Deck 14: Statute of Frauds and Equitable Exceptions

Question 1

Which of the following does the one-year rule state?

A)Every contract in writing is subject to yearly renewal.
B)The terms of a written contract can be modified within a year of its formation.
C)A contract that cannot be performed on its own terms within a year should be in writing.
D)Valid contracts cannot be rescinded by either party until a year after their formation.

Answer 1

C

Question 2

In a guaranty situation,the original contract is between the ________.

A)creditor and the guarantor
B)debtor and the creditor
C)debtor and the guarantor
D)creditor and the lessee

Answer 2

B

Question 3

The ________ states that an executory contract which cannot be performed by its own terms within one year of its formation must be in writing.

A)parol evidence rule
B)common law of contracts
C)merger clause
D)one-year rule

Answer 3

D

Question 4

Which of the following is an interest in real property given to a lender as security for the repayment of a loan?

A)lease
B)mortgage
C)life estate
D)easement

Question 5

A(n)________ occurs when one person agrees to answer for the debts or duties of another person.

A)main purpose exception
B)mortgage
C)guaranty contract
D)implied integration

Question 6

Which of the following is an exception to the Statute of Frauds?

A)contracts under promissory estoppel
B)agents' contracts
C)merger clause
D)prenuptial agreement

Question 7

Which of the following is considered a real property?

A)a fixture permanently affixed to a building
B)fifty-one percent partnership in a firm
C)a club membership
D)diamond jewelry

Question 8

Which of the following contracts is required to be in writing in most states?

A)contracts for the sale of goods for $100
B)contracts for the lease of goods with payments of $500
C)promises to write a will
D)contracts falling under the promissory estoppel

Question 9

Which of the following statements is true of the Statute of Frauds?

A)An executory contract that is not in writing even though the Statute of Frauds requires it to be is enforceable by either party.
B)Executed oral contracts that should have been in writing under the Statute of Frauds can be rescinded.
C)If an oral contract that should have been in writing under the Statute of Frauds is already executed, either party may seek to rescind the contract.
D)Most states require contracts to pay compensation for services rendered in negotiating the purchase of a business to be in writing.

Question 10

Which of the following statements is true of the writing requirement of contracts,according to the Statute of Frauds?

A)Contracts for the sale of goods for $500 need not be in writing.
B)Contracts for the lease of goods with payments of $101 must be in writing.
C)Finder's fee contracts need not be in writing.
D)Promises made in consideration of marriage must be in writing.

Question 11

Which of the following interests in real property transfers to another person after the present holder's death?

A)easement
B)mortgage
C)installment
D)life estate

Question 12

The ________ requires certain contracts to be in writing.

A)part performance exception
B)common law of contracts
C)equal dignity rule
D)Statute of Frauds

Question 13

A right to use someone else's land without owning or leasing it is called ________.

A)mortgage
B)easement
C)life estate
D)leasehold

Question 14

Which of the following phrases explains the term lease?

A)an interest in real property given to a lender as security for the repayment of a loan
B)an interest in real property for a person's lifetime
C)the transfer of the right to use real property for a specified period of time
D)a right to use someone else's land without owning or hiring it

Question 15

Ida moves to New York from Poland and wants to live in an apartment.However,she does not have sufficient money to buy one.Her colleague Henry said Ida can live in his old apartment for a year,if she pays him $25,000.This contract would be considered a(n)________.

A)lease
B)mortgage
C)installment
D)easement

Question 16

A ________ is a person who agrees to pay a debt if the primary debtor does not.

A)secondary contractor
B)third-party contractor
C)lessee
D)guarantor

Question 17

Good Faith Consultants partnered with QuickFind IT Solutions for a period of six months.After three months,they wanted to extend the contract by two years.According to the Statute of Frauds,which of the following is true of the contract?

A)The modification to the duration of the contract should be in writing.
B)A new contract must be formed.
C)The contract can be oral both before and after modification.
D)Only the original contract should be in writing.

Question 18

Which of the following grants a person the right to use real property for a specified period of time?

A)lease
B)mortgage
C)sale
D)barter

Question 19

Which of the following statements is true of a guaranty contract?

A)The guaranty contract is between the guarantor and the debtor.
B)A guaranty contract need not be in writing.
C)The guarantor's liability is secondary.
D)The original contract is between the creditor and the guarantor.

Question 20

Which of the following is an instance of a mortgage?

A)Richard pays Ellen $1000 a month to live in her apartment.
B)Richard pays Ellen $12,000 a year to live in her apartment.
C)Richard gives his country estate as collateral to a bank from where he has borrowed money to buy an apartment.
D)Richard has been living in an apartment for thirty years and upon his death, the apartment will be transferred to somebody else.

