Deck 15: Contracts in Writing

Question 1

The purpose of the statute of frauds is to prevent the performance of oral contracts.

Answer 1

False

Question 2

The part performance exception to the land contract provision of the statute of frauds in many states requires both that the transferee has paid a portion of the purchase price and has either taken possession of the real estate or has started to make valuable improvements on it.

Answer 2

True

Question 3

A significant impediment to e-commerce has been the questionable enforceability of contracts entered into through electronic means, such as the Internet or e-mail, because of the writing requirements under contract and sales law.

Answer 3

True

Question 4

The statute of frauds generally requires that both parties sign the writing.

Question 5

Jim promises to marry Cynda if Cynda will buy him a new Ferrari for his birthday. If this promise is made orally, it is not enforceable.

Question 6

Most types of contracts are valid without being written.

Question 7

A collateral promise is an undertaking to be primarily liable for the principal debtor's debt.

Question 8

Clara types a letter to David setting forth the terms of their contract that falls within the statute of frauds. At the end of the letter, she types her name but does not sign her signature to it. If David wants to use the letter to satisfy the writing requirement, he may do so.

Question 9

A contract to pay for lawn care services costing $1,500 would have to be in writing or in proper electronic form to be enforceable.

Question 10

In an employment agreement with Carl, Arnold promises to work for Carl for the rest of his life. This promise must be in writing or in proper electronic form to be enforceable.

Question 11

The word "parol" literally means release.

Question 12

A number of courts have used the doctrine of promissory estoppel to displace the requirement of a writing by enforcing oral contracts within the statute of frauds.

Question 13

Under the Code an oral contract for specially manufactured goods costing $500 is enforceable even if the seller has not begun their manufacture.

Question 14

The UCC statute of frauds requires that the writing include all agreed-upon terms.

Question 15

Bob sends Fred a letter offering to sell Fred his car for $2,500. Fred writes back that he'll take it. They now must get together and write a memorandum because it is a sale of goods for over $500.

Question 16

Parol evidence refers only to any oral evidence that is outside an integrated written contract and not incorporated into it, either directly or by reference.

Question 17

The statute of frauds has to do with fraud in the inducement of a contract.

Question 18

The UCC requires that all contracts for the sale of goods must be in writing or in proper electronic form.

Question 19

In order to be sufficient, an agreement required to be written under the statute of frauds must be signed at the bottom and notarized.

Question 20

A usage of trade is a practice or method of dealing regularly observed and followed in a place, vocation, or trade.

Question 21

The statute of frauds applies to executory contracts only.

Question 22

The parol evidence rule applies to partially written agreements.

Question 23

Under the majority rule, the test under the one-year provision of the statute of frauds is whether it is likely that the contract will be completed within one year.

Question 24

The Uniform Electronic Transactions Act, which has been adopted by all of the states and the District of Columbia, gives full effect to electronic contracts and develops a uniform legal framework for their implementation.

Question 25

The UCC permits an oral agreement for the sale of goods to be enforced against a party who admits to the contract in court, even though the statute of frauds requires the agreement in writing.

Question 26

E-Sign was enacted by Congress in 2000 and makes electronic records and signatures valid and enforceable across the United States for many types of transactions in or affecting interstate or foreign commerce.

Question 27

An example of language creating a suretyship as meant under the statute of frauds would be the following: "If my business partner does not write out the check for the supply bill for our company, I will."

Question 28

The suretyship provision rule within the statute of frauds applies to cases involving one party promising to perform the duty of another party to yet a third party.

Question 29

An oral contract for the transfer of an interest in land may be enforced if the party seeking enforcement has so changed his position in reasonable reliance on the contract that a court can prevent injustice only by enforcing the contract.

Question 30

In interpreting a contract, terms which have been separately negotiated are given priority over standardized pre-printed terms.

Question 31

Tom's bank is threatening to repossess his car. Tom's mother notifies the bank that she promises to pay the bank if Tom defaults on the loan. This promise must be in writing or have a sufficient electronic record to be enforceable.

Question 32

The main purpose doctrine is a court-developed exception to the suretyship provision.

