Question 1

The primary contract in a guarantee situation is between the debtor and the creditor.

Accepted Answer

A) True 
 B)False

Question 2

In most states,contracts for the lease of goods with payments of $2000 require to be in writing.

Accepted Answer

A) True 
 B)False

Question 3

In which of the following cases is parol evidence admitted by a court?

Accepted Answer

A) when the plaintiff reduces the value of damages he expects 
B) when the evidence explains ambiguous language 
C) when the defendant does not wish to appeal 
D) when the defendant takes the case to the appellate court 
A) when the plaintiff reduces the value of damages he expects 
B) when the evidence explains ambiguous language 
C) when the defendant does not wish to appeal 
D) when the defendant takes the case to the appellate court

Question 4

The ________ states that an executory contract which cannot be performed by its own terms within one year of its formation must be in writing.

Accepted Answer

A) parol evidence rule 
B) common law of contracts 
C) merger clause 
D) one-year rule 
A) parol evidence rule 
B) common law of contracts 
C) merger clause 
D) one-year rule

Question 5

The doctrine of ________ allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid injustice.

Accepted Answer

A) part performance 
B) undue performance 
C) equitable performance 
D) promissory estoppel 
A) part performance 
B) undue performance 
C) equitable performance 
D) promissory estoppel

Question 6

If a modification of the lease contract increases the lease payment to $1,000 or more,the modification has to be in writing to be enforceable.

Accepted Answer

A) True 
 B)False

Question 7

Good Faith Consultants partnered with QuickFind IT Solutions for a period of six months.After three months,they wanted to extend the contract by two years.According to the Statute of Frauds,which of the following is true of the contract?

Accepted Answer

A) The modification to the duration of the contract should be in writing. 
B) A new contract must be formed. 
C) The contract can be oral both before and after modification. 
D) Only the original contract should be in writing. 
A) The modification to the duration of the contract should be in writing. 
B) A new contract must be formed. 
C) The contract can be oral both before and after modification. 
D) Only the original contract should be in writing.

Question 8

Jonas enters into an oral contract with Chelsea to lease his house to her for $100,000.Chelsea pays him $100,000 and moves in.A month later,Jonas learns that his state requires contracts for the lease of goods with payments of $1,000 or more to be in writing.Which of the following options does either party have now?

Accepted Answer

A) Jonas can evict Chelsea as the contract does not comply with the Statute of Frauds and is hence void. 
B) The contract cannot be rescinded by either party as it has already been executed. 
C) Chelsea can rescind the contract on the grounds of noncompliance with the Statute of Frauds. 
D) Jonas can rescind the contract on the grounds of noncompliance with the Statute of Frauds. 
A) Jonas can evict Chelsea as the contract does not comply with the Statute of Frauds and is hence void. 
B) The contract cannot be rescinded by either party as it has already been executed. 
C) Chelsea can rescind the contract on the grounds of noncompliance with the Statute of Frauds. 
D) Jonas can rescind the contract on the grounds of noncompliance with the Statute of Frauds.

Question 9

A(n)________ occurs when one person agrees to answer for the debts or duties of another person.

Accepted Answer

A) main purpose exception 
B) mortgage 
C) guaranty contract 
D) implied integration 
A) main purpose exception 
B) mortgage 
C) guaranty contract 
D) implied integration

Question 10

The signature of the person who is enforcing the contract is necessary.

Accepted Answer

A) True 
 B)False

Question 11

If Johnny made an oral contract with Peter to sell Peter his truck for $15,000,Johnny's eventual refusal to sell the truck is considered breach of contract.

Accepted Answer

A) True 
 B)False

Question 12

The ________ states that if the main purpose of a transaction and an oral collateral contract is to provide pecuniary benefit to the guarantor,the collateral contract does not have to be in writing to be enforced.

Accepted Answer

A) merger clause 
B) leading object exception 
C) collateral contract rule 
D) parol evidence rule 
A) merger clause 
B) leading object exception 
C) collateral contract rule 
D) parol evidence rule

Question 13

An easement is a form of real property security given by a borrower to a lender.

