Question 1

An honest effort to meet both the spirit and letter of the contract is termed

Accepted Answer

A) reasonable circumstances. 
B) sole discretion. 
C) honest representation. 
D) good faith. 
A) reasonable circumstances. 
B) sole discretion. 
C) honest representation. 
D) good faith. D

Question 2

Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days. The parties negotiated and meant to say in the written agreement, delivery in 50 days. If the evidence is clear that the two parties intended to agree to 50 days, the courts will probably

Accepted Answer

A) reform the contract. 
B) rescind the contract. 
C) issue a warranty. 
D) issue a covenant. 
A) reform the contract. 
B) rescind the contract. 
C) issue a warranty. 
D) issue a covenant. A

Question 3

Define and compare the terms "vagueness" and "ambiguity."

Accepted Answer

Vagueness occurs when the parties do not want the contract to be clear. They want to keep their options open, so they don't clearly define some terms. Ambiguity is different -- it means that the provision is accidentally unclear. It occurs in contracts when the parties think only about what they want a provision to mean, without considering the literal meaning or the other side's perspective. Any ambiguity is interpreted against the drafter of the contract .

Question 4

Lawyers prefer to negotiate touchy subjects as they arise rather than address them at the beginning of a relationship.

Accepted Answer

A) True 
 B)False

Question 5

In the case of scrivener's errors, a court will usually

Accepted Answer

A) reform the contract if it is clear that the mistake is not what the parties intended. 
B) instruct the parties to rewrite the contract without the errors. 
C) enforce the contract as written. 
D) throw out the contract completely. 
A) reform the contract if it is clear that the mistake is not what the parties intended. 
B) instruct the parties to rewrite the contract without the errors. 
C) enforce the contract as written. 
D) throw out the contract completely.

Question 6

Standard provisions in a contract that are often listed under the heading "Miscellaneous" are called

Accepted Answer

A) boilerroom. 
B) boilerplate. 
C) boilerpot. 
D) boilertape. 
A) boilerroom. 
B) boilerplate. 
C) boilerpot. 
D) boilertape.

Question 7

Contracts must use formal terminology such as "whereas" and "heretofore" in order to be legal.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is the best example of a contract title?

Accepted Answer

A) AGREEMENT 
B) LEASE AGREEMENT 
C) LEASE AGREEMENT BETWEEN ALISON ALBRIGHT AND KEYSTONE PROPERTIES 
D) CONTRACT BETWEEN LESSOR AND LESSEE 
A) AGREEMENT 
B) LEASE AGREEMENT 
C) LEASE AGREEMENT BETWEEN ALISON ALBRIGHT AND KEYSTONE PROPERTIES 
D) CONTRACT BETWEEN LESSOR AND LESSEE

Question 9

Compare and contrast the perspectives of a lawyer and a business client when approaching the negotiation of a contract.

Accepted Answer

Businesspeople are optimists - they beli

Question 10

Farmer's Fortune Insurance has a contract with Farmer Fran to insure her crops against insect damage. The contract does not specify which insects are covered or how much damage is necessary to make a claim. The contract will probably be enforced in favor of

Accepted Answer

A) Farmer Fran. 
B) Farmer's Fortune Insurance. 
C) Neither side, as it is ridiculous to try to insure against insects. 
D) Cannot determine... would have to go through litigation to decide. 
A) Farmer Fran. 
B) Farmer's Fortune Insurance. 
C) Neither side, as it is ridiculous to try to insure against insects. 
D) Cannot determine... would have to go through litigation to decide.

Question 11

An agreement should definitely be in writing if you do not have an ongoing relationship with the other party.

Accepted Answer

A) True 
 B)False

Question 12

If the subject of the contract includes issues that may be controversial or "touchy," it is best to

Accepted Answer

A) keep lawyers out of the negotiation, so relationships are not strained. 
B) deal with them up front before the relationship becomes strained. 
C) deal with them one at a time, as the problems arise. 
D) state your position up front and stand firm when the other party objects. 
A) keep lawyers out of the negotiation, so relationships are not strained. 
B) deal with them up front before the relationship becomes strained. 
C) deal with them one at a time, as the problems arise. 
D) state your position up front and stand firm when the other party objects.

