Deck 54: Contracts and E-Contracts

Question 1

Nora contracts with Odell to sell land that, unknown to either party, has groundwater contaminated from adjacent land that was occupied several decades earlier by a paper pulp processing plant. When this is discovered, Nora asserts the doctrine of commercial impracticability. This doctrine applies only when, with respect to an event that renders performance impossible, at the time the contract was formed the parties​

A) ​could not have reasonably foreseen the supervening event.
B) ​could have reasonably foreseen the supervening event.
C) ​should have foreseen the supervening event, reasonable or not.
D) ​should not have foreseen any supervening events.

Answer 1

A

Question 2

Pals & Allies, Inc., sponsors QuikFlik, a social-networking, video-sharing site. Pals & Allies changes the terms of service on its site with thirty days' notice to its users. Rochelle and other users continue to use the site but nevertheless file a suit against its owner for breach of contract. If the court rules against the plaintiffs, it will most likely be because​

A) ​a change to terms of service is not a breach of contract.
B) ​the site belongs to Pals & Allies, not its users.
C) ​Pals & Allies set the original terms and can change them freely.
D) ​the plaintiffs continued to use the site after the thirty-day period.

Answer 2

D

Question 3

Mainstay, Inc., sponsors NowUCMe, a social-networking, video- and photo-sharing site. To use NowUCMe, Mainstay requires users to accept terms of service associated with the site. By clicking on "accept," users enter into a contract​

A) ​after thirty days.
B) ​as soon as they begin to use the service.
C) ​when a court declares that a contract exists.
D) ​under no circumstances.

Answer 3

B

Question 4

Linda enters into a contract for a credit card sponsored by Max'dOut Inc. The sponsor provides the contract, which contains an arbitration clause. This clause requires that any dispute must be submitted to private arbitration and prohibits class-action litigation. Under new rules sought by the Consumer Financial Protection Bureau, such clauses would be​

A) ​prohibited.
B) ​favored in contracts for credit cards and other financial products.
C) ​favored in all consumer contracts.
D) ​favored for all disputes involving relatively small sums.

Question 5

Beth enters into a contract for the services of Cable Connection Inc. The corporation provides the contract, which contains an arbitration clause. This clause requires that any dispute must be submitted to arbitration rather than being pursued through litigation. With respect to contracts with such clauses, federal courts have ruled all of the following except​

A) ​arbitration is encouraged under the Federal Arbitration Act.
B) ​arbitration can provide a meaningful way to seek redress for harm.
C) ​state law preempts federal law with respect to arbitration clauses.
D) ​federal law preempts state courts' interpretations of arbitration clauses.

Question 6

International Fantasy Sports League involves Olympic games in which the participants compile imaginary teams consisting of real athletes. The League offers free entry for its participants. In most states, these games would not be considered gambling because they lack the element of​

A) ​consideration.
B) ​reward.
C) ​chance.
D) ​excitement.

Question 7

O'Malley contracts to deliver a crop of organic mandarin oranges to Pete's Natural Produce Mart. An unexpected freeze destroys the oranges in O'Malley's orchard. Pete's insists that O'Malley deliver by acquiring the oranges on the open market. O'Malley claims that this is prohibitively expensive. The best argument against enforcing the contract is​

A) ​frustration of purpose.
B) ​objective impossibility of performance.
C) ​anticipatory repudiation.
D) ​commercial impracticability.

Question 8

Fantasy sports leagues are exempt from a federal statute that prohibits unlawful Internet gambling if the outcomes reflect the knowledge and skill of the participants and the performance of the athletes in real sporting events. Daily fantasy sports games may not meet this definition because the effect on the result of a participant's skill is decreased, and the effect of luck is increased, by​

A) ​the short duration of the fantasy games.
B) ​the amount of the payout in an individual game.
C) ​the number of participants in a given game.
D) ​the size of the entry fee to play a fantasy game.

Question 9

SportsMaster operates a daily fantasy sports Web site. The state of Texas orders SportsMaster to stop accepting "bets" from Texas residents. In the best interest of its owners and its games' participants, SportsMaster may arguably have an ethical duty to​

A) ​challenge the order.
B) ​comply with order.
C) ​defy the order.
D) ​any of the choices.

Question 10

Evermore Marketing LLC and Family Restaurants Inc. engage in an instant-messaging conversation while discussing an existing contract. Evermore suggests a modification-an increase in fees. Family asks about an increase in service. Evermore replies, "No limits!" Family responds, "Great!" As a modification of the parties' contract, this chat is most likely​

A) ​enforceable.
B) ​not enforceable because any indication of an agreement is "accidental."
C) ​not enforceable because it is an instant-messaging conversation.
D) ​not enforceable because the language is relatively "careless."

Question 11

Copa Mundo Fantasy Sports League involves soccer games in which the participants compile imaginary teams consisting of real athletes. These games would be considered gambling in a state that finds the outcome of a game is determined​

A) ​unpredictably by factors outside the participants' control.
B) ​more than 50 percent by the participants' skill.
C) ​at the end of a full professional season.
D) ​almost entirely by the participants' judgment.

Question 12

Robin and Simon exchange offers and counteroffers via e-mail. These exchanges can constitute a valid contract​

A) ​if the e-mails contain all of the necessary elements of a contract.
B) ​unless only the receiving party believes that there is an agreement.
C) ​unless the parties believe that the e-mails are only negotiations.
D) ​under no circumstances.