Deck 6: Overview and Formation of Contracts

Question 1

Uncle Buck has lent you $10,000 for tuition and living expenses.The agreement was oral.This contract violates the statute of frauds,so it is unenforceable and you need not repay the loan.

Answer 1

False
Explanation: Contracts for the sale of goods fall under the $500 rule however a loan, even of this amount does not.

Question 2

In many states,if a person has been declared incompetent,contracts that person enters into are classified as void ________ or not valid from the onset.

Answer 2

Per se

Question 3

Boris sky dives out of a plane and gets hung up in a tree,hopelessly suspended and swinging precariously in his parachute from the branches of the tree.Natasha sees that he is in trouble and comes to his rescue.Once Boris is safely on the ground,he gratefully promises to give Natasha half of his life savings account.When he changes his mind,Natasha will probably be unsuccessful in enforcing his promise.

Answer 3

True
Explanation: Boris made his promise after Natasha had performed so the promise is based on past consideration.

Question 4

The legal term for guilty knowledge that is an element of fraudulent misrepresentation is _______.

Question 5

If an offer does not specify a required type or form of acceptance,the offeree is required to provide a written acceptance for valid mutual assent to be proven.

Question 6

If a 17 year old enters into a contract to purchase a car,that contract is ________ at the minor's option until they reach the age of 18.

Question 7

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

Question 8

A contract formed from a party's actions rather than their words is called a/an ________ contract.

Question 9

If Bill Gates goes into a car dealership and buys every car on the lot for sticker price,the dealer has suffered no contractual detriment because he's in the business of selling cars and got full price.

Question 10

Most oral agreements will be enforceable as contracts by courts.

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

Jeff goes to a car dealership and the salesman tells him that the car he's looking at is a great car and an excellent value.The statements made by the salesman,if untrue,will not be adequate to create either an innocent misrepresentation or a fraudulent misrepresentation.

Question 13

An option contract has to do with a contract that gives one of the parties a choice of consideration to accept.

Question 14

Use of unfair coercion to force another into a contract constitutes _______.

Question 15

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

Question 16

According to the mailbox rule,a revocation is valid the moment that it is mailed.

Question 17

Consideration in a small or minimal amount that is written into a contract but never actually paid is called ________ consideration.

Question 18

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

Question 19

A contract that is so blatantly unfair that it shocks the objective conscience would be rendered unenforceable and subject to the defense of _______.

Question 20

A basic fact or assumption in a contract is said to be ________ to the contract.

Question 21

Contractual consideration is defined as the thought process a party uses to decide whether or not to accept the offer and enter into a contract.

Question 22

An agreement to purchase $499 worth of land does not have to be in writing to be enforceable.

Question 23

In Harley-Davidson Motor Co.,v.PowerSports,Inc.,the court permitted PowerSports to retain their Harley-Davidson franchise because their decision to become a publicly owned corporation had nothing to do with their commitment to sales and service so it was deemed not material to the negotiations so no fraud occurred.

Question 24

Ronald is 17 years old and contracts to purchase a car and make monthly payments for three years.His birthday is August 1^st.If Ronald changes his mind,he may disaffirm the contract at anytime prior to August 1^st but loses the right to disaffirm on August 2^nd.

Question 25

If you give a truthful answer to a question during contract negotiations,but something then happens that makes that answer now false,you are not obligated to notify the other party unless they ask the question again.

Question 26

Duress must be based on a physical threat and not an economic one.

Question 27

Generally,mutual mistakes will often lead to the court allowing an avoidance of a contract; however,a unilateral mistake is not usually grounds to cancel a contract.

Question 28

Generally,for an acceptance to create a non-commercial contract,the acceptance must be without qualifications or conditions.

Question 29

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

Question 30

Larry has had a few beers and is starting to get a bit drunk.He isn't acting strange and he's conducting conversations with others slurring only an occasional word or two.Larry,should he enter into a contract in this state would be considered mentally incompetent and his contract would be void.

Question 31

A minor's contract for actual necessities does not require that the minor be mentally competent for the contract to be valid.

Question 32

Jon owns two cars.He says to Rachel,"I'll sell you either car for $8,000".This would be a valid offer.

