Deck 10: Contracts

Question 1

A contracts with B to drive the get away car after A robs a bank.A successfully robs the bank, but B is late with the car and A is apprehended by the police.A sues B.B can successfully argue that

A) the contract is void.
B) the contract is impossible.
C) the contract is voidable.
D) None of these answers can be successfully argued.

Answer 1

A

Question 2

At common law, an acceptance must be a mirror image of the offer.

Answer 2

True

Question 3

Pepsi Cola ran an advertising campaign "Drink Pepsi, Get Stuff." If consumers collected enough caps from Pepsi products, they could redeem them for merchandise.On the print ad was the picture of a Harrier jet, a military aircraft that costs over a million dollars.Bob put together a group of investors, collected about $350,000 worth of Pepsi caps, and demanded his jet.What will be the critical issue as to whether there is an enforceable contract?

A) Did Bob really think the ad was an offer?
B) Did Pepsi really mean for the ad to be an offer?
C) Would a reasonable person given all the circumstances have assumed the ad was an offer?
D) All of the above are correct.

Answer 3

C

Question 4

Most state statutes provide that contracts fully completed within one year have to be in writing.

Question 5

A voidable contract is

A) unenforceable.
B) always bilateral.
C) always unilateral.
D) None of the above is correct.

Question 6

In most situations, remaining silent or inaction by the person receiving an offer constitutes acceptance.

Question 7

Contract law rapidly developed as courts responded to parties' expectation that promises would be enforced.

Question 8

The Uniform Commercial Code covers only commercial paper and bank collection processes.

Question 9

The common law writ of assumpsit was the predecessor of the modern action.

Question 10

A phoned B and offered to sell him "my farm in New Hampshire for $100,000." B says, "I accept." A actually owns two farms in New Hampshire.He was referring to his 5-acre farm, whereas B was referring to his 10-acre farm.With regard to the agreement,

A) there has been fraud.
C) a valid contract has not been formed.
B) there has been innocent misrepresentation.
D) an illegal contract has been formed.

Question 11

Jill says to Ben, "I offer to sell you my DVD player for $90." Ben replies, "If you do not hear otherwise from me by Thursday, I have accepted your offer." Jill agrees and does not hear from Ben by Thursday.Does a contract exist between Jill and Ben?

A) Yes, because the parties agreed that silence would constitute an acceptance.
B) No, because silence can never constitute an acceptance.
C) No, because there was no consideration because neither party had performed yet.
D) No, because neither parties are merchants.

Question 12

An uncle, in writing, promised his nephew $5,000 if his nephew would refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until the age of twenty-one, all of which was otherwise legal for the nephew to do at the time.The nephew performed as requested.Which of the following statements is true?

A) The uncle's offer was for a bilateral contract.
B) There is no contract because the nephew did not make a promise.
C) There is a valid contract and the nephew is entitled to the $5,000.
D) There is no contract because there is no consideration to support the agreement because the abstention benefitted the nephew.

Question 13

An injured party who has established a breach of contract is only entitled to turn to a court for equitable relief such as specific equitable, rescission, restitution, and injunctions.

Question 14

A void contract is totally lacking in effect.

Question 15

Jesse writes to Nadine, "I'll pay you $50 if you clean my house by Saturday." On Friday, Nadine cleaned Jesse's house as requested.What kind of contract has been formed?

A) Unilateral
C) Void
B) Bilateral
D) Voidable

Question 16

A "mirror image" means that

A) the acceptance matches the offer.
C) Both A and B are correct.
B) there are no counteroffers.
D) None of the above is correct.

Question 17

The Uniform Commercial Code covers both personal and intellectual property.

Question 18

Consideration usually consists of an act or a promise to perform an act.

Question 19

When determining if the parties to a contract agree, the intention of the parties is

A) a major factor.
C) a minor factor.
B) one of many equally considered factors.
D) not considered at all.

Question 20

In which of the following situations would the promise be enforceable as a contractual obligation?

A) "Why don't you come over for dinner on Saturday? I promise I'll cook you a steak and buy a lovely Cabernet."
B) "Thank you so much for supporting me while I received my BA degree, Mom.I promise I'll pay you back every penny you spent on my tuition as soon as I'm gainfully employed."
C) "If you give up cigarettes and alcohol for Lent, I'll pay you $200."
D) All of the above are enforceable providing they are in writing.

Question 21

If goods are unique, a court could order

A) novation.
B) specific performance.
C) restitution.
D) None of the above is correct.

