Quiz 2

Created by nkirn 

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70 terms

Under the objective theory of contracts, the intention to enter into a contract is judged by outward, objective facts as interpreted by a reasonable person.

True

A contract can only be created when a promise is given in exchange for another promise

False

Quasi contracts do not arise from mutual agreement by the parties but are imposed by courts to avoid unjustly enriching a party at the expense of another.

True

An express contract may be written or oral.

True

To be valid, a contract must be enforcable by all parties to it.

False

In deciding whether a valid contract was formed, the courts will not look at:
a-the statements by the parties when they entered into the contract
b-the ways the parties acted when they enterd into the contract
c-the circumstances surrounding the transaction
d-the subjective beliefs of the contractual parties

D

It is necessary for an offer to be communicated by the offeror to the offeree to be effective

True

Revocation normally must be communicated to the offeree before acceptance or else it will be inneffective

True

In most states, revocation is effective when it is sent by the offeror

False

An option contract takes away the offeror's power to revoke an offer for the period of time specified in the option.

True

Rejection of an offer by the offeree will not necessarily terminate an offer

False

It is possible for an offeree to accept an offer silently

True

For consideration to have "legally sufficient value," it must consist of goods or money

False

Janet tries to start her new car with no cuccess. She yells in desperation that she would seel the car to anyone for $100. Bill, a passerby, hands Janet $100. Bill's act
a-constitutes a valid acceptance
b-constitutes a valid acceptance only if Janet and Bill already know each other
c-doesn't constitute a valid acceptance, unless Bill is a car dealer
d-doesn't constitute a valid acceptance, because janet does not seriously intend to sell the car

D

Harry takes his canary to Dr Power for surgury on a broken wing. Power says thay the wing should be fully healed within a week. The wind does not heal within a week. Power is
a-not liable for breach of contract because the statement was an opinion
b-not liable for breach of contract but Harry is excused from paying the bill
c-not liable for breach of contract because the repair of the wing is not propper subject matter for contract
d-liable for breach of contract

A

The Hardys decide to sell their farm and send out a flyer describing the location, the acreage, and the price. Laurel responds with a letter of "acceptance." Laurel and the Hardys have
a-no contract because the letter was an invitation to negotiate
b-no contract because the Hardys sent a letter to more than one party
c-a contract if, under the circumstances, a reasonable person would believe that the Hardys were making an offer to sell the farm
d-none

C

Jones offers to sell Flint his bicycle. Before accepting the offer, Flint learns that the bicycle has been sold to Bond. jones is
a-liable to Flint for breach of contract
b-not liable because the sale of the bicycle revokes the offer made to Flint
c-not liable, only if he provides an acceptable substitute to Flint
d-liable to Bond and Flint for breach of contract

B

Keith offers to sell his home to Debbie for $80,000. Debbie replies, "your price is too high. I will offer to purchase your home for $70,000." Debbie's response is
a- a counteroffer
b-a rejection of the original offer only
c-the creation of a new offer only
d-none

A

Sam offers to sell a high-speed modem to Randy but Sam receives a letter of acceptance from Ford. A valid contract exists between
a-Sam and Randy
b-Sam and Ford
c-Sam, Randy, and Ford
d-mome

D

Tyler offers to buy a laser printer, with a case of paper and an extra certridge, from Rico for $200. If Rico says, "OK, but no paper and no extra cartridge," he will be deemed to
a-accept the offer
b-reject the offer
c-make a counteroffer
d-both b and c

D

Hubert promises to give Jane $500 because she does not have as much money as other people. Hubert's promise is,
a-enforceable because society wishes to encourage people to keep their promises
b-enforceable because the redistribution of wealth is a vlid social objection
c-not enforceable because Jane has not given any consideration in return
d-not enforceable because Hubert could have given he more money

C

Jane promises to pay her secretary $1,000 in consideration of the services the secretary provided over the years. Jane later renegs on the promise. jane is
a-liable for payment of $1000
b-liable only if the promise was written
c-not liable because the consideration was in the past
d-not liable because the consideration was accidental

C

Ned contracts to sell his boat to Larry. Larry builds a dock behind his house in which to keep his boat. Ned's subsequent attempt to cancel the contract will
a-not be effective because Larry has detrimentally relied on Ned's offer
b-not be effective because Larry may not be able to obtain a similar boat for a similar price elsewhere
c-be effective because Ned did nothing to encourage Larry to build a dock
d-be effective because Ned wants to sell the boat to someone else

A

A bilateral contract is created when
-one party gives a promise in exchange for another party's promise
b-one party gives a promise in exchange for another party's performance of a particular act
c-both a and b
d-none