Question 33

After an offer is made,the offeror may revoke that offer at any time,even if the offeree has not been given a reasonable period of time to decide whether or not to accept.

Question 34

Should an adult find out that they have entered into a contract with a minor,the adult may disaffirm the contract if they do so before the minor reaches the legal age.

Question 35

Ike has orally agreed to paint Tina's portrait.The oral agreement is for the portrait to be completed in nine months.Even if the portrait actually takes thirteen months to complete,the agreement will be enforceable.

Question 36

Amanda,a recent university graduate,needed a car to get to her new job.To help Amanda secure a loan for the car,Ted,a friend,agreed to pay the loan should Amanda default.Ted's promise is enforceable as long as he goes to the bank,declares his promise to guarantee Amanda's loan in front of witnesses and shakes hands on the deal giving his word.

Question 37

The legal detriments exchanged by the parties must be equal,or reasonably close to equal,for consideration to be valid.

Question 38

An option contract refers to the choices that one has when entering into a contract.

Question 39

It is not possible for a total stranger with no ties to the alleged victim to commit undue influence over another.

Question 40

All bilateral contracts are express.

Question 41

Josh is negotiating the sale of his car with Jonathan.Jonathan asks if the car has ever been in an accident and Josh replies,"No,it has never been in an accident." In fact,the car was nearly totaled the year before when Sheila,Josh's girlfriend,driving Josh's car,hit a wet spot and skidded into a pole.Shehad it repaired without telling him about the accident.Josh has committed:

A) fraudulent misrepresentation.
B) innocent misrepresentation.
C) an unconscionable act.
D) nothing because he thought he was being truthful and didn't intend to deceive Jonathan

Question 42

Applying the parole evidence rule:

A) written contracts with ambiguous terms are automatically void and cannot be corrected.
B) oral agreements may be used to change a final written contract if the final written contract isn't exactly conforming to the pre-contract agreements.
C) written agreements may be used to change a final written contract if the final written contract isn't exactly conforming to the pre-contract agreements.
D) a written contract is the final expression of the party's agreement and may not be contradicted by oral or written agreements made prior to the writing

Question 43

Bruno owns a French Poodle that he advertises for sale.The dog has a history of viciously biting three local neighborhood kids without reason as well as one of Bruno's kids.Marge is looking for a dog to be a playmate for her children.When she comes to Bruno's house to see the dog,she sees it playing with Bruno's kids and doesn't ask about the dog's past behavior.She tells Bruno that she's looking for a dog for her kids and Bruno says nothing.Five minutes after the dog enters her house,it bites one of Marge's kids:

A) Bruno has not committed a fraudulent misrepresentation because silence cannot be considered a fraudulent misrepresentation.
B) Bruno has not committed a fraudulent misrepresentation because Marge didn't specifically ask if the dog bites.
C) Bruno has committed a fraudulent misrepresentation because he withheld a material fact.
D) Bruno has committed an innocent misrepresentation because he didn't state a lie but only withheld all of the truth

Question 44

Which of the following promises ordinarily need not be in writing to be enforceable?

A) Promises made as a part of a prenuptial agreement.
B) An agreement to sell of a car for $1,500.
C) A lease of a warehouse for 24 months.
D) A $1,000 agreement with a personal trainer for 10 sessions

Question 45

Jonathan's Soccer Mart (JSM)advertises a pair of boots on sale.The normal price is $150.00 and the sale price should have read $135.00 but the advertisement says $15.00.Josh walks into the store,picks up a pair of the boots and puts $15.00 on the counter demanding to purchase the boots at the advertised price.Which of the following is correct?

A) JSM must sell the boots at the advertised price
B) Josh has accepted JSM's offer to sell
C) JSM has made an ambiguous offer
D) Josh has made an offer

Question 46

Bud calls Lou and says,"I'll sell you my car for a thousand bucks,interested?" Lou says,"I'll look it up on the Internet.If the Blue Book price is close,I'll pay you $1000 in the morning." At sunrise Lou shows up with $1000.00.

