Deck 9: Introduction to Contracts

Question 1

The Uniform Commercial Code sufficiently addresses the concerns that parties have when contracts are made to create or distribute information.

Answer 1

False

Question 2

The rules promulgated by the Restatement (Second) of Contracts often resemble the rules created by Article 2 of the UCC.

Answer 2

True

Question 3

Generally, the terms of a standardized contract are negotiable.

Answer 3

False

Question 4

The UCC imposes a duty of good faith in the performance and enforcement of every contract it covers.

Question 5

Alan and Ben have a contract. Alan has performed 100 percent and Ben has performed 50 percent of it. This contract is now executory.

Question 6

To qualify as a contract, a set of promises must be based on a voluntary agreement, which is made up of an offer and a(n) _____ of that offer.

A) understanding
B) writing
C) assumption
D) acceptance

Question 7

If no Code rule applies to an issue regarding a sale of goods contract, the common law rules apply.

Question 8

Abby promises to pay Brian $50 if he will mow Abby's lawn. Brian does not promise to mow Abby's lawn; however, later that day, Brian completely and satisfactorily does mow Abby's lawn. This is an example of a unilateral contract.

Question 9

The mutual agreement necessary to create an express contract is evidenced by writing.

Question 10

CISG applies only to sale of goods and commercial parties.

Question 11

Jimmy and Pat had a long-standing professional relationship. In 2001, Jimmy's business began experiencing financial strain. The two friends discussed Jimmy's personal problems and financial difficulties, and Pat was concerned about his friend's depressed mental state. In 2003, Pat flew from Atlanta to New York to meet Jimmy. Prior to Pat's flight, Jimmy's employee had faxed copies of various construction contracts and correspondence relating to Jimmy's controversial projects for Pat to review. In late 2005, Pat billed Jimmy for a $40,000 balance that Jimmy owed on the alleged oral contract. In a letter to Pat, Jimmy stated: "I have paid you plenty and will not pay you any more. I have not called for any professional advice since then." Pat filed suit against Jimmy for breach of contract. Will Pat succeed?

A) Yes, because Pat was offering his friend professional consultation.
B) Yes, because there is a valid contract formed, since Jimmy had sought Pat's advice.
C) No, because it was a friendly advice and not an actual contract.
D) No, because Pat never entered into an oral contract and only written contracts are enforceable.

Question 12

Sometimes, Article 2 of the UCC holds merchants to standards different from the standards it applies to nonmerchants.

Question 13

The essence of a contract is that it is a legally enforceable promise or set of promises.

Question 14

Article 2 of the UCC never applies to mixed goods-services contracts; instead, it treats them as pure service contracts.

Question 15

Pratt, owner of an appliance store, has a garage sale at his home where he sells old furniture and books. He sells a set of books to his neighbor, Stacey. Pratt is considered a merchant under Article 2 of the UCC in selling the books to Stacey.

Question 16

Contracts must always be in writing to be enforceable.

Question 17

Speaking generally, a quasi-contract applies where there has been foreseeable reliance on an express promise.

Question 18

A contract must be between parties who have _____ to contract.

A) knowledge
B) capacity
C) resources
D) intention

Question 19

Which of the following statements about standardized form contracts is false?

A) Frequently, the terms of standardized contracts are negotiable.
B) They are used both online and offline.
C) They are contracts that are preprinted by one party and presented to the other party for signing.
D) In most situations, the party who drafts and presents the standardized contract is the party who has the most bargaining power in the transaction.

Question 20

Which of the following is NOT a basic element of a contract?

A) Offer
B) Consideration
C) Capacity
D) Goods

Question 21

An oral contract that is covered by the statute of frauds is:

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

Question 22

Greg signed a contract to work as an auto-parts manager for Jones Chevrolet. This contract is governed by:

A) Article 2 of the UCC.
B) state common law.
C) the doctrine of promissory estoppel.
D) the law of quasi-contract.

Question 23

What type of transactions are governed by the Uniform Commercial Code?

A) Contracts for the sale of goods.
B) Contracts for services.
C) Contracts for the sale of land.
D) Any commercial contract, whether for goods, services, or land.

Question 24

Calvin tells Sara that he will sell her his car for $5,000. Sara agrees. The exchange is to take place in 10 days. The contract between Calvin and Sara is now:

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

Question 25

A void contract is:

A) a contract that one or both parties can cancel at their convenience.
B) a contract, even though the courts will not enforce it.
C) an agreement that creates no legal obligations.
D) created by operation of law rather than by the agreement of the parties.

Question 26

A contract in which one or more of the parties have the legal right to cancel their obligations under the contract is called a(n):

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

Question 27

A contract is _____ when all of the parties have fully performed their contractual duties.

