Deck 13: Introduction to Contracts

Question 1

Contract law comes from case law, the Uniform Commercial Code and the United Nations Convention for the International Sale of Goods.

Answer 1

True

Question 2

If a quasi-contract is imposed, the amount of damages for a breach is based upon the fair market value of any service provided to the defendant.

Answer 2

True

Question 3

Which of the following is true regarding the type of marriage contract discussed in the text called the muta'a?

A) It is a type of premarital contract typical to the U.S. in which the parties agree ahead of time how property and assets should be divided in the event of divorce.
B) It is a contract by which the female agrees to a divorce if there are no children from the marriage within five years.
C) It is a contract by which the female agrees to a divorce if there are no children from the marriage within three years.
D) It is a temporary type of arrangement called a "responsibility marriage" in which the female is paid to care for the male's elderly parents.
E) It is a temporary type of arrangement called a "pleasure marriage" in which the female is paid for sexual intimacy.

Answer 3

E

Question 4

Any contract that is not a formal contract is an informal contract, also called a simple contract.

Question 5

Which of the following was the result on appeal in Reisenfeld & Co. v. The Network Group, Inc.; Builders Square, Inc.; Kmart Corp., the case in the text involving whether the plaintiff could recover from BSI in the situation in which BSI contracted with Network Group to lease property, and Network Group contracted with the plaintiff agreeing to pay a certain commission for his work but then defaulted on the contract?

A) The court ruled that because it was a third-party beneficiary, BSI was required to pay the plaintiff the full amount of the commissions claimed.
B) The court ruled that because it was a third-party beneficiary, BSI was required to pay the plaintiff the reasonable value of the services rendered, not necessarily the contractual amount promised for commissions.
C) The court ruled that because a quasi-contract was involved, BSI was required to pay the plaintiff the full amount of the commissions claimed.
D) The court ruled that because a quasi-contract was involved, BSI was required to pay the plaintiff the reasonable value of the services rendered, not necessarily the contractual amount promised for commissions.
E) The court ruled that because the plaintiff did not have a contract with BSI, the plaintiff was entitled to no recovery from BSI.

Question 6

There is no requirement that enrichment be unjust in order to recover under quasi-contract.

Question 7

Today, courts hold that once an offeree begins performance on a unilateral contract, the offeror must hold the offer open for a reasonable time to allow the offeree to complete the performance.

Question 8

In relation to contracts, the term "consideration" pertains to parties acting in an ethical manner.

Question 9

Implied-in-law contracts are not actually contracts but are to help prevent unjust enrichment.

Question 10

The definition of a contract is any two promises.

Question 11

The purpose of a covenant not to compete, in the employer/employee context, is to restrict what an employee may do after leaving a company.

Question 12

A bond used as bail in a criminal case is a recognizance, which is an example of a formal contract.

Question 13

The Restatement (Second) of the Law of Contracts is not actually the law itself.

Question 14

The response that the offeror expects from the offeree determines whether a contract is bilateral or unilateral.

Question 15

An agreement consists of ________.

A) consideration
B) capacity
C) coherence
D) an offer and acceptance
E) a concurrence of the parties

Question 16

In the Case Opener, Hallmark claimed that an arbitration ruling against a former employee should be upheld. Which of the following was the result of the case?

A) The former employee was barred from proceeding in court because of the binding arbitration clause.
B) The former employee was barred from proceeding in court based on the statute of limitations which expired while she was pursuing her remedies in arbitration.
C) The former employee was allowed to proceed in court because she had exhausted her remedies in the arbitration arena.
D) The former employee could proceed with an action in court because there was no consideration for the arbitration agreement and, therefore, no valid agreement.
E) The former employee could proceed with an action in court because, as a matter of law, arbitration agreements are barred in the arbitration context.

Question 17

Bilateral contracts are a promise plus a requested action.

Question 18

A contract is ________ for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.

A) a promise or set of promises
B) an offer and acceptance
C) an offer only
D) obligations on only one party
E) legal objective

Question 19

Due to increasing globalization, the International Commercial Code is important to contract law.

