Deck 9: The Law of Contracts and Sales I

Question 1

Contract law is grounded in .

A) state and federal case law and statutes including the Uniform Commercial Code
B) state and federal case law that now supersedes the Uniform Commercial Code
C) the Uniform Commercial Code alone, which now supersedes state and federal case law
D) the Commerce Clause of the U. S. Constitution

Answer 1

A

Question 2

Article 2A of the Uniform Commercial Code (UCC) prescribes a set of uniform rules for the creation and enforcement of contracts .

A) covering financial services
B) for the sale of leases of goods
C) covering employment
D) for the sale of electronic data

Answer 2

B

Question 3

A contract established by the conduct of the parties is a(n) .

A) implied contract
B) exchange contract
C) express contract
D) quasi-contract

Answer 3

A

Question 4

A(n) contract is a contract that at its formation has an illegal object or serious defects.

A) executory
B) executed
C) void
D) voidable

Question 5

Which of the following statements defines a bilateral contract?

A) the exchange of one promise for another promise
B) the exchange of a promise for an act
C) the exchange of two or more promises for two or more acts
D) a contract that will be performed twice

Question 6

A contract is defined as .

A) a formal writing that is signed and notarized as required by law
B) a legally enforceable exchange of promises
C) an exchange of a promise for an act, whether or not it is legally enforceable
D) an exchange of goods or money for services or barter

Question 7

Article 2 of the Uniform Commercial Code (UCC) applies to contracts covering .

A) real property
B) professional services
C) employment
D) the sale of goods

Question 8

Contracts are essential to the workings of a private-enterprise economy.

Question 9

Which of the following is an example of an offer to make a unilateral contract?

A) Jose offers to sell Melinda his car for $20,000.
B) Martin offers to fund the renovation of Billy's farm to help ease his debt problems.
C) Robert offers to take Jasmine to the park on Thursday if it does not rain.
D) Helena offers to pay $300 to anyone who finds her lost puppy and returns it to her.

Question 10

The Restatement of the Law of Contracts summarizes contract principles as set out by the
U.S. Supreme Court.

Question 11

A contract that is established by the conduct of a party rather than by the party's written or spoken words is known as an implied-in- contract.

A) law
B) equity
C) fact
D) presumption

Question 12

Which of the following is an example of a contract that would be governed by Article 2 of the Uniform Commercial Code (UCC)?

A) Bill agrees to sell his farm to Sam for $200,000.
B) Chantelle agrees to work for Jenna as her personal secretary for $50 an hour for the next year.
C) Dwayne buys a used car from Tom's Autos for $7,000.
D) Carlo leases a car for a year from EZ Cars for $2,000 per month.

Question 13

A(n) contract involves the exchange of a promise for an act.

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

Question 14

Sean agrees to restore Janine's car for $2,000. Janine agrees to this amount. However, she will pay Sean only after the restoration is complete. This is an example of a(n) .

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

Question 15

A(n) contract gives one of the parties the option of withdrawing from the agreement.

A) executory
B) executed
C) void
D) voidable

Question 16

Which of the following is an example of a void contract?

A) Missy orally agrees to lease Bob's house for $950 a month.
B) Kallie agrees in writing to pay Will $400,000 to mug her uncle.
C) Jamal, who is 15, agrees to buy a stereo from Stereo World for $5,000.
D) Roberto orally agrees to buy Jim's art collection for $150,000.

Question 17

An exchange between parties of oral or written promises that are enforceable in a court of law is a(n) .

A) implied contract
B) exchange contract
C) express contract
D) quasi-contract

Question 18

Contract law is grounded in the case law of the state and federal courts, as well as state and federal statutory law.

Question 19

What purpose does the Restatement of the Law of Contracts accomplish?

A) It interprets the U. S. Constitution in areas relating to the Commerce Clause.
B) It summarizes contract principles as determined by legal scholars.
C) It supersedes the old Uniform Commercial Code.
D) It serves as an implied contract form in cases where there is no written instrument.

Question 20

Which of the following would render a contract voidable?

A) the contract being unilateral
B) one of the parties to the contract committing a crime
C) one of the parties to the contract being underage
D) the contract being bilateral

Question 21

A contract that is established by the conduct of a party rather than by the party's written or spoken words is an implied contract.

Question 22

Under the Uniform Commercial Code, a merchant can prevent additional terms contained in a counteroffer from being added to the contract by .

A) citing the limitations described in the Restatement of the Law of Contracts
B) applying the mailbox rule
C) issuing a written objection to the added terms within 90 days of receipt
D) objecting to the added terms within a reasonable time

Question 23

Which of the following is not a required element for a legally enforceable contract?

A) consideration
B) competent parties
C) legal object
D) valid counteroffer

Question 24

Explain the difference between an express contract and an implied contract.

Question 25

A voidable contract is a contract that gives one of the parties the option of withdrawing from the agreement.

Question 26

Which of the following is not a required element for a legally enforceable contract?

A) legal offer
B) legal acceptance
C) fair bargain
D) genuine assent

Question 27

A bilateral contract is an exchange of one promise for another promise.

Question 28

An executory contract is a contract the terms of which have been performed.

Question 29

A unilateral contract is a court-imposed agreement to prevent the unjust enrichment of one party when the parties have not previously agreed to an enforceable contract.

Question 30

Which of the following statements is true of a legal offer?

A) The offer must be communicated to the party intended by the offeror.
B) Industry custom and prior dealings are irrelevant when determining whether the terms of the offer are definite.
C) Courts consider what was in the person's mind when entering the contract.
D) The contractual process ends with the legal offer.

Question 31

Explain the differences among void, voidable, and valid contracts.

Question 32

Explain the difference between a unilateral contract and a bilateral contract.

Question 33

According to the Uniform Commercial Code Section 2-207, which of the following is true with regard to non-merchants dealing with the sale of goods?

A) A counteroffer by the offeree does not constitute a rejection, and the additional term added by the offeree will automatically become part of the contract.
B) A counteroffer by the offeree does not constitute a rejection, but the additional term added by the offeree will not become part of the contract.
C) A counteroffer terminates the negotiation and triggers the terms of the Restatement of the Law of Contracts.
D) A counteroffer constitutes a rejection of the original offer, but the parties may continue to negotiate the contract terms.

Question 34

An offeror can be given an amount of money to keep the offer open for a time, which is usually days.

A) 15
B) 30
C) 60
D) 90

Question 35

Section 2- of the Uniform Commercial Code deals with electronic communication of an acceptance by an offeree.

A) 213
B) 207
C) 202
D) 201

Question 36

A unilateral contract is an exchange of a promise for an act.

Question 37

Mrs. Jones offers to sell her house to Smith for $200,000. Smith says he will pay no more than $185,000. Which of the following statements would be true at common law?

A) Mrs. Jones and Smith have negotiated a settlement.
B) Smith's price is close enough to constitute acceptance of Mrs. Jones's original offer, but the contract price will be set at $200,000.
C) Smith has terminated the original offer and now has set forth a counteroffer.
D) Mrs. Jones's offer remains open and so does Smith's counteroffer.

Question 38

An offeree can forestall a revocation by using a(n) .

A) attachment
B) garnishment
C) option
D) enforceable contract

Question 39

A void contract is a contract that at its formation has an illegal object or serious defects.

Question 40

Which of the following is true of Section 2-213 of the Uniform Commercial Code with regard to electronic communication?

A) Legally defensible acceptance cannot be communicated using electronic communication.
B) Electronic communication of an acceptance is legally defensible but only if the recipient is aware that it has arrived.
C) A company that sends an acceptance electronically must include a clause that indicates acceptance of the agreement can be made electronically.
D) Acceptance occurs when the electronic communication is received, even if the recipient is unaware that it has arrived.

Question 41

An illusory promise can be defined as a .

A) contract providing that only one of the parties need perform, only if he or she chooses to do so
B) contract not supported by consideration since the promise is supported by an illegal act
C) promise that lacks consideration since the person promises to perform an act or do something she already has an obligation to do
D) contract based on love and affection

Question 42

Celine offered Jenna $50 for a six carat diamond necklace. Jenna immediately agreed to sell it to Celine. However, after Jenna went home and looked at it again, she decided that the necklace was worth a lot more than $50. She told Celine she could not sell her the necklace for such a low price. In this scenario, did the parties have an enforceable contract?

A) yes, because all the elements of a valid contract are present
B) no, because the value of the consideration for the necklace is inadequate
C) no, because of the preexisting duty rule
D) no, because of the past consideration rule

Question 43

The doctrine of promissory estoppel is used when the requirements of are not met.

