Deck 12: Formation of Traditional and E Contracts

Question 1

Shrink-wrap terms are enforceable even if a buyer does not discover them until after the parties have entered into a contract.

Answer 1

False

Question 2

A click-on agreement can indicate the acceptance of an online offer.

Answer 2

True

Question 3

Like other types of law, contract law is distinct from our social values, interests, and expectations at any given point in time.

Answer 3

False

Question 4

Contracting parties are bound only by terms that can be objectively inferred from promises made.

Question 5

By supplying procedures for enforcing private agreements, contract law provides an essential condition for the existence of a market economy.

Question 6

An offer made in undue excitement is an effective offer.

Question 7

A contract that only one of the parties can enforce in a court is not valid.

Question 8

The offeror's intention to become bound by the offer must be subjectively clear.

Question 9

Posting an item for sale on an online auction site is an offer to form a contract.

Question 10

One of the requirements of a valid contract is an adequate market for the deal's goods or services.

Question 11

A promise to do something that one has no prior legal duty to do is not legally sufficient consideration.

Question 12

The offeror can revoke the offer only be expressing repudiating it.

Question 13

Acceptance is timely if it is effective before the offer is terminated.

Question 14

An agreement to agree to the material terms of a contract at some future date may be enforceable.

Question 15

Because so much e-commerce involves parties in the United States, the preeminence of U.S. law in this area is not likely to be challenged in the future.

Question 16

In effect, a counteroffer converts the original offeror into an offeree with the power of acceptance.

Question 17

The primary purpose of the Uniform Electronic Transactions Act is to create new rules for electronic contracts.

Question 18

An exchange of e-mails cannot create a complete and unambiguous binding agreement.

Question 19

An offer that can be accepted simply by a promise to perform does not create a binding contract.

Question 20

Consideration must provide the basis for the bargain struck between contracting parties.

Question 21

A promise to refrain from competing in business with another is considered to be unconscionable.

Question 22

Contracts entered into by mentally incompetent persons are not valid under any circumstances.

Question 23

On a delegation of contract duties, the delegator is absolved from any liability for performance under the contract.

Question 24

Macy offers to sell his fitness watch for $50 to Nona. Nona promises to pay Macy the price. Later, they exchange the watch for the funds. A contract was created when

A) Macy offered to sell the watch.
B) Macy delivered the watch.
C) Nona promised to pay for the watch.
D) Nona paid for the watch.

Question 25

To apply the doctrine of promissory estoppel in a given situation, there must exist no clear or definite promise.

Question 26

A promise made in return for an act or event that has already taken place is fully enforceable.

Question 27

An agreement subject to the writing requirement must be written on paper.

Question 28

The contracts entered into by a minor are voidable at the option of that minor.

Question 29

Marketing Inc. offers to create a campaign to increase N'Ice Cream Inc.'s online business. N'Ice agrees to pay for the service. These parties have

A) no contract.
B) an express contract.
C) an implied contract.
D) a formal contract.

Question 30

Two parties can mutually agree to rescind a contract only to the extent that it has been executed-otherwise, there is nothing to rescind.

Question 31

A bank's sale of its right to receive payment on a loan to a third party is a transfer but not an assignment.

Question 32

A landlord can avoid liability for injuries that occur on rental property by including an exculpatory clause in the lease.

Question 33

Red offers to pay Sari to deliver certain documents within thirty minutes. Sari can accept the offer only by completing the task within the deadline. If she does, Red and Sari will have

A) a bilateral contract.
B) a unilateral contract.
C) a void contract.
D) an executive contract.

Question 34

Raj agrees to work as a freight broker for Shipping Inc. In determining whether a contract has been formed, an element of prime importance is the parties'

A) intent.
B) objectives.
C) subjective beliefs.
D) motives.

Question 35

The lack of a license in certain occupations bars the enforcement of work-related contracts.

Question 36

A contract provision that deprives one party of the benefits of the agreement may seem unfair but a court is not likely to consider it unconscionable.

Question 37

Steel Mill Inc. makes an offer to Teri to enter into a contract to work as an metallurgical engineer for a certain salary for one year subject to a five-year renewal based on his performance. Teri accepts the offer. This is a valid contract because it includes

A) a price and a subject.
B) a duration and a termination.
C) an offer and an acceptance.
D) specific quality standards.

Question 38

Any contract involving consumer goods must be in writing to be enforceable.

Question 39

A contract that calls for an action contrary to public policy is illegal but not unenforceable.

Question 40

If a party is already bound by contract to perform a certain duty, that duty can serve as consideration for a second contract.

Question 41

Holes Inc. begins digging a foundation at a construction site for Investment Company under a contract for a certain price. After six months, Holes demands a higher price because of extraordinary difficulties that were totally unforeseen at the time the contract was formed. An agreement to pay the higher price is

A) enforceable as the consideration is past.
B) enforceable due to unforeseen difficulties.
C) unenforceable as an illusory promise.
D) unenforceable due to the preexisting duty rule.

