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214 terms

Blaw Final Part 1

Chap 14,15,16
STUDY
PLAY
Kris, age 17, who looks 18 or older, makes a contract to buy a car from Maisie, who is the age of majority. Maisie finds out Kris's age. Maisie may avoid the contract even if Kris did not misrepresent his age.
F
Sally goes away to college at 17, lives on her own, and pays her own rent and electric bills. If she makes a contract to buy a television set, in most jurisdictions, she may assert her minority status and set aside the contract.
T
Beth, at age 17, sells an antique pin she inherited. Even if the buyer resells the pin to someone who did not know that it was purchased from a minor, Beth can recover the pin from the third person if she changes her mind about wanting to sell it.
F
Seventeen-year-old Teresa wants to disaffirm her student loan agreements. Most states will not allow her to avoid such contracts.
T
In a contract to sell necessaries to a minor, these goods and services are limited to medical care, food, and shelter.
F
If Carrie, age 14, contracted to buy a fur coat by mail, the coat manufacturer would not have to send it since the contract was void.
F
Jessica at the age of 15 entered into a contract to sell five acres of land to her uncle. She may disaffirm this contract at any time before reaching her majority.
F
In general, if a minor lies about her age in order to induce the seller to contract with her, she cannot disaffirm that contract.
F
In general, a contract made by a mentally incompetent person is void when no guardian has been appointed
F
The doctrine of necessaries applies in the same way to minors and mental incompetents.
T
If a person is adjudicated insane and placed in care of a guardian, that person's contracts are void.
T
Sean had two beers and felt tipsy. He made a deal with Yoko to buy her stereo. He can avoid the contract because of lack of capacity.
F
By the majority view, a minor need only return any property he has received from the other party if the minor wishes to disaffirm the contract. He has no duty to return the property in the same condition in which he received it.
T
In general, a minor may only disaffirm a contract after he has reached the age of majority.
F
All states agree that a minor who has fraudulently misrepresented her age when entering into a contract has no power to disaffirm the contract.
F
In general, minors have liability for their torts.
T
A person under guardianship by court order has no contractual capacity.
T
At common law, a minor was a person who was under twenty-one years of age.
T
An intoxicated person must have been so intoxicated as to have been unable to understand the consequences of his actions or have been unable to act in a reasonable manner in order to avoid a contract.
T
Ratification makes a contract void from the beginning
F
Disaffirmance may be express, but it may not be implied
F
An automobile may be considered a necessary item for a minor.
T
Ratification need not be express; it may be implied from the minor's conduct.
T
In some states, minors are liable for contracts involving bank accounts and student loans and cannot avoid these contracts even though they can avoid other types of contracts.
T
Emancipated minors have no ability to avoid contracts based upon their minority.
F
Michael, a minor, rents a car to attend the senior prom at his high school. He signs an agreement stating that he will not take the car more than 100 miles from the rental agency. At 2:00 a.m., after he has had a few beers, his friends talk him into driving 200 miles to Chicago for the weekend. On the way, the car is involved in a minor traffic accident that damages the vehicle. Because the tort of negligence is related to the rental contract for the vehicle, Michael has no liability to the rental agency.
F
Darrell goes to lunch with an office equipment salesman. After drinking two beers and eating a Reuben sandwich, Darrell signs a contract to purchase a $1200 machine for the office. Two hours later, he has second thoughts and decides a different machine might be a better buy, so he calls the salesman and wants to disaffirm the contract based upon intoxication. Darrell can avoid the contract on this basis.
F
Intoxicated persons are liable in quasi contract for necessaries purchased during their incapacity.
T
All furniture, television sets, and appliances purchased by a minor for her apartment would be considered necessaries.
F
John is 17 years old and earns extra money by repairing cars. Nathan, who is 21, brings his car to John for repairs, and John ruins the brake system of the car, because of his inexperience. If Nathan sues John for negligence in performing the auto repair contract, in most states John will have no liability, because the tort of negligence and the auto repair contract are connected.
T
If a person is unable to understand the nature and effect of entering into a contract, he or she can avoid it.
T
An incompetent person who lacks understanding of a contract and its consequences can avoid it even if the other party had no reason to know of the incompetent's mental condition.
T
A mental condition that impairs a person's ability to act in a reasonable manner is one type of mental incompetence.
T
Courts treat contracts of incompetents and intoxicated persons essentially the same, except they are stricter with intoxicated persons because of intoxication's voluntary nature.
T
A person taking a prescription medication will be treated the same as an incompetent under the cognitive ability test.
T
A minor can ratify part of a contract and disaffirm another part of it.
F
Ratification of a contract, once effected, is final and cannot be withdrawn
T
Persons who lack mental capacity at the time they enter into a contract may avoid liability under the agreement.
T
Lydia makes a contract to purchase a used car on her seventeenth birthday. Six months later, her ratification of the contract can be effectively implied by her continuing payments.
F
A mental illness or defect of one of the parties to a contract automatically makes a contract void.
F
Anna is 88 years old and under the legal guardianship of her daughter. One day Anna receives a telephone call from a health insurance salesman and purchases a $400-a-month Medigap insurance policy.
a. This contract is valid.
b. This contract is voidable.
c. This contract is void.
d. This contract is voidable only at the option of Anna.
c. This contract is void.
Fay, age 17, ordered a pair of skis on the installment plan. She paid $20 every month until she turned 18, the age of majority. The next day, she sold them to Sharon and disaffirmed the contract. What result?
a. Fay is still liable since she had to disaffirm before her 18th birthday.
b. Fay is still liable because selling the skis amounts to a ratification.
c. Fay is not liable because she disaffirmed the contract.
d. Fay is not liable because skis are not necessaries.
b. Fay is still liable because selling the skis amounts to a ratification.
