terminated at will by either party.
In most bilateral contracts, the performances of the parties are __.
A homeowner who refinances her home mortgage may cancel the transaction:
if the terms of the contract were less favorable than anticipated.
within three business days.
only if she was the victim of fraud.
upon payment of a $1,000 penalty, as required by a Federal Trade Commission rule.
A contract can be discharged by impossibility in all the following scenarios except:
destruction of subject matter in a sales contract.
performance under the contract becomes 25% more expensive due to currency fluctuations in construction contract.
when the law changes.
death of obligee in a personal services contract.
Which of the following events excuses a promisor from performing his or her contractual obligations?
a shortage of materials necessary for production of goods and/or provision of services called for under the contract
an unanticipated increase in the cost of performance
destruction of the subject matter through no fault of either party
The death or disability of a party to a contract discharges the contract when:
personal services requiring peculiar skill are involved.
the payment of money is involved.
a house is to be painted.
all of these.
__ occurs when a party expressly declares that performance will not be made when required.
A waiver of breach.
Repeated breaches and waivers are generally interpreted to indicate:
poor business practices.
ignorance of the law.
modification of contract.
Consequential damages may be recovered if:
the damages were not a foreseeable consequence of the breach.
the damages reasonably flow from the breach as a result of the injured party’s particular circumstances.
the breach did not cause the damages.
the loss exceeds $500.
Damages in excess of actual loss are called: