Deck 6: Overview and Language of Contracts

Question 1

A(An) ___________ contract is one in which each component of the contract is dependent on every other component.

Answer 1

entire

Question 2

An investigation period during which a party can examine the suitability of a transaction is called _____________.

Answer 2

due diligence

Question 3

Parties must be of proper age and mental competence to have ___________ to contract.

Answer 3

capacity

Question 4

All contracts can be described in seven ways.

Question 5

Each contract should cover a singular promise, and if multiple promises are involved, multiple contracts should be created.

Question 6

Justin is 17 years old and just signed a contract to buy his first car. This contract is unenforceable.

Question 7

A contract formed from a party's actions rather than the party's words is called a(an) ________ contract.

Question 8

A unilateral contract is formed by an exchange of promises.

Question 9

Contracts that involve goods and services are known as ________ contracts.

Question 10

The reason and outcome of the contract must be a ___________ purpose.

Question 11

Ralph calls Alice and asks her out on a date to see a movie. Alice agrees. This is the type of promise that the courts will enforce as a contract.

Question 12

Express contracts arise from the parties' conduct.

Question 13

___________ is the element of a contract that requires a bargained-for exchange of goods and/or services that are recognized as valuable.

Question 14

When a party may, at his or her option, either disaffirm or enforce a contract, that contract is said to be _______.

Question 15

Valid contracts can be written or oral.

Question 16

Void contracts are seemingly valid contracts that one party has the right to declare void.

Question 17

Only written agreements are enforceable as contracts by courts.

Question 18

To have __________ assent, there must be an offer and agreement between the parties.

Question 19

A contract is a promise or set of promises __________ by law.

Question 20

A unilateral contract is formed when a promise requires acceptance by performance.

Question 21

Unjust enrichment is a theory used to impose an obligation in the absence of an actual agreement.

Question 22

The terms agreement and contract have the same meaning.

Question 23

Sophia stops at a coffee shop after class and orders a latte. This is an example of an implied contract.

Question 24

A negotiation to buy a car is an example of entering into an implied contract.

Question 25

Jason writes a check to the university bookstore to pay for textbooks and supplies. This is an example of an informal contract.

Question 26

Any meeting of the minds resulting in mutual assent to do or refrain from doing something is called a contract.

Question 27

The Uniform Commercial Code (UCC) is law that governs contracts for the sale of goods.

Question 28

A contract for installing a new furnace is an example of a hybrid contract.

Question 29

Elise hires an artist to paint a portrait of her family. This contract is governed by common law.

Question 30

A building manager hires a painting company to paint the common areas in the building. The manager will supply all of the paint. This contract is a hybrid contract.

Question 31

A valid contract is one that has all the necessary elements and, thus, can be enforced.

Question 32

A contract that is not yet complete is called an executed contract.

Question 33

A legal defense renders a contract unenforceable, even though it has the necessary elements of a valid contract.

Question 34

Under a bilateral contract, there is no contract until the offeree performs the requested act.

Question 35

Common law governs a contract that involves installation of computer equipment when materials are valued at $75,000 and labor is $10,000.

Question 36

Divisible contracts are often referred to as severable contracts in many states.

Question 37

An enforceable contract has four necessary elements: mutual assent, capacity to contract, consideration, and legal purpose.

Question 38

A handyman goes to the wrong house by mistake and cleans the gutters while the homeowners are at work. The homeowners will have to pay for the service under the quasi-contract theory of unjust enrichment.

Question 39

Most contracts require a specific format or ceremony.

Question 40

Legal purpose means the contract itself does not violate the law.

Question 41

A contract in which each component of the contract is dependent on every other component is called:

A) a divisible contract.
B) an entire contract.
C) a severable contract.
D) a voidable contract.

Question 42

All of the following are necessary elements of a contract except:

A) mutual assent.
B) capacity.
C) writing.
D) consideration.

Question 43

Something of value that is exchanged as part of an agreement is called:

A) mutual assent.
B) consideration.
C) capacity.
D) legal purpose.

Question 44

Which of the following is formed to remedy unjust enrichment?

A) implied contract
B) contract based on promissory estoppel
C) express contract
D) quasi-contract

Question 45

Mike is walking through a parking lot and finds Kathy lying unconscious. He puts her in his car and takes her to the hospital. The hospital saves her life, and when she becomes conscious, it presents her with a bill.