Ann, a minor, disaffirmed her agreement to buy $127 worth of cosmetics from Facial Glo Company. She had used up all the eye shadows, lipsticks, and powders. The general rule is that she may:
a. disaffirm, but she must pay the asking price of the cosmetics used.
b. disaffirm, but she has to return the makeup that is not used up.
c. not disaffirm without paying the value of used makeup.
d. not disaffirm because she has used the goods.
b. disaffirm, but she has to return the makeup that is not used up.
Mary, age 17, sold Mark, age 22, the briefcase she got for graduation. Mark's father liked it and bought it from him. If Mary decides to disaffirm the contract, will Mark's father have to return the briefcase to her?
a. Yes, the briefcase is not a necessary.
b. Yes, if Mark's father still has it.
c. No, her contract was with Mark and he cannot return goods he does not have.
d. No, if Mark's father bought it without knowing that Mary was a minor.
d. No, if Mark's father bought it without knowing that Mary was a minor.
Ratification can occur in which of the following ways?
a. Through express language
b. As implied from conduct
c. Through failure to make a timely disaffirmance
d. All of the above.
D. all of the above
Tim, who is a minor, enters into a contract with Violet, who is an adult. Which of the following is correct?
a. Violet may not disaffirm the contract.
b. Violet may disaffirm the contract at any time.
c. Violet may disaffirm the contract when Tim becomes an adult.
d. Tim may ratify the contract at any time during his minority.
a. Violet may not disaffirm the contract.
Todd, a minor, rents an automobile from Rosa, an adult. Todd damages the vehicle when he negligently backs into a pole. Under the majority view, can Rosa recover damages from Todd?
a. Yes, Todd breached his duty to exercise reasonable care and diligence to protect the automobile.
b. Yes, although Todd is a minor, it is well settled that minors are generally liable for their torts.
c. No, minors generally cannot be held liable for their torts.
d. No, his contractual immunity protects him from legal action by Rosa.
d. No, his contractual immunity protects him from legal action by Rosa.
Steve purchases a four-wheel drive truck from Belk Auto Sales. Steve is only 17 years of age. He wrecks the vehicle and attempts to disaffirm the contract and have Belk repay him all that he has paid. In the majority of jurisdictions, what would happen?
a. Steve would be out of luck.
b. Steve must have the truck repaired.
c. Steve will receive his money less the depreciation in value of the vehicle.
d. Steve may simply return the vehicle and get his money.
d. Steve may simply return the vehicle and get his money.
Randy, a minor, buys a new four-wheel drive truck from the Jones Dealership. Randy sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to Arthur Smith. Arthur does not personally know Steve or Randy. Which of the following expresses the status of this situation?
a. Randy may recover the vehicle from Mr. Smith.
b. Randy may not recover the vehicle from Mr. Smith.
c. Randy may hold Steve liable in tort.
d. Randy may recover the reasonable value of the vehicle from Mr. Smith but not the vehicle itself.
b. Randy may not recover the vehicle from Mr. Smith.
Robert is 17 years old. He lies to Bouyers Auto in order to induce it to sell him a new pickup. Bouyers falls for this lie and sells him the pickup. In most jurisdictions, which of the following is correct?
a. Robert may disaffirm and get his money back.
b. Robert may not disaffirm since he lied.
c. Robert must restore Bouyers to its position before contracting with him.
d. Robert will receive his money less depreciation.
a. Robert may disaffirm and get his money back.
Which of the following is not true regarding the contracts of incompetent persons?
a. An incompetent person is liable for necessaries.
b. Unlike a minor, an incompetent person can never ratify a contract.
c. To avoid a contract, a person need not be permanently incompetent.
d. A person is competent unless he is unable to understand the nature and effect of his act.
b. Unlike a minor, an incompetent person can never ratify a contract.
Which of the following is not true regarding the contracts of intoxicated persons?
a. If an intoxicated person is unable to understand the nature and consequences of his act, then the contract is voidable.
b. The effect of intoxication is generally the same as that given to contracts that are voidable because of incompetency.
c. Slight intoxication will destroy one's contractual capacity.
d. Contracts made while a person is too intoxicated to act in a reasonable manner may be ratified when the intoxicated person regains his capacity.
c. Slight intoxication will destroy one's contractual capacity.
The exercise of the power to avoid a contract is known as:
a. ratification.
b. disaffirmance.
c. ab initio.
d. restitution.
b. disaffirmance.
Sixteen-year-old Laura's disaffirmance of a contract:
a. for a sale of land by her is not effective until after she reaches the age of majority.
b. is only effective if expressed in words in the particular form required by statute.
c. can only be effective if she is an "emancipated" minor.
d. must take place after she reaches the age of majority, regardless of the type of contract, since only then does she have capacity.
a. for a sale of land by her is not effective until after she reaches the age of majority.
Which of the following is least likely to be classified as a necessary for which a minor will be held liable on a contract?
a. A camera
b. School supplies
c. Boots for a snowy climate
d. An automobile
A. A Camera
In which of the following situations would a minor be unable to disaffirm a contract which he had made?
a. Upon restoring the consideration received in a situation involving a fully executed contract
b. Where the minor wishes to affirm part of a contract and disaffirm another part of the same contract
c. During the time of his minority or for a reasonable time thereafter
d. None of the above.
b. Where the minor wishes to affirm part of a contract and disaffirm another part of the same contract
Which of the following would be a valid ratification?
a. Two weeks after his eighteenth birthday, Jerry sells the motorcycle he contracted to buy when he was seventeen.
b. Two weeks after attaining his eighteenth birthday, Jerry calls the bank to assure them that he will continue making payments on the loan agreement he signed a month before his eighteenth birthday.
c. Two weeks after his eighteenth birthday, Jerry makes a payment on the installment contract he signed a month before.
d. All of the above
d. All of the above
Percy, age 17, purchased a used mobile home from a mobile home dealer for $20,000. This price, however, was twice the reasonable value of the mobile home. One month later, Percy wishes to disaffirm the contract. If the mobile home is considered a necessary, then:
a. Percy can disaffirm the contract based on the wrongful act of the dealer.
b. Percy can disaffirm the contract because the minor can live in an apartment rather than a mobile home.
c. Percy may keep the mobile home but is only liable for the reasonable value of the mobile home.
d. Percy must keep the mobile home and abide by the original terms of the contract.
c. Percy may keep the mobile home but is only liable for the reasonable value of the mobile home.
Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress is too expensive and now wishes to cancel the order.
a. Cheryl must pay $500 for the dress because the dress was specially ordered for Cheryl.
b. Cheryl must pay $500 for the dress because clothing is classified as a necessity.
c. Cheryl may disaffirm this executory contract.
d. Cheryl must accept the dress and pay the reasonable value of the dress.
c. Cheryl may disaffirm this executory contract.
Wanda at age 17 purchased an expensive stereo system from Stereo Sales. If Wanda wishes to ratify this contract, Wanda:
a. must reach the age of majority and ratify the contract as a whole.
b. may do so by express notification at any time before reaching the age of majority.
c. may at any time keep the stereo but avoid any remaining debt owed on the stereo.
d. may do so at any time by express or implied action before or after reaching the age of majority.
a. must reach the age of majority and ratify the contract as a whole.
Donald, a minor, makes a contract with Albert, an adult, to buy a computer. One week later, Donald has his eighteenth birthday and shortly thereafter tells Albert he will pick up the computer next week.
a. Donald has expressly ratified the contract.
b. The contract must be renegotiated, because Donald was a minor when it was made.
c. Donald can change his mind and avoid the contract, because it was made when he was a minor.
d. The contract is void ab initio, because Donald was a minor at the time it was made.
a. Donald has expressly ratified the contract.
When a minor falsely advises the other party that he is of the age of majority and based upon that misrepresentation, the other party in good faith enters into a contract with the minor:
a. the minor has lost his right to disaffirm the contract because of the misrepresentation.
b. the adult party can recover damages from the minor in tort.
c. the minor is required to restore the other party to the position occupied before the making of the contract.
d. There is no uniform rule. States differ, and depending upon the state, any of the above could be correct.
d. There is no uniform rule. States differ, and depending upon the state, any of the above could be correct.
Which of the following is correct regarding the contractual liability of incompetent persons?
a. An incompetent person's responsibility upon disaffirmance is the same as for a minor.
b. For executed, fair contracts with a mentally incompetent person who understands but cannot control his behavior to act rationally, the incompetent must restore the competent party to the status quo before the transaction by a return of the consideration received or its equivalent in money.
c. The contracts of a person under guardianship by court order are voidable.
d. The contracts of a ward are binding without the approval of the guardian.
b. For executed, fair contracts with a mentally incompetent person who understands but cannot control his behavior to act rationally, the incompetent must restore the competent party to the status quo before the transaction by a return of the consideration received or its equivalent in money.
In most states, whether the time within which a minor disaffirms a contract constitutes a reasonable time is determined by:
a. state statute.
b. the UCC.
c. the facts and circumstances of the case.
d. common law, without regard to the unique facts of the case at hand.
c. the facts and circumstances of the case.
The parol evidence rule is an exclusionary rule of evidence.
F
The parol evidence rule only applies to written contracts.
T
The word "parol" literally means release.
F
The parol evidence rule would allow evidence to be introduced to explain what the parties meant by the term "serrated."
T
The parol evidence rule prohibits introduction of all evidence that would result in modifying written contracts.
F
The statute of frauds has to do with fraud in the inducement of a contract.
F
Most types of contracts are valid without being written.
T
The statute of frauds generally requires that both parties sign the writing.
F
A collateral promise is an undertaking to be primarily liable for the principal debtor's debt.
F
Jim promises to marry Cynda if Cynda will buy him a new Ferrari for his birthday. This promise must be in writing to be enforceable.
T
A part performance exception to the statute of frauds in many states requires both that the transferee has paid at least a portion of the purchase price and has either taken possession of the real estate or has started to make valuable improvements on it.
T
A usage of trade is a practice or method of dealing, regularly observed and followed in a place, vocation, or trade.
T
In an employment agreement with Karl, Arnold promises to work for Karl for the rest of his life. This promise must be in writing to be enforceable.
F
Clara types a letter to David setting forth the terms of a contract between the two of them that falls within the statute of frauds. At the end of the letter, she types her name but does not sign her signature to it. If David wants to use the letter to satisfy the writing requirement, he may do so.
T
A contract to pay for lawn care services costing $1,500 would have to be in writing to be enforceable.
F
Under the Code an oral contract for specially manufactured goods costing $500 is enforceable even if the seller has not begun their manufacture.
F
The UCC requires that all contracts for the sale of goods must be in writing.
F
Most courts consider a merger clause to be conclusive proof of an integrated contract.
T
In order to be sufficient, an agreement required to be written under the statute of frauds must be signed at the bottom and notarized.
F
Bob sends Fred a letter offering to sell Fred his car for $2,500. Fred writes back that he'll take it. They now must get together and write a memorandum because it is a sale of goods for over $500.
F
The statute of frauds does not prevent the performance of oral contracts if the parties are willing to perform.
T
The parol evidence rule applies to partially written agreements.
F
When a court interprets an ambiguous contract, usage of the trade will take precedence over express terms in the contract.
F
To satisfy the statute of frauds, the person who wants to bring the lawsuit must sign a memorandum.