Question 20

A contract for the sale of a good falls under Article 2 of the UCC.

Question 21

In a[n] ________ contract, the offeror wants a performance to form the contract.

A) Trilateral
B) Bilateral
C) Unilateral
D) Complete
E) Anticipatory

Question 22

Patrick and Britt are in agreement that Patrick will pay Britt $2,000 for a used vehicle. At what point is there a binding contract?

A) When the agreement is made.
B) When the money is paid.
C) When the car is delivered.
D) Ten days after the car is delivered and approved.
E) Twenty days after the car is delivered and approved.

Question 23

Of the following, which was introduced by prominent legal scholars who were recruited by the American Law Institute?

A) The Restatement of the Law Second, Contracts.
B) The Convention on Contracts for the National Sales of Goods.
C) Common law.
D) Common law and the Convention on Contracts for the international Sale of Goods.
E) The Convention on Contracts for the National Sales of Goods and the Restatement of the Law Second, Contracts.

Question 24

A[n] ________ contract is commonly defined as a promise in exchange for a promise.

A) Unilateral
B) Trilateral
C) Complete
D) Bilateral
E) Classified

Question 25

An offeror in a contract is ________.

A) the person who receives the offer
B) the person who makes an offer
C) the person who gives consideration
D) a legal agent of a contracting party
E) an inquirer

Question 26

If a contract is for the sale of goods, it falls under Article 2 of the UCC; if it is for anything else, it falls under ________.

A) Article 1
B) Article 3
C) the common law
D) the federal rules of contracts
E) statutory laws

Question 27

Which of the following may represent a lack of genuine assent?

A) Acceptance secured through fraud, duress, or misrepresentation, but not acceptance through undue influence.
B) Acceptance secured through undue influence, misrepresentation, or duress, but not through fraud.
C) Acceptance secured through fraud or duress, but not through misrepresentation or undue influence.
D) Acceptance secured through fraud, dress, or undue influence, but not through misrepresentation.
E) Acceptance secured through fraud, duress, undue influence, or misrepresentation.

Question 28

Generally, when determining whether a contract exists the ________ intent of the parties is not relevant; rather, what matters is how they represented their intent through their actions and words.

A) Objective
B) Subjective
C) Unilateral
D) Comprehensive
E) Considered

Question 29

All contracts can be categorized as either ________ or ________.

A) Unilateral; complete
B) Unilateral; trilateral
C) Bilateral; trilateral
D) Unilateral; bilateral
E) Bilateral; complete

Question 30

If a[n] ________ misunderstanding between the parties exists, and as a result of that misunderstanding the parties do not really come to a meeting of the minds, there is no contract.

A) Mutual
B) Unilateral
C) Comprehensive
D) Subjective
E) Reasonable

Question 31

Today's law of contracts originated from judicial decisions in ________.

A) France
B) Italy
C) Spain
D) England
E) Switzerland

Question 32

The legal ability to enter into a binding agreement is known as what?

A) Majority
B) Emancipation
C) Contractual knowledge
D) Contractual capacity
E) Informed consent

Question 33

Tulume argues with Brenda that the law of contracts is primarily statutory law. Is he correct?

A) No, the law of contracts is known as comprehensive law.
B) Yes, statutory law is the primary law of contracts.
C) No, the common law is the primary law of contracts.
D) No, the restated contracts cases are the primary law of contracts.
E) No, there is no primary source of contract law, it is a big mixture of different bodies of law.

Question 34

If a defendant states that the contract was not in "proper form," in contract law this means which of the following?

A) The agreement lacked a writing.
B) The contract lacked capacity.
C) The contract lacked the legally binding UCC paperwork.
D) The contract lacked consideration.
E) The contract was not made to specifications of the common law.

Question 35

________ theory in contract law, means that the existence and interpretation of the contract is based on the outward manifestations of intent by the parties.

A) Appearance
B) Objective
C) Subjective
D) Bilateral
E) Communication

Question 36

Which of the following is a definition for consideration?