A) Bud must sell him the car because Lou accepted the evening before when he promised to look up the car's value
B) Bud must sell him the car because he could not revoke his offer after Lou accepted
C) Bud does not have to sell the car because his promise was unclear
D) Bud does not have to sell the car because the payment is based on past consideration

Question 47

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 they present 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 48

Bill has voluntarily organized office birthday parties for the past 10 years because he enjoys making people happy.One day,Brenda,his boss tells him that he's been doing such a great job that she's going to pay him an extra $200 next month.However,when Bill gets his check,it's the same amount that it has always been.Which of the following is correct?

A) Brenda's promise is enforceable because it is based on a bargained for exchange
B) Brenda's promise is unenforceable because it is based on past consideration
C) Brenda's promise is enforceable because Bill performed a service for the company and should be paid even if it's not part of the job description
D) Brenda's promise is unenforceable because the situation is governed under the preexisting duty rule

Question 49

Brandi orally tells landscaper Mike "If you trim my bush I'll pay you $50.00." Mike trims her bush.Which of the following is correct?

A) this was a unilateral contract
B) this was a bilateral contract
C) this was an implied contract
D) this was a quasi contract

Question 50

Hillary is a nerdy bookworm couch potato who rarely goes out of her home except to go to work as a deskbound CPA.She wears a sweater almost every day including during the summer and is always complaining about being cold.Edmund,a coworker,tells Hillary that he will give her $1M if she climbs Mt.Everest.Edmund doesn't believe that she'd even give the offer a second thought.Hillary,without saying anything to anyone,starts an intensive training program to whip herself into shape and six months later,during her vacation,in fact,climbs Mt.Everest.Upon returning to work,she presents Edmund a picture of herself on the summit of Mt.Everest and demands her $1M.Edmund tells her that they never had a contract so he owes her nothing and Hillary claims that the money is owed based on promissory estoppel.

A) promissory estoppel only applies if Edmund was very rich because $1M is a lot of money
B) promissory estoppel applies whether Edmund was rich or not
C) promissory estoppel does not apply because Edmond had no reason to believe that Mary would rely on his promise
D) promissory estoppel does not apply because Mary must announce that she accepts his offer for it to create an obligation to pay

Question 51

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 nor had she 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 so 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 52

Where a promise can only be accepted by the performance of the person to whom it is offered is an example of a/an:

A) bilateral contract.
B) unilateral contract.
C) implied contract.
D) quasi contract

Question 53

Jon works for a major bank.The revised employee handbook that he received five years ago says that all employees with 25 years of service will receive a retirement party.He is about to hit 25 years of service and has announced his retirement.His manager tells him that the company,based on his years of service,will throw him a party and present him with a gold watch.Jon retires on his 25^th anniversary and his manager announces that the company will not throw the party or give him the watch.

A) because of past consideration, no party or watch is owed
B) the company is required to throw the party but no watch is owed
C) the company is required to present him with the watch but no party is owed
D) the company is required to present him with the watch and throw him the party

Question 54

Robert is about to graduate college and his parents tell him that because he is the first member of the family to graduate college,they want to buy him a new,but inexpensive car.They have the money to buy the car and Robert is excited to get his gift.Robert owns a used car but he as never owned a new car so this will be his first.He decides to keep his used car because he had been promised a new car by his parents for his high school graduation and never got it.On graduation day,his parents tell him that they have decided to use the car money for a vacation and there will be no car.

A) Robert can successfully sue based on promissory estoppel
B) Robert can successfully sue based on the promise of a gift
C) Robert cannot successfully sue because he did not rely to his detriment on the promise
D) Robert cannot successfully sue because the promise was not reasonable and would not support promissory estoppel

Question 55

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 56

Which of the following is formed to remedy unjust enrichment?

A) implied contracts.
B) contracts based on promissory estoppel.
C) express contracts.
D) quasi contracts

Question 57

Aimee is a 21 year old college student.Her parents are worried about her being away from home so they tell her that if she goes both the Fall and Spring semesters without drinking alcohol,they will buy her a new car.Aimee does in fact go both semesters without drinking:

A) Aimee gets the car because she performed exactly as required under her parents offer.
B) Aimee gets the car because a quasi contract is formed due to her parent's unjust enrichment.
C) Aimee is not entitled to the car because her benefit far outweighed her detriment.
D) Aimee is not entitled to the car because she's healthier so she suffered no detriment

Question 58

A professor tells a student that if she writes a 5,000 word paper on the evils of plagiarism by May 13^th,he will pay the student $750.00.