F
On March 20, Gordon orally agrees to work for Carrham, Inc. for a period of one year commencing on June 1. No writing is necessary here, because the contract can be performed within one year.
F
The parol evidence rule applies only to integrated contracts, meaning those in which the parties have assented to the written agreement as the statement of the complete agreement between them.
T
In interpreting a contract, terms which have been separately negotiated are given priority over standardized, pre-printed terms.
T
The English statute of frauds and the Code's provision differ in language but have the same basic legal effect: an oral contract for certain identified situations is void.
F
In order to induce a car dealer to sell her son a car on credit, Mary promises that she will pay for the son's car if the son defaults on his monthly payments to the dealership. Mary's promise must be in writing or have a sufficient electronic record.
T
An example of language creating a suretyship as meant under the statute of frauds would be the following: "If my business partner does not write out the check for the supply bill for our company, I will."
F
Tom's bank is threatening to repossess his car. Tom's mother promises the bank to pay Tom's obligation if Tom defaults. This promise must be in writing (or have a sufficient electronic record) to be enforceable.
T
ABC Corp. is building a new office tower. Ace Plumbing Supplies refuses to provide plumbing materials on credit to the plumbing subcontractor on the building. ABC promises Ace that it will pay for the materials if the subcontractor does not. ABC's promise is unenforceable unless in writing.
F
Although a contract to purchase an undeveloped lot must be in writing to be enforceable, a contract to run power lines over someone else's lot need not be.
F
The test under the one-year provision of the statute of frauds is based on the likelihood that the contract will be completed within one year.
F
The test under the one-year provision of the statute of frauds is whether the terms of the contract make it possible for performance to occur within one year.
T
A party to a contract that is unenforceable because of the statute of frauds may be able to recover in restitution.
T
The UCC permits an oral agreement for the sale of goods to be enforced against a party who admits to the contract in court, even though the statute of frauds requires the agreement to be in writing.
T
The suretyship provision rule within the statute of frauds applies to cases involving one party's promising to perform the duty of another party to yet a third party
T
The main purpose doctrine is an exception developed by the courts to the suretyship provision.
T
The suretyship provision has been interpreted to include promises made to a debtor.
F
The executor-administrator provision applies to promises of an executor of a decedent's will to the decedent's creditors.
T
The statute of frauds requires all contracts that can be fully performed within one year of their making to be in writing or proper electronic form.
F
The UETA has been adopted by all of the states to give full effect to emergency transactions.
F
The computation of time for the one-year provision of the statute of frauds starts when the agreement is made, not when the performance is to begin.
T
Which of the following promises does not have to be evidenced by writing in order to be enforceable?
a. Jones' agreement with Smith to sell his condominium for $100,000
b. Stewart's promise to work for Austin for a two-year period
c. Dad's promise to the credit union that he will make payments on his son's truck if his son does not pay
d. Mindy's agreement with Susan to buy her bike for $400
d. Mindy's agreement with Susan to buy her bike for $400
Chris receives a printed form in the mail from Wyandott Heating indicating that he has placed a telephone order for a $600 heater. He doesn't recall placing the order. Which of the following is correct?
a. Wyandott can hold Chris to the order.
b. Chris can hold Wyandott to the order.
c. Neither party is bound, because there is no signed writing.
d. Chris is bound if he makes no objection within 10 days.
b. Chris can hold Wyandott to the order.
In states that have adopted it, the UETA:
a. encourages and gives full effect to electronic contracts.
b. gives full effect to emergency transactions.
c. supplements and covers all of the UCC.
d. covers wills, codicils, and testamentary trusts.
a. encourages and gives full effect to electronic contracts.
Which of the following is an exception to the suretyship provision requirement under the statute of frauds?
a. A collateral promise made to the creditor
b. A promise, the leading object of which is to obtain an economic benefit for oneself
c. A collateral promise where there are three parties and two contracts involved
d. A promise by an executor to pay the debts of the decedent from the executor's own funds
b. A promise, the leading object of which is to obtain an economic benefit for oneself
E-Sign provides consumers must:
a. evidence their consent on paper to conducting transactions with electronic records after being informed of the types of hardware and software required.
b. receive a "clear and conspicuous" statement informing them of their right to withdraw consent to receiving electronic records.
c. receive a "clear and conspicuous" statement informing them of their right to have the record provided only in electronic form.
d. All of the above.
b. receive a "clear and conspicuous" statement informing them of their right to withdraw consent to receiving electronic records.
What is another name for the main purpose doctrine?
a. The collateral promise rule
b. The possibility test
c. The leading object rule
d. The suretyship provision
c. The leading object rule
Under the parol evidence rule, which of the following types of evidence may be used to vary or contradict the written agreement?
a. Prior oral or written agreements
b. Contemporaneous oral or written agreements
c. Subsequent oral or written agreements modifying the original agreement
d. Both (a) and (b).
c. Subsequent oral or written agreements modifying the original agreement
Under the UCC, a(n) ____ is a sequence of previous conduct between the parties to an agreement which may be fairly regarded as establishing a common basis of understanding for interpreting their conduct under the contract.
a. course of dealing
b. usage of trade
c. course of performance
d. integrated document
a. course of dealing
Under the UCC, ____ refers to the manner and extent to which the respective parties to a contract have accepted successive tenders of performance by the other party without objection.
a. course of dealing
b. usage of trade
c. course of performance
d. integrated document
c. course of performance
Under the UCC, a(n) ____ is a practice or method of dealing, regularly observed and followed in a place or vocation or trade.
a. course of dealing
b. usage of trade
c. course of performance
d. integrated document
b. usage of trade
In determining the meaning of a contract under the UCC, which of the following will have first priority?
a. Course of performance
b. Course of dealing
c. Usage of trade
d. Express terms
d. Express terms
Which of the following would NOT require a writing under the statute of frauds?