A) Being cordial in the negotiation of contracts.
B) Refraining from unethical behavior in the negotiation of contracts.
C) Being cordial and refraining from unethical behavior in the negotiation of contracts.
D) The bargained-for exchange.
E) A contract negotiated in person as opposed to by telephone or e-mail.

Question 37

Which of the following is the reason the Uniform Commercial Code was drafted?

A) Different states had different laws governing contracts which did not result in a smooth flow of interstate commerce.
B) Some states had no law governing contracts.
C) Federal law governing contracts was difficult to apply.
D) The Uniform State Act on laws was not working.
E) The Restatement of the Law Second, Contracts was not being evenly and fairly applied.

Question 38

Who is the person who agrees to the terms of an offer made by another party?

A) Offeror
B) Offeree
C) Acquirer
D) Agreer
E) Inquirer

Question 39

In the U.S., which of the following are the two most important sources of contract law?

A) Case law and the Restatement of Law, Contracts.
B) Case law and the Uniform Commercial Code.
C) The Uniform Commercial Code and the United Nations Convention on Contracts for the International Sale of Goods.
D) Case law and the United Nations Convention on Contracts for the International Sale of Goods.
E) The United Nations Convention on Contracts for the International Sale of Goods and the Restatement of the Law, Contracts.

Question 40

Which of the following references the requirement that a contract not be either illegal or against public policy?

A) Consideration
B) Capacity
C) Legal object
D) Illegal prohibition
E) Ethical requirement

Question 41

If one or both of the parties have the ability to either withdraw from the contract or enforce it, without breaching the contract, the contract is ________.

A) Voidable
B) Executory
C) Implied
D) Executed
E) Void

Question 42

The term ________ originated from the days when a contract was literally sealed by a piece of soft wax into which an impression was made.

A) Implied-in-fact contracts
B) Implied-in-law contracts
C) Contracts under wax
D) Contracts under seal
E) Contracts under pressure

Question 43

When written documents are signed by a party that makes an unconditional promise to pay the holder of the instrument a specific sum of money on demand, or at a certain time, they are called?

A) Negotiable instruments
B) Informal contracts
C) Simple contracts
D) Recognizances
E) Formal contracts

Question 44

When there is a law that prohibits the courts from enforcing a valid contract, it may be valid but ________.

A) Executed
B) Executory
C) Unenforceable
D) Novated
E) Condoned

Question 45

This type of contract is sometimes referred to as an implied-in-law contract but are not actually contracts.

A) Fictional-contracts
B) Quasi-contracts
C) Implied-in-fact contracts
D) Expression contracts or implied-in-fact contracts
E) Simple contracts and quasi-contracts

Question 46

In In Re Zappos.com Inc., Customer Data Security Breach Litigation, the case in the text in which customers of Zappos claimed that they were not bound to an arbitration agreement contained in a contract with Zappos, what was the result of the case?

A) The court ruled for the plaintiffs for the following two reasons: (1) there was no contract because the plaintiffs did not assent to it, and (2) even if a contract existed, the contract was illusory and unenforceable because Zappos could avoid promises at any time.
B) The court ruled for the plaintiffs only because of its finding that no contract existed based on the plaintiffs' lack of assent.
C) The court ruled for the plaintiffs only because of its finding that the contract was illusory and unenforceable because Zappos could avoid promises at any time.
D) The court ruled in favor of Zappos on the basis that even though some provisions of the contract were unenforceable, because of the federal policy favoring arbitration agreements, the arbitration clause itself was enforceable.
E) The court ruled in favor of Zappos on the basis that the contract was properly entered into and was fully enforceable.

Question 47

Brent and Gayle complete their contractual obligations to each other. This is known as a(n) ________.

A) voidable contract
B) executed contract
C) formal commitment
D) bilinear contract
E) approved contract

Question 48

For several months, Yolanda has been picking up Tom's suit at the cleaners on the first Monday of each month. Each month, Tom pays her $25 when she delivers the suit to his office. This month she picks up the suit and delivers it to Tom's office. Tom refuses to pay Yolanda the $25, stating that they did not have a contract. What type of contract did Tom and Yolanda have?