Accepted Answer

A) True 
 B)False

Question 14

A ________ is a person who agrees to pay a debt if the primary debtor does not.

Accepted Answer

A) secondary contractor 
B) third-party contractor 
C) lessee 
D) guarantor 
A) secondary contractor 
B) third-party contractor 
C) lessee 
D) guarantor

Question 15

Any writing-including letters,telegrams,invoices,sales receipts,checks,and handwritten agreements written on scraps of paper-can be an enforceable contract.

Accepted Answer

A) True 
 B)False

Question 16

Section 2-201(1)of the Uniform Commercial Code (UCC)states that ________.

Accepted Answer

A) all lease contracts must be in writing 
B) lease contracts involving payments of $1,000 or more must be in writing 
C) all sales contracts must be in writing 
D) sales contracts involving payments of $500 or more must be in writing 
A) all lease contracts must be in writing 
B) lease contracts involving payments of $1,000 or more must be in writing 
C) all sales contracts must be in writing 
D) sales contracts involving payments of $500 or more must be in writing

Question 17

The main purpose exception to the Statute of Frauds allows oral collateral contracts to be enforced if there is a monetary benefit to the guarantor.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is an instance of a mortgage?

Accepted Answer

A) Richard pays Ellen $1000 a month to live in her apartment. 
B) Richard pays Ellen $12,000 a year to live in her apartment. 
C) Richard gives his country estate as collateral to a bank from where he has borrowed money to buy an apartment. 
D) Richard has been living in an apartment for thirty years and upon his death, the apartment will be transferred to somebody else. 
A) Richard pays Ellen $1000 a month to live in her apartment. 
B) Richard pays Ellen $12,000 a year to live in her apartment. 
C) Richard gives his country estate as collateral to a bank from where he has borrowed money to buy an apartment. 
D) Richard has been living in an apartment for thirty years and upon his death, the apartment will be transferred to somebody else.

Question 19

In a guaranty situation,there is only one contract among three parties.

Accepted Answer

A) True 
 B)False

Question 20

The ________ says that agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable.

Accepted Answer

A) merger clause 
B) common law of contracts 
C) doctrine of equity 
D) equal dignity rule 
A) merger clause 
B) common law of contracts 
C) doctrine of equity 
D) equal dignity rule

Exam 14: Statute of Frauds and Equitable Exceptions

The primary contract in a guarantee situation is between the debtor and the creditor.

In most states,contracts for the lease of goods with payments of $2000 require to be in writing.

In which of the following cases is parol evidence admitted by a court?

The ________ states that an executory contract which cannot be performed by its own terms within one year of its formation must be in writing.

The doctrine of ________ allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid injustice.

If a modification of the lease contract increases the lease payment to $1,000 or more,the modification has to be in writing to be enforceable.

Good Faith Consultants partnered with QuickFind IT Solutions for a period of six months.After three months,they wanted to extend the contract by two years.According to the Statute of Frauds,which of the following is true of the contract?

A(n)________ occurs when one person agrees to answer for the debts or duties of another person.

The signature of the person who is enforcing the contract is necessary.

If Johnny made an oral contract with Peter to sell Peter his truck for $15,000,Johnny's eventual refusal to sell the truck is considered breach of contract.

The ________ states that if the main purpose of a transaction and an oral collateral contract is to provide pecuniary benefit to the guarantor,the collateral contract does not have to be in writing to be enforced.

An easement is a form of real property security given by a borrower to a lender.

A ________ is a person who agrees to pay a debt if the primary debtor does not.

Any writing-including letters,telegrams,invoices,sales receipts,checks,and handwritten agreements written on scraps of paper-can be an enforceable contract.

Section 2-201(1)of the Uniform Commercial Code (UCC)states that ________.

The main purpose exception to the Statute of Frauds allows oral collateral contracts to be enforced if there is a monetary benefit to the guarantor.

Which of the following is an instance of a mortgage?

In a guaranty situation,there is only one contract among three parties.

The ________ says that agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable.

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