Deck 10: Contracts

Question 1

If a party fails to perform a nonbinding promise the law will provide a remedy.

Answer 1

False

Question 2

Contract law is primarily state common law.

Answer 2

True

Question 3

Express contracts must be in writing to be valid.

Answer 3

False

Question 4

Freedom of contract means businesses may enter into any contracts they wish to.

Question 5

Advertisements that state prices are usually not considered binding offers.

Question 6

The basic elements of a contract are: offer, acceptance, consideration, lawful subject matter, and genuine consent.

Question 7

Not all promises are enforceable contracts.

Question 8

A contract may be based on a promise not to do something.

Question 9

Contract law enforces duties imposed on citizens by the government.

Question 10

An offer is made by an offeree.

Question 11

An offer is made by an offeror.

Question 12

In an express contract, promises are inferred from the behavior of the parties in relation to one another.

Question 13

The Uniform Commercial Code has significantly influenced the operation of commercial contract law.

Question 14

An offer is made to the offeree.

Question 15

An effective offer requires a clear manifestation of intent, definite terms and conditions, and communication of the offer.

Question 16

An implied contract is based on promises inferred from the behavior or circumstances of the parties involved.

Question 17

The basic elements of a contract are: offer, acceptance, consideration, genuine consent and court approval.

Question 18

The basic elements of a contract are: offer, acceptance, fair value, lawful subject matter, and genuine consent.

Question 19

The Restatement of Contracts is an authoritative source that presents and summarizes the common law of contracts.

Question 20

Preliminary negotiations are generally considered to create as binding offers.

Question 21

Offers may be terminated by the destruction of the subject matter of the contract.

Question 22

If a printed advertisement states the price of a good offered for sale, the seller must sell to any customer who wants the good at that price.

Question 23

If the offeree accepts an offer through performance requested, unilateral contract is formed.

Question 24

Most contracts are bilateral.

Question 25

Option contracts are binding promises to keep a specific offer open to a specific party for, say, one month.

Question 26

"I want $10,000 for my car," says Sam. "I would love to have it," says Jan. We have an offer that has been accepted to form a contract.

Question 27

Most contracts are unilateral.

Question 28

In unilateral contracts, performance is acceptance of an offer.

Question 29

"I will sell you my car for $5,000," says A. "How about $4,000 instead?" says B. The offer to sell for $5,000 has been terminated.

Question 30

An offer that is missing only one key element will be accepted as the basis of a contract; the court will clarify the offer.

Question 31

Termination of an offer can only occur through the operation of law.

Question 32

An offer may be revoked before the offeree has a chance to respond to it.

Question 33

"I will pay you $100 to not sell your $500,000 house to anyone else for the next month so I can see if I can get the money together to buy it," you say. "Ok," says the home owner. The $100 payment is a valid contract.

Question 34

Option contracts are binding promises to keep an offer to sell a good open to the public for a certain length of time.

Question 35

"I will pay you $100 to not sell your $500,000 house to anyone else for the next month so I can see if I can get the money together to buy it," you say. "Ok," says the home owner. The $100 payment is an option contract.

Question 36

A counteroffer terminates the original offer.

Question 37

You return a lost dog to its owner. You did not know a reward was being offered for the dog. You do not have a legal right to the reward.

Question 38

Two promises or an exchange of promises are involved in bilateral contracts.

Question 39

If an offeree accepts an offer through an exchange of mutual promises, a unilateral contract is formed.

Question 40

If no time is specified in an offer, the law presumes the offer exists for one year before it is terminated by lapse of time.

Question 41

Promissory estoppel applies when, to avoid injustice, a court refuses to enforce a grossly unfair promise.

Question 42

Promissory estoppel is also known as detrimental reliance.

Question 43

Acceptance of an offer must be conditional, unequivocal, and legally communicated to be effective.

Question 44

Acceptance of an offer must be unconditional, unequivocal, and legally communicated to be effective.

Question 45

In Caley v. Gulfstream Aerospace the court held that when employees were told a new dispute resolution policy would be imposed on them if they kept working that there was no consideration, so no contract.

Question 46

If an acceptance is mailed before a revocation of an offer is received, the acceptance is effective.

Question 47

Consideration is something of value in exchange for a promise.

Question 48

In Caley v. Gulfstream Aerospace the court held that when employees were told a new dispute resolution policy would be imposed on them if they kept working that getting to keep working was adequate consideration, so there was a contract.

Question 49

Usually, the acceptance of an offer is legally effective when the acceptance is sent.

Question 50

Courts will not enforce contracts if the consideration is not "reasonably consistent" with what is received in exchange.

Question 51

Usually, acceptance of an offer is legally effective when the acceptance is received.

Question 52

The general rule in contract law is that an acceptance of an offer must be its "mirror image."

Question 53

Consideration involves the right of individuals to be considered to be able to enter into contracts legally.

Question 54

In Caley v. Gulfstream Aerospace the court held that when employees were told a new dispute resolution policy would be imposed on them if they kept working that there was no acceptance of an offer, so no contract.

Question 55

A signs a contract to buy B's ranch for $900,000 then learns that the true market value is $500,000. There is not adequate consideration, so the contract will not be enforced.

Question 56

A legal detriment may be good consideration for a contract.

Question 57

The party who makes an offer can require the acceptance to be communicated in a very specific way or the acceptance is not good.

Question 58

A promise not to do something may not be consideration for a valid contract.

Question 59

"Unless you say no, then you must buy my car for $5,000," says A. B says nothing. B must buy the car.

Question 60

The acceptance of an offer to form a contract may be communicated in any "reasonable" way and be effective, in most instances.

Question 61

The promise of a gift is generally considered to be an enforceable promise.

Question 62

If a minor buys a car and later wants his money back after the car burns in a fire, courts will typically hold the contract to be voidable and a full refund is required.

Question 63

Contracts created by an intoxicated person may be voidable by that person because he only had partial capacity to contract.

Question 64

A contract formed under conditions of fraud is voidable.

Question 65

A minor always has the ability to disaffirm a contract.

Question 66

If a minor agrees to join the Army, the minor's agreement to join is voidable.

Question 67

Generally, minors and intoxicated persons have only partial capacity to contract.

Question 68

If you promise to give $1 million to a church, which begins new construction based on your promise, you may be held legally obligated to make the gift even though there is no contract.

Question 69

Contracts created by intoxicated persons, or persons under the influence of drugs, are always voidable at their option.

Question 70

A voidable contract never was or will be a valid contract.

Question 71

In Hinson v. N&W Construction Co., where N&W relied on a plumbing bid by Hinson in making a bid on a construction contract that was later awarded, the court held that N&W could rely on the bid based on promissory estoppel.

Question 72

A void contract never was or will be a valid contract.

Question 73

A minor may ratify a contract, upon reaching the age of majority, that she had the right to disaffirm if she so desired.

Question 74

An intoxicated person has no capacity to contract.

Question 75

If a minor contracts for student loans for college, the contract is not voidable.

Question 76

An intoxicated person often has partial capacity to contract.

Question 77

A voidable contract is a contract that one party has the right to avoid.

Question 78

When the courts use the doctrine of promissory estoppel (detrimental reliance), it means that despite the lack of the elements of a contract, the court may require payment to be made as if a contract had existed.

Question 79

If a 16-year-old buys a car, uses it for six months, then decides to disaffirm the contract to buy the car on a three-year payment plan, the contract is voidable.

Question 80

In Hinson v. N&W Construction Co., where N&W relied on a plumbing bid by Hinson in making a bid on a construction contract that was later awarded, the court held that since Hinson received no consideration for his bid, he could not be bound to it later.