Question 13

Nate works as a sales representative. His employment contract specifies that he cannot work for a competitor for a period of two years from employment. This is an example of

Accepted Answer

A) vagueness. 
B) extortion. 
C) ambiguity. 
D) duress. 
A) vagueness. 
B) extortion. 
C) ambiguity. 
D) duress.

Question 14

Any ambiguity in a contract is interpreted against the party who drafted the contract.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is one of the four steps in reading a contract?

Accepted Answer

A) What-ifs 
B) Scan for typos 
C) Re-write with a lawyer 
D) Final approval 
A) What-ifs 
B) Scan for typos 
C) Re-write with a lawyer 
D) Final approval

Question 16

Emily runs a children's clothing boutique that takes in local homemade items on a consignment basis. Her standard form contract indicates that Emily has the right to put items on sale without prior approval, but does not specify what effect the sale has on the consignor's payment percentage. Her intent is to keep the same profit she would have had without the sale. She is using ambiguity in her contract to increase her sales and profit.

Accepted Answer

A) True 
 B)False

Question 17

"Scrivener's error" is another (fancier)name for a typo.

Accepted Answer

A) True 
 B)False

Question 18

You should hire a lawyer to review any legal papers you have to sign, especially such papers as lease agreements or car purchases.

Accepted Answer

A) True 
 B)False

Question 19

Two parties are debating whether or not to put their contract into writing. In making their determination, which of the following factors would normally NOT be considered?

Accepted Answer

A) whether or not the agreement falls within the Statute of Frauds 
B) the complexity of the agreement 
C) the length of time covered by the agreement 
D) the relationship between the two parties 
A) whether or not the agreement falls within the Statute of Frauds 
B) the complexity of the agreement 
C) the length of time covered by the agreement 
D) the relationship between the two parties

Question 20

In which of the following situations is it likely that you may NOT need a written contract?

Accepted Answer

A) You are dealing with a party you do not know well, so you need to remain flexible. 
B) You are buying land from a member of your family. 
C) The terms of the agreement are simple and the value of the transaction is small. 
D) You have negotiated with the other party enough that you both know what the other person intends. 
A) You are dealing with a party you do not know well, so you need to remain flexible. 
B) You are buying land from a member of your family. 
C) The terms of the agreement are simple and the value of the transaction is small. 
D) You have negotiated with the other party enough that you both know what the other person intends.

Exam 13: Practical Contracts

An honest effort to meet both the spirit and letter of the contract is termed

Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days. The parties negotiated and meant to say in the written agreement, delivery in 50 days. If the evidence is clear that the two parties intended to agree to 50 days, the courts will probably

Define and compare the terms "vagueness" and "ambiguity."

Lawyers prefer to negotiate touchy subjects as they arise rather than address them at the beginning of a relationship.

In the case of scrivener's errors, a court will usually

Standard provisions in a contract that are often listed under the heading "Miscellaneous" are called

Contracts must use formal terminology such as "whereas" and "heretofore" in order to be legal.

Which of the following is the best example of a contract title?

Compare and contrast the perspectives of a lawyer and a business client when approaching the negotiation of a contract.

Farmer's Fortune Insurance has a contract with Farmer Fran to insure her crops against insect damage. The contract does not specify which insects are covered or how much damage is necessary to make a claim. The contract will probably be enforced in favor of

An agreement should definitely be in writing if you do not have an ongoing relationship with the other party.

If the subject of the contract includes issues that may be controversial or "touchy," it is best to

Nate works as a sales representative. His employment contract specifies that he cannot work for a competitor for a period of two years from employment. This is an example of

Any ambiguity in a contract is interpreted against the party who drafted the contract.

Which of the following is one of the four steps in reading a contract?

"Scrivener's error" is another (fancier)name for a typo.

You should hire a lawyer to review any legal papers you have to sign, especially such papers as lease agreements or car purchases.

Two parties are debating whether or not to put their contract into writing. In making their determination, which of the following factors would normally NOT be considered?

In which of the following situations is it likely that you may NOT need a written contract?

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