Deck 14: Formation of Traditional and E-Contracts

Question 1

There are no exceptions to the rule that contracts voluntarily entered into will be enforced.

Answer 1

False

Question 2

Parties can form a contract without putting the terms in writing.

Answer 2

True

Question 3

An offer to form a bilateral contract is accepted only by completing the contract performance.

Answer 3

False

Question 4

Contract law shows what excuses our society accepts for breaking certain types of promises.

Question 5

To be valid, a contract must be enforceable by all of the parties to it.

Question 6

An expression of opinion-"your customers will like this"-is an offer.

Question 7

An invitation to negotiate-"can you afford this"-is an offer.

Question 8

An executory contract is one that has been fully performed.

Question 9

An informal contract requires a special form to bind the parties to it.

Question 10

An acceptance that materially changes a term in the offer will still be considered an acceptance.

Question 11

A person who does not know about a reward can still claim it.

Question 12

An effective offer requires reasonably certain terms.

Question 13

A unilateral contract is formed when the one receiving the offer completes the requested act or performance.

Question 14

A void contract is enforceable if it is in writing.

Question 15

An implied contract is implied from the conduct of the parties.

Question 16

One of the requirements of a valid contract is its acceptance.

Question 17

If a voidable contract is avoided, the parties to it are released from it.

Question 18

A letter of credit is a formal contract.

Question 19

The intention to enter into a contract is judged by objective facts as interpreted by a reasonable person.

Question 20

An offer must be practical to be effective.

Question 21

The Uniform Electronic Transactions Act applies to a transaction even if the parties have not previously agreed to conduct it by electronic means.

Question 22

InTown Delivery Service promises to deliver a certain couch to Kurt, who promises to pay for the service.If InTown does not perform, the firm may be required to

A)do nothing.
B)make another promise.
B)perform a different service.
C)pay damages.

Question 23

The terms of a shrink-wrap agreement may be enforced in the same way as the terms of other contracts.

Question 24

Bobbie claims that Carl breached their contract.Carl responds that he never intended to enter into a contract with Bobbie.The intent to enter into a contract is determined with reference to

A)the conscious theory of contracts.
B)the objective theory of contracts.
C)the personal theory of contracts.
D)the subjective theory of contracts.

Question 25

A contract to do something that is prohibited by law is void.

Question 26

In contract law, "consideration" refers to the courtesy that one party shows another in negotiating a deal.

Question 27

An obligation is enforceable only if it is supported by past consideration.

Question 28

The Uniform Electronic Transactions Act gives the same legal effect to electronic documents as is given to paper documents.

Question 29

On behalf of the rock group Uno, their manager Thalia agrees to a performance in Seaside Amphitheatre on July 4.Rex, acting for Seaside Productions, sends a written copy of the agreement to Thalia to be signed.Typically, businesspersons put their contracts in writing to

A)ensure proof of the contracts' existence.
B)create substance from form.
C)obtain a check.
D)practice their "letters of credit."

Question 30

An online offer should include provisions relating to dispute settlement.

Question 31

A contract is void if one of the parties was intoxicated at the time of its formation.

Question 32

Inadequate consideration may reflect a lack of bargained-for exchange.

Question 33

Parties are not usually free to bargain as they wish.

Question 34

A partnering agreement can indicate the parties' intent with respect to subsequent contracts.

Question 35

A partnering agreement reduces the likelihood that a dispute will arise under a contract.

Question 36

Contractual capacity refers to the size or volume of a contract.

Question 37

An e-contract must meet the same basic requirements as a paper contract.

Question 38

On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday.On Wednesday, Outdoor is more than half done with the work.This is

A)an informal contract because a "variety of tasks" are required.
B)a bilateral contract when Neil says that he will pay for certain work.
C)a unilateral contract as soon as Outdoor begins to perform.
D)no contract.

Question 39

Legally, a minor may not contract with an adult.

Question 40

When Jeff's car breaks down, he asks Kwik Tow, Inc., to tow it from its location to Loyal Repair Shop.There is no discussion of a price, and Jeff and Kwik do not sign any documents.After the tow, Kwik sends Jeff a bill.With respect to Jeff's obligation to pay the bill, this is

A)an express contract.
B)an implied contract.
C)a formal contract.
D)no contract.

Question 41

Jane offers to sell Kyle three desks for his Lights & Lamps Company administrative office.Kyle sends a rejection first, then changes his mind and sends an acceptance.Whether they have a contract is determined by

A)Kyle's rejection.
B)Kyle's subjective intent.
C)whatever Jane decides.
D)whether Kyle's rejection or acceptance is received first.

Question 42

Rollo promises to perform, for a price, shoe repair services in affiliation with Togs 'n Things, a clothing store.To support a contract, the consideration exchanged by the parties must be

A)adequately considerate.
B)equally valuable.
C)legally sufficient.
D)wisely priced.

