Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Jones and Clark entered into a written contract for the purchase of an apartment building by Clark. The contract was carefully drafted to set forth the agreement of the parties. It was signed by both parties. Clark subsequently claimed that the contract did not cover all the terms included in the written and oral agreements that the parties had made during their prior negotiations.
Jones claimed that the parol evidence rule barred proof of all of their prior agreements. Which claim would be upheld in court?

Accepted Answer

Judgment would be for Jones. The parol e

Question 3

In interpreting an ambiguous contract, one part of the contract:

Accepted Answer

A)  must be viewed in isolation. 
B)  must be viewed as a condition. 
C)  must be viewed in connection with the rest of the contract. 
D)  must be viewed as indicating joint and several liability. 
A)  must be viewed in isolation. 
B)  must be viewed as a condition. 
C)  must be viewed in connection with the rest of the contract. 
D)  must be viewed as indicating joint and several liability.

Question 4

The statute of frauds applies to:

Accepted Answer

A)  the lease of an apartment on a month-to-month basis. 
B)  the cancellation of a written agreement for the sale and purchase of land. 
C)  an employment agreement. 
D)  the sale of goods priced at less than $500. 
A)  the lease of an apartment on a month-to-month basis. 
B)  the cancellation of a written agreement for the sale and purchase of land. 
C)  an employment agreement. 
D)  the sale of goods priced at less than $500.

Question 5

Because many oral contracts are legally enforceable, it is a good business practice in the preliminary stages of discussions to stipulate that no binding agreement is intended to be formed until a written contract is prepared and signed by the parties.

Accepted Answer

A) True 
 B)False

Question 6

A person who is prevented from enforcing a contract because of the statute of frauds also is prevented from recovering the value of services, property, or money furnished the other party to the oral contract.

Accepted Answer

A) True 
 B)False

Question 7

When an insurance policy is ambiguous, the policy is interpreted:

Accepted Answer

A)  against the insurer. 
B)  in favor of the insurer. 
C)  according to the dictionary meaning of the words. 
D)  according to the meaning of the words in the insurance industry. 
A)  against the insurer. 
B)  in favor of the insurer. 
C)  according to the dictionary meaning of the words. 
D)  according to the meaning of the words in the insurance industry.

Question 8

An oral agreement to supply a line of credit for two (2) years cannot be enforced because of the statute of frauds.

Accepted Answer

A) True 
 B)False

Question 9

A writing required by the statute of frauds may be in any form.

Accepted Answer

A) True 
 B)False

Question 10

Parol evidence generally is admissible to explain:

Accepted Answer

A)  ambiguous terms. 
B)  why signatures are missing. 
C)  why a contract was not performed. 
D)  implied terms. 
A)  ambiguous terms. 
B)  why signatures are missing. 
C)  why a contract was not performed. 
D)  implied terms.

Question 11

Suzy Bartles enters into an oral contract to purchase a tract of land from Bill Hermes. The land is considered worthless, but Bartles feels that she has discovered a possible usage that would drastically increase the value of the land. To assure herself of the potential value of the land, Bartles orally hires an attorney to investigate the title and records associated with the land in question. Before gaining any information from her attorney, Bartles orally contracts with a builder to construct a huge building on the site. Because of the size of the project, a completion time is difficult to predict. Bartles now discovers that the land is indeed useless, a fact that she obtains through information from her attorney.
Bartles now refuses to honor her contracts with Hermes, her attorney, and the builder. Must Bartles honor her contractual agreements?

Accepted Answer

All contracts concerning the sale of lan

Question 12

When the statute of frauds applies and there is no written proof of the contract, the contract is:

Accepted Answer

A)  void. 
B)  enforceable if there are two credible witnesses. 
C)  voidable by a party who has not signed. 
D)  illegal. 
A)  void. 
B)  enforceable if there are two credible witnesses. 
C)  voidable by a party who has not signed. 
D)  illegal.