A) An implied contract
B) An express contract
C) A quasi contract
D) A bilateral contract
E) A unilateral contract

Question 49

Under ________, if a writing, or term in question, appears to be plain and unambiguous on its face, its meaning must be determined from the four corners of the instrument without resort to outside evidence, with the words being given their ordinary meaning.

A) the interpretation rule
B) the Uniform Commercial Code
C) the complete contract rule
D) the plain-meaning rule
E) the rule of reason

Question 50

Marshall promises to smuggle illegal drugs for Thor across the border. What is the effect of this contract?

A) A void contract
B) An executory contract
C) An implied contract
D) An executed contract
E) A voidable contract

Question 51

[Book Sale] Yasmeen offered to sell Dylan a used business law book for $50. She told him that he could use it in his upcoming business law class the next semester. However, there was a problem with the book; it was several editions old. Dylan was not aware of that fact, and neither was Yasmeen. When Dylan took the book to class and realized the problem, he went back to Yasmeen requesting a refund. Yasmeen refused to return his money. She claimed that she did not commit fraud because subjectively she thought that the book was correct, and that a binding contract existed. The book, however, is outdated and cannot be appropriately used in the class.
Which of the following describes Dylan's role in the transaction?

A) He was the offeror.
B) He was the offeree.
C) He was the assentor.
D) He was the assentee.
E) He was the offeree and the assentee.

Question 52

Which of the following contracts are usually voidable?

A) Contracts entered into as a result of fraud, but not duress or undue influence.
B) Contracts entered into as a result of duress or undue influence, but not fraud.
C) Contracts entered into as a result of undue influence or fraud, but not duress.
D) Contracts entered into as a result of fraud or duress, but not undue influence.
E) Contracts entered into as a result of fraud, duress, or undue influence.

Question 53

Philip promises to tutor Erin for $25 an hour. Philip has tutored Erin but she has not paid. This contract is ________.

A) executory
B) void
C) voidable
D) unenforceable
E) executed

Question 54

Quinton is 15 years old and pays cash to purchase a laptop computer from Brittany's Used Laptops. Quinton uses the computer for a week and then decides he wants a different laptop and returns the laptop to the store. Brittany tells Quinton that she will not allow Quinton to return the laptop. Quinton says she must. Is Quinton correct?

A) No, Quinton paid cash for the laptop and he does not have the right to return it.
B) No, Quinton has no right to return the laptop because he used the laptop.
C) Yes, Quinton is correct, contracts with minors are always void.
D) Yes, Quinton is correct, contracts with minors are voidable at the minor's option.
E) Yes, Quinton is correct, contracts with minors are illegal.

Question 55

A contract is said to be ________, once all the terms of the contract have been fully performed.

A) Executory
B) Executed
C) Anticipatory
D) Ended
E) Stopped

Question 56

Which of the following is the most likely measure of recovery when a quasi-contract is involved?

A) The amount set forth in the contract.
B) The fair market value of the matter involved.
C) The wholesale price of any good involved.
D) The amount sought by the plaintiff in the Complaint.
E) Damages will be computed the same way as they are computed for any other contract.

Question 57

A[n] ________ arises when a person acknowledges in court that he or she will perform some specified act or will pay a price upon failure to do so.

A) Contract under seal
B) Voidable contract
C) Recognizance
D) Implied-in-fact contract
E) Informal contract

Question 58

Barette and Julianna agree in writing to buy and sell a piece of property. All the terms are completed except that Julianna has not paid the required $50,000 purchase price. What type of contract is this?

A) Executed and implied
B) Formal and executory
C) Informal and executed
D) Formal and executed
E) Informal and executory

Question 59

[Book Sale] Yasmeen offered to sell Dylan a used business law book for $50. She told him that he could use it in his upcoming business law class the next semester. However, there was a problem with the book; it was several editions old. Dylan was not aware of that fact, and neither was Yasmeen. When Dylan took the book to class and realized the problem, he went back to Yasmeen requesting a refund. Yasmeen refused to return his money. She claimed that she did not commit fraud because subjectively she thought that the book was correct, and that a binding contract existed. The book, however, is outdated and cannot be appropriately used in the class.
Which of the following would describe Yasmeen's role in the transaction?