Question 43

Kim sends an offer to Leo to cut down and remove a tree for $200.Kim says, "If you say nothing, I will consider you to have accepted my offer." If Leo does not respond, he will be deemed to

A)accept the offer.
B)make a counteroffer.
C)reject the offer.
D)none of the choices.

Question 44

Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500.Under the mailbox rule, Relay's acceptance by e-mail will be considered effective when

A)received.
B)sent.
C)followed up by a confirmation letter sent by regular mail.
D)composed on a Relay computer.

Question 45

Deep Check
Mayfair Company offers to sell a certain mall to Galleria Stores, Inc., for a certain price if it accepts before 10
A)before 10
A)m.Monday.
A)m.Monday.
A)m.Monday.

A)m.Monday.A contract is formed if Galleria's acceptance is received

Question 46

Employment Sources, Inc., enters into a contract with Fred.If Fred is a minor, this contract is most likely

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

Question 47

Vernon claims that his contract with Ulani is voidable.If their contract is avoided

A)both parties are released from it.
B)both parties must fully perform their obligations under it.
C)a wholly different contract is agreed to.
D)a wholly different contract is imposed "as if" the parties had agreed.

Question 48

Wanda tells Vito that she plans to buy his Chocolate Goodies store some day.Vito says, "I won't sell," but later changes his mind and sends to Wanda a letter of "acceptance." Wanda and Vito have

A)a contract.
B)no contract, because Wanda merely expressed her intention to enter a future contract.
C)no contract, because Vito simply expressed his opinion that "I won't sell."
D)no contract, because Vito's letter was only an invitation to negotiate.

Question 49

Digital Architecture, Inc., enters into a contract to design robotic software for Chassis Assembly Corporation.Digital agrees to perform for a deeply discounted price.Under the doctrine of freedom of contract, these parties

A)are free to bargain as they wish.
B)must renegotiate the contract before either party performs.
C)must renegotiate the contract to avoid a frivolous suit.
D)entered into a bargain that lacks consideration.

Question 50

Todos Ltd.agrees to supply United Steel, Inc., with minerals from Venezuela.When the government is unexpectedly overthrown in a revolution, Todos can obtain the goods only at a much higher price.United agrees to pay but later files a suit to recover the difference.The court will most likely rule that

A)a change in government is a risk ordinarily assumed in business.
B)an unforeseen difficulty supported the contract modification.
C)Todos engaged in extortion or the so-called holdup game.
D)Todos had a preexisting duty to supply the goods at the initial price.

Question 51

Greco promises to buy illegal copies of CDs and DVDs from Fava, who promises to deliver on April 15.These promises are most likely

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

Question 52

Business Properties, Inc.(BPI), offers to sell a warehouse to Corporate Investments.Transport Storage Company is aware of the offer and is interested in buying the warehouse.This offer can be accepted by

A)only Corporate Investments.
B)only Corporate Investments or Transport Storage.
C)any party who is aware of it.
D)no one.

Question 53

Panini Vittles, Inc., contracts with Qino to deliver its sandwiches.Before Qino performs, these parties have

A)an executed contract.
B)an executory contract.
C)an unenforceable contract.
D)no contract.

Question 54

Demi promises to buy a house from Caleb, who promises to vacate the property on June 1.If these promises are in writing, they are most likely

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

Question 55

Lovett County Bank offers to lend money to Kino, the owner of Java Stop, at 15 percent interest.Before Kino accepts, a state statute is enacted prohibiting loans at rates greater than 12 percent.Kino and the bank have

A)a contract for a loan at 15 percent interest.
B)a contract for a loan at 12 percent interest.
C)a contract for a loan at 0 percent interest.
D)no contract.

Question 56

GR8 Marketing Company and Hot Tunes, Inc., sign a document that states GR8 agrees to create a marketing campaign for Hot and Hot agrees to pay GR8 for the service.GR8 and Hot have

A)an executed contract.
B)an express contract.
C)an implied contract.
D)no contract.

Question 57

Kingston promises to pay Melina $500 to install a sump pump in his warehouse.Melina completes the installation.The act of installing the pump

A)imposes a moral obligation on Kingston to pay Melina.
B)imposes no obligation on Kingston unless he is satisfied with the job.
C)is not sufficient consideration because it is not goods or money.
D)is the consideration that creates Kingston's obligation to pay Melina.

Question 58

Lou claims that he and Myra entered into an implied contract.To establish this contract, it is not necessary to show that

A)a court imposed a promise in the interest of fairness.
B)Lou expected to be paid for providing services or prop?erty.
C)Lou provided Myra with services or property.
D)Myra failed to reject services or property provided by Lou.

Question 59

Under a contract with Bucolic Farms, Agro Excavation, Inc., begins digging an agricultural pond.In mid-project, Agro asks for $15,000 over the contract price, claiming an increase in the "cost of doing business." Bucolic agrees but later refuses to pay.Their agreement is

A)unenforceable because Agro's performance was a preexisting duty.
B)unenforceable because Bucolic's promise was illusory.
C)enforceable.
D)unenforceable because its performance is unforeseeably difficult.

