Business Law MCQs Ch6-10KnowledgeCats
T/F: Each contract should cover a singular promise and if multiple promises are involved, multiple contracts should be created
T/F: Boris sky dives out of a plane and gets hung up in a tree, hopelessly suspended and swinging precariously in his parachute from the branches of the tree. Natasha sees that be is in trouble and comes to his rescue. Once Boris is safely on the ground, he gratefully promises to give Natasha half of his life savings account. When he changes his mind, Natasha will probably be unsuccessful in enforcing his promise
T/F: Most oral agreements will be enforceable as contracts by courts
T/F: An option contract has to do with a contract that gives one of the parties a choice of consideration to accept
T/F: Duress must be based on a physical threat and not an economic one
T/F: An option contract refers to the choices that one has when entering into a contract
T/F: Larry has had a few beers and is starting to get a bit drunk. He isn't acting strange and he's conducting conversations with others slurring only an occasional word or two. Larry, should he enter into a contract in this state would be considered mentally incompetent and his contract would be void
T/F: Generally, mutual mistakes will often lead to the court allowing an avoidance of a contract; however, a unilateral mistake is not usually grounds to cancel a contract
T/F: Amanda, a recent university graduate, needed a car to get to her new job. To help Amanda secure a loan for the car, Ted, a friend, agreed to pay the loan should Amanda default. Ted's promise is enforceable as long as he goes to the bank, declares his promise to guarantee Amanda's loan in front of witnesses and shakes hands on the deal giving his word
T/F: Contractual consideration is defined as the thought process a party uses to decide whether or not to accept the offer and enter into a contract
T/F: The legal detriments exchanged by the parties must be equal, or reasonably close to equal, for consideration to be valid
Helen's cat Fluffy has run away and she places reward posters throughout her neighborhood. Mark sees the reward poster and spends the next six hours searching for Fluffy. While Mark is searching the neighborhood, Fluffy gets hungry and comes home, what type of contract is this and what is Mark entitled to for his work?
Where a promise can only be accepted by the performance of the person to whom it is offered is an example of what type of contract?
If the offer specifies no time limit in which to accept how much time does the offeree have to accept?
Josh is negotiating the sale of his car with Jonathan. Jonathan asks if the car has ever been in an accident and Josh replies, "No, it has never been in an accident." In fact, the car was nearly totaled the year before when Sheila, Josh's girlfriend, driving Josh's car, hit a wet spot and skidded into a pole. She had it repaired without telling him about the accident. Josh has committed what?
Brandi orally tells landscaper Mike "If you trim my bush I'll pay you $50.00." Mike trims her bush. What type of contract was this?
Bud calls Lou and says, "I'll sell you my car for a thousand bucks, interested?" Lou says, "I'll look it up on the Internet. If the Blue Book price is close, I'll pay you $1000 in the morning." At sunrise Lou shows up with $1000.00; What is Bud required to do according to the laws of contracts?
What type of contract is formed to remedy unjust enrichment?
Mike is walking through a parking lot and finds Kathy lying unconscious. He puts her in his car and takes her to the hospital. The hospital saves her life and when she becomes conscious they present her with a bill, Kathy will be required to pay based on what type of contract?
With regard to the court, adequacy of consideration means?
Dick has made a statement that the average person would realize is puffery. Dick is guilty of?
In Leonard v. Pepsico, the court ruled against Leonard and refused to enforce the purchase of a Harrier Jet because?
Abel sends Baker a letter: "I offer to perform consulting services for six months at $100/month." Baker signs "I agree." This contract fits into which category?
A contract in which one party may either disaffirm or enforce a contract is?
Helsel goes to see a physician concerning a particularly harsh flu. The doctor examines him prescribes medication, and gives him a bill for medical services. This agreement falls into which category of contracts?
The owner of an office building hires an architect to produce renovation plans for a $5,000 fee. The owner retains the plans once the fee is paid. What source of law governs this contract?
Digital signatures are recognized under state statutes that have passed what act?
Hyde hires an arsonist to set a warehouse on fire for $1,000. This agreement is legally?
Holmes Hats agrees to sell 100 top hats to a formal wear store and deliver them no later than April. This agreement falls into what category of contracts?
The owner of a warehouse contracts with Satellite Services for the purchase and installation of satellite dishes at the warehouse. the contract allocated $8,000 for the satellite and $2,000 for installation. Which source of law governs this contract?
When two parties agree to use an electronic-commerce method for a transaction, what sets out procedural guidelines that recognize electronic records and signatures under the law?
A contract that meets all of the statutory requirements to form a contract but is subject to a legal defense is what kind of an agreement?
Cardozo Candies agrees to sell 100 boxes of chocolate to a retail store and deliver them in one week. This agreement falls into what category of contracts?
What actions by parties are events of termination of an offer?
What events of termination of an offer via operation of law?