A) garnishment
B) acceptance
C) consideration
D) restatement

Question 44

The death of the agent of a corporation will result in termination of an offer.

Question 45

The contractual process begins with a legal offer.

Question 46

Which of the following contracts would be void due to duress?

A) Mikhail wants Ivana to sign a contract for the sale of her apartment. He tells her that if she does not sign the contract, he will harm her son.
B) Janet owns a pair of zircon earrings. She sells them claiming they are diamonds and receives a much higher price for them.
C) Carla unknowingly sells a painting to a collector thinking it's genuine. However, the collector finds out that it actually is an imitation.
D) Gary has been the McGill family attorney for decades. When he needs investors for his business, he convinces Mr. McGill to invest in the new business.

Question 47

When is a legal acceptance by email effective?

A) when the email is sent
B) when the email arrives
C) when the offeror reads it
D) offers cannot be validly accepted by email

Question 48

If the offeror withdraws the offer after the offeree accepts it, the offer is terminated.

Question 49

Raj may sell his car to Hazel for $1,000 on Friday if he feels like it. If he refuses to sell her the car on Friday, can she sue him for breach of contract?

A) yes, because they formed a valid, enforceable contract
B) no, because Raj made an illusory promise
C) no, because of the preexisting duty rule
D) no, because the consideration from Hazel was inadequate

Question 50

Which of the following contracts would be void due to fraudulent misrepresentation?

A) Mikhail wants Ivana to sign a contract for the sale of her apartment. He tells her that if she does not sign the contract, he will harm her son.
B) Janet owns a pair of zircon earrings. She sells them claiming they are diamonds and receives a much higher price for them.
C) Carla unknowingly sells a painting to a collector thinking it's genuine. However, the collector finds out that it actually is an imitation.
D) Gary has been the McGill family attorney for decades. When he needs investors for his business, he convinces Mr. McGill to invest in the new business.

Question 51

Consideration is defined as a bargained-for exchange of promises in which a legal detriment is suffered by the promisee.

Question 52

Which of the following statements is true about a court's willingness to rescind a contract due to a mistake?

A) Courts are more willing to rescind a contract when a unilateral mistake has occurred.
B) Courts are equally willing to rescind a contract whether the mistake is unilateral or bilateral.
C) Courts are more willing to rescind a contract when a bilateral mistake has occurred.
D) Neither a unilateral nor a bilateral mistake constitutes sufficient reason to rescind a contract.

Question 53

Which of the following contracts would be void because of undue influence?

A) Mikhail wants Ivana to sign a contract for the sale of her apartment. He tells her that if she does not sign the contract, he will harm her son.
B) Janet owns a pair of zircon earrings. She sells them claiming they are diamonds and receives a much higher price for them.
C) Carla unknowingly sells a painting to a collector thinking it's genuine. However, the collector finds out that it actually is an imitation.
D) Gary has been the McGill family attorney for decades. When he needs investors for his business, he demands that Mr. McGill invest in the new business.

Question 54

A liquidated debt exists when there is a dispute about the amount or other terms of the debt.

Question 55

Fraud is one of the factors that prevents genuine assent.

Question 56

The doctrine of promissory estoppel requires a promise justifiably relied on by the promisee.

Question 57

Morgan entered into a long-term contract at age 17. In the state in which the contract was executed, the majority age was 18. She is now 19 and would like to disaffirm the contract on the grounds that she was a minor when she entered into the contract. Which of the following statements is true?

A) Morgan can disaffirm the contract because she lacked competency at the time she entered into the contract, thus rendering the contract voidable.
B) Morgan can disaffirm the contract because the contract is void.
C) Morgan cannot disaffirm the contract because there was ample consideration.
D) Morgan cannot disaffirm the contract because she ratified it by failing to disaffirm the contract in a timely fashion.

Question 58

James works for the county fire department and has not had a raise in three years. When he shows up at the mayor's house to put out a fire, he sees the mayor standing outside. James tells the mayor that he will put out the fire only if the mayor agrees to give him a raise. The mayor agrees. In this scenario, which of the following statements is true?

A) A valid contract exists because all the elements of a valid contract are present.
B) A valid contract does not exist because the value of the consideration for the mayor's promise is inadequate.
C) A valid contract exists because of the past consideration rule.
D) A valid contract does not exist because of the preexisting duty rule.