Question 22

Two friends, John and Steve, went into Sound City to look at stereos.An ad in the morning paper had interested John in a particular model that was on sale for $650 for that day only.John decided to buy it, but realized he had forgotten his wallet and credit cards.John asked if the store would extend him credit.The manager hesitated, but then Steve pulled the manager aside and said, "It's all right.I could cover it." Because Steve buys nearly $600 worth of merchandise a month, the manager agreed.The manager then had John sign and address a delivery slip that says simply, "August 1, 1996-1 model A-942.Deliver Monday.Purchased by John Smith, 2 Central St." Does the manager have an enforceable contract with John? Explain.Can the manager collect from Steve if John does not pay? Explain.

Question 23

Marie was a famous model.Tempo magazine mailed her an offer to do a five-page photo layout for a new line of swimsuits for $35,000.Marie received the offer January 2.On January 3, Marie mailed Tempo the following note: "I accept.But must have twelve pages devoted to me, and accordingly, $50,000." Tempo received this note on January 5.On January 6, Marie called them and told them she would do the modeling under the original terms.

A) There is no contract.The offer terminated when Marie made her counteroffer.
B) There is a contract.Marie's note did not constitute a counteroffer; therefore, her acceptance of their original terms was effective.
C) There is a contract.The agreement is supported by consideration.
D) There is an enforceable agreement, but only if it is in writing.

Question 24

A woman says to a boy in her neighborhood, "If you cut the grass in my yard, I will pay you $10." The boy cuts the grass, but the woman refuses to pay, saying, "You never accepted my offer-besides, a minor can't make a contract." Why can or cannot the boy enforce the contract? Support or refute the woman's argument.

Question 25

Wichelhaus (Buyer) purchased a shipment of Surat cotton from Raffles (Seller) "to arrive on Peerless from Bombay." Wichelhaus expected the goods to be shipped on the ship Peerless sailing from Bombay in October.Raffles expected to ship the goods on a different ship Peerless, which sailed from Bombay in December.When the cotton arrived two months later than expected, the buyer refused to take delivery.This situation illustrates which defense to the enforcement of a contract?

A) Bilateral or mutual mistake
C) Misrepresentation
B) Unilateral mistake
D) Duress

Question 26

Johnson has a contract to supply Peters with widgets over a three-year period.Halfway through the contract, Johnson decides to change the focus of his company and he will no longer sell widgets.He wants to transfer his contract for widgets to Bennett.Can he do that? If so, how? If not, why not?

Question 27

On December 20, 1952, Lucy and Zehmer met while having drinks in a restaurant.During the course of their conversation, Lucy apparently offered to buy Zehmer's 471.6-acre farm for $50,000 cash.Although Zehmer claims that he thought the offer was made in jest, he wrote the following on the back of a pad: "We hereby agree to sell to W.O.Lucy the Ferguson Farm complete for $50,000, title satisfactory to buyer." Zehmer then signed the writing and induced his wife, Ida, to do the same.She claims, however, that she signed only after Zehmer assured her that it was only a joke.Finally, Zehmer claims that he was "high as Georgia Pine" at the time but admits that he was not too drunk to make a valid contract and understood the nature of the discussion.Which of the following statements is false?

A) There is no contract because lack of capacity is always a defense anytime someone has consumed alcohol.
B) There is no contract if Zehmer thought it was a joke; it doesn't matter how the reasonable person would have construed his words.
C) There is a contract because as long as there is a writing; whether or not there is mutual assent, consideration, or capacity is completely irrelevant.
D) There is a contract because intentions are judged objectively and Zehmer admits to having contractual capacity.

Question 28

Restitution is

A) not allowed at common law.
B) the return of property or money given in a contract.
C) the only remedy available under the UCC.
D) illegal in modern contracts.

Question 29

The agreement to accept something different from what was due under an original contract is called

A) accord.
C) satisfaction.
B) warranty.
D) consideration.

Question 30

Delaney is a locally famous cabinet maker with a contract to build cabinets for the new Designer Fashions headquarters.However, Delaney injures his wrist and cannot work.Designer Fashions hears about the injury and realizes that Delaney will not be able to finish the contract in the scheduled time.At common law, Designer Fashions can

A) sue immediately under anticipatory repudiation.
B) wait for the day of performance and then sue if the cabinets are not done.
C) either sue or wait.
D) there is no remedy in this situation at common law.

Question 31

Cunningham contracted with the Cougars to play professional basketball.The Cougars at the time were owned by the Southern Sports Corporation.Which of the following statements is true?