Question 33

Abco Corp. is building a new office tower. Ace Plumbing Supplies refuses to provide plumbing materials on credit to the plumbing subcontractor on the building. Abco promises Ace that it will pay for the materials if the subcontractor does not. Abco's oral promise is enforceable.

Question 34

On March 20, Alan orally agrees to work for Trower, Inc. for a period of one year commencing on June 1. No writing is necessary here, because the contract can be performed within one year.

Question 35

The parol evidence rule applies only to integrated contracts, meaning those in which the parties have assented to the written agreement as the statement of the complete agreement between them.

Question 36

Under the majority rule, the test under the one-year provision of the statute of frauds is whether the parties believe that the contract cannot be performed within one year.

Question 37

The parol evidence rule does not prevent the use of evidence that a party would like to use to establish the defense of fraud, duress, or undue influence.

Question 38

Under the UCC parol evidence rule, usage of trade will take priority over specific provisions in a written contract.

Question 39

In order to induce a car dealer to sell her son a car on credit, Mary promises that she will pay for the son's car if the son defaults on his monthly payments to the dealership. Mary's promise must be in writing or have a sufficient electronic record.

Question 40

An employment contract that is in any way capable of being performed within one year from the date of the agreement falls within the requirements of the statute of frauds.

Question 41

In determining the meaning of a contract, which of the following will have first priority?

A) Course of performance.
B) Course of dealing.
C) Usage of trade.
D) Express terms.

Question 42

Under the UCC, __________ refers to the manner and extent to which the respective parties to a contract have accepted successive tenders of performance by the other party without objection.

A) course of dealing
B) usage of trade
C) course of performance
D) integrated document

Question 43

Which of the following is an exception to the suretyship provision requirement under the statute of frauds?

A) A collateral promise made to the creditor.
B) A promise, the leading object of which is to obtain an economic benefit for oneself.
C) A collateral promise where there are three parties and two contracts involved.
D) A promise by an executor to pay the debts of the decedent from the executor's own funds.

Question 44

The suretyship provision has been interpreted to include promises made to a debtor.

Question 45

The statute of frauds requires all contracts that can be fully performed within one year of their making to be in writing.

Question 46

Under the UCC, a(n) __________ is a practice or method of dealing regularly observed and followed in a place or vocation or trade.

A) course of dealing
B) usage of trade
C) course of performance
D) integrated document

Question 47

Under the parol evidence rule, which of the following types of evidence may be used to vary or contradict the written agreement?

A) Prior oral or written agreements.
B) Contemporaneous oral or written agreements that change the contract.
C) Subsequent oral or written agreements modifying the original agreement.
D) Two of these but not all three.

Question 48

The UCC Article 2 statute of frauds provision applies to the sale of goods for the price of __________ or more.

A) $50
B) $100
C) $500
D) $1,000

Question 49

The parol evidence rule is:

A) another term for the exclusionary rule.
B) a rule of construction.
C) a rule of interpretation.
D) a rule of substantive law.

Question 50

An example of an unenforceable oral contracts is:

A) an oral promise to guarantee the additional duties of another.
B) an oral agreement to substitute different land for that described in the original lease contract.
C) an oral agreement to extend an employee's contract for six months to a total of two years.
D) All of these.
E) Two of these but not all three these examples.

Question 51

Where a contractual term has more than one possible meaning, it will be interpreted in favor of the party who supplied the contract.

Question 52

What is another name for the main purpose doctrine?

A) The collateral promise rule.
B) The possibility test.
C) The leading object rule.
D) The suretyship provision.

Question 53

Which of the following would NOT require a writing under the statute of frauds?

A) The buyer agrees to pay $10,000 for a piece of real estate.
B) A renter agrees to rent a building for a 5-year period.
C) An agreement creates an easement to run cables across adjoining land.
D) A landscaper agrees to landscape the lot surrounding an office building.

Question 54

In which of the following cases would an oral contract be enforceable without a written memorandum?

A) Ron orders three custom-made suits.
B) Michelle calls an employment agency in Paris to arrange for maid service for her three-month Parisian vacation.
C) Anna orders a top-of-the-line computer over the phone.
D) Catherine calls Lucky Dude Ranch to purchase the championship race horse they have advertised in the paper.