a. Where the buyer of a five-acre lot pays the $40,000 purchase price, thus fully performing his obligation
b. Where a renter agrees to rent a building for a 5-year period
c. Where a contractor enters into an agreement for an easement across adjoining land to run cables
d. Where a landscaper agrees to landscape the lot surrounding an office building
d. Where a landscaper agrees to landscape the lot surrounding an office building
Which of the following would not be subject to the writing requirements of Article 2 of the UCC?
a. An unborn puppy whose mother is an AKC champion
b. Trees that will be cut from a ten-acre tree farm
c. Food served in the banquet room of a Florida resort
d. Medical care received in a hospital
d. Medical care received in a hospital
E-Sign:
a. preempts the Uniform Electronic Transactions Act.
b. requires persons to agree to use or accept electronic records or electronic signatures, provided they are informed of the types of hardware and software required and they have the required equipment.
c. defines the included transactions narrowly.
d. ensures that the electronic form of Internet and e-mail agreements will not make them unenforceable because of the statute of frauds.
d. ensures that the electronic form of Internet and e-mail agreements will not make them unenforceable because of the statute of frauds.
Which of the following need NOT be contained in a memorandum, which satisfies the general statute of frauds writing requirement?
a. The names of the parties to the contract
b. The signature of the party being sued
c. The signature of the party suing
d. The subject matter and essential terms of the unperformed promises
c. The signature of the party suing
Which of the following would NOT meet the signature requirement for a writing to satisfy the statute of frauds?
a. A typewritten name
b. Handwritten initials
c. A printed name
d. All of the above meet the signature requirement.
d. All of the above meet the signature requirement.
Most states have statutes requiring which of the following contracts to be evidenced by a writing to be enforceable?
a. Contracts to make wills.
b. Contracts for the sale of securities.
c. Contracts for the sale of personal property for more than $5,000.
d. Contracts creating certain types of security interests.
e. All of the above.
e. All of the above.
On March 1, Sara, a student, received a telephone call from ComputerChip, Inc. offering her a job for one year beginning on June 15, after completion of the school year. According to the personnel manager, she will have to move to California and be ready to start work at 8:00 a.m. on June 15. Should Sara ask for a letter confirming the telephone conversation if she accepts the offer immediately?
a. Yes, because the job offer is a collateral promise
b. Yes, because the job offer is covered by the parol evidence rule
c. Yes, because the job offer is for longer than one year from March 1
d. No, because the job offer is for one year from June 15
c. Yes, because the job offer is for longer than one year from March 1
Which of the following would be admissible under the parol evidence rule? Assume the written contract was made on June 1, 2007, and that it is an integrated document.
a. A letter dated July 9, 2007, reciting agreement to new delivery terms
b. A chart showing the dates for delivery written on August 16, 2006
c. A copy of two letters while the parties were in the negotiation stage of their contract which showed agreement to a term not included in the June 1, 2007 contract
d. A copy of common carrier rules on the duty of delivery persons for uncrating merchandise, which is dated December 1, 2003
a. A letter dated July 9, 2007, reciting agreement to new delivery terms
Barry's Sport Shop calls Champs Tee Shirt Company to order 200 designer tee shirts at $2 per shirt. The next day, Barry decides he can easily sell 100 more. Before the order is filled, he calls to change the order to 300 tee shirts. Champs sends 200. Can Barry force Champs to send the additional 100?
a. No, because there is no consideration for the extra 100 shirts
b. No, because Barry does not have a writing signed by Champs Tee Shirts
c. Yes, because this is a subsequent modification of the original contract
d. Yes, because Champs Tee Shirts is a merchant within the meaning of Article 2 of the UCC
b. No, because Barry does not have a writing signed by Champs Tee Shirts
Which of the following is untrue with regard to the interpretation of contracts?
a. Express terms prevail over course of performance, and course of performance prevails over course of dealing.
b. Technical terms will always be given technical meaning even where a different intent is manifested by the parties.
c. Handwritten or typed terms are given greater weight than preprinted terms.
d. All writings that are part of the same transaction are interpreted together.
b. Technical terms will always be given technical meaning even where a different intent is manifested by the parties.
Sam, a shopkeeper, dies unexpectedly at the age of 46. His lifelong business associate, Paul, is appointed the administrator of the estate. Sam had a personal debt of $8,000 which he owed to Art's Appliance Store. Paul says to Art, "If there isn't enough money in the estate, I'll personally see that the bill is paid." Which of the following is correct?
a. The oral statement is enforceable because Paul is the administrator.
b. An oral statement such as this is not enforceable because it is outside the statute of frauds.
c. An oral statement such as this is not enforceable because this promise is within the statute of frauds.
d. The oral statement is enforceable because it is a collateral promise.
c. An oral statement such as this is not enforceable because this promise is within the statute of frauds.
The statute enacted by Congress which makes electronic records and signatures valid and enforceable for many transactions affecting interstate or foreign commerce is the:
a. UETA.
b. UCC, Article 2E.
c. Electronic Signatures in Global and National Commerce Act.
d. Interstate and Foreign Commerce Electronic Transactions Act.
c. Electronic Signatures in Global and National Commerce Act.
Which of the following promises in consideration of marriage would be outside the statute of frauds?
a. In consideration of Joan's promising to marry him, a man promises to pay her an allowance and to give her all of his property upon his death.
b. John and Mary mutually agree that their marriage shall not affect the existing property rights of the other.
c. John and Joan mutually promise to marry each other in a formal ceremony on June 23.
d. Joan promises to release a money judgment against Steven in consideration of his marrying her.
c. John and Joan mutually promise to marry each other in a formal ceremony on June 23.