Question 21

In a guaranty situation,there is only one contract among three parties.

Question 22

In a guarantee situation,the guarantor's liability is secondary.

Question 23

The ________ says that agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable.

A)merger clause
B)common law of contracts
C)doctrine of equity
D)equal dignity rule

Question 24

According to the Statute of Frauds,an executory contract that cannot be performed by its own terms within one year of its formation must be in writing.

Question 25

A guaranty contract between people with no bad credit history can be oral.

Question 26

The ________ states that if the main purpose of a transaction and an oral collateral contract is to provide pecuniary benefit to the guarantor,the collateral contract does not have to be in writing to be enforced.

A)merger clause
B)leading object exception
C)collateral contract rule
D)parol evidence rule

Question 27

The primary contract in a guarantee situation is between the debtor and the creditor.

Question 28

Statute of Frauds is a state statute that requires certain types of contracts to be in writing.

Question 29

Under the Statute of Frauds,any contract that transfers an ownership interest in real property must be in writing to be enforceable.

Question 30

Nina wants to borrow money from Tina,but Tina refuses to lend the money unless another person promises to pay the money in case Nina cannot clear the debt.James agrees to pay the debt if Nina does not.James is the ________ in this transaction.

A)creditor
B)debtor
C)guarantor
D)facilitator

Question 31

Built-in cabinets in a house would be considered as permanent parts of the real property.

Question 32

Trees,crops,minerals,and timber are barred from being included in contracts involving interests in real property.

Question 33

A lease is an interest in real property given to a lender as security for the repayment of a loan.

Question 34

A life estate will be transferred to another party in the event of the holder's death.

Question 35

In most states,contracts for the sale of goods for $900 do not require to be in writing.

Question 36

In most states,contracts for the lease of goods with payments of $2000 require to be in writing.

Question 37

An easement is a form of real property security given by a borrower to a lender.

Question 38

The main purpose exception to the Statute of Frauds allows oral collateral contracts to be enforced if there is a monetary benefit to the guarantor.

Question 39

An easement contract occurs when one person agrees to answer for the debts or duties of another person.

Question 40

The transfer of the right to use real property for a specified period of time is known as a lease.

Question 41

Santos told his friend Ernesto that he would sell Ernesto his car for $5,000.However,on the day of the sale,Santos refused to sell the car for the agreed-upon price and demanded more money.Which of the following statements is true in this scenario?

A)Ernesto can sue Santos as their oral sales contract was binding.
B)Santos has violated Section 2-201(1)of the Uniform Commercial Code (UCC).
C)The oral contract to trade a car for $5,000 is not binding, according to the Uniform Commercial Code (UCC).
D)Santos has violated Section 2A-201(1)of the Uniform Commercial Code (UCC).

Question 42

Section 2A-201(1)of the Uniform Commercial Code (UCC)states which of the following?

A)All lease contracts must be in writing.
B)Lease contracts involving payments of $1,000 or more must be in writing.
C)All sales contracts must be in writing.
D)Sales contracts involving payments of $500 or more must be in writing.

Question 43

Any oral or written words outside the four corners of a written contract are termed as ________.

A)parol evidence
B)exclusive integration
C)leading object exception
D)main purpose exception

Question 44

Equal dignity rule says that agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable.

Question 45

Which of the following statements is true of signature on a written contract?

A)The contract should be signed by the party who seeks enforcement.
B)The signature of the person who is enforcing the contract is not necessary.
C)The signature must appear at the end of the writing.
D)A person's nickname or initials are not binding legal signatures.

Question 46

If Johnny made an oral contract with Peter to sell Peter his truck for $15,000,Johnny's eventual refusal to sell the truck is considered breach of contract.

Question 47

If a modification of the lease contract increases the lease payment to $1,000 or more,the modification has to be in writing to be enforceable.

Question 48

Which of the following statements is true of interpreting contract words and terms?

A)Where a preprinted form contract is used, preprinted words prevail over typed words.
B)Preprinted words prevail over handwritten words.
C)Specific terms are presumed to qualify general terms.
D)If there is an ambiguity in a contract, the ambiguity will be resolved in favor of the party who drafted the contract.

Question 49

Jonas enters into an oral contract with Chelsea to lease his house to her for $100,000.Chelsea pays him $100,000 and moves in.A month later,Jonas learns that his state requires contracts for the lease of goods with payments of $1,000 or more to be in writing.Which of the following options does either party have now?

A)Jonas can evict Chelsea as the contract does not comply with the Statute of Frauds and is hence void.
B)The contract cannot be rescinded by either party as it has already been executed.
C)Chelsea can rescind the contract on the grounds of noncompliance with the Statute of Frauds.
D)Jonas can rescind the contract on the grounds of noncompliance with the Statute of Frauds.