A) She was the offeror.
B) She was the offeree.
C) She was the assentor.
D) She was the assentee.
E) She was the offeree and the assentee.

Question 60

Which of the following are examples of formal contracts?

A) Contracts under seal, but not executed contracts or letters of credit.
B) Executed contracts, but not contracts under seal or letters of credit.
C) Letters of credit and contracts under seal, but not executed contracts.
D) Contracts under seal and letters of credit, but not executory contracts
E) Contracts under seal, letters of credit, and executed contracts.

Question 61

[Wrong Deck] Gina hires Jackson over the telephone to paint her back deck. She tells him her address and agrees to pay him $200 for the job, and he accepts. They enter into the agreement on Tuesday, and he is to paint the deck on Saturday. Jackson had a little difficulty finding her house because he spilled coffee on the note where he wrote her address. When Jackson arrives, neither Gina nor her neighbor is at home. He mistakenly paints the neighbor's deck. Gina calls him the next day and asks him why he did not paint her deck. He informs her that he did paint the deck. When it is discovered that he mistakenly painted the neighbor's deck, Gina tells him not to worry because the neighbor will be required to pay him. Jackson says that if the neighbor does not pay, then he expects all of the payment from Gina, because the contract is executed.
Which statement is true regarding Jackson's assertion that Gina must pay him if the neighbor fails to do so?

A) He is correct because an express contract existed, and he made an honest mistake for which Gina must accept the risk.
B) He is correct because an implied contract existed, and he made an honest mistake for which Gina must accept the risk.
C) He is correct because an implied-in-law contract existed.
D) He is correct because a valid contract existed; and, after his performance, it is considered executed.
E) He is incorrect unless he can somehow establish that Gina gave him poor directions or was otherwise at fault in informing him which deck to paint, and the contract remains executory.

Question 62

[Book Sale] Yasmeen offered to sell Dylan a used business law book for $50. She told him that he could use it in his upcoming business law class the next semester. However, there was a problem with the book; it was several editions old. Dylan was not aware of that fact, and neither was Yasmeen. When Dylan took the book to class and realized the problem, he went back to Yasmeen requesting a refund. Yasmeen refused to return his money. She claimed that she did not commit fraud because subjectively she thought that the book was correct, and that a binding contract existed. The book, however, is outdated and cannot be appropriately used in the class.
Which of the following is true regarding Yasmeen's claim that she subjectively believed the book was an appropriate edition and that an enforceable contract, therefore, existed?

A) She is correct because contract law is based upon a subjective theory of contracts.
B) She is correct because her genuinely held belief establishes that she did not commit fraud.
C) She is correct because agreements for the sale of goods are based on a subjective theory.
D) She is incorrect because her subjective belief would not be the basis for a determination of whether the contract would be enforced in this case and also because fraud is not necessary in order to find a breach of contract.
E) She is correct but only if Dylan subjectively believed the same as she did.

Question 63

[Refusal to Pay] Business law teacher Allison needed some yard work done. She told her class that she would give $50 to the first person who mowed her yard. She also entered into an agreement with Karina who agreed to trim some shrubbery for $40. Another student, Brendan, went to mow Allison's yard. Unfortunately, just as he finished mowing, a neighborhood dog bit him, and he had to go to the emergency room for a couple of stitches. Allison refused to pay Brendan because she said that he had upset the neighbors and their dog, and that he was more trouble than he was worth. Secretly, Allison was glad about the dog bite because she felt it gave her a reason not to pay. Brendan refused to pay the emergency room because he said that they did not have a binding, bilateral contract. Karina refused to trim the shrubbery because she got a better offer and claimed that she was not bound on the contract until she started the work.
Which of the following is true regarding Brendan's statement that he did not have to pay the emergency room charges?

