A) legally enforceable promises. B) always required to be written. C) a form of a circular. D) enforceable only in the supreme court. E) informal agreements. A) legally enforceable promises. B) always required to be written. C) a form of a circular. D) enforceable only in the supreme court. E) informal agreements.

A novation is a three (or more) party co

Exam 8: Contract Formation

Mark entered into a written contract to sell Dobby his music collection for $10,000 payable in five installments. Mark then sells Cathy the right to collect the proceeds of his sale. Discuss Cathy's legal rights.

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Question 1

Correct Answer:

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Mark has made an assignment. If the assignment is properly structured, the assignee can enforce the original contract. When an assignor assigns rights, an implied warranty is made that the rights are valid and enforceable. Mark will have to send a notice to Dobby notifying him of the assignment. Cathy can enforce her rights as the assignee to collect the proceeds of Mark's sale from Dobby.

Sherry Shoe Company sends an offer by fax to Hulk Retailers to sell 100,000 pairs of shoes at $150 each, and mentions that it will hold the offer open for Hulk for two months. Four months after receiving Sherry's offer, Hulk faxes an acceptance. However, at this time Sherry has already entered a contract with another retailer. Discuss the situation.

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Question 2

Correct Answer:

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The offer by Sherry is an example of a firm offer, where a merchant agrees to hold the offer open for a reasonable period of time, without any consideration. A firm offer exists when a merchant offering goods promises in writing that the offer will not be revoked for a period not to exceed three months. Since Hulk replied after the time limit, Sherry's offer is automatically revoked. Sherry Shoe Company can enter into a contract with another retailer.

A collateral promise is a secondary or conditional promise.

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(True/False)

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Question 3

Correct Answer:

Verified

True

Contracts are legally enforceable promises.

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Question 4

Which of the following oral contracts can be enforceable in court?

(Multiple Choice)

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Question 5

Mayra offers to sell her home to Hanna for "about $100,000 plus closing costs." Hanna accepts Mayra's offer but later, a dispute arises concerning the precise dollar amount of the purchase price. How will a court resolve this dispute?

(Multiple Choice)

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Question 6

Contracts are:

(Multiple Choice)

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Question 7

Adam applied for a loan of $80,000, to purchase land from Chad. Chad makes an oral promise to Adam that he will allow Adam a period two months to accept his offer. Chad refuses to give this promise in writing. Discuss how Adam can ensure that the owner does not sell the land to another buyer in two months.

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Question 8

Avery mails Taylor offering to sell her house at a reasonable price. Taylor mails his acceptance. Avery and Taylor are bound by a valid contract.

(True/False)

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Question 9

What is a novation?

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Question 10

Daniel purchases a house through Adelaide Loan Co. However, he moves to another city for work and sells the house to Christopher. Daniel wants to be released from his payment obligations to Adelaide Loan Co. Which of the following would release Daniel from this liability?

(Multiple Choice)

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Question 11

A(n) _____ contract is the one in which the promised terms of the contract have been discussed by the parties.

(Multiple Choice)

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Question 12

If a minor fails to disaffirm a contract within a reasonable time after reaching majority, the minor is said to _____ the contract.

(Multiple Choice)

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Question 13

Casper offers to sell a car to Amanda for $1,000, to which Amanda agrees. Both the parties have signed a contract fully detailing the transaction which will be executed in 24 hours. This contract is an example of a firm offer.

(True/False)

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Question 14

Fixman Ltd. agrees to renovate Juan's house for $20,000. During the renovation, Fixman demands an additional $5,000 to complete the work, which Juan agrees. Fixman can sue Juan, if Juan fails to pay the additional amount.

(True/False)

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Question 15

Contract law enables private agreements to be legally enforceable.

(True/False)

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Question 16

Misrepresentation is simply a misstatement without intent to mislead.

(True/False)

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Question 17

Darcy offers Kate his farm house for $200,000. However, before Kate communicates her acceptance, the farm house gets destroyed due to a fire. In this situation Kate can sue Darcy for breach of contract.

(True/False)

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Question 18

Appy hires Tring Painters to paint her living room. She selects deluxe paints that cost her $200 in total. However, as the painters begin their work, Appy notices that they are mistakenly using washable finesse paints, which would cost her $500 in total. When the work is done, Appy refuses to pay Tring Painters the $500, saying she wanted paints that would cost $200. Analyze the rights of the parties in this case.

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Question 19

An important exception to the rule requiring consideration to support a promise is the doctrine of _____. This doctrine arises when a promisee justifiably relies on a promisor's promise to his or her economic injury.

(Multiple Choice)

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Question 20

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Mark entered into a written contract to sell Dobby his music collection for $10,000 payable in five installments. Mark then sells Cathy the right to collect the proceeds of his sale. Discuss Cathy's legal rights.

A collateral promise is a secondary or conditional promise.

Contracts are legally enforceable promises.

Which of the following oral contracts can be enforceable in court?

Mayra offers to sell her home to Hanna for "about $100,000 plus closing costs." Hanna accepts Mayra's offer but later, a dispute arises concerning the precise dollar amount of the purchase price. How will a court resolve this dispute?

Contracts are:

Avery mails Taylor offering to sell her house at a reasonable price. Taylor mails his acceptance. Avery and Taylor are bound by a valid contract.

What is a novation?

Daniel purchases a house through Adelaide Loan Co. However, he moves to another city for work and sells the house to Christopher. Daniel wants to be released from his payment obligations to Adelaide Loan Co. Which of the following would release Daniel from this liability?

A(n) _____ contract is the one in which the promised terms of the contract have been discussed by the parties.

If a minor fails to disaffirm a contract within a reasonable time after reaching majority, the minor is said to _____ the contract.

Casper offers to sell a car to Amanda for $1,000, to which Amanda agrees. Both the parties have signed a contract fully detailing the transaction which will be executed in 24 hours. This contract is an example of a firm offer.

Fixman Ltd. agrees to renovate Juan's house for $20,000. During the renovation, Fixman demands an additional $5,000 to complete the work, which Juan agrees. Fixman can sue Juan, if Juan fails to pay the additional amount.

Contract law enables private agreements to be legally enforceable.

Misrepresentation is simply a misstatement without intent to mislead.

Darcy offers Kate his farm house for $200,000. However, before Kate communicates her acceptance, the farm house gets destroyed due to a fire. In this situation Kate can sue Darcy for breach of contract.

An important exception to the rule requiring consideration to support a promise is the doctrine of _____. This doctrine arises when a promisee justifiably relies on a promisor's promise to his or her economic injury.

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