A) The Cougars could assign their right to have Cunningham play to its successor corporation, the SlamDunk Corporation, and delegate their duty to pay him as well.
B) Cunningham could assign his right to payment to the Special Olympics and delegate his duty to play to Herb "Shorty" McGee.
C) The Cougars could not assign their right to have Cunningham play to another club or delegate the duty to pay his salary, because the common law absolutely prohibits the assignment of rights and the delegation of duties.
D) All of the above are correct.

Question 32

A, who is selling her house, was told when she bought the house that it was fully insulated when built.She tells B this, and B decides to buy the house.If B finds out that the house is not insulated and that, as a result, his heating bills will be much higher than expected, B's proper remedy will be

A) specific performance.
C) injunction.
B) rescission.
D) None of the above is correct.

Question 33

Delaney is a locally famous cabinetmaker with a contract to build cabinets for the new Designer Fashions headquarters.However, Delaney injures his wrist and cannot perform the contract.Rather than breach, he decides to assign the contract to Nelson, who has a good reputation as a cabinetmaker but is not famous.Designer Fashions opposes the assignment and sues.

A) Designer Fashions will not be successful because contractual obligations can be delegated.
B) Designer Fashions will be successful because there is a personal component involved and thus the contract cannot be assigned.
C) Designer Fashions will not be successful because, although there is a personal component involved, both Delaney and Nelson are locally famous, allowing for the assignment.
D) None of the above is correct.

Question 34

Ruby sells her car to Bob.She fails to tell him that the car has been previously wrecked, even though he had asked if it had ever been involved in a collision.If Bob later learns that the car was almost totaled six months prior to the sale and wants to rescind the contract, what would be his best defense to the enforceability of the contract?

A) Duress
C) Fraud
B) Undue influence
D) Mistake

Question 35

An uncle, in writing, promised his nephew $5,000 if his nephew would refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until the age of twenty-one, all of which was otherwise legal for the nephew to do at the time.Would this agreement need to be in writing to satisfy the statute of frauds and be enforced?

A) Yes, because the consideration is $5,000, which is more than $500
B) Yes, if the nephew will not become twenty-one within a year
C) Yes, because all contracts must be in writing to be enforced
D) No, because there is no valid agreement.However, even if the agreement is not valid, it will be enforced as long as it is in writing and signed by both parties.

Question 36

Gilbert S.Shaw was chairman of the Board of Directors of the National School of Heavy Equipment, Inc.He drew a substantial weekly salary, held 100 percent of the voting stock and 51 percent of the Class B stock of the school and employed most of his family in the operation of the school.Shaw contracted on behalf of the school with Stuart Studio to produce 25,000 catalogs for the school.The catalogs were being printed in an effort to attract new students through an advertising campaign, as the school was bordering on financial ruin.Gilbert orally assured Stuart Studio that if the National School could not pay the full total that he "would stand good" for the entire bill.The school is now unable to pay for the printing, and Gilbert argues that he is not liable because the statute of frauds requires his promise to be in writing.Which rule might consider this promise to be original and permit the oral agreement to be enforced?

A) The parole evidence rule
C) The public policy rule
B) The leading object rule
D) The Uniform Commercial Code

Question 37

Delaney's Department Store had been trying for three years to collect $100 owed it by a customer.Finally the customer said, "Look, I'm broke.I can give you $50 right now and I'll wash the windows on the front of your store if you'll forget about the rest of it." Delaney's accountant, thinking that they would never see any money at all if they didn't accept this offer agreed to it.This is an example of

A) an express warranty.
C) innocent misrepresentation.
B) disaffirmance of a contract.
D) an accord and satisfaction.

Question 38

The boosters of the athletic program at a small college were trying to get uniforms and equipment for its football team.By a stroke of luck, a wealthy alumnus of the school happened to have forty football helmets.The boosters wrote and asked him to donate the helmets.The alumnus wrote back a very short letter in which he stated only that he would donate the helmets.Unfortunately, during the first day of practice in the hot sun, the helmets melted and became unusable.The boosters are demanding that the alumnus replace the helmets because he has breached an express warranty and the implied warranty of merchantability.The alumnus contends that there was no contract because there was no consideration, and thus he is liable for nothing.Evaluate each of the claims individually and state which party should prevail.

Question 39

A transfer of rights is called a(n)

A) assignment.
B) delegation.
C) rescission.
D) None of the above is correct.