A) He is correct.
B) He is incorrect because there was a bilateral, express contract.
C) He is incorrect because there was a unilateral, express contract.
D) He is partially correct in that because a quasi-contract existed, he would have to pay; but he would only have to pay fair market value, not what the hospital requested.
E) He is incorrect because there was a binding implied contract.

Question 64

[Wrong Deck] Gina hires Jackson over the telephone to paint her back deck. She tells him her address and agrees to pay him $200 for the job, and he accepts. They enter into the agreement on Tuesday, and he is to paint the deck on Saturday. Jackson had a little difficulty finding her house because he spilled coffee on the note where he wrote her address. When Jackson arrives, neither Gina nor her neighbor is at home. He mistakenly paints the neighbor's deck. Gina calls him the next day and asks him why he did not paint her deck. He informs her that he did paint the deck. When it is discovered that he mistakenly painted the neighbor's deck, Gina tells him not to worry because the neighbor will be required to pay him. Jackson says that if the neighbor does not pay, then he expects all of the payment from Gina, because the contract is executed.
Which of the following statements is true about ESIGN?

A) ESIGN affirms e-contracts as legally valid.
B) ESIGN stands for the Electronic Signing In Great Numbers.
C) ESIGN is international law.
D) Documents produced electronically are legally valid, but not as valid as documents produced on paper.
E) E-contracts are formed electronically but executed when printed and signed.

Question 65

[Refusal to Pay] Business law teacher Allison needed some yard work done. She told her class that she would give $50 to the first person who mowed her yard. She also entered into an agreement with Karina who agreed to trim some shrubbery for $40. Another student, Brendan, went to mow Allison's yard. Unfortunately, just as he finished mowing, a neighborhood dog bit him, and he had to go to the emergency room for a couple of stitches. Allison refused to pay Brendan because she said that he had upset the neighbors and their dog, and that he was more trouble than he was worth. Secretly, Allison was glad about the dog bite because she felt it gave her a reason not to pay. Brendan refused to pay the emergency room because he said that they did not have a binding, bilateral contract. Karina refused to trim the shrubbery because she got a better offer and claimed that she was not bound on the contract until she started the work.
Which of the following is a correct description of the agreement between Allison and Brendan?

A) They had a bilateral, express agreement.
B) They had a bilateral, implied agreement.
C) They had a bilateral and unilateral agreement.
D) They had a unilateral, express agreement.
E) They had a unilateral, implied agreement.

Question 66

Section 29 of the contract which states, "Pigment may be redesigned at any time."
Serena claims the contract is not valid because she only typed her name onto an electronic form and she did not "sign" any contract. Is she correct?

A) No, because e-contracts are legally valid.
B) Yes, to be valid, she needed to print the form, sign in, and send it in.
C) Yes, although an e-contract is valid, it is voidable.
D) Yes, since she paid the down payment, the contract was executory and e-contracts that are executory are void.
E) No, an e-contract is voidable where there is no consideration.

Question 67

[Refusal to Pay] Business law teacher Allison needed some yard work done. She told her class that she would give $50 to the first person who mowed her yard. She also entered into an agreement with Karina who agreed to trim some shrubbery for $40. Another student, Brendan, went to mow Allison's yard. Unfortunately, just as he finished mowing, a neighborhood dog bit him, and he had to go to the emergency room for a couple of stitches. Allison refused to pay Brendan because she said that he had upset the neighbors and their dog, and that he was more trouble than he was worth. Secretly, Allison was glad about the dog bite because she felt it gave her a reason not to pay. Brendan refused to pay the emergency room because he said that they did not have a binding, bilateral contract. Karina refused to trim the shrubbery because she got a better offer and claimed that she was not bound on the contract until she started the work.
Which of the following is correct regarding Karina's statement that there was no contract?

A) Karina is correct. There was no contract because she had not started working.
B) Karina is incorrect because there was a bilateral, express agreement.
C) Karina is incorrect because there was a bilateral, implied agreement.
D) Karina is incorrect because there was a unilateral, express agreement.
E) Karina is incorrect because there was a unilateral, implied agreement.

Question 68

In Baum v. Helget Gas Products, Inc., what was the outcome of the handwritten notes that were claimed to comprise an employment contract?