A) void
B) executed
C) contingent
D) ineffective

Question 28

Which of the following contracts are agreements that create no legal obligations and for which no remedy is given?

A) Valid contracts
B) Unenforceable contracts
C) Void contracts
D) Voidable contracts

Question 29

Aaron promises to sell his boat to Matt, and Matt promises to buy it from Aaron. What type of contract is this?

A) A unilateral contract
B) A quasi-contract
C) A bilateral contract
D) A promissory estoppel contract

Question 30

When the surrounding facts and circumstances indicate that an agreement has in fact been reached, a(n) _____ has been created.

A) implied contract
B) quasi-contract
C) void contract
D) unenforceable contract

Question 31

An otherwise valid contract whose enforcement is barred by the applicable contract statute of limitations is an example of a(n):

A) voidable contract.
B) quasi-contract.
C) bilateral contract.
D) unenforceable contract.

Question 32

Reggie went to the Napa Valley Harvest Festival, when he stopped at Tracy's booth where she was selling paintings of vineyards. Reggie admired a painting of vineyards, which did not appear to be for sale. Reggie said to Tracy, "I will give you $200 if you give me that painting right now." Tracy said nothing in response, but she gave Reggie the painting, and Reggie gave her $200 in cash. This is an example of a contract that is now:

A) bilateral and executed.
B) bilateral and executory.
C) unilateral and executed.
D) unilateral and executory.

Question 33

Article 2 of the UCC does NOT apply to a sale of:

A) baseball bats.
B) harvested wheat.
C) corporate stock.
D) a new car.

Question 34

Dawson entered into a contract with Jensen for the sale of Dawson's boat. Which set of legal rules governs this transaction?

A) Contract rules of the common law
B) Contract rules of the Uniform Commercial Code
C) Equity rules that ensure fairness in transactions
D) Marine law

Question 35

Ann wants to download the Adobe Acrobat software from the Internet. Prior to downloading, a standardized online contract appears on the screen that requires her to click on an icon indicating agreement, before she can proceed in the program. Such contracts are called:

A) clickwrap contracts.
B) shrinkwrap contracts.
C) click-off contracts.
D) unenforceable contracts.

Question 36

A contract whose formation is induced by duress is an example of a contract that is:

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

Question 37

Alana, who runs a flower shop, sells Jose a shotgun. Jose is unemployed, and Alana has never before sold a firearm in her life. Which of the following is true?

A) Article 2 of the UCC applies because Alana is a merchant.
B) Article 2 of the UCC applies because a shotgun is a movable thing.
C) Article 2 of the UCC does not apply because Alana is not a merchant with respect to shotguns.
D) Article 2 of the UCC does not apply because Jose is not a merchant.

Question 38

An executed contract is one that has been:

A) terminated by operation of law.
B) terminated by the parties' voluntary agreement.
C) fully performed by one or both parties.
D) fully performed by both parties.

Question 39

A contract in which the parties have not yet fully performed their obligations is called a(n):

A) executed contract.
B) executory contract.
C) quasi-contract.
D) bilateral contract.

Question 40

Which is the only state to have adopted the Uniform Commercial Code (UCC) only partially?

A) Arizona
B) Connecticut
C) Louisiana
D) Wisconsin

Question 41

Which of the following is NOT covered by Article 2 of the UCC?

A) Vehicles
B) Appliances
C) Stocks
D) Books

Question 42

What is the main difference between a void contract and a voidable contract? Give examples of each.

Question 43

Why did the Restatement not have the force of law?

A) It was the product of a private organization.
B) It had conflicting perspectives.
C) It was deemed significantly inferior to the common law.
D) It was deemed significantly inferior to the UCC.

Question 44

Linda wanted to replace the old carpet in her home. She entered into a contract with Carpet Co., for the purchase and installation of a new carpet. The price of the carpet was $3,000 and the cost of the labor to install the carpet was $150. Later, Linda became dissatisfied with this transaction and now wants to sue Carpet Co. Linda wants to apply the contract rules of the UCC, but Carpet Co., wants to apply the contract rules of the common law. Which source of law should govern this case?

A) The contract rules of the UCC apply, because the contract included the sale of goods.
B) The contract rules of the UCC apply, because the predominant purpose of the contract was sale of goods.
C) The contract rules of the common law apply, because the contract included services, which are governed by the common law.
D) The contract rules of the common law apply, because all contracts are governed by the common law.

Question 45

The CISG:

A) provides uniformity for transactions among contracting parties in different states in the United States.
B) applies only to consumers, not commercial parties.
C) applies only to services, not sales of goods.
D) does not have provisions to cover every contract problem that might occur.

Question 46

A fundamental difference between a promissory estoppel and traditional contract principles is that a promissory estoppel protects:

A) reliance.
B) bargains.
C) agreements.
D) consideration.