Question 55

Which of the following is a collateral promise?

A) A mother tells a merchant to extend $1,000 worth of credit to her son and says, "If he doesn't pay, I will."
B) Andrew promises Donald that if Donald cannot pay his bills, Andrew will.
C) A father tells a merchant to deliver a computer to his daughter and says, "Send me the bill. I'll pay for it."
D) All of these are collateral promises.

Question 56

Under the UCC, a(n) __________ is a sequence of previous conduct between the parties to an agreement which may be fairly regarded as establishing a common basis of understanding for interpreting their conduct under the contract.

A) course of dealing
B) usage of trade
C) course of performance
D) extrinsic set of evidence

Question 57

Chris receives a printed form in the mail from Wyandott Heating & Air indicating that he has placed a telephone order for a $600 heater. He doesn't recall placing the order. Which of the following is correct?

A) Wyandott can hold Chris to the order.
B) Chris can hold Wyandott to the order.
C) Neither party is bound, because there is no signed writing.
D) Chris is bound if he makes no objection within ten days.

Question 58

Which of the following promises does not have to be evidenced by a writing or electronic record in order to be enforceable?

A) Jones's agreement with Smith to sell his condominium for $100,000.
B) Stewart's promise to work for Austin for a two-year period.
C) Dad's promise to the credit union that he will make payments on his son's truck.
D) Mindy's agreement with Susan to buy her bike for $400.

Question 59

June, executrix of Calvin's estate, promised Mr. Wentworth in writing that she would personally pay one of Calvin's debts to Wentworth Co. If June fails to pay, the written promise must be in existence at the time Wentworth Co. initiates a lawsuit so the writing can be produced as evidence.

Question 60

The executor-administrator provision applies to promises of an executor of a decedent's estate to the decedent's creditors.

Question 61

General contract law states that contracts that have to be in writing must:

A) specify the parties to the contract.
B) specify the subject matter and essential terms.
C) be signed by the party to be charged or by his/her agent.
D) All of these.

Question 62

Which of the following promises in consideration of marriage would be outside the statute of frauds?

A) In consideration of Joan's promising to marry him, Dwight promises to pay her an allowance and to give her all of his property upon his death.
B) John and Mary mutually agree that their marriage shall not affect the existing property rights of the other.
C) John and Joan mutually promise to marry each other in a formal ceremony on June 23.
D) Joan promises to release a money judgment against Steven in consideration of his marrying her.

Question 63

Barry's Sport Shop calls Champion Tee Shirt Company to order 200 designer tee shirts at $2 per shirt. The next day, Barry decides he can easily sell 100 more. Before the order is filled, he calls to change the order to 300 tee shirts. Champion sends 200. Can Barry force Champion to send the additional 100?

A) No, because there is no consideration for the extra 100 shirts.
B) No, because Barry does not have a writing signed by Champion Tee Shirts.
C) Yes, because this is a subsequent modification of the original contract.
D) Yes, because Champion Tee Shirts is a merchant within the meaning of Article 2 of the UCC.

Question 64

Under the Restatement and the Code, when can supplemental evidence be used with a written contract?

Question 65

Under E-Sign, an electronic agent:

A) is a computer program or other automated means used independently to initiate an action or respond to electronic records or performances.
B) is an individual who uses electronic means to initiate an action or respond to electronic records or performance.
C) is an electronic sound, symbol, or process attached to or logically associated with a contract or other record.
D) may not form a contract without an individual's reviewing the terms.

Question 66

Although not covered by the original statute of frauds, most states have statutes requiring a writing to make all but which of the following contracts enforceable?

A) A contract to make a will.
B) A contract authorizing an agent to sell real estate.
C) Contracts for the sale of securities.
D) Contracts creating certain types of security interests.

Question 67

In which of the following cases will an oral contract for the sale of goods of $750 be enforceable without a writing?

A) The goods are to be specially manufactured for the buyer and the seller has made a substantial beginning of their manufacture.
B) A party admits in an answer to a complaint in a lawsuit that the contract was made.
C) Delivery and acceptance of the goods has been made.
D) All of the above.