A) Kathy has to pay based on a unilateral contract.
B) Kathy has to pay based on an implied contract.
C) Kathy has to pay based on a quasi-contract.
D) Mike has to pay because he brought her to the hospital.

Question 46

All of the following are examples of formal contracts except:

A) negotiable instruments.
B) contracts under seal.
C) checks.
D) a purchase over $500.

Question 47

When the reason and outcome of a contract are legal, the contract has:

A) legal purpose.
B) consideration.
C) capacity.
D) mutual assent.

Question 48

Helen's cat Fluffy has run away, and she places reward posters throughout her neighborhood. Mark sees one of the reward posters and spends the next six hours searching for Fluffy. While Mark is searching the neighborhood, Fluffy gets hungry and comes home.

A) This is a bilateral contract, and Mark is entitled to be compensated for his efforts.
B) This is a bilateral contract, and Mark is entitled to nothing because he didn't perform.
C) This is a unilateral contract, and Mark is entitled to be compensated for his efforts.
D) This is a unilateral contract, and Mark is entitled to nothing because he didn't perform.

Question 49

A professor tells a student that if she writes a 5,000-word paper on the evils of plagiarism by May 13, he will pay the student $750.

A) The offer is for a unilateral contract.
B) If the student gives the paper to the professor on May 14, the money is owed because the student came close and did get the paper done.
C) This contract is enforceable only if it's in writing.
D) This contract is enforceable only if the student verbally or in writing accepts the offer prior to beginning the paper.

Question 50

A promise that can be accepted only by the performance of the person to whom it is offered is an example of:

A) a bilateral contract.
B) a unilateral contract.
C) an implied contract.
D) a quasi-contract.

Question 51

In general, contracts for services are governed by:

A) state common law.
B) state statutory law.
C) the Uniform Commercial Code.
D) federal law.

Question 52

When a party to a contract is of proper age and mental competence, it is said that he or she has:

A) capacity to contract.
B) legal purpose.
C) mutual assent.
D) consideration.

Question 53

A contract that meets one or more specific requirements of construction is considered:

A) a formal contract.
B) an informal contract.
C) a hybrid contract.
D) a unilateral contract.

Question 54

When Maria comes home from work, she finds that her yard has been mowed and trimmed. An hour later a man comes to her door to collect payment for the yard work. Maria refuses to pay him because she has never seen him before and had not hired him to do the work. Which of the following is accurate?

A) This is an implied, unilateral contract, so she must pay.
B) Maria has received unjust enrichment, so a quasi-contract is formed and she must pay.
C) The court would make Maria pay the reasonable cost of the work to be fair to both parties.
D) Maria would not have to pay anything.

Question 55

In general, contracts for the sale of goods are governed by:

A) state common law.
B) state statutory law based on the Uniform Commercial Code.
C) federal regulations.
D) the Uniform Commercial Code.

Question 56

At this moment, your contract with your university or college is:

A) implied, unilateral, and voidable.
B) express, bilateral, and valid.
C) implied, bilateral, and valid.
D) quasi, unilateral, and voidable.

Question 57

When an offer and agreement exist between parties, this is called:

A) capacity.
B) legal purpose.
C) consideration.
D) mutual assent.

Question 58

An offer of a reward, if it is fulfilled, forms:

A) a bilateral contract.
B) a unilateral contract.
C) an express contract.
D) a quasi-contract.

Question 59

Brandi orally tells landscaper Mike, "If you trim my hedges, I'll pay you $50." Mike trims her hedges. Which of the following is correct?

A) This is a unilateral contract.
B) This is a bilateral contract.
C) This is a formal contract.
D) This is a quasi-contract.

Question 60

ABC Land Co. is negotiating the sale of an office building to Mega Co. Which laws will govern the contract for the sale of the building?

A) hybrid laws
B) the Uniform Commercial Code
C) state statutory law based on the Uniform Commercial Code
D) state common law

Question 61

An agreement between two adults to pay $300 cash for a bicycle is an example of a contract that is:

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

Question 62

Randy is home when a landscaping crew enters his yard and begins working on his front garden beds and lawn. Randy did not hire the crew, but he allows them to continue working. Explain whether Randy will have to pay for the work.

Question 63

Ally, a minor, purchases a car from a used-car dealer. The law allows minors the right to cancel a contract until the time the minor turns 18. The contract between Ally and the dealer is:

A) a valid contract.
B) a voidable contract.
C) a void contract.
D) an unenforceable contract.