Under the UCC statute of frauds, which of the following terms must be included in a writing in order to satisfy the writing requirement?
a. The price of the goods
b. The quantity of the goods
c. The signatures and names of the buyer and the seller
d. The time and place for delivery
b. The quantity of the goods
Blevins, Inc. calls the Widget Corporation of America to order 400 widgets at $2 a widget. Widget accepts the oral order and then sends out an order confirmation form, with the pre-printed name Widget Corporation of America on the top of the form. The form states that an order has been received for "300" widgets and that it will be filled promptly.
a. The order acceptance form fails to meet the writing requirement in the UCC, because it isn't signed.
b. Blevins can enforce the contract for 300 widgets, but not for 400 widgets.
c. If Blevins signs and returns the form, it will be able to sue for the extra 100 widgets later.
d. The contract is enforceable for 400 widgets, because it has been partially performed.
b. Blevins can enforce the contract for 300 widgets, but not for 400 widgets.
The parol evidence rule does not apply to:
a. a typographical error that obviously does not represent the agreement of the parties.
b. evidence showing one of the parties to the contract lacks contractual capacity.
c. The parol evidence rule does not apply to either (a) or (b).
d. The parol evidence rule applies to both (a) and (b).
c. The parol evidence rule does not apply to either (a) or (b).
A contract contains a provision that states it will be effective for a "year." The plaintiff in a lawsuit claims that a "year" is obviously 12 months. The defendant claims that the contract meant a 10-month school year.
a. Parol evidence cannot be used to explain the term, because the plain meaning of a "year" is 12 months.
b. Parol evidence cannot be used to explain the term, because it is an integrated document.
c. The term "year" in the contract is ambiguous, and the parties can bring in parol evidence to clarify their intent.
d. Parol evidence cannot be used, because the contract contains an express term that could have been changed by the parties prior to the contract's execution.
C. The term "year" in the contract is ambiguous, and the parties can bring in parol evidence to clarify their intent.
Requirements for a memorandum that satisfies the statute of frauds include that the writing:
a. must be a single document.
b. must not contain an attachment.
c. needs to be notarized.
d. None of the above.
d. None of the above.
After an assignment, only the assignee has a right to the obligor's performance.
T
The person who makes an assignment is the assignor.
T
A gratuitous assignment is always revocable
F
Consideration is required in order to have a valid assignment.
F
The general rule is that an assignee stands in the shoes of the assignor. He acquires the rights of the assignor but no new or additional rights.
T
Arthur enters into a contract with Bob as a result of Bob's fraud in the inducement. Under the contract, Bob has the right to the payment of $100. Bob assigns the right to the $100 to Carl. Arthur may not assert the defense of fraud in the inducement to avoid paying Carl the $100.
F
A gratuitous assignment is generally valid and enforceable.
T
The delegation of a duty still leaves the delegator responsible for the performance of the duty.
T
An incidental beneficiary has no right to enforce a contract.
T
An intended donee beneficiary may enforce the contract only against the promisor.
T
In some states, the vesting of a third party's rights occurs only when the third party learns of the contract and assents to it.
T
Some states have statutes which prohibit an employee from assigning his future wages.
T
A valid assignment requires that notice be given to the obligor.
F
An assignor normally guarantees that the obligor will pay the assigned debt.
F
Though contractual duties generally are delegable; a delegation will not be permitted if the nature of the duties is personal in that the obligee has a substantial interest in having the delegator perform the contract.
T
When the assignee gives consideration in exchange for an assignment, there is a contract between the assignor and the assignee that prevents the assignor from revoking the assignment without the assent of the assignee.
T
The right to property other than money, such as goods or land, is not assignable.
F
A promisor and a promisee may provide that the benefits under a contract will never vest in a third person
T
In a novation, the delegator is discharged and the third party becomes directly bound upon his promise to the obligee.
T
A contract in which a party (the promisor) promises to render a certain performance not to the other party (the promisee) but to a third person (the beneficiary) is called a third party beneficiary contract.
T
A creditor beneficiary is a type of incidental beneficiary.
F
The law governing assignments arises solely from the common law of contracts.
F
Pedro has a contract to build a garage. He delegates the wiring job to a local electrician who improperly performs it. Pedro is responsible, even though he delegated the duty.
T
An assignor is bound by any express warranties he makes to the assignee with respect to the right assigned.
T
Contractual duties are assignable.
F
Lauren received a $1,500 scholarship to attend the local community college. She decides not to attend college that year, so she can assign her right to the money to her friend, Sean.
F
Rick has a contract with a home repair company to paint his house and landscape his yard. When he realizes that he will have some unexpected medical expenses, he calls the home Repair Company to cancel the contract. Rick's next door neighbor can sue Rick to enforce the contract, because if Rick improves his own property, his neighbor's property will also be worth more money.
F
The Restatement and Article 2 of the Code provide that, unless circumstances indicate the contrary, a contract term that prohibits the assignment of a contract bars only the delegation to the assignee of the assignor's duty of performance and does not bar the assignment of contract rights.
T
In a third-party beneficiary contract, the third party's rights arise after the contract is made.
F
The Restatement adopts the majority American rule and provides that, where there are successive assignments of the same right, the first assignee in point of time prevails
F
Third party rights in contracts can arise by assignment of rights, delegation of duties, or express terms in third party beneficiary contracts.
T
The UCC imposes a writing requirement on all assignments of $500 or more
F
The UCC prohibits assignments of $5,000 or more.
F
Ron owes Lloyd $500 due March 1. Lloyd assigns his right to the money to Lou, but neither Lloyd nor Lou notifies Ron. On March 1, Ron pays Lloyd the $500. Ron is not discharged from his obligation, but is liable to Lou for the money.
