Deck 9: Contract Formation

Question 1

A party's intent to enter into a contract is judged by their personal,subjective intent or belief.

Answer 1

False

Question 2

An incidental beneficiary is not entitled to enforce the promise of a promisor.

Answer 2

True

Question 3

A contract lacking a quantity term,when appropriate,may not be enforceable.

Answer 3

True

Question 4

Only a mistake in value will make a contract voidable.

Question 5

A covenant not to compete is enforceable only if it is necessary to restrain trade.

Question 6

A contract entered into under undue influence is voidable.

Question 7

Under the Statute of Frauds,all contracts must be in writing to be enforceable.

Question 8

One of the elements of a valid contract is a fair price.

Question 9

An unequivocal acceptance operates as a rejection of the original offer.

Question 10

An executory contract is one that has been fully performed.

Question 11

If a contract stipulates that a right cannot be assigned,then ordinarily it cannot be assigned.

Question 12

An advertisement is generally considered an invitation to negotiate.

Question 13

A contract is void if its purpose is illegal.

Question 14

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

Question 15

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

Question 16

An innocent party can rescind a fraudulent contract.

Question 17

A minor may not contract with an adult.

Question 18

An offer that a statute makes illegal automatically terminates the offer.

Question 19

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

Question 20

To be legally sufficient,consideration must include something of economic value.

Question 21

Eustace and Durango Oil Company enter into an oral contract under which Eustace agrees to work on a Durango rig for not less than eighteen months.This contract is enforceable by

A)Eustace.
B)Durango.
C)any interested third party,such as a member of Eustace's family.
D)none of the choices.

Question 22

Build-Rite Contractors,Inc. ,asks Cool Electric,a subcontractor,to provide certain services.Nothing is said about payment.Cool provides the services and submits an invoice,which Build-Rite refuses to pay.In Cool's suit to recover,the chief issue is most likely to be whether these parties had

A)a formal contract.
B)an executory contract.
C)an implied contract.
D)a voidable contract.

Question 23

George promises to repair Francesca's boat dock in exchange for Efrem's promise to plant trees on George's property.This is

A)a delegation.
B)an assignment.
C)a third party beneficiary contract.
D)not a contract.

Question 24

New Cell Phone Company offers to buy a laser printer,with a case of paper and an extra cartridge,from Office Products,Inc.(OPI),for $200.Paul,OPI's representative,says,"Okay,but no paper and no extra cartridge." Paul has

A)accepted the offer.
B)made a counteroffer without rejecting the offer.
C)rejected the offer and made a counteroffer.
D)rejected the offer without making a counteroffer.

Question 25

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

A)both parties.
B)Koko,but not Laurel Valley.
C)Laurel Valley,but not Koko.
D)no one.

Question 26

Genie.com initiates an online dating service.To attract subscribers and encourage participation,Genie.com creates and posts profiles of fictitious persons and exaggerated profiles of actual users.Fooled by the false profiles,Ham buys a subscription.He is most likely a victim of

A)undue influence.
B)fraud.
C)mistake.
D)nothing.

Question 27

Digital Architecture,Inc. ,agrees to design robotic software for equipment owned by Chassis Assembly Corporation.Whether or not this agreement meets all of the requirements of a contract,the parties are most likely to follow the rules of contract law because they

A)want to avoid potential disputes.
B)are conscious of those rules.
C)are not conscious of those rules.
D)have a moral obligation to do so.

Question 28

U-Can-Own-It Corporation sells appliances to less educated consumers,including Viv,on installment plans.U-Can-Own-It files a suit against Viv when she stops making payments.Viv claims that the deal is unconscionable.The court will most likely consider

A)the geographic area of the relevant market.
B)the parties' relative bargaining power.
C)the quality of related products in the general market.
D)the relation of this deal to those of other customers.

Question 29

A contract between Drill-Bit Sharpeners,Inc. ,and East Oil Mining Corporation contains a clause stating that any assignment is "void." This ordinarily prohibits

A)any assignment.
B)no assignment.
C)only an assignment of contract rights to personal services.
D)only an assignment that would change the obligor's risk.

Question 30

Brick Products,Inc. ,files a suit against City Trucking Service for breach of contract,based on what Brick claims was City's offer.For a court to determine if a contract has been breached,under the common law,the offer must include terms that are

A)exactly precise.
B)reasonably definite.
C)unequivocally approximate.
D)vague or uncertain.

Question 31

Chip's Chips Company agrees to supply Delicioso Café with all the corn chips that it requires for a year.A sudden demand for ethanol results in a shortage of corn,and the price rises sharply.Chip's asks Delicioso to pay a higher price for the chips.This request is

A)invalid as an attempt at extortion or the so-called holdup game.
B)invalid under the preexisting duty rule.
C)valid as a risk ordinarily assumed in business.
D)valid due to the unforeseen difficulty of the sudden price increase.

Question 32

Dora,an accountant,uses undue influence to induce her client Emily to invest in Fine Gems,Ltd. ,a business with little potential.When Emily learns the truth,she can

A)do nothing.
B)enforce the contract but not rescind it.
C)enforce the contract or rescind it.
D)rescind the contract but not enforce it.

Question 33

Urban City and Thru-way Construction Company enter into a contract that includes calculations.Urban,whose engineer,Sergei,compiled the figures,discovers later that some numbers were added incorrectly,but Thru-way refuses to make changes.Urban can

A)not rescind the contract.
B)rescind the contract on the basis of fraud.
C)rescind the contract on the basis of mistake.
D)rescind the contract on the basis of duress.

Question 34

Eve tells Finlay that she will pay him $50 if he unloads her truck.Finlay's acceptance is complete

A)as soon as Finlay says he will unload the truck.
B)once Finlay starts to unload the truck.
C)only after Finlay unloads the truck.
D)when Finlay hears Eve's offer.

Question 35

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 36

John says to Kris,"I would like to sell you my sports memorabilia collection." This is not an offer because it

A)does not describe the subject matter specifically.
B)does not include a price term.
C)only expresses an opinion.
D)only invites Kris to negotiate.

Question 37

Fresh Air Filter & Purification Company and Big Box Commercial Storage Company enter into a contract.To be enforceable,the contract must be in writing if it involves

A)an interest in land.
B)an air filter that costs less than $500.
C)collateral for a loan.
D)a service that can be performed within less than a year.

Question 38

Debit & Credit Accounting Services and Brickwork Construction Company negotiate a contract.If it has all of the elements necessary for one of the parties to enforce it in court,it is

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

Question 39

Paco offers to pay Quik Delivery (QD)$50 if it picks up and delivers to him a package from his accountant Rupert within 30 minutes.QD can accept the offer only by meeting the deadline.If QD performs as directed,these parties will have

A)a bilateral contract.
B)a trilateral contract.
C)a unilateral contract.
D)no contract.

Question 40

Quality Aluminum Corporation files a suit against Rite Tool Company,claiming that the consideration for their contract is inadequate.The court will most likely not examine the adequacy of the consideration if

A)it is obvious that the consideration is adequate.
B)Rite Tool asserts that there is adequate consideration.
C)something of value passed between the parties.
D)the consideration is worth more than $100.

Question 41

Cody signs and returns a letter from Deb,referring to Deb's Double-D Ranch and its price.When Cody attempts to complete the deal,Deb refuses,claiming that they have no contract.Cody claims they do.What standard determines whether these parties have a contract?