T/F: When a party successfully sues for an equitable remedy for a breach of contract, they do not receive a monetary award
T/F: When an accord and satisfaction is agreed to, the original obligation subject to the accord is immediately discharged
T/F: Nominal damages are rarely awarded in contract cases
T/F: Craig is a licensed plumber and has a contract to install a replacement toilet for Mary. When Craig realizes that he has booked two appointments simultaneously, he calls Brian, another licensed plumber and asks him to install Mary's toilet. Craig has assigned his duties to Brian
T/F: A party to a contract may be discharged from performance due to operation of law if the other party unilaterally alters the contract
T/F: Restitution is classified as an equitable remedy
T/F: When an assignment is made, the assignee has the right to reform the contract and change the obligor's rights and duties as they wish
T/F: Impossibility of performance is subjective meaning that one of the parties may unilaterally decide that performance is impossible, thus discharging the contract
T/F: Specific performance is almost always available when a real estate contract is involved
T/F: Beth has a contract with Annie in which Annie is to deliver 1000 hand decorated beverage holders in 60 days. When Beth calls the Psychic Hotline for her weekly reading, the psychic informs her that she has entered into a contract and the other party will not perform all the conditions and specifications as per the agreement. Beth may sue for an anticipatory repudiation
T/F: Mel is under contract with a textbook publisher to write a teachers manual to accompany a new textbook. The contract states that the instructor's manual is to be completed by August 1. On July 1, the publisher calls Mel and asks for an update. Mel states that he's working hard and making progress. He then states that the August 1 deadline is "doable but it's going to be tough". Based on Mel's statement the textbook publisher may claim an anticipatory repudiation and find another author to complete the project
T/F: A rescission of a contract may occur when either party chooses to end the agreement
T/F: Burt has contracted with Mel to put a concrete driveway on Mel's property. If Burt delegates the duty of laying the driveway to Chuck, and Chuck does an unacceptable job, Mel may sue Burt for damages
T/F: Lance is an avid bicyclist and sends in a $150 fee to participate in an across the state ride in the Midwest. A week before the ride, he breaks his leg. Unless the contract specifically provides for no refunds under any conditions, he will be able to receive a refund based on impossibility
T/F: Generally, courts do enforce a strict compliance standard for contact conditions
T/F: Anticipatory repudiation may be used when a party has knowledge that either a complete or a partial breach will occur by the other party
T/F: Incidental beneficiaries are known about when the contract is entered into
List three ways of discharge by mutual consent
You have booked a hotel room for conference at a rate of $100 per day for five days. When you arrive to check in you are told that the hotel is full and that they overbooked and cannot supply you with a room. You are forced to go to the only hotel in town with available rooms and pay $150 per night. If you sue for damages you entitled to what amount?
Max has contracted with Lew to have his house painted. The contract specifically stated that the job was to be completed by 8/25. Lew completes the job on 8/26. Max has suffered no loss due to the delay. The job was otherwise done exactly to all contract requirements and specifications. If Max sues Lew for breach of contract due to the missed completion date, were the courts to award damages, what type of damages would most likely be awarded?
In a delegation situation, the nondelegating party is called the?
Lon has just come home from serving in the Marines and contracts with a local car dealership to purchase a car. The car must be ordered and payment is to be made when the car arrives. The next day, Lon receives orders to return to active duty. Realizing that he doesn't need the car, he brings Tony to the dealership and asks that Tony substitute for him. Lon will take delivery and ownership of the car and Lon will pay the dealership upon delivery. The dealership agrees to have Tony substitute for Lon. What has occurred?
Punishment damages are called:
Fred's Flooring (FF) contracts with Harry homeowner to install wood flooring throughout Harry's home. Harry was to purchase the flooring and the contract was solely for installation. Payment was to be 20% at the time that the work commenced and 80% once the flooring was installed. Harry purchased the flooring materials and paid the 20%, so FF began work. When FF was half way completed, Harry realized that he didn't have the money to pay FF upon completion so he bolted the doors and refused access. If FF wants to rescind the contract and be paid for work completed, FF would sue for:
When one party fails to perform under an agreement, the failing party has what the contract?
Anticipatory repudiation can occur in which of the following ways?
Coopers agrees to prepare and file an income tax return for young for $500. Coopers fails to file the return on time. Which of the following types of breaches describes this senario?
Which remedy covers foreseeable indirect losses suffered by the nonbreaching party?
Rockefeller hires Pablo to paint his portrait due to Pablo's reputation as an excellent painter. Pablo breaches the agreement. Which of the following is Rockefeller's probable remedy?
What are two forms of equitable relief
Which remedy covers losses of actual damages suffered by the nonbreaching party?
Louis agrees to sell Stevens a rare coin collection for $10,000. When Stevens shows up with the money, Louis changes his mind and refuses to sell it to him. Which of the following is Stevens' probable remedy?
When the parties in a contract perform the obligations in good faith and complete the contract, the parties are said to have what the contract?
In cases where the parties agree to a contract and pursue good faith performance but one party cannot give perfect performance, the law still recognizes the party's right to discharge the contract through?
Name three ways a party may discharge their obligation for a contract?