Question 59

is defined as a bargained-for exchange of promises in which a legal detriment is suffered by the promisee.

A) Acceptance
B) Garnishment
C) Consideration
D) Restatement

Question 60

Roberto has an art collection valued at $1,000,000. He has promised to donate his collection to a local arts foundation if that foundation satisfactorily obtains donations of equal value from other sources. The foundation manages to obtain matching donations. However, when Roberto died, his will stated that he had left his collection to his nephew, Michael. If the foundation sues, which of the following is true?

A) Since Michael is the beneficiary of Roberto's will, the arts foundation cannot collect.
B) The arts foundation will be awarded the art collection based on the quasi-contract.
C) The arts foundation will be awarded the art collection based on the doctrine of promissory estoppels.
D) The art foundation cannot contest the will since they are not immediate family.

Question 61

In the case of necessaries, the intoxicated individual is not allowed to disaffirm, but is held liable for the reasonable value of such items.

Question 62

Leases for longer than usually have to be in writing.

A) six months
B) one year
C) eight months
D) two months

Question 63

A notable exception to the requirement that contracts for sale of an interest in land must be written is partial performance.

Question 64

State the six elements of a legal contract.

Question 65

List the five methods of termination of an offer.

Question 66

According to the evidence rule, when parties have executed a written agreement which is complete on its face, oral agreements made before or at the same time as the written agreement that vary, alter, or contradict the written agreement are invalid.

A) parol
B) statutory
C) fraudulent
D) promissory

Question 67

A notable exception to the requirement that contracts for sale of an interest in land must be written is .

A) partial performance
B) garnishment
C) consideration
D) competency

Question 68

Courts apply an objective test when determining the existence of duress. The party's state of mind is irrelevant.

Question 69

A contract must be in writing if it specifies that it will last longer than .

A) 30 days from the formation of the contract
B) 90 days from the beginning of performance
C) 180 days from the beginning of performance
D) one year from the formation of the contract

Question 70

Based on the statute of frauds, which of the following contracts is orally enforceable?

A) a contract by the administrator of Harold's estate to personally pay Harold's outstanding debt if the estate cannot
B) a contract by an athlete to endorse a company's products for three years
C) a contract between two parties to sell goods worth $5,000
D) a contract to provide medical help to a person till the person dies

Question 71

Which of the following is true of the parol evidence rule?

A) It discourages parties from signing a no-competition clause.
B) It prevents a party from varying the terms of a written contract by claiming the existence of contradictory oral terms.
C) It provides a set of exceptions to the statute of frauds.
D) It prevents the unjust enrichment of a party who has refused to perform pursuant to clear contract terms.

Question 72

Contracts in consideration of marriage are non-business-related contracts that must be in writing to be enforceable.

Question 73

Discuss the relationship between the doctrine of promissory estoppel and the consideration requirement of contract formation.

Question 74

An "interest in land" includes all but which of the following?

A) a mortgage
B) an easement
C) the buildings on the land
D) the automobiles on the land

Question 75

Under UCC Section 2-201, contracts for the sale of goods of $500 or more fall within the statute of frauds and must be in writing to be enforceable. Exceptions to this rule include all but which of the following?

A) the agreement is between a merchant seller and a non-merchant buyer
B) one of the parties to a suit admits in writing or in court to the existence of an oral contract
C) a buyer accepts and uses the goods
D) the contract is between merchants, and the merchant who is sued received a written confirmation of the oral agreement and did not object within 10 days.

Question 76

State the requirements for a legal acceptance to be valid.

Question 77

Abigail agrees to clear Adam's debt with the bank if he is unable to pay it. Which of the following is true of this scenario?

A) This agreement is not within the statute of frauds.
B) Abigail has primary liability to the bank.
C) Under the statute of frauds, this contract must be in writing.
D) Adam is not liable to the bank in any way.

Question 78

Discuss the various contracts that must be in writing to be enforceable.

Question 79

Which of the following contracts needs to be in writing?

A) a contract to provide medical help to a person till the person dies
B) a contract to play for a football team as long as the player's health allows it
C) a contract to pay a person's tuition for as long as they are on the honor list
D) a contract to provide services to a hospital for two years

Question 80

Fraud is defined as any wrongful act or threat that prevents a party from exercising free will when executing a contract.