Chapter 13 Business Law

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A(n) _____ is defined as "a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty."

contract

Which element of the contract consists of the bargained-for exchange or what each party gets in exchange for his or her promise under the contract?

Consideration

Which element of the contract best describes the legal ability to enter into a binding agreement?

Contractual capacity

Which of the following can be considered a defense to the enforcement of a contract?

Lack of genuine assent

Which of the following theories of contracts best explains the existence of a contract on the parties' outward manifestations of intent and basing its interpretation on how a reasonable person would interpret it?

The objective theory of contracts

The law of contracts is primarily:

common law

A contract for the sale of a good falls under:

Article 2 of UCC

A(n)_____ is commonly defined as a promise in exchange for a promise

bilateral contract

A reward is a most common example of:

a unilateral contract

Which of the following is intended to avoid unjust enrichment?

A quasi-K

A void contract

is in effect not a contract at all, either its object is illegal or it has some defect so serious that it is not a contract

A contract is _____ if one or both parties has the ability to either withdraw from the contract or enforce it.

voidable

A recognizance:

arises when a person acknowledges in court that he or she will perform some specified act or pay a price upon failure to do so.

Which of the following is true of the rules that guide the interpretation of contracts?

If numerals and numbers written out in words conflict, the written words prevail.

The term "consideration" in relation to contracts involves parties acting in an ethical manner

False

The Restatement of the Law Second, Contracts is not actually the law itself.

True

Whether a contract is bilateral or unilateral depends upon what response the offeror expects from the offeree.

True

Today, courts hold that once an offeree begins performance, the offeror must hold the offer open for a reasonable time to allow the offeree to complete the performance.

True

Quasi-contracts are actual contracts.

False

If a quasi-contract is imposed, the amount of damages for a breach is based upon the fair market value of any service provided to the defendant.

True

In order to recover under quasi-contract, there is no requirement that enrichment be unjust.

False

If a contract is valid, then it is enforceable.

False

Any contract that is not a formal contract is an informal contract, also called a simple contract.

True

In the employer/employee context, the purpose of a covenant not to compete is to restrict what an employee may do after leaving a company.

True

Which of the following was the result in the Case Opener in which Hallmark claimed that an arbitration ruling against a former employee should be upheld?

The former employee could proceed with an action in court because there was no consideration for the arbitration agreement and, therefore, no valid agreement

A[n] ___________ is a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.

Contract

Which of the following consists of an offer by one party and an acceptance of the terms by another party?

Agreement

The person who makes an offer is called an _____________.

Offeror

The person who agrees to the terms of an offer by another party is called the ___________.

Offeree

Which of the following is a definition for consideration?

A bargained-for exchange.

Which of the following represents the legal ability to enter into a binding agreement?

Contractual capacity

Which of the following are examples of people who do not have the capacity to enter into legally binding contracts?

People under the age of majority, people suffering from mental illness, and intoxicated persons.

Which of the following references the requirement that a contract not be either illegal or against public policy?

Legal Object

Which of the following represents a lack of genuine assent?

Acceptance secured through fraud, undue influence, or misrepresentation

An attorney who says that a contract lacks "the proper form" is typically referencing which of the following?

The contract lacked a writing.

Contract law is said to be based on a[n] ___________ theory, meaning that the existence and interpretation of the contract is based on the outward manifestations of intent by the parties.

Objective

As a general rule, the ________ intent of the parties is not relevant when determining whether a contract exists; rather, what is relevant is how they represented their intent through their actions and words.

Subjective

If a _____________ misunderstanding between the parties exists, and as a result of that misunderstanding the parties do not really come to a meeting of the minds, there is no contract.

mutual

Which of the following are the two most important sources of contract law?

Case Law and the Uniform Commercial Code

Today's law of contracts originated from judicial decisions in ________.

England

The law of contracts is primarily _______________ law.

Common

Which of the following was propounded by prominent legal scholars, recruited by the American Law Institute?

The Restatement of the Law Second, Contracts.

Which of the following is the reason the Uniform Commercial Code was drafted?

Different states had different laws governing contracts which did not result in a smooth flow of interstate commerce.

Which of the following articles are parts of the Uniform Commercial Code relevant to contracts?

2 and 2A

All contracts can be categorized as either ___________ or ____________.

Unilateral, bilateral

A ______________ contract is commonly defined as a promise in exchange for a promise.

Bilateral

Harry promises to pay Frank $2,000 for a used car. At what point is there a binding contract?

When the agreement is made

In a(n) _____________ contract, the offeror wants a performance to form the contract.

Unilateral

Which of the following have all their terms clearly set forth in either written or spoken words?

Express contracts

In which of the following does a contract arise not from words but from the conduct of the parties?

Implied contracts

Which of the following is sometimes referred to as an implied-in-law contract?

Quasi-contracts

Which of the following is the most likely measure of recovery when a quasi-contract is involved?

The fair market value of the matter involved

A[n] _____________ contract is one that contains all the legal elements of a contract.

valid

A valid contract may be _____________ when there is some law that prohibits the courts from enforcing it.

Unenforceable

Which of the following is in effect not a contract at all?

A void contract

A contract is _______________if one or both of the parties have the ability to either withdraw from the contract or enforce it.

Voidable

Which of the following contracts are usually voidable?

Contracts entered into as a result of fraud, duress, or undue influence

Once all the terms of the contract have been fully performed, the contract is said to be _____________.

Executed

As long as some of the duties under a contract have not yet been performed, the contract is considered __________________.

Executory

Which of the following is an example of a formal contract?

Contracts under seal and also letters of credit

The reference to __________________ comes from the days when the contract was literally sealed by a piece of soft wax into which an impression was made.

Contracts under sea

How many states still allow a contract without consideration to be enforced if it is under seal?

10

A(n) _______________ arises when a person acknowledges in court that he or she will perform some specified act or will pay a price upon failure to do so.

Recognizance

A ________________ is an agreement by the person who issues a letter to pay a sum of money on receipt of an invoice and other documents.

Letter of credit

Which of the following are written documents signed by a party that makes an unconditional promise to pay a specific sum of money on demand or at a certain time to the holder of the instrument?

Negotiable instrument

Which of the following states that if a writing, or term in question, appears to be plain and unambiguous on its face, its meaning must be determined from the four corners of the instrument without resort to intrinsic evidence, with the words being given their ordinary meaning?

The Plain Meaning Rule

What was the result on appeal in the case of D.L. Peoples Group, Inc., v. Hawley, in which heirs of the defendant's deceased employee claimed entitlement to workers' compensation benefits based on a contract of employment entered into in Florida by the deceased employee, but the trial court ruled that Florida law was inapplicable?

Because the last act necessary for the formation of the contract occurred in Florida, Florida workers' compensation law applied.

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