Question 13

A contract is interpreted to give effect to:

Accepted Answer

A)  the intent manifested by the contract. 
B)  what the court believes is a fair contract. 
C)  what the defendant thought the contract meant. 
D)  what will be best for the economic life of the community. 
A)  the intent manifested by the contract. 
B)  what the court believes is a fair contract. 
C)  what the defendant thought the contract meant. 
D)  what will be best for the economic life of the community.

Question 14

Bart was a self-made millionaire who had earned his fortune by dedicated hard work. Bart had worked so hard that he never had developed much of a social life. Bart met Linda and fell in love with her. When Bart proposed to Linda, she told him that she needed time before making such an important decision. Pressing her for a favorable response, Bart telephoned Linda and promised her $100,000 if she would marry him. Linda then accepted the proposal.
Bart contracted with Quick Builders for the construction of a home Bart intended to move into with Linda after their marriage. Construction by Quick was not very quick because Quick was not paying subcontractors the sums that they were owed. They, in turn, were not completing their work. To expedite matters, Bart called the subcontractors and assured them that Bart would pay any sums that Quick Builders did not pay if they would complete the construction.
Bart and Linda married and the subcontractors completed the work. Quick Builders did not pay the subcontractors in full. Bart failed to pay Linda the $100,000. Both Linda and the subcontractors sued Bart. Discuss the probable outcome of the lawsuits.

Accepted Answer

Linda's lawsuit will be unsuccessful bec

Question 15

The writing required by the statute of frauds in the case of a contract for the sale of land must:

Accepted Answer

A)  be addressed to the other party to the contract. 
B)  be made with the intent to create a writing to satisfy the statute of frauds. 
C)  be signed at the end of the writing. 
D)  describe the land to be sold. 
A)  be addressed to the other party to the contract. 
B)  be made with the intent to create a writing to satisfy the statute of frauds. 
C)  be signed at the end of the writing. 
D)  describe the land to be sold.

Question 16

The parol evidence rule prohibits only the use of oral testimony that alters an apparently complete written contract.

Accepted Answer

A) True 
 B)False

Question 17

An oral contract to sell a house is binding if:

Accepted Answer

A)  the agreement is witnessed by a member of the clergy. 
B)  there is a tape recording of the agreement. 
C)  the buyer paid the price and received the deed of conveyance. 
D)  the seller is a merchant. 
A)  the agreement is witnessed by a member of the clergy. 
B)  there is a tape recording of the agreement. 
C)  the buyer paid the price and received the deed of conveyance. 
D)  the seller is a merchant.

Question 18

Details of performance of a contract not expressly stated in a contract will often be implied by the court.

Accepted Answer

A) True 
 B)False

Question 19

The standard 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.

Exam 17: Writing, Electronic Forms, and Interpretation of Contracts

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

In interpreting an ambiguous contract, one part of the contract:

The statute of frauds applies to:

Because many oral contracts are legally enforceable, it is a good business practice in the preliminary stages of discussions to stipulate that no binding agreement is intended to be formed until a written contract is prepared and signed by the parties.

A person who is prevented from enforcing a contract because of the statute of frauds also is prevented from recovering the value of services, property, or money furnished the other party to the oral contract.

When an insurance policy is ambiguous, the policy is interpreted:

An oral agreement to supply a line of credit for two (2) years cannot be enforced because of the statute of frauds.

A writing required by the statute of frauds may be in any form.

Parol evidence generally is admissible to explain:

When the statute of frauds applies and there is no written proof of the contract, the contract is:

A contract is interpreted to give effect to:

The writing required by the statute of frauds in the case of a contract for the sale of land must:

The parol evidence rule prohibits only the use of oral testimony that alters an apparently complete written contract.

An oral contract to sell a house is binding if:

Details of performance of a contract not expressly stated in a contract will often be implied by the court.

The standard statute of frauds:

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

The Legal Environment of International Trade

Crimes

Torts

Intellectual Property Rights

Cyberlaw

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 Instruments, Parties, and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

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

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

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