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

Question 59

If the offer specifies no time limit in which to accept:

A) the offeree has 10 days to accept.
B) the offeree has 30 days to accept.
C) the offeree has an unlimited time to accept as long as a revocation has not been made.
D) the offeree has a reasonable time to accept

Question 60

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

A) this was 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 was 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 61

Which of the following is not required for promissory estoppel to apply?

A) the promise made must be reasonable
B) the promise made must be relied on by the promisee to the promisee's detriment
C) the promisor must suffer an injustice if the promise isn't enforced
D) the promisor must know that the promisee is likely to rely on the promise

Question 62

Wilma has a valid driver's license but has a tendency to get speeding tickets.Fred tells her that he will pay her $1,000.00 if she does not get a ticket for one year.Wilma drives very cautiously and goes one year without a ticket.Is Fred obligated to pay?

A) yes, because Wilma gave up a legal right based on the agreement
B) no, because $1,000.00 is not an adequate amount based on Wilma's detriment
C) no, because Wilma suffered no detriment in this agreement
D) yes, because a promise is a promise and consideration has nothing to do with this agreement

Question 63

You arrive at your final exam for your law class and as you approach the door your professor is standing at the door with a sign saying,"THE COST FOR TAKING THIS TEST IS $10.00 PAYABLE TO ME" (the professor).Your professor is also holding a tin cup for students to place their cash and checks into.Speaking entirely from a contracts perspective,can your professor enforce such a fee? Explain fully.

Question 64

Which of the following statements may be grounds for a misrepresentation,innocent or fraudulent,to occur?

A) this car is the best looking car in its price class
B) this is the best car that money can buy
C) this car gets 32 miles per gallon in highway driving
D) this car has the most comfortable ride you can buy

Question 65

In which of the following situations will the court enforce a contract?

A) Tinker offers to sell his car to Evers. Evers asks for some time to decide and Tinker gives him until 6:00 pm. At 4:00 pm Evers sees Chance driving the car and is told that Tinker sold it to him. Evers calls Tinker at 4:30 pm and says "I accept".
B) Jan offers to sell his boat to Dean. Dean asks for 24 hours to decide and Jan agrees. At midnight, the boat sinks although neither Jan nor Dean knows it's sunk. Dean calls Jan before the 24 hours is over and says, "I accept".
C) Martin offers to sell his horse to Lewis for $1,000. Lewis replies that $1,000 is too much and says "I'll give you $850 for her". Martin says no and Lewis replies, "Okay, I'll give you $1,000.
D) Fred offers to sell his car to Wilma. Wilma asks for more time and Fred says you may have until 10:00 am the next morning. Wilma gives Fred $50 for him to keep the offer open to her that is nonrefundable. Fred dies during the night and after hearing that Fred died, Wilma calls Fred's heirs at 9:00 am the next morning and accepts Fred's offer

Question 66

In Stevens v.Publicis,the courts addressed the statute of frauds issue of what constitutes a writing in today's cyber world and determined that:

A) technology aside, a writing must contain an original signature to create a true contract
B) since e-mail could be written by anyone, an e-mail must be followed up by a document with an original signature
C) an e-mail with the senders typed signature showed an intent to authenticate the contents and satisfies statute of frauds requirements
D) the statute of frauds requires that certain contracts be in writing to be enforceable but does not address or concern itself with signatures

Question 67

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

Question 68

Maria has just sat down and is ready to take her last final exam before graduating.Just before the tests are distributed she discovers that all three pens that she brought are out of ink.She turns to Mike,a classmate,and asks to borrow a pen.Recognizing her predicament,he says,"No,I won't lend you a pen but I'll sell you this BIC ballpoint pen for $100.00".Recognizing that she has no alternative,she gives him the money.A BIC pen is worth about $.10.Afterwards she demands a return of her cash and offers to return the pen.Mike laughs and says,"No,a deal's a deal".How would the courts look at this "deal"?