Kitchen Clean contracts to provide services for Chef Rave's restaurants at a rate of $1,000 per month to begin on January 2. On February 2, Chef Rave is unhappy with the work. He sends a check for $500 along with a letter notifying Kitchen Clean that he is unhappy, canceling the contract and only willing to pay half-price. Kitchen Clean receives the letter, deposits the check, and sues Chef Rave for the balance owed. What event of discharge occurred in the Chef Rave v Kitchen Clean case?
Name three methods of discharging a contract through operation of law?
The doctrine of what allows one party to discharge the contract through less-than-perfect performance
Name three ways you can discharge a contract
Kitchen Clean contracts to provide services for Chef Rave's restaurants at a rate of $1,000 per month to begin next month. In the interim, Chef Rave hears of a cheaper cleaning service, and Kitchen Clean hears to Chef Rave's bad temper and slow payment habits. The parties mutually agree to cancel the contract before it begins. The parties have discharged their contract via what method?
Name three methods of discharging a contract through operation of law
Pilgrim Industries scheduled its annual sales meeting at Celestial City Resort from Jan. 5 to 10. In addition to meeting and hotel rooms, the resort was to provide an ice-skating pond for Pilgrim's annual employee hockey game. Two months before the meeting, the resort is hit with a devastating fire, and no hotel or meeting rooms are available. the Pilgrim-Celestial contract is discharged via the doctrine of:
In cases where the parties have agreed to a certain service at a certain price, but one party finds that he or she cannot provide perfect performance, the law recognizes what as an event of discharge, so long as the party acted in good faith and that any deviation from the contract did not materially alter the contract
What is the most common way in which parties discharge a contract?
Kitchen Clean contracts to provide services for Chef Rave's restaurants at a rate of $1,000 per month to begin next month. After the first cleaning, Kitchen Clean complains that the conditions of the exhaust hoods were worse than either party knew. The parties agree to a new agreement for $1,500 per month during months when the hoods required cleaning and $1,000 for all other months. The parties have discharged their original contract via what method?
Pilgrim Industries scheduled its annual sales meeting at Celestial City Resort from Jan. 5 to 10. In addition to meeting and hotel rooms, the resort was to provide an ice-skating pond for the Pilgrim's annual employee hockey game. In the weeks before the meeting, the resort is hit with its worst heat wave on record. Although hotel and meeting rooms are available, there is not possibility of ice skating at the site. If a court finds that one of Pilgrim's principal purposes in the agreement was the inclusion of an ice-skating pond, the Pilgrim-Celestial contract could be discharged via the doctrine of?
T/F: Shovels R Us sends a purchase order to Acme Snow Shovel, Inc. for 500 shovels to be delivered by September 30, 2010, in time for the winter season. Acme returns an acknowledgment form indicating that the shovels would be delivered on March 1, 2011. The acknowledgement letter forms a valid contract
T/F: Just as in the common law, the UCC recognizes the concept of anticipatory repudiation allowing a breach to be declared prior to performance being due
T/F: UCC risk of loss provisions will govern the terms of a contract even if the parties have specified risk allocation in the contract
T/F: The 2003 revisions to the UCC have only been adopted by about half of the states
T/F: If the seller ships conforming goods, the buyer has a duty to accept them and may not reject the goods
T/F: Wrongfully revoking an acceptance will constitute a breach of contract by the buyer
T/F: If a party has been delivered nonconforming goods and has rejected them, if they are forced to cover in order to maintain business operations, they may sue the seller for the difference in price plus consequential damages
T/F: If a buyer knowingly accepts nonconforming goods, they may still sue the seller for monetary damages based on the nonconformity
T/F: The United Nations Convention on Contracts for the International Sale of Goods does not recognize a formal writing requirement similar to the UCC statute of frauds requirement
T/F: The UCC permits a contract to be considered formed entirely by the parties' conduct even if no definite time of formation can be determined
T/F: The mirror image rule is not enforced under UCC standards
T/F: On February 1st, Frank's Fedora Manufacturers sends an offer to Metropolitan Outfitters by letter with all price, quality, quantity and delivery terms clearly stated, indicating that the offer will remain open until October 1st. On September 1st Metropolitan sends an acceptance of the offer to Frank's with no material alterations to any of the stated terms in the offer. The acceptance makes the contract valid and enforceable
In a shipping contract, the risk of loss passes to the buyer when what happens?
In the absence of a specific contract provision regarding the details of payment the UCC provides that:
In Merchants Acceptance, Inc. v. Jamison, Jamison ordered encyclopedias and the contract specified that delivery was to be made to Jamison's home. Instead the encyclopedias were delivered to her post office box and she never received them. She refuses to pay for them and is sued
In a destination contract, risk of loss passes to the buyer when?
Contracts for the sale of goods are governed by Article what of the Uniform Commerce Code
The underlying policy of the Uniform Commerce Code is to promote the what of a business transaction?
What is an irrevocable offer under the Uniform Commerce Code?
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