Question 64

An agreement to buy cocaine from a dealer is:

A) a valid contract.
B) a void contract.
C) a voidable contract.
D) an unenforceable contract.

Question 65

Aimee goes online and orders a pair of jeans, three T-shirts, and a pair of boots. This is an example of:

A) a divisible contract.
B) an entire contract.
C) a quasi-contract.
D) a formal contract.

Question 66

Why is it so important that the law of contracts be ordered and strong, particularly with regard to the business world?

Question 67

If one part of the contract becomes illegal or impossible to perform, the remaining contract components remain in effect if:

A) the contract is an express contract.
B) the contract is an entire contract.
C) the contract contains a severability clause.
D) the contract is an implied contract.

Question 68

April is at work when a commercial painter's truck pulls up in front of her house. After checking the address on his assignment sheet, the painter starts erecting ladders against April's house and unloading brushes, rollers, and cans of paint. April has not contracted with this company, and the company has mistakenly put the wrong address on the painter's assignment sheet. When April arrives home, the painter is just finishing and he presents her with a bill. Is she obligated to pay? Why or why not?

Question 69

Will and Kendrick live in a state that requires that contracts involving transactions over $500 be in writing. If they enter a verbal agreement to buy a car for $1,500, this contract is:

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

Question 70

Real estate deeds and mortgages that require a seal to be enforceable are considered:

A) quasi-contracts.
B) implied contracts.
C) informal contracts.
D) formal contracts.

Question 71

In lawsuits that involve both goods and services, how is the proper source of law to enforce and govern the agreement established?

Question 72

What are the categories of contracts in the following scenario?
An avid skier, Dr. Pearson decides to purchase a new pair of skis. He goes to a local ski shop and is assisted by the shop's owner as he looks at several pairs. He really likes a pair that costs $1,085, the most expensive set in the store, and says he will buy them if the owner will include bindings. The owner agrees and prints an order form with instructions to the shop staff for fitting the skis with bindings. Dr. Pearson pays for the skis and collects his receipt. The shop staff prepares the skis, and Dr. Pearson returns the following week to pick them up, ready to hit the slopes.

Question 73

What are some examples of contracts in the business context, and how does having an understanding of contract law help business owners and managers?

Question 74

A contract in which one party may disaffirm or enforce the contract is:

A) a valid contract.
B) a void contract.
C) a voidable contract.
D) an unenforceable contract.

Question 75

Aimee goes online and orders a suit for work that consists of a jacket and skirt. This is an example of:

A) a divisible contract.
B) an entire contract.
C) a quasi-contract.
D) a formal contract.

Question 76

In Chattler v. U.S., a passport applicant claimed that the government breached its contract with her when it failed to process her application in a timely manner, even after she paid a fee for expedited processing. Chattler asserted that the expedited process was a valid offer that she accepted by paying the $60 fee. How did the court rule, and what must be present to find mutual assent?

Question 77

In Advanced Technology Services Inc., v. KM Docs, LLC, company employees signed an employment agreement that contained a noncompetition covenant, a nonsolicitation agreement, and a nondisclosure agreement. It also contained a severability clause. The employees, who resigned and started their own competing company, claimed that the noncompetition agreement was too broad and the entire agreement was unenforceable. What did the court determine about the severability of the contract?

Question 78

Alan lives in a beachfront home, and one morning he discovers an adult woman who has washed up on shore and is unconscious. Alan takes her into his home and administers aid to her. She awakens after a few hours but has amnesia, not knowing who she is or how she ended up washed ashore on his property. Alan cares for her for two weeks, and then her memory returns. She fell overboard while sailing with her wealthy parents on their yacht. She tells him that her name is April, and she provides him with contact information for her parents. Naturally, when Alan calls, they are ecstatic. They tell Alan that they will fly in to pick her up the next day and that he should tally up his expenses and they will reimburse him for his costs. When they arrive, Alan gives them the cost sheet, which they refuse to pay. Does Alan have any rights against the parents? Does Alan have any rights against April?

Question 79

A consulting contract between a management consulting firm and a software company is governed by what source of law?

A) common law
B) statutory law
C) the Uniform Commercial Code
D) law at equity

Question 80

In Georgia Malone & Company Inc., v. Ralph Rieder et al., Malone was a real estate firm that accused a former potential buyer of selling confidential information Malone had gathered about the sale property. The former buyer sold the information to a competing real estate firm. How did the court rule in the case, and what must a plaintiff show to recover under this equitable theory?