Question 42

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Agency, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is

A) liable to Niki under the concept of rescission.
B) liable to Niki under the doctrine of promissory estoppel.
C) liable to Niki under the preexisting duty rule.
D) not liable to Niki.

Question 43

Cindy, a real estate agent, sells her friend Doug's house without charging a commission. In return, Doug promises to give Cindy $1,000. This promise is not an enforceable contract because

A) the house has already been sold-the consideration is past.
B) selling the house was the agent's preexisting duty.
C) selling the house was a foreseen difficulty.
D) the promise of a payment of $1,000 is illusory.

Question 44

To control specific offers for goods or services and thus the resulting contracts, important terms to provide online include

A) a provision relating to the resolution of any dispute.
B) a detailed history of the particular business.
C) positive reviews from customers or clients.
D) an updated list of the goods or services.

Question 45

Raj defends against a breach-of-contract suit by Student Loan Corporation by claiming that their deal-a student loan-was unfair because the consideration for the contract was inadequate. With respect to Raj's defense, the court will most likely rule in favor of the lender on the ground that

A) Raj promised to do something that he had no prior legal duty to do.
B) Raj performed an act that he was not otherwise obligated to undertake.
C) Raj refrained from an act that he had a legal right to undertake.
D) the adequacy of the consideration is not for the court to determine.

Question 46

Ocean Inc., a seafood distributor, agrees to buy from Pai, a commercial fisher, any "overstock" of fish that he catches in excess of the legal limit. This agreement is most likely

A) enforceable.
B) valid.
C) void.
D) voidable.

Question 47

Rena asks Sully, "Do you want to pay me to repair your forklift?" This is

A) an offer.
B) not an offer, because the terms are not definite.
C) not an offer, because Rena did not express an intent.
D) not an offer, because Sully did not respond.

Question 48

Hometown Bank posts on its website an offer of a reward for information leading to the apprehension of a certain criminal. This offer could normally be terminated by

A) a post on the website.
B) any of the choices.
C) payment of the reward.
D) apprehension of the criminal.

Question 49

Maeve posts her motorcycle for sale on an online auction site. This is

A) an offer.
B) an invitation to negotiate, not an offer.
C) a price list, not an offer.
D) a request, not an offer.

Question 50

Pastries Inc. sends Rollo its catalogue showcasing a variety of baked goods for certain prices. This is

A) an offer.
B) an invitation to negotiate, not an offer.
C) an ad, not an offer.
D) a request, not an offer.

Question 51

Bianca, a minor, enters into a contract to buy two all-season passes from Chalet Ski Park. The contract will be made enforceable if, after reaching the age of majority, Bianca

A) ratifies it.
B) disaffirms it.
C) nullifies it.
D) voids it.

Question 52

National Trucking Company begins transporting crude for Oil Inc. under a contract for a stated amount per load. After six months, National demands an increase in the stated amount because ordinary business expenses have increased. Oil's agreement to pay the increased amount is

A) enforceable as the consideration is past.
B) enforceable due to unforeseen difficulties.
C) unenforceable as an illusory promise.
D) unenforceable due to the preexisting duty rule.

Question 53

Shep offers to make digital copies of Reliable Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Reliable's acceptance by e-mail will be considered effective when

A) received.
B) sent.
C) followed up by a confirmation letter sent by regular mail.
D) composed on a Reliable computer.

Question 54

Brie buys a subscription to music provided by Concerto, an online streaming service. Before gaining access, Brie must agree to a provision stating that she will not make and sell copies of the music. This provision is

A) a partnering agreement.
B) a click-on agreement.
C) a shrink-wrap agreement.
D) a browse-wrap term.

Question 55

Key promises to pay Liv, his niece, $5,000 if she obtains her degree at Metro College, where she is in her third year. Liv graduates. Key must pay because

A) Liv was already enrolled at Metro.
B) obtaining a degree benefits Liv.
C) a job can be hard to find after college.
D) Liv obtained a degree at Metro.

Question 56

Khe says, "I plan to sell my Apple stock." This is not an offer because

A) the statement is not addressed to a specific offeree.
B) the offeror has only committed to negotiate the terms in good faith.
C) a statement of future intent to do something in the future is not an offer.
D) an expression of opinion does not indicate an intent to enter into a deal.

Question 57

Shipping Corporation enters into contracts with distributors and other buyers in e-commerce and in traditional commerce. Between Shipping and its customers, the UETA applies if the parties agree to conduct transactions by

A) electronic means.
B) paper documents.
C) any of the choices.
D) verbal communication.

Question 58

Primo tries to start his car with no success. He yells that he will sell the car to anyone for $10. Quanto, a passerby, hears Primo's yell. This is not an effective offer because it lacks

A) communication.
B) definite terms.
C) serious intent.
D) practicality.

