Question 1

Because contracts are legally binding agreements, they must be in writing to be enforceable.

Accepted Answer

A) True 
 B)False  False

Question 2

To be enforceable under the statute of frauds, the note or memorandum must be signed by the party sought to be bound by the contract.

Accepted Answer

A) True 
 B)False  True

Question 3

The parol evidence rule does not apply in which of the following scenarios?

Accepted Answer

A)  contradict a complete written contract. 
B)  prove the modification or termination of a contract. 
C)  replace the statute of frauds. 
D)  create a contract. 
A)  contradict a complete written contract. 
B)  prove the modification or termination of a contract. 
C)  replace the statute of frauds. 
D)  create a contract. B

Question 4

An oral understanding is not binding if:

Accepted Answer

A)  the services performed were not to the satisfaction of the other party. 
B)  the amount agreed to be paid for services rendered was not a fair and reasonable amount. 
C)  the parties intended to formalize their understanding with a written agreement. 
D)  the understanding may be terminated at will by either party. 
A)  the services performed were not to the satisfaction of the other party. 
B)  the amount agreed to be paid for services rendered was not a fair and reasonable amount. 
C)  the parties intended to formalize their understanding with a written agreement. 
D)  the understanding may be terminated at will by either party.

Question 5

The past performance of the parties under a continuing contract is irrelevant in determining what the contract means.

Accepted Answer

A) True 
 B)False

Question 6

The parol evidence rule is based on the theory that any oral agreement was abandoned when the contact was written.

Accepted Answer

A) True 
 B)False

Question 7

A contract for the sale of goods with a price of $500 or more requires written proof to be enforceable.

Accepted Answer

A) True 
 B)False

Question 8

If a contract is unclear, it will be interpreted against the party who drafted it.

Accepted Answer

A) True 
 B)False

Question 9

The Uniform Commercial Code contains a statute of frauds rule relating to sales of personal property, specifically:

Accepted Answer

A)  goods. 
B)  chattel paper. 
C)  real property. 
D)  prenuptial agreements. 
A)  goods. 
B)  chattel paper. 
C)  real property. 
D)  prenuptial agreements.

Question 10

A contract is created by which the terms are stated to be for consideration in the amount of $3,000. If typewritten in the contract is the term "four thousand dollars," while the amount of $3,000 is printed within the form:

Accepted Answer

A)  the contract will be interpreted to be for $3,000. 
B)  the contract will be interpreted to be for $4,000. 
C)  there is a contract but the courts will not specify the dollar amount, as a conflict exists. 
D)  a compromise settlement amount of $3,500 will be used. 
A)  the contract will be interpreted to be for $3,000. 
B)  the contract will be interpreted to be for $4,000. 
C)  there is a contract but the courts will not specify the dollar amount, as a conflict exists. 
D)  a compromise settlement amount of $3,500 will be used.

Question 11

The statute of frauds applies to promises to answer for another party's debt, but does not apply to a promise to answer for another party's default.

Accepted Answer

A) True 
 B)False

Question 12

The one-year performance requirement for an oral contract begins:

Accepted Answer

A)  on the day of the agreement. 
B)  on the first day of performance. 
C)  on the day following the agreement. 
D)  the day on which the agreement was placed in writing. 
A)  on the day of the agreement. 
B)  on the first day of performance. 
C)  on the day following the agreement. 
D)  the day on which the agreement was placed in writing.

Question 13

When ________ of the promisor's promise to pay the debt of another is to benefit the promisor, the statute of frauds is not applicable, and the oral promise to pay the debt is binding.

Accepted Answer

A)  part performance. 
B)  an oral version. 
C)  the main purpose. 
D)  promissory estoppel. 
A)  part performance. 
B)  an oral version. 
C)  the main purpose. 
D)  promissory estoppel.

Question 14

Parol evidence may be admitted to show that a provision was omitted as the result of:

Accepted Answer

A)  fraud. 
B)  mistaken understanding. 
C)  oral additions. 
D)  oral modification. 
A)  fraud. 
B)  mistaken understanding. 
C)  oral additions. 
D)  oral modification.