F
In England and in a minority of states, the first of two or more assignees to give notice to the obligor is entitled to the assigned performance
T
Donee beneficiaries and incidental beneficiaries are called intended beneficiaries.
F
Assignment of rights is the voluntary transfer to a third party of the rights arising from a contract.
T
In an assignment or delegation, the third parties' rights or duties arise after the contract is made.
T
The student government of State University has a contract with a famous rock band to perform at the university on homecoming weekend. The band cannot assign its rights and delegate its duties under this contract.
T
Generally, rights under an option contract are not assignable.
F
As a general rule, most contract rights are assignable
T
Unless otherwise provided by statute, an assignment may be oral.
T
A partial assignment is a transfer of a portion of the contractual rights to one or more assignees.
T
As a general rule, partial assignments of contract rights are not enforceable.
F
An agreement between Greg and Margaret to marry one another cannot be transferred to a third party.
T
The voluntary transfer of a contractual right to a third party is known as a(n):
a. implied warranty.
b. assignment.
c. delegation.
d. novation.
b. assignment.
A(n) ____ is a method of discharging a contract in which a third party becomes bound upon a promise to the obligee.
a. assignment
b. delegation
c. partial assignment
d. novation
d. novation
A(n) ____ is a third party who obtains possible benefits but no rights under a contract.
a. incidental beneficiary
b. intended beneficiary
c. assignor
d. donee beneficiary
a. incidental beneficiary
A(n) ____ is an intended beneficiary of a contract who receives the benefits of the contract as a gift.
a. incidental beneficiary
b. intended beneficiary
c. assignor
d. donee beneficiary
d. donee beneficiary
Anita owes Brad $75,000. Brad signs a written statement granting Glen a gratuitous assignment of his rights from Anita. Brad delivers the signed statement to Glen before Brad dies.
a. The delivery of the statement makes the assignment irrevocable.
b. The assignment is terminated upon Brad's death.
c. The signing of the statement makes the assignment irrevocable.
d. The assignment is invalid, because it is revocable.
a. The delivery of the statement makes the assignment irrevocable.
Which of the following duties would not be delegable?
a. John has a contractual duty to pay Isaac $50.
b. Karl has a contractual duty to deliver 50 bushels of corn to Michael by October 1.
c. Jeffrey has a duty to mow Georgia's lawn at least once a week.
d. Arthur has a duty to teach an accounting class at a community college during the fall semester.
d. Arthur has a duty to teach an accounting class at a community college during the fall semester.
Theresa has a contract to teach eighth grade at Washington Middle School. She decided she could make more money writing a book, so she assigns her teaching contract to her friend, Stephanie, who is also a licensed teacher.
a. The duties under the teaching contract are nondelegable.
b. The duties which Theresa has attempted to delegate are personal in nature.
c. If the school district agrees to accept Stephanie's services, a novation would occur, which would relieve Theresa of her obligation to the school district.
d. All of the above are correct.
d. All of the above are correct.
Annette entered into a contract with a local truck dealer to have a new truck delivered to her daughter, Sue, as a graduation present. In this contract, Sue is:
a. an incidental beneficiary.
b. a donee beneficiary.
c. a creditor beneficiary.
d. an assignor.
b. a donee beneficiary.
Professor Dought has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds. Professor Dought's mother is a(n):
a. incidental beneficiary.
b. creditor beneficiary.
c. donee beneficiary.
d. assignee.
c. donee beneficiary.
Bill wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10.00 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n):
a. incidental beneficiary.
b. creditor beneficiary.
c. donee beneficiary.
d. assignee.
b. creditor beneficiary.
Betty owes Agatha $1,000. On March 1 Agatha, for value, assigned the debt to Clara. Thereafter, on March 30 Agatha assigned the same right to Diane.
a. Under the American rule, Clara will prevail over Diane.
b. Under the English rule, the first assignee to notify Betty will prevail.
c. Under the Restatement rule, the first assignee to notify Betty will prevail.
d. Both (a) and (b) are correct.
d. Both (a) and (b) are correct.
Courts will enforce contracts for the benefit of all but which of the following?
a. Donee beneficiaries
b. Creditor beneficiaries
c. Incidental beneficiaries
d. Intended beneficiaries
c. Incidental beneficiaries
Bill has a right against Heather and assigns it for $100 to Dan. Later, Bill grants Heather a release. Bill:
a. is liable to Dan for damages because he breached an implied warranty.
b. has no liability to Dan because he did not expressly warrant that he would not impair the assignment.
c. has no liability to Dan because the only implied warranty he made was that the assigned right actually existed at the time of the assignment.
d. was acting contrary to public policy by assigning a contractual right for money.
a. is liable to Dan for damages because he breached an implied warranty.
Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will benefit from this contract since his restaurant is adjacent to the planned mall. Donner in this instance is a(n):
a. implied beneficiary.
b. partial beneficiary.
c. donee beneficiary.
d. incidental beneficiary.
d. incidental beneficiary.
The party to whom a contractual duty of performance is owed is known as the:
a. obligee.
b. obligor.
c. assignee.
d. assignor.
a. obligee.
Mr. Homayer hired Blake Painters to paint his house. Blake decides it has too many jobs and delegates the duties to the Andrews Company. Andrews does a poor job, and drips paint on the Homayers' flowers and windows.
a. Mr. Homayer can sue both Blake and Andrews.
b. Mr. Homayer can sue Blake, but he cannot sue Andrews.
c. Mr. Homayer can sue Andrews, but he cannot sue Blake.
d. Mr. Homayer cannot sue, because he has accepted the benefits of the assignment.
a. Mr. Homayer can sue both Blake and Andrews.
Mary goes to a stockbroker, purchases 50 shares of a certain stock, and instructs the broker to register the stock in her husband Warren's name. If this stock is intended as a Valentine's Day gift, Warren becomes a(n):
a. donee beneficiary.
b. transferee.
c. delegatee.
d. assignee.
a. donee beneficiary.