A

John offers to pay Mary $100 if she walks across the Bridge. Mary can accept the offer only by walking across the bridge. If mary walks across the bridge, she and John will have formed
a-a bilateral contract
b-a unilateral contract
c-a performance contract
d-a surety contract

B

Betty visits a grocery store in which she has an open account, holds up an apple so that the clerk can se it, acknowledges the clerk's nod, and pockets the apple knowing that she will be billed for it at the end of the month. bettery has formed
a-an inplied-in-fact contract
b-a quasi contract
c-a bilateral contract
d-a unilateral contract

A

Under the modern-day view, an offer that can only be accepted by completion of a specific act can
a-be revoked prior to completion of performance
b-not be revoked once the performance has begun
c-not be revoked once the promise indicated that he will perform
d-none

B

The doctrine of quasi contract
a- can only be used if there is an actual contract covering the area in controversy
b-cannot be used if there is an actual contract covering the area in controversy
c-can be used whether of not there is an actual contract covering the area in controversy
d-none

B

Fred and Ethyl sign a contract in which Fred agrees to deliver heating oil in exchange for Ethyl's promise to pay for the oil. Fred delivers the oil. The contract is
a-fully executed
b-executory on the part of Fred
c-executory on the part of Ethyl
d-none

C

When ambiguities appear in a contract, they will be construed against
a-the party with the greater bargaining power
b-the promiser
c-the promisee
d-the party who drafted the contract

D

Some states impose a duty on a minor who dissafirms a contract to restore the adult party too the position that he or she held before the contract was made

True

Food, clothing and shelter are the only things that the courts have been willing to define as being "necessaries."

False

A minor normally is permitted to disaffirm a contract for purchase of necessaries but remains liable for the reasonable value of the goods

True

Parents are ordinarily liable for the contracts made by their minor children acting on their own

False

A covenant not to compete will be upheld only if it is reasoonable with respect to duration and geographical scope.

True

A contract in which there is no real oportunity for a party to bargain with the supplier of an esssential good is an adhesion contract.

True

After an illegal contract is executed, the courts will require a party who is unjustly enriched at the expense of the other party to pay damages

False

Jill is 15. in most states, Jill would be considered a minor because she is under the age of
a-16
b-18
c-20
d-21

B

Shelly celebrates her 18th birthday and decides that she no linger wishes to keep a car she bought when she was 17. her right to disaffirm will depend on whether
a-the car is in good condition
b-she acts within a reasonable period of time after reaching the age of majority
c-the other party has the right to disaffirm the contract
d-none

B

Carla convinces her parents to permit her to become an emancipated minor. On emancipation she will acquire rights, including the right to
a-vote
b-buy alcohol
c-a and b
d-none

D

Linda is adjudicated incompetent by a court and a guardian is appointed, but she subsequently purchases a new car. The contract is
a-binding and enforceable
b-binding and enforceable to the extent that the car is a "necessary."
c-unenforceable because persons declared to be mentally incompetent are not permitted to drive cars
d-void

D

Paul agrees to sell his clothing store to Michael and as part of the sale, to execute a covenant not to compete, and promising not to open a similar store within 1000 miles for the next 20 years. A court reviewing the terms of the covenant would likely find that it is
a-unenforceable because all covenants not to compete are unreasonable restraints of trade
b-unreasonable as to the geographical scope and duration
c-unreasonable with reguard to duration
d-enforceable

B

Jack runs an illegal gambling ring and contracts to pay various law enforcement officers not to interfere with his operation. The illict payments are discovered and the officers and Jack are sent to prison. Jack can
a-successfully sure for the return of all the money paid to the officers
b-successfully sure for the return of all the money paid to the officers that has not been spent
c-not successfully sure for the return of any of the money paid to the officers
d-none

C

In general, minors are not held personally liable for their torts

False

A contract or a clause in a contract is illegal only if there is a specific statute that prohibits the action bt the contract

False

If a contract is illegal, the party less at fault will usually be entitled to enforce it so long as it has not yet been fully performed.

False

When one of the parties to a contract has no knowledge or any reason to know that the contract of illegal, a court may allow the party to recover benefits conferred in a partially executed contract

True

Ted, a minor, signs a contract to purchase a bicycle from Fred, the woner of the shop. Ted's right to disaffirm the contract
a-gives Fred the right to disaffirm the contract
b-is not valid because the bicycle is a "necessary"
c-does not alter the fact that Fred is bound by the contract
d-requires Fred to deal with all minors

C

Ken, an unmarried 17 year old, signs a contract to sell his car to the Ragal Used Car co. Ken receives a better offer the next day from another car dealer and accepts the new offer. ken is
a-liable on the contract with Ragal and must sell it a car of comparable value
b-liable on the contract with Regal and must sell it his car
c-not liable to regal because he is a minor
d-not liable to Regal because the sale of the car disaffirmed their contract

D

Tony, a minor, attempts to return to its former owner, a car that he recently purchased and subsequently wrecked, in a state in which a duty of restoration is imposed. Tony
a-can return the car in its present condition and avoid any further liability
b-is not required to return the car due to his minority
c-must return the car and pay for the damage
d-will not be able to return the car unless it can be fully restored to its original condition

C

Mistakes in judgement as to value or quality will permit one to avoid a contract.