Question 50

If an oral contract that should have been in writing under the Statute of Frauds is already executed,neither party can seek to rescind the contract on the grounds of noncompliance with the Statute of Frauds.

Question 51

Which of the following is an example of a specific term qualifying general term?

A)Currency referred to as bank transfer
B)Pounds referred to as length
C)Bills referred to as papers
D)Dollars referred to as Australian dollars

Question 52

________ says that if a written contract is a complete and final statement of the parties' agreement,any prior or contemporaneous oral or written statements that alter,contradict,or are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract.

A)Main purpose exception
B)Leading object exception
C)Parol evidence rule
D)Promissory estoppel

Question 53

Why is it a bad idea for Edward and his landlord to make an oral lease contract for $30,000? Suggest an alternative and explain how it is beneficial to an oral contract.

Question 54

Jim's landlord insists on a written agreement to lease his apartment for $25,000 in order to comply with ________ of the Uniform Commercial Code (UCC).

A)Section 2-201(1)
B)Section 2A-201(1)
C)the merger clause
D)the equal dignity rule

Question 55

Section 2-201(1)of the Uniform Commercial Code (UCC)states that ________.

A)all lease contracts must be in writing
B)lease contracts involving payments of $1,000 or more must be in writing
C)all sales contracts must be in writing
D)sales contracts involving payments of $500 or more must be in writing

Question 56

Explain the creation and working of guaranty contracts.

Question 57

________ refers to the integration made by express reference in one document that refers to and incorporates another document within it.

A)Implied integration
B)Incorporation by reference
C)Executory contract
D)Merger clause

Question 58

Section 2-201(1)of the Uniform Commercial Code (UCC)is the basic Statute of Frauds provision for ________.

A)sales contracts
B)lease contracts
C)all contracts involving interests in real property
D)mortgage contracts

Question 59

Section 2-201(1)of the Uniform Commercial Code (UC
C)states that a unilateral promise to pay money or property in consideration for a promise to marry must be in writing.

Question 60

Section 2A-201(1)of the Uniform Commercial Code (UC
C)states that lease contracts involving payments of $1,000 or more must be in writing.

Question 61

Incorporation by reference is an integration made by express reference in one document that refers to and incorporates another document within it.

Question 62

While interpreting contract words and terms,specific terms are presumed to qualify general terms.

Question 63

Any oral or written words outside the four corners of the written contract are called parol evidence.

Question 64

When is parol evidence admitted in court?

Question 65

If there is an ambiguity in a contract,the ambiguity will be resolved in favor of the party who drafted the contract.

Question 66

The doctrine of part performance allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if performance is necessary to avoid injustice.

Question 67

________ stipulates that the contract is a complete integration and the exclusive expression of the parties' agreement.

A)Promissory estoppel
B)Merger clause
C)Main purpose exception
D)Leading object exception

Question 68

The signature of the person who is enforcing the contract is necessary.

Question 69

In which of the following cases is parol evidence admitted by a court?

A)when the plaintiff reduces the value of damages he expects
B)when the evidence explains ambiguous language
C)when the defendant does not wish to appeal
D)when the defendant takes the case to the appellate court

Question 70

Under which of the following conditions does a promissory estoppel provide for the enforceability of an oral contract?

A)when the promise induces action or forbearance of action by another
B)when the reliance on the oral promise was unforeseeable
C)when enforcing the oral promise provides for faster resolution of the case
D)when the oral promise provides for reduced damages to the defendant

Question 71

Any writing-including letters,telegrams,invoices,sales receipts,checks,and handwritten agreements written on scraps of paper-can be an enforceable contract.

Question 72

How are contract words and terms interpreted?

Question 73

A person's nickname or initials that indicate his or her intent are not considered binding signatures.

Question 74

Promissory estoppel is an equitable doctrine that permits enforcement of oral contracts that should have been in writing.

Question 75

Explain the doctrine of equitable estoppel.

Question 76

The doctrine of ________ allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid injustice.

A)part performance
B)undue performance
C)equitable performance
D)promissory estoppel

Question 77

________ is an equitable doctrine that permits enforcement of oral contracts that should have been in writing.

A)Promissory estoppel
B)Merger clause
C)Main purpose exception
D)Leading object exception

Question 78

Placing several documents in the same envelope indicates implied integration.

Question 79

The Uniform Commercial Code (UCC)does not permit several writings to be integrated to form a single written contract.

Question 80

A merger clause stipulates that the contract is a complete integration and the exclusive expression of the parties' agreement.