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Ordinarily, every party to a contract is presumed to have contractual capacity until the contrary is shown.
As the social force of protecting the person has gained recognition, many concepts of contractual incapacity have been abolished.
Generally, when a person of legal age makes a contract with a minor, the contract is voidable by either party.
The parent of a minor is liable for payment of the purchase price of a contract that the minor has avoided.
The appointment of a guardian for an insane person does not avoid a contract made by the person the day before the guardian was appointed.
A person who has drunk too much alcohol at a party and signs a contract may be able to rescind that contract.
The seller of a painting is not bound by the sales contract if the painting purchased was considered of little value and only later discovered to be valuable to the surprise of both buyer and seller.
A party who speaks with a reckless disregard for the truth not knowing of the falsity of his or her words cannot be liable for fraud.
Increasingly, parties to a contract are being required to disclose defects or conditions that are unknown to and not obvious to the other party.
Contractual capacity is the ability to:
understand that a contract is being made and to understand its general nature.
The key time for determining whether a party lacked contractual capacity is:
the time the contract was made.
The maximum amount of time that a minor has to disaffirm a contract is:
a reasonable period of time after reaching the legal age.
A minor cannot avoid a contract to purchase a car if the:
minor is able to return the car but does not do so.
When a minor avoids a contract to purchase a car:
a relative who cosigned the contract is liable for the purchase price.
In which of the following cases is a contract between A and B binding?
A makes a mistake of material fact.
A person unable to read is bound by signing a paper without obtaining an explanation of it, unless:
the other contracting party knows of the signer's disability.
All of the following statements refer to an element of fraud except:
the defendant desired to obtain a financial benefit.
Jack sells Jim a used car that Jack falsely described as having been driven only 12,000 miles. Fraud has occurred if:
Jim relied upon Jack's statement.
I believe that I own a very valuable vase. I tell this to you and state that I will sell it to you for $800. I sell the vase to you, and you later find out that the vase is worth only $200. A fraud:
ordinarily has not occurred.
A court will do its best to find the intent of parties to an agreement provided that the agreement is not too indefinite
A vague contract may be clarified by references in the contract to other documents or agreements.
A contract to buy all the buyer's requirements from the seller at a stated price is too vague to be a contract.
A person returning lost property without knowing that a reward was offered cannot sue the owner for the reward.
The addition of any new terms in the acceptance, including terms that relate to mere clerical detail, converts the acceptance into a counteroffer.
Acceptance of an offer to form a unilateral contract need not be communicated to the offeror to be effective.
If not an offer, the first statement made by one of two persons is most properly termed a(n):
invitation to negotiate.
A customer requested a price from a carpenter on a teak cabinet to be built according to the buyer's specifications. Because teak wood is difficult to obtain, the customer agreed to pay the cost of the wood plus $175 and the carpenter agreed to build it. Which of the following is correct?
Although the price is somewhat unclear, the parties have entered into a contract.
An agreement that consists of two or more parts and calls for corresponding performances of each part by the parties is called a:
A binding promise to keep an offer open for a stated period of time or until a specified date is called a(n):
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?
B's counteroffer of $135 terminated A's offer of $100.
If no termination date is specified for an offer, the offer will remain open:
for a reasonable time.
An acceptance made in a telegram that never is delivered to the offeror:
is effective as an acceptance at the time that it is given by the offeree to the telegraph office for sending to the offeror.
Arthur made a bid at an auction by calling out the amount of $250. The auctioneer noted Arthur's bid. There were no higher bids, and Arthur called out that he was withdrawing the bid. The auctioneer said that it was too late to withdraw the bid.
Arthur's bid is an ordinary offer that can be revoked.
Only the parties who signed the original contract can have rights with respect to that contract.
A recognizance is an agreement by which one party admits or recognizes that a specified sum of money is owed to another party.
An express contract is one in which the agreement is shown by acts and conduct of the parties.
A voidable contract is one that is otherwise valid but may be rejected or set aside by one of the parties.
An option contract gives one of the parties an absolute right to enter into a second contract at a later date.
A legally binding agreement that can be rejected at the option of one of the parties is called a(n):
An offer of a reward for the arrest and conviction of a criminal is an example of:
a unilateral contract.
The plaintiff in a quasi-contractual action can recover:
the reasonable value of the benefit conferred upon the defendant.
In a bilateral contract, which is an exchange of promises, each promise is consideration for the other promise.
In most cases, consideration will result in a benefit to the promisor and imposition of some burden or detriment to the promisee.
The promise of a creditor to forbear collecting a debt is consideration for a promise by the debtor to modify the terms of the transaction.
An unenforceable promise will constitute consideration as long as the parties to the contract appear to be in agreement.
A promise by a coat factory to pay $0.25 per button for any buttons that it orders from the ABC Button Company constitutes consideration.
Arresting 100 persons guilty of crime can be consideration for the promise made to a police officer to pay a bonus for making such arrests.
If a claimant knows that there is no merit in the claim itself but is using the claim to force an issue, a settlement of the claim based on partial payment lacks consideration.
Sara Student wished to pay off her $5,000 student loan. If she sends in a check for $3,000 and the creditor cashes the check, the debt will be fully satisfied provided the check is marked "paid in full."
Promissory estoppel does not require that the promisee's detrimental reliance on the promise be reasonably foreseeable to the promisor.
Will the law enforce every promise?
Generally yes, if consideration amongst other elements is present.
In a unilateral contract, the consideration for the promise is:
the doing of the act called for by the promisor.
In a unilateral contract, the doing of a requested act is also the:
acceptance of the offer of the promisor.
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:
contain a conditional promise.
A promise to pay a contractor a bonus to complete construction of a building according to the contract is:
ordinarily not binding on the promisor.
An agreement to provide a realistic additional compensation for a contractor who performed a contract despite formidable unforeseen difficulties is called a:
The effect of the making of a partial payment to satisfy an admitted debt is an example of the rule that:
doing what one is bound to do is not consideration.
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