False

if a price quotation contains a mistake in the adding of a number of figures, the contract may not be enforced.

true

A signifigant mistake in value will usually enable a party toa contract to avoid the contract.

False

By signing a contract in which the value of the object being purchased is specified, the parties assume the risk that the value of the object will change or prove to be different from what they originally thought.

True

When both parties are mistaken as to the same material fact, the contract can be recinded by either party.

True

If a transaction is tainted by fraud, the innocent party may enforce the contract and seek damages for any injuries resulting from the fraud.

True

Undue influence will typically arise in situations in which there is some sort of family or fiduciary relationship between parties.

True

The parole evidence rule permits the introduction at trial of evidence of the parties' prior negotiations, prior agreements, or contempoaneous oral agreements that contradicts or varies the terms of the written contract.

False

Ronald agrees to sell to Jill, for $150, a 150-acre parcel of land in the desert. they both believe the land to be worthless, but in fact it sits on top of a huge oil deposit. A court will
A-set the agreement aside due to the obvious discrepancy in valuse between the price paid and the true value of the land.
B-Set the agreement aside due to the evident failure of the owner to ascertain the value of the land.
C-Enforce the agreement
D-None

C

John agrees to buy 37 hard drives from Whitney. If the hard drives have less capacity than Whitney and he believed, John may
A-only enforce the contract
B-only avoid the contract
C-Either enforce or avoid the contract
D-none

C

Ron, a renowned architect, sells to Jan an apartment that he has not lived in for many years. After Jan moves in, she discovers a number of Ron's drawings in the closet which were produced during his early career and would now be considered very valuable. Ron files suit to get the drawings. Ron should
A-prevail because there was no mutual assent
B-prevail because the sale of an apartment includes nothing in it
C-no prevail because the sale of an apartment includes everthing in it
D-not prevail because he should have known the drawings were in the closet.

A

Steve and Gloria contract for the sale fo an office building. A mutual mistake of fact will make it possible for either party to rescind the contract in all situations
A-under any circumstances
B-as long as the mistake of fact is material
C-al long as the mistake of fact is immaterial
D-none

B

Will falsely states a material fact to Jacqueline, who relies on it to her detriment. Will's statement
A-constitutes fraud - nothing more is necessary
B-constitutes fraud only if both justified reliance and the intend to deceive are present
C-will prompt a court to consider whether Jacqueline's damages were significant enough to warrent further action
D-none

B

Edgar promises Alice that a certain used car will give her a "smooth ride." Edgar offers to let Alice take the car for a test drive, but Alice declines. She pays for the car and drives off but soon realizes that the car's suspension system is in poor condition. Alice
A-may rescind the contract on the ground of unilaterial mistake
B-may rescind the contract on the ground of fraud
C-may rescind the contract on the ground of misrepresentation
D-was not defrauded

D

Ira persuades Jake to buy his horse by telling Ira that the horse rides "like the wind." Ira's statement is
A-duress
B-fraud
C-puffery
D-undue influence

C

Steven, who is Wesley's guardian, convinces Wesley that buying a certain parcel of land from Steven's brother-in-law at a price that is greatly inflated is a good deal. If in fact it is not a good deal, Steven may be liable for
A-duress
B-fraud
C-puffery
D-undue influence

D

Jane, an accountant, convinces her elderly client Howard to sign a contract to give her his life savings as part of a phony investment scheme. When Howard learns the truth, he may
A-only enforce the contract
B-only recover what he gave to jane
C-enforce the contract or recover what he gave to Jane
-do nothing

C

Stan offers to buy a house from Kay for less than Kay paid for it because he would "hate to see anything bad happen to her family." Kay agrees to sell. Regarding this agreement, a court would likely
A-enforce it
B-rescind it
C-order the parties to renegotiate it
D-not enforce it

D

Mary makes an oral contract with Nick that would ordinarily be unenforceable under the Statute of Frauds. A court may enforce the contract under the doctrine of promissory estoppel only if the contract
A-cannot be performed in one year
B-involves a purchase or sale of land
C-involved a sale of goods valued in excess of $5,000
D-none

D

George and Martha enter into an oral contract for a sale of George's office building. Before Martha takes possession, this contract is
A-enforceable by George only
B-enforceable by Martha only
C-enforceable by neither party
D-not enforceable

D

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