A) Handwritten notes are too informal to comprise an employment contract.
B) Handwritten notes can be part of an employment contract, if a formal contract is subsequently executed.
C) Handwritten notes can comprise certain types of contracts, but not an employment contract.
D) Handwritten notes can be considered an enforceable employment contract.
E) Handwritten notes can constitute a unilateral contract only.

Question 69

[Wrong Deck] Gina hires Jackson over the telephone to paint her back deck. She tells him her address and agrees to pay him $200 for the job, and he accepts. They enter into the agreement on Tuesday, and he is to paint the deck on Saturday. Jackson had a little difficulty finding her house because he spilled coffee on the note where he wrote her address. When Jackson arrives, neither Gina nor her neighbor is at home. He mistakenly paints the neighbor's deck. Gina calls him the next day and asks him why he did not paint her deck. He informs her that he did paint the deck. When it is discovered that he mistakenly painted the neighbor's deck, Gina tells him not to worry because the neighbor will be required to pay him. Jackson says that if the neighbor does not pay, then he expects all of the payment from Gina, because the contract is executed.
Which of the following is correct regarding Gina's assertion that the neighbor will be required to pay Jackson?

A) She is correct. The neighbor will be required to pay Jackson under a theory of quasi-contract.
B) She is correct. The neighbor will be required to pay Jackson based upon an implied-in-fact contract.
C) She is correct. The neighbor will be required to pay Jackson based upon an implied-in-law contract.
D) She is correct. The neighbor will be required to pay Jackson based upon an express contract.
E) She is incorrect. The neighbor will not be required to pay Jackson.

Question 70

Which of the following is not a negotiable instrument?

A) Check
B) Note
C) Letter of credit
D) Certificate of deposit
E) Draft

Question 71

[Book Sale] Yasmeen offered to sell Dylan a used business law book for $50. She told him that he could use it in his upcoming business law class the next semester. However, there was a problem with the book; it was several editions old. Dylan was not aware of that fact, and neither was Yasmeen. When Dylan took the book to class and realized the problem, he went back to Yasmeen requesting a refund. Yasmeen refused to return his money. She claimed that she did not commit fraud because subjectively she thought that the book was correct, and that a binding contract existed. The book, however, is outdated and cannot be appropriately used in the class.
The $50 to be provided by Dylan in exchange for the book to be provided by Yasmeen is considered to be ________ under contract law.

A) consideration
B) material obligations
C) contractual capacity
D) provisions
E) equitable remedies

Question 72

Section 29 of the contract which states, "Pigment may be redesigned at any time."
Serena claims Flo breached the contract by arriving at 5:00 p.m., rather than 3:00. Is she correct?

A) Yes, but only if the contract provision is ambiguous.
B) No, because where there is a conflict between preprinted and handwritten terms, the preprinted ones prevail unless ambiguous.
C) Yes, because where there is a conflict between preprinted and handwritten terms, the handwritten ones prevail.
D) No, because Serena could not change the terms of the contract.
E) No, although Serena could change the terms of the contract, she could not do so via e-mail.

Question 73

Section 29 of the contract which states, "Pigment may be redesigned at any time."
If this case ended up in court, what might the court most likely find to be the proper price of the flowers, according to the terms of the contract?

A) $3,000 because that was how it was written on the form and Serena has no right to cross it out.
B) $2,000 because that was what they agreed and the judge would follow the intent of the parties.
C) $2,000 because that was the contract's margins.
D) $3,000 because the words were written out.
E) $2,000 because Serena may cross out terms if initialed and she gave her the new contract when the flowers were delivered.

Question 74

Congress passed ESIGN for what purpose?

A) Because, globally, every other nation accepted ESIGN but the U.S.
B) States were not in agreement as to how to allow e-signatures in commerce.
C) Congress passed ESIGN to work in conjunction with a previous law they passed, UETA, to facilitate e-commerce.
D) To add fraud protection to electronic contracts.
E) To facilitate use of electronic records and signatures in e-commerce.