Question 69

When a store places an advertisement in a newspaper or runs an ad for broadcast on the radio,what are the stores obligations if a customer arrives at the store and demands to purchase the item at the advertised price? Be complete.

Question 70

Alan lives in a beach front home and one morning 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 when 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 that 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 71

What does the parole evidence rule say and how does it affect contracts?

Question 72

In Raffles v.Wichelhaus,the court refused to enforce the contract for a boatload of cotton,shipped to but refused by Wichelhaus,because:

A) the parties made a mutual mistake with regard to which ship named Peerless the cotton was to be shipped on and the two ships sailed in different months
B) the parties made a mutual mistake with regard to the quality of the cotton as each ship carried different grades of cotton
C) despite there being two ships named Peerless sailing on different dates, the contract was oral and violated the statute of frauds
D) Raffles knew that there were two ships named Peerless but failed to notify Wichelhaus constituting a fraudulent misrepresentation due to the withholding of a material fact

Question 73

With regard to the court,adequacy of consideration means:

A) the consideration exchanged must be exactly equal in value.
B) the consideration exchanged must be reasonably close in value.
C) the court will adjust the consideration if the value exchanged is unfair.
D) the court doesn't care about value as long as the mutual assent is valid

Question 74

In Leonard v.Pepsico,the court ruled against Leonard and refused to enforce the purchase of a Harrier Jet because:

A) the advertisement specifically referred to the accumulation of points to purchase items in the catalog and the Harrier was not listed in the catalog
B) the sale of a Harrier jet, still used by the military, would jeopardize national security so Pepsi's ad could not be taken seriously
C) Leonard did not accumulate points but instead purchased them which violated the rules of the offer
D) Leonard did not accept the offer in the manner specified and required in the offer so his acceptance was defective and void

Question 75

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 starts unloading brushes,rollers and cans of paint.April has not contracted with this company and the company has made a mistake putting the wrong address on the assignment sheet the painter took the address off of.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 76

Your school is negotiating with another school to run a joint program.The other school is not sure that your college can handle the increase in students and tells your administration that they will join the joint program initiative if your college increases its faculty.Based on this offer,two full time tenure track faculty are hired.Soon afterward the other college decides that they have chosen not to participate in the program and ends negotiations.What rights does your school have?

Question 77

Dick has made a statement that the average person would realize is puffery.Dick is guilty of:

A) fraudulent misrepresentation.
B) innocent misrepresentation.
C) undue influence.
D) nothing

Question 78

In Lucy v.Zehmer,the two parties were drinking in a bar when Lucy offers to buy Zehmer's farm.After some negotiation a written contract was executed.Zehmer claimed that the whole episode was only a joke and he never intended to sell the farm.The court determined that:

A) since Zehmer claimed to be "high as a Georgia pine" and it was only the liquor talking, there was no contract.
B) since the contract was written without lawyers present, it was likely not really serious so no contract was actually formed.
C) because the terms were fair, the parties are bound by the contract regardless of their intent or capacity.
D) because negotiations and modifications to the written agreement lasted between 30-40 minutes, it appeared that both parties were serious so even if Zehmer had no objective intent to sell the farm he is still bound by his actions and the contract was enforceable

Question 79

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

Question 80

In 1975,Denise purchased a used Volkswagen Beetle from Don.At the sale,Don produced a title to the car that said it was a 1972 car.In 1976,Denise sold the car to Ed,delivering a title stating that the car was a 1972 Volkswagen Beetle.Both titles were genuine and issued by the proper state office.In the 1970's,Volkswagen Beetles underwent essentially no body changes and quite frankly the cars were indistinguishable from year to year except to experts.When Ed takes the car to his mechanic for some routine maintenance,he is told that the car is actually a 1970,not a 1972 model.Ed immediately calls Denise and accuses her of fraud.Denise calls Don and is told that the car was indeed a 1970 car but he had replaced the motor with a new 1972 motor and had the car reregistered for the year of the new engine which at the time was legal in that state.Has Don committed an actionable wrong? Has Denise committed any form of an actionable wrong?