When contract terms prohibiting the assignment of rights exist, most courts will:
a. strictly construe them.
b. interpret a general term prohibiting assignments as rendering any assignment ineffective.
c. award the obligor no right to damages for breach of a general term prohibiting assignments.
d. All of the above.
a. strictly construe them.
Which of the following is NOT true concerning the requirements for an effective assignment?
a. The assignment must be voluntary.
b. Consideration is required.
c. There must be an intention to make the assignee the owner of the right.
d. The assignment may be either written or oral.
b. Consideration is required.
Which of the following involves a creditor beneficiary relationship?
a. A contract where the insured names a bank with which he has a loan as the beneficiary of a life insurance policy
b. A contract between an employer and a union representing the employees, which contract is made for the benefit of the employees
c. A contract between the owner of a building and the contractor stating that the contractor will pay his employees at a stated rate
d. A contract between a governmental unit and business for services to be rendered to area citizens
a. A contract where the insured names a bank with which he has a loan as the beneficiary of a life insurance policy
Lynne is the intended beneficiary of a third-party contract. Her rights have vested. In an action by Lynne to enforce the promise, the promisor may assert the defense of:
a. rescission.
b. contractual modification.
c. fraud.
d. All of the above.
c. fraud.
Which of the following involves an invalid assignment that a court would not enforce?
a. An assignment of a savings account accompanied by the delivery of the passbook
b. An assignment lacking consideration
c. An assignment of an automobile liability insurance policy accompanied by the delivery of the policy
d. An assignment in writing signed by the assignor and delivered to the assignee
c. An assignment of an automobile liability insurance policy accompanied by the delivery of the policy
Which of the following is correct with regard to successive assignments of the same right?
a. It is impossible for an assignor to assign the same right more than once.
b. In England, the first assignee to notify the obligor prevails.
c. The Restatement does not recognize the validity of any successive assignments.
d. All of the above are correct.
b. In England, the first assignee to notify the obligor prevails.
Noel and Lyle have a contract whereby Noel is to perform routine construction services according to the blueprints that Lyle has provided. Noel assigns the contract to David. As a result of this assignment:
a. Lyle can bring suit based upon detrimental reliance.
b. Noel has no more rights or responsibilities with regard to the contract.
c. Noel no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform.
d. Noel has all of his rights under the contract, but he has no responsibility for the performance of the duties.
c. Noel no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform.
Brice owns a parcel of land that is encumbered by a mortgage held by the First National Bank. Brice agrees to sell the land to Paul for $50,000. Brice and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Brice, Paul, and the banker sign an agreement stating that Paul will assume the mortgage and that Brice will be discharged from all further liability on the mortgage.
a. The bank is a third party donee beneficiary.
b. The bank can collect from Brice if Paul defaults.
c. Brice is a third party beneficiary of the agreement between Paul and the bank.
d. The agreement among the three is a novation.
d. The agreement among the three is a novation.
Anita owes Brad $75,000. Brad signs a written statement granting Carla a gratuitous assignment of his rights from Anita. Brad dies prior to delivering the statement to Carla.
a. Brad's death has no effect on the assignment.
b. The assignment is terminated upon Brad's death.
c. The signing of the statement makes the assignment irrevocable.
d. The assignment is invalid because it is gratuitous.
b. The assignment is terminated upon Brad's death.
Odessa owes Kevin $2,000. On July 1, Kevin assigns the right to the $2,000 to Troy. Thereafter, on July 15, Kevin assigns the same right to Donna, who in good faith gives value for it and knows nothing about the first assignee.
a. Troy has the right to the payment of $2,000.
b. Donna has the right to the $2,000.
c. Neither Troy nor Donna can claim the $2,000.
d. The rule differs in different states. Depending on which rule a state follows, the answer will vary.
d. The rule differs in different states. Depending on which rule a state follows, the answer will vary.
Barbara owes Arturo $2,000. On July 1, Arturo assigns the debt to Charles. Thereafter on July 15, Arturo assigns the same right to Dennis, who in good faith gives value for it and knows nothing about the first assignee. Dennis immediately notifies Barbara of the assignment.
a. Under all of the rules, Charles has priority since he was the first assignee in time.
b. Under the majority rule, Dennis has priority.
c. Under the English Rule, Dennis has priority.
d. Under the English Rule, Charles has priority.
c. Under the English Rule, Dennis has priority.
Under Section 2-210 of the Code, unless circumstances indicate to the contrary, a contract that prohibits an assignment:
a. prohibits both an assignment of rights and a delegation of duties under the contract.
b. prohibits only a delegation of the delegator's duty of performance and not the assignment of rights.
c. renders any subsequent assignment ineffective.
d. Both (a) and (c).
b. prohibits only a delegation of the delegator's duty of performance and not the assignment of rights.
Notice of an assignment:
a. must be given to the obligor.
b. cuts off any defenses based on subsequent agreements between the obligor and assignor.
c. precludes subsequent setoffs and counterclaims of the obligor that arise out of entirely separate matters.
d. All of the above.
e. Only (b) and (c).
e. Only (b) and (c).
The law governing assignments is found in Articles ____ and ____ of the Uniform Commercial Code (UCC), as well as the common law.
a. 1 and 2
b. 2 and 4
c. 2 and 9
d. 3 and 4
c. 2 and 9
A gratuitous assignment is rendered irrevocable if, prior to the attempted revocation, the assignee:
a. receives payment of the claim from the obligor.
b. obtains a judgment against the obligor.
c. Neither of the above. A gratuitous assignment is always revocable.
d. Both (a) and (b).
d. Both (a) and (b).