Question 47

Is the installation of a battery in an automobile subject to Article 2 of the UCC or to the common law of contracts? Why?

Question 48

Fun Foods fraudulently induces Holly to buy a household products franchise by grossly misstating the average revenues of its franchisees. She discovers the misrepresentation after she has resold some products that she has received but before she has paid Fun Foods for the products. Holly wants to cancel the franchise contract on the basis of the fraud. What is the remedy available to her?

A) Promissory estoppel
B) Duty of good faith
C) Executory contract
D) Quasi-contract

Question 49

Amy bought Mississippi State Lottery tickets. Several days later, she learned that someone had won the lottery but that the winner had not yet come forward. She searched for her ticket to see if she had selected the winning numbers, but was unable to find it.
Although the lottery ticket was gone, Amy still possessed the play slip she had used when she purchased the ticket. She checked the numbers on the play slip and discovered that she had the winning numbers for the lottery.
Reasoning that the play slip would satisfy the Lottery office, Amy laid her claim. The Lottery Office took the position that Amy needed to produce the actual winning ticket as per the rules, and hence denied her claim. Amy sued the Lottery Office for breach of contract and unjust enrichment. Will she succeed?

A) Yes, because the play slip should be proof enough to substantiate her claim on the prize money.
B) Yes, because this is a good faith claim and the Lottery office should accept Amy's play slip as proof of her winning the lottery.
C) No, because Amy had made a mistake in losing the original ticket.
D) No, because the rules of the contract prescribed the ticket must be shown to claim the money. Amy had accepted that rule when she entered into the contract and thus she is now precluded from claiming the prize money.

Question 50

Why does Article 2 hold merchants to a higher standard than nonmerchants?

A) Because buyers tend to place more reliance on merchants.
B) Because merchants are not required to observe reasonable commercial standards of fair dealing.
C) Because the Code gives more weightage to technical requirements such as consideration.
D) Because the Code does not recognize the concept of an unconscionable contract between a merchant and a buyer.

Question 51

The UCC differs from the common law of contracts in that the UCC:

A) is less concerned with technical rules.
B) deals with the sale of intangibles.
C) deals with service contracts.
D) is less concerned with the "good faith" doctrine.

Question 52

John, a house painter, enters into a contract with Robert under which he promises to paint Robert's house for which Robert promises to pay $1,000 at the completion of work. John mistakenly paints Mary's house next door. Mary returns from vacation, surprised to see her house beautifully painted. John asks Mary to pay for the work. Mary refuses. Under what theory may John attempt to recover from Mary? Will he be successful? Explain.

Question 53

What is the test frequently used to determine "hybrid" contracts?

A) Determining the value of the contract.
B) Determining the party to benefit.
C) Determine which element predominates.
D) Determining the validity of the contract.

Question 54

James goes to a dentist to have a tooth extracted. James never signs a written contract for this service, and he and the dentist never made an oral agreement either. Later, the dentist bills James who refuses to pay. The dentist sues James. Which of the following is true?

A) The dentist can recover under quasi-contract.
B) The dentist cannot recover under an implied contract theory.
C) The dentist can recover under the doctrine of promissory estoppel.
D) The dentist cannot recover because there was no express contract here.

Question 55

The Code empowers courts to deal fairly with a contract that is grossly unfair or one-sided by recognizing the concept of:

A) good faith.
B) unconscionable contract.
C) quasi-contract.
D) implied contract.

Question 56

Why was the emergence of large corporations so important in shaping the 20^th century contract law?

Question 57

Which of the following is true regarding promissory estoppel?

A) It requires reasonable reliance on the promisee's promise.
B) It requires a written promise.
C) It requires consideration.
D) It applies only when one party is a merchant.

Question 58

Mark, an attorney, accepts an offer for an attorney position at The Firm. Prior to Mark's first day at work, Harold, a managing partner, sends Mark an Employment Policy Manual which contains policies regarding attendance and confidentiality. Harold includes a note advising Mark to carefully review the manual as he would be expected to adhere to its policies. During his first week at The Firm, Mark is seen leaving the office at noon with copies of files tucked under his arm. He is also observed giving the copied files to a man not associated with The Firm. At the end of the week, Mark is terminated for violating the terms of the Employment Policy Manual. Which of the following is true?

A) Mark may recover his moving expenses under the doctrine of promissory estoppel.
B) The Firm breached its express contract with Mark by terminating him.
C) The Employment Policy Manual is part of the implied contract between Mark and The Firm.
D) The Firm may recover Mark's salary under the doctrine of quasi-contract.

Question 59

How have the drafters of the Code tried to promote fair dealing and higher standards in the marketplace?

A) By applying stringent technicalities to contracts.
B) By recognizing void contracts.
C) By discriminating between merchants and nonmerchants.
D) By imposing the duty of good faith.