Question 59

Lon says to Misty, "I would like to sell you my sofa." This statement is

A) an offer.
B) an invitation to negotiate, not an offer.
C) an ad, not an offer.
D) a request, not an offer.

Question 60

Coffee Beans Inc. offers to buy Brewing Company's roasting services for a certain price. Brewing responds that the price is too low and thereby rejects the offer. The offer is

A) terminated.
B) valid for a reasonable time.
C) valid for the period of time prescribed by a state statute.
D) valid until Coffee Beans revokes the offer.

Question 61

Mesa County contracts with New Construct Inc. to build a courthouse. New Construct hires Odell to excavate the site. Odell's work damages adjacent properties. Mesa files a suit against the excavator, who argues that the county is not named in his contract with New Construct. Most likely, the court will hold that Odell is

A) not liable because Mesa is not named in Odell's contract.
B) not liable because Odell's contract was with New Construct, not Mesa.
C) liable on the ground that Mesa is an incidental third-party beneficiary.
D) liable on the ground that Mesa is an intended third-party beneficiary.

Question 62

Cass agrees to sell her Daily Donut shop to Ernie. In the agreement, there is a covenant not to compete that prohibits Cass from operating a donut shop within a certain distance. If the restriction is unreasonable, a court will most likely

A) award Cass damages.
B) order Ernie to stop doing business.
C) reform the covenant.
D) prohibit both parties from operating donut shops.

Question 63

In determining procedural unconscionability, a court is most likely to consider whether

A) none of the choices.
B) any provision left one party without a remedy for nonperformance.
C) any provision deprived one party of the benefits of the agreement.
D) the buyer had an opportunity to ask questions about the contract.

Question 64

The state of Nevada enacts a usury statute. With respect to different types of transactions, including ordinary loans, the purpose of the statute is to

A) set a maximum rate of interest.
B) regulate certain forms of gambling.
C) specify clauses that must be included in certain contracts.
D) prohibit certain contracts based on their subject matter.

Question 65

Ben makes an appointment for a $50 haircut, buys a bike for $250, and agrees to work for Coding Associates for one year for $5,000 per month, starting at the beginning of next month. To be enforceable, a writing is required for

A) the appointment.
B) the purchase.
C) the employment agreement.
D) all of the choices.

Question 66

Seb is mentally incompetent but has not been adjudged by a court to be incompetent. Seb enters into a contract with Toby for the sale of Seb's warehouse. Most likely, the contract is

A) voidable if Seb did not comprehend the consequences.
B) enforceable if Toby did not know that Seb was mentally incompetent.
C) enforceable if the price of the deal is reasonable.
D) void.

Question 67

Intoxicated, Efron enters a contract for the sale of his business, Freight Dispatch, to Gretel for less than its market value. This contract is enforceable if, at the time,

A) Efron's intoxication was purely voluntary.
B) Gretel fraudulently induced Efron to become intoxicated.
C) Gretel was also intoxicated.
D) Efron understood the legal consequences.

Question 68

Duane and Eddy orally agree to a transfer of forty acres of farmland. Eddy asks Finance Bank for a loan of the funds to buy the land. Under the Statute of Frauds, the agreement between Duane and Eddy is enforceable by

A) Duane or Eddy.
B) Duane, Eddy, or Finance Bank.
C) Finance Bank.
D) none of the choices.

Question 69

Retail LLC contracts with Paving Inc. to grade and pave a parking lot. The contract provides that it cannot be assigned without Retail's consent. Later, Paving assigns the contract to Roadwork Company without obtaining Retail's consent. Retail could most successfully argue that the contract cannot be assigned because

A) the assignment is prohibited by statute.
B) the contract is personal.
C) the assignment will materially change a risk.
D) the contract prohibits assignment.

Question 70

On May 1, Bok and Che orally agree that Che will guide a party from the base of Mount Denai to its summit and from the summit to a return to the base. Under the agreement, Bok will pay for the service after the completion of the climb on July 31. On May 1, is this contract express or implied? On July 31, after the climb has been made but before payment is paid, is the contract executed or executory?

Question 71

A contract to do something that is prohibited by statute is

A) enforceable if the parties are aware of the prohibition.
B) enforceable if the parties are ignorant of the prohibition.
C) enforceable if the contract does not negatively affect society.
D) unenforceable.

Question 72

Laz is a friend of Maya, the owner of Nuevo Dias, a coffee kiosk. Every day, Laz spends five minutes at the kiosk, looking at the goods and usually buying a cinnamon bun or a bagel. One morning, Laz looks at the items, and picks up a one-dollar donut. He waves the donut at Maya without saying a word and walks on. Is there a contract? If so, how would it be classified in terms of formation, performance, and enforceability?