Question 75

Section 29 of the contract which states, "Pigment may be redesigned at any time."
Serena tells Flo that any judge would find that the contract calls for purple flowers, and that Flo breached the contract by providing pink flowers instead of purple. Is she correct?

A) No, because the technical terms of Section 29 take precedence.
B) No, because where there is a conflict between preprinted and handwritten terms, the preprinted ones prevail unless ambiguous.
C) Yes, but only because more specific provisions take precedence over general ones in a contract.
D) No, because Serena could not change the terms of the contract.
E) Yes, because a judge should interpret a contract so as to give effect to the parties' intentions at the time they entered into the contract, and there is evidence that they discussed and intended to have purple flowers.

Question 76

Section 29 of the contract which states, "Pigment may be redesigned at any time."
Flo claims that "pigment redesign" in Section 29 is regularly used in the flower business, and that she had every right to "redesign" the color of the arrangements because she is a professional in the business. On which general guideline of contract interpretation is Flo relying?

A) The plain language rule.
B) Section 29 is quoting a federal law that allows professionals in the flower business to select color.
C) The four corners rule.
D) The technical exemption law of the UCC.
E) General guidelines of contract interpretation.

Question 77

Which country has seven chapters of general provisions for contracts but also has chapters with special provisions for 15 different types of contracts?

A) China
B) France
C) Germany
D) Canada
E) England

Question 78

[Book Sale] Yasmeen offered to sell Dylan a used business law book for $50. She told him that he could use it in his upcoming business law class the next semester. However, there was a problem with the book; it was several editions old. Dylan was not aware of that fact, and neither was Yasmeen. When Dylan took the book to class and realized the problem, he went back to Yasmeen requesting a refund. Yasmeen refused to return his money. She claimed that she did not commit fraud because subjectively she thought that the book was correct, and that a binding contract existed. The book, however, is outdated and cannot be appropriately used in the class.
Which analysis of the effect of the discovery that Dylan has a book that is not appropriate for the class would be correct?

A) Dylan is stuck with the book because he objectively agreed to purchase it.
B) Dylan is stuck with the book because Yasmeen did not commit fraud.
C) Dylan is stuck with the book because Yasmeen subjectively thought it was the correct book, and Dylan did not openly disagree before the contract was executed.
D) Because the parties had a mutual misunderstanding, the parties did not come to a meeting of the minds, and there is no contract.
E) Because both parties were mistaken, at Dylan's option he may return the book; but only half of the purchase price would be required as a refund from Yasmeen because she is not guilty of fraud.

Question 79

[Wrong Deck] Gina hires Jackson over the telephone to paint her back deck. She tells him her address and agrees to pay him $200 for the job, and he accepts. They enter into the agreement on Tuesday, and he is to paint the deck on Saturday. Jackson had a little difficulty finding her house because he spilled coffee on the note where he wrote her address. When Jackson arrives, neither Gina nor her neighbor is at home. He mistakenly paints the neighbor's deck. Gina calls him the next day and asks him why he did not paint her deck. He informs her that he did paint the deck. When it is discovered that he mistakenly painted the neighbor's deck, Gina tells him not to worry because the neighbor will be required to pay him. Jackson says that if the neighbor does not pay, then he expects all of the payment from Gina, because the contract is executed.
As of Tuesday when Jackson and Gina agreed upon the price for the job, what was the status of the agreement?

A) The contract was executory.
B) The contract was executed.
C) The contract was novated.
D) The contract was formal.
E) The contract was a recognizance contract.

Question 80

Section 29 of the contract which states, "Pigment may be redesigned at any time."
Flo claims that pink was proper under Section 29, and any court would interpret the contract in Flo's favor. Would Section 29 likely be enforced?

A) No, Section 29 is ambiguous and should be interpreted against Flo.
B) Yes, Serena should have read the contract more carefully and, if there were any ambiguity, she should have clarified it prior to signing.
C) Yes, Serena signed the contract.
D) Yes, Section 29 should be interpreted according to its plain language.
E) Yes, Section 29 is ambiguous and should be interpreted against Serena.