Exam 7: Contract Formation

Ronald is 17 years old and contracts to purchase a car and make monthly payments for three years. He may disaffirm the contract at any time prior to his 18th birthday.

If the offer specifies no time limit in which to accept:

Jon owns two cars. He says to Rachel, "I'll sell you either car for $8,000." This is a valid offer.

The term option contract refers to the choices that one has when entering into a contract.

Most advertisements in the mass media are not offers because they:

Burns offers Realtor a commission of 10 percent of the sales price if Realtor can find a buyer for the Burns Building for $500,000. Realtor spends funds to research and obtain potential-buyer contact information and locates Walters, who is willing to accept the $500,000 offer to sell from Burns. Before any transaction takes place, Burns revokes his offer to Realtor and refuses to sell the property to Walters. Burns's revocation is:

In many states, if a person has been declared incompetent, contracts that person enters into are classified as void ________ or not valid from the onset.

Generally, mutual mistakes will often lead to the court allowing an avoidance of a contract; however, a unilateral mistake is not usually grounds to cancel a contract.

Jon works for a major bank. The revised employee handbook that he received 5 years ago says that all employees with 25 years of service will receive a retirement party. He is about to hit 25 years of service and has announced his retirement. His manager tells him that the company, on the basis of his years of service, will throw him a party and present him with a gold watch. Jon retires on his 25th anniversary, and his manager announces that the company will not throw the party or give him the watch.

Contractual consideration is defined as the thought process a party uses to decide whether or not to accept the offer and enter into a contract.

Courts enforce contracts only if each party had the legal capacity to enter into a contract. Which classes of persons have limited power to contract?

If Peter owns two different cars and says to Amy, "I'll sell you my car for $5,000," this offer is unclear.

It is not possible for a total stranger with no ties to the alleged victim to commit undue influence over another.

The legal term for guilty knowledge that is an element of fraudulent misrepresentation is _______.

Jeff goes to a car dealership and the salesperson tells him that the car he's looking at is a great car and an excellent value. The statements made by the salesperson, if untrue, will not be adequate to create either an innocent misrepresentation or a fraudulent misrepresentation.

What does the parole evidence rule say, and how does it affect contracts?

Should an adult find out that he or she has entered into a contract with a minor, the adult may disaffirm the contract if the adult does so before the minor reaches the legal age.

In which of the following situations will the court enforce a contract?

The mailbox rule determines when a contract is considered to be deemed accepted by the offeree, thus depriving the offeror of the right to revoke the offer.

Which of the following statements may be grounds for a misrepresentation, innocent or fraudulent, to occur?