Question 68

In which of the following situations does the parol evidence rule not apply?

A) Where a typographical error occurs in the document and obviously does not represent the agreement of the parties.
B) Where one of the parties to the contract lacks contractual capacity.
C) The parol evidence rule applies in both of the above situations.
D) The parol evidence rule does not apply in either (a) or (b).

Question 69

On March 1, Tammy, a student, received a telephone call from Watterson, Inc. offering her a job for one year beginning on June 15, after completion of the school year. According to the personnel manager, she will have to move to California and be ready to start work at 8:00 a.m. on June 15. Should Tammy ask for a letter confirming the telephone conversation if she accepts the offer immediately?

A) Yes, because the job offer is a collateral promise.
B) Yes, because the job offer is covered by the parol evidence rule.
C) Yes, because the job offer is for longer than one year from March 1.
D) No, because the job offer is for one year from June 15.

Question 70

Which of the following is true regarding noncompliance with the statute of frauds?

A) The basic legal effect under the statute of frauds and the UCC differs.
B) The statute of frauds applies to executed and executory contracts.
C) A party to a contract which was unenforceable because of the statute of frauds but who relied upon the contract may recover in restitution the benefits he conferred on the other party.
D) The doctrine of promissory estoppel cannot displace the requirement of a writing under a statute of frauds.

Question 71

Kelley borrows $3,000 from Paul and orally agrees to repay him in three annual installments. Most courts would hold:

A) the oral contract is unenforceable because it cannot be performed within one year.
B) Article 2 of the UCC controls this loan.
C) the oral contract is enforceable only through the doctrine of promissory estoppel.
D) the oral contract is enforceable because Paul fully performed his obligation under the contract.

Question 72

Sam orally agreed to sell his house to Humphrey. Humphrey wanted it ready for his family quickly, so after he paid Sam a 5% deposit, he had a new roof put on, new carpeting installed, and he renovated the kitchen. Sam now thinks the place looks great and has decided not to sell. A business law student told him he could back out of the oral agreement. Can he? Explain.

Question 73

a. What are the basic requirements of a writing within the statute of frauds in Article 2 of the UCC?
b. In what three cases does Article 2 of the UCC permit an oral contract?

Question 74

Would a letter written after the execution of a contract and which contained agreements different from those in the written contract be admissible under the parol evidence rule?

A) No, because it contradicts the terms of the contract.
B) No, because it changes the agreement.
C) No, because it explains the agreement.
D) Yes, it would be admissible, because it is subsequent to the written agreement.

Question 75

A written, integrated contract contains a provision that states it will be effective for a "year." The plaintiff in a lawsuit claims that a "year" is obviously 12 months. The defendant claims that the contract meant a 10-month school year. In this case:

A) parol evidence cannot be used to explain the term, because the plain meaning of a "year" is 12 months.
B) parol evidence cannot be used to explain the term, because it is in an integrated document.
C) the term "year" is ambiguous, and the parties can bring in parol evidence to clarify their intent.
D) parol evidence cannot be used, because the contract contains an express term that could have been changed by the parties prior to the contract's execution.

Question 76

Identify at least six situations in which the parol evidence rule does not apply.

Question 77

With regard to the interpretation of a contract, what priority is given to each of the following items?
(a) Course of dealing
(b) Usage of trade
(c) Express terms
(d) Course of performance

Question 78

Which of the following is untrue with regard to the interpretation of contracts?

A) Express terms prevail over course of performance, and course of performance prevails over course of dealing.
B) Technical terms will always be given technical meaning and language that has a commonly accepted meaning is always interpreted in accordance with that meaning.
C) Handwritten or typed terms are given greater weight than preprinted terms.
D) All writings that are part of the same transaction are interpreted together.

Question 79

Richard agrees to supply Henry with all his needs of specially made shampoo for Henry's beauty salon. Henry believes that Richard is a representative of a famous hair products company, but he finds a letter to a competitor written by Richard two days before Henry's agreement with Richard was signed, proving that Richard is a fraud. Richard says that this letter may not be admitted in court since their contract is wholly integrated. Is he correct?