Question 60

Scot and Tiffany enter into an implied contract.The parties' conduct

A)defines the contract's terms.
B)finds the contract's facts.
C)terminates any unintended consequences.
D)undercuts any terms based on the facts.

Question 61

Nero and Oona negotiate a contract.Nero prints out a hard copy to review before both parties sign the electronic form of the contract.Neither party signs the hard copy.Under the Electronic Signatures in Global and National Commerce Act (E-SIGN Act), the signatures can

A)be denied effect because they are in electronic form.
B)be denied effect because Nero has not signed a hard copy.
C)be denied effect because Oona has not signed a hard copy.
D)not be denied effect because they are in electronic form.

Question 62

Renee, a product designer for Supersize Cosmetics Company, agrees not to work for Supersize's competitors or start a competing business for a specified period of time after termination of employment.This agreement is legal in most states

A)if the specified period of time is reasonable.
B)if the parties have relatively equal bargaining power.
C)if Renee is in middle- or upper-level management.
D)under no circumstances.

Question 63

Kylie signs a covenant not to compete as part of a sale of her ongoing medical equipment business to Lake Valley Medico, Inc., in exchange for a bonus payment.The covenant is most likely enforceable by

A)both parties.
B)Kylie, but not Lake Valley.
C)Lake Valley, but not Kylie.
D)no one.

Question 64

Lightspeed Corporation makes computers, each of which is packaged with a shrink-wrap agreement.Milo buys a Lightspeed desktop.The shrink-wrap agreement is most likely enforceable if

A)Milo buys the computer directly from Lightspeed.
B)Milo expressly agrees to the terms in the shrink-wrap agreement.
C)Milo reads the shrink-wrap agreement.
D)the terms in the shrink-wrap agreement concern warranties.

Question 65

Jolie signs a contract with Keaton, an unlicensed physician, to perform plastic surgery-a medical procedure.The purpose of the licensing statute is to protect the public from unauthorized practitioners.This contract is enforceable by

A)Jolie.
B)Jolie's medical insurance company.
C)Keaton.
D)no one.

Question 66

Michelle gives out a business card with an e-mail address on it.According to the comments that accompany the UETA, it may be reasonable to infer that Michelle has consented to

A)transact business electronically.
B)submit to the jurisdiction of any selected forum.
C)accept and respond to any correspondence sent to that address.
D)nothing.

Question 67

Myra owns a house, which she advertises for sale for $200,000.On May 1, Nicole offers Myra $180,000 for the house.On May 5, Myra delivers to Nicole a form that includes additional terms but does not state a price.At 9 a.m.on May 6, Nicole signs the form and gives it to Odell, her administrative assistant, with instructions to mail it.At 10 a.m., Myra calls to tell Nicole that the deal is off.The next day, Odell mails the signed form to Myra.When Myra refuses to sell the house, Nicole files a suit against her, alleging breach of contract.Myra claims that there was no contract.What are arguments supporting each party's position What is the court likely to rule Explain.

Question 68

Emma, a minor acting on her own, signs a contract to buy an off-road vehicle from Rec Buggies, Inc.Later, after taking possession of the vehicle, Emma decides to disaffirm the deal.She

A)cannot cancel the contract.
B)must wait until the age of majority to terminate the contract.
C)must petition a court for emancipation to avoid the contract.
D)must express her intent not to be bound to disaffirm the contract.

Question 69

On May 1, Brand Name Industries, Inc.(BNI), sent Carol a letter, via overnight delivery, offering to employ her to audit BNI's financial statements for the current year for $10,000.In the letter, BNI stated that Carol had ten days to accept.On May 5, Carol sent BNI a fax that stated, "The price for the audit seems too low.Would you consider paying $12,000" BNI received the fax.The next day, Dan offered to conduct the audit for $8,000.On learning of Dan's offer, Carol immediately e-mailed BNI, agreeing to do the work for $10,000.BNI received this e-mail on May 7.Explain why BNI and Carol do, or do not, have a contract.

Question 70

Overnight Delivery Service delivers a package to Pam.At the request of Overnight's delivery person, to acknowledge receipt Pam signs a digital pad.This signing creates

A)an e-signature.
B)a handwritten signature.
C)a typed signature.
D)no signature.

Question 71

Lively Toys Store and Movin' Products Company (MPC)enter into an e-contract under which MPC agrees to ship a case of electronic, remote-controlled bugs to Lively Toys, which agrees to pay on delivery.The Uniform Electronics Transactions Act (UETA)

A)denies the enforcement of such contracts.
B)does not apply to such contracts.
C)preempts all other laws with respect to such contracts.
D)supports the enforcement of such contracts.

Question 72

Deb buys a song through eSongs, an online music vendor.Before completing the purchase and downloading the song, Deb must agree to a provision not to sell copies of the song.This provision is

A)a dispute-resolution provision.
B)a click-on agreement.
C)a shrink-wrap agreement.
D)none of the choices.