Question 15

Customs and trade usage can override the express provisions of a contract.

Accepted Answer

A) True 
 B)False

Question 16

If the main purpose of a promise is to pay the debt of another and benefit the promisor, the statute of frauds is not applicable, and the oral promise to pay the debt is binding.

Accepted Answer

A) True 
 B)False

Question 17

A note or memorandum does not have to contain all the essential terms of the contract to be valid.

Accepted Answer

A) True 
 B)False

Question 18

The parol evidence rule may not apply if:

Accepted Answer

A)  the contract is materially incomplete. 
B)  the parties disagree on the meaning of the contract. 
C)  there is no ambiguity regarding the terms of the contract. 
D)  one party is unable to perform the contractual obligations. 
A)  the contract is materially incomplete. 
B)  the parties disagree on the meaning of the contract. 
C)  there is no ambiguity regarding the terms of the contract. 
D)  one party is unable to perform the contractual obligations.

Question 19

The statute of frauds:

Accepted Answer

A)  requires full disclosure in the case of consumer sales on credit. 
B)  requires a seller of real estate to obtain a broker's license. 
C)  specifies the punishment of perjury. 
D)  requires that a contract for the sale of land be evidenced by a writing. 
A)  requires full disclosure in the case of consumer sales on credit. 
B)  requires a seller of real estate to obtain a broker's license. 
C)  specifies the punishment of perjury. 
D)  requires that a contract for the sale of land be evidenced by a writing.

Question 20

When a contract proves to be a bad bargain:

Accepted Answer

A)  the injured party is never bound by the terms of the contract. 
B)  courts will always imply terms that are necessary to avoid hardship. 
C)  parties are generally still bound by the terms of the contract. 
D)  the contract must be rewritten. 
A)  the injured party is never bound by the terms of the contract. 
B)  courts will always imply terms that are necessary to avoid hardship. 
C)  parties are generally still bound by the terms of the contract. 
D)  the contract must be rewritten.

Exam 16: Writing, Electronic Forms, and Interpretation of Contracts

Because contracts are legally binding agreements, they must be in writing to be enforceable.

To be enforceable under the statute of frauds, the note or memorandum must be signed by the party sought to be bound by the contract.

The parol evidence rule does not apply in which of the following scenarios?

An oral understanding is not binding if:

The past performance of the parties under a continuing contract is irrelevant in determining what the contract means.

The parol evidence rule is based on the theory that any oral agreement was abandoned when the contact was written.

A contract for the sale of goods with a price of $500 or more requires written proof to be enforceable.

If a contract is unclear, it will be interpreted against the party who drafted it.

The Uniform Commercial Code contains a statute of frauds rule relating to sales of personal property, specifically:

A contract is created by which the terms are stated to be for consideration in the amount of $3,000. If typewritten in the contract is the term "four thousand dollars," while the amount of $3,000 is printed within the form:

The statute of frauds applies to promises to answer for another party's debt, but does not apply to a promise to answer for another party's default.

The one-year performance requirement for an oral contract begins:

When ________ of the promisor's promise to pay the debt of another is to benefit the promisor, the statute of frauds is not applicable, and the oral promise to pay the debt is binding.

Parol evidence may be admitted to show that a provision was omitted as the result of:

Customs and trade usage can override the express provisions of a contract.

If the main purpose of a promise is to pay the debt of another and benefit the promisor, the statute of frauds is not applicable, and the oral promise to pay the debt is binding.

A note or memorandum does not have to contain all the essential terms of the contract to be valid.

The parol evidence rule may not apply if:

The statute of frauds:

When a contract proves to be a bad bargain:

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

Crimes

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Intellectual Property Rights and the Internet

The Legal Environment of International Trade

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Negotiable Instruments and Negotiability

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Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

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LPs, LLCs, and LLPs

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Management of Corporations

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