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Business Law
Q:
For accord and satisfaction to occur, the amount of the debt cannot be in dispute.
Q:
There can be no satisfaction unless there is first an accord.
Q:
Even if the terms of a contract express such uncertainty of performance that the promisor has not definitely promised to do anything, the promise binds the promisor.
Q:
If a debt is liquidated, accord and satisfaction cannot take place.
Q:
A contract that one party retains the exclusive right to cancel at any time is unenforceable.
Q:
An illusory promise is an enforceable promise.
Q:
Risks ordinarily assumed in business constitute consideration for the modification of a contract.
Q:
It is illegal for two parties to mutually agree to rescind a valid contract.
Q:
Past consideration can be legally sufficient consideration.
Q:
A promise made in return for an act or event that has yet taken place is unenforceable.
Q:
Rescission is the unmaking of a contract so as to return the parties to the positions they occupied before the contract was made.
Q:
If, during the performance of a contract, extraordinary difficulties arise that were totally unforeseen at the time the contract was formed, a court may allow an exception to the preexisting duty rule.
Q:
A promise to do what one already has a legal duty to do constitutes legally sufficient consideration.
Q:
A preexisting duty may arise from a previous contract.
Q:
A transaction that lacks a bargained-for exchange lacks an element of consideration.
Q:
The element of bargained-for exchange distinguishes contracts from gifts.
Q:
A promise by one party to pay another for refraining from an action that one has a legal right to undertake is enforceable.
Q:
For consideration to have "legally sufficient value," it must consist of goods or money.
Q:
Inadequate consideration always indicates undue influence.
Q:
In general, courts consider the fairness of a contract when deciding if the contract is binding.
Q:
Adequacy of consideration refers to how much consideration is given.
Q:
Forbearance is the act of refraining from doing something that one has a legal right to do.
Q:
A determination of whether consideration exists depends on a comparison of the values of the things exchanged.
Q:
Consideration in bilateral contracts normally consists of a promise in return for a performance.
Q:
In contract law, the term consideration refers to the serious thought that underlies a party's intent to enter into a contract.
Q:
Consideration is the value given in return for a promise.
Q:
Beta Software Company and Gamma Sales Corporation agree to follow a certain security procedure in transacting their business online. Beta fails to follow the procedure, however. Due to this failure, Beta does not detect an error in the deal, which will have a negative impact on Gamma's interest in the deal. Can Gamma avoid the effect of this error? How?
Q:
Creative Solutions Corporation (CSC) sells business application softwareaccounting and bookkeeping programs, blank business forms, inventory control functions, and the likein different combinations, in different packages, at different prices, downloadable online. To complete a deal, a purchaser clicks on a button that, with reference to certain terms, states, "I agree." What is this sort of agreement called? Do the parties have a binding, enforceable contract that includes the terms? Explain.
Q:
National Shipping Corporation and Office Software Company (OSC) make a deal for OSCs products, communicating entirely online. Under the UETA, an electronic record is considered sent
a. only at a midway point between the sender and recipient.
b. only on coming into the recipient's control.
c. only on leaving the sender's control.
d. when it leaves the sender's control or comes into the recipient's control.
Q:
Michelle gives out a business card with an e-mail address on it. It is reasonable to infer that Michelle has consented to
a. transact business electronically.
b. submit to the jurisdiction of any selected forum.
c. accept and respond to any correspondence sent to that address.
d. nothing.
Q:
Bill and Stacy enter into a contract that falls within the provisions of the UETA. Under the UETA, "information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form" is
a. an e-document.
b. an e-signature.
c. an e-transaction.
d. a record.
Q:
Kay and Leo enter into a contract that falls within the provisions of the UETA. Under the UETA, "an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record" is
a. an e-document.
b. an e-signature.
c. an e-transaction.
d. a record.
Q:
Standard Purchasing Corporation and Total Sales, Inc., enter into a partnering agreement. Under a partnering agreement, parties agree
a. in advance to terms that apply to their future e-transactions.
b. to become partners.
c. to conduct transactions solely in electronic form.
d. to resolve all disputes without involving a third party.
Q:
Fred's Paper Shop frequently buys paper from Online Office Supplies, Inc. Online Office Supplies and Fred's Paper Shop decide to enter into a partnering agreement. One of the advantages of entering into a partnering agreement is that
a. the costs of all transactions will be reduced.
b. the likelihood that disputes will arise under their contract is reduced.
c. neither party will be able to file suit for breach of contract.
d. Fred's Paper Shop will not be able to file suit for breach of contract.
Q:
Under the E-SIGN Act, Phillip may use an e-signature in all of the following instances except
a. opening an account with a financial institution.
b. obtaining a mortgage.
c. buying insurance.
d. signing his will.
Q:
First Design Corporation, a business firm, and Glen, a consumer, make a deal over the Internet that involves e-signatures. Under the E-SIGN Act, the e-signatures
a. are as valid as signatures on a paper document.
b. must be
encrypted to be enforceable.
c. must have been inscribed on a digital tablet to be authenticated.
d. must relate to a partnering agreement.
Q:
Clean Health Insurance, Inc. sends Kathy a health insurance termination. The health insurance termination is
a. governed by the E-SIGN Act.
b. not governed by the E-SIGN Act.
c. governed by Article 2 of the UCC.
d. governed by Article 2A of the UCC.
Q:
Vivian and Rob enter into a contract under which Vivian will clean Rob's house every week for a year. Under the E-SIGN Act, in order for e-signatures to be enforceable for this contract
a. Vivian and Rob must both agree to use e-signatures.
b. only Vivian needs to agree to use e-signatures.
c. only Rob needs to agree to use e-signatures.
d. Vivian and Rob must both register their e-signatures with the federal government.
Q:
Jared downloads some video games from the Internet. There is a page indicating the terms of use, but nothing that requires Jared to affirmatively indicate his consent before downloading the games. These terms are
a. a click-on agreement.
b. browse-wrap terms.
c. an attribution agreement.
d. a shrink-wrap agreement.
Q:
Digital Products Company includes a shrink-wrap agreement in a transaction with Eagle Engineering Corporation. A shrink-wrap agreement is an agreement whose terms are expressed
a. in code at the end of a computer program .
b. inside a box in which goods are packaged.
c. in small print at the end of a paper contract signed by both parties.
d. on a computer screen.
Q:
Hi-Lite Manufacturing, Inc., orders supplies online from Indigo Parts Company. To complete the order, the buyer is required to click on a button that says, in reference to certain terms, "I agree." This is
a. a click-on agreement.
b. a default agreement.
c. an attribution agreement.
d. a shrink-wrap agreement.
Q:
Over the Internet, Red & White Contractors, Inc., arranges to lease storage space from Blue Services Company. To complete the deal, Red & White clicks on a button that says, in reference to certain terms, "I agree." Most likely, the parties have
a. a binding contract that includes the terms.
b. a binding contract that does not include the terms.
c. an unenforceable contract that includes the terms.
d. an unenforceable contract that does not include the terms.
Q:
Deb buys a song through eSongs, an online music vendor. Before completing the purchase and downloading the song, Deb must agree to a provision stating that she will not make and sell copies of the song. This provision is
a. a browse-wrap term.
b. a click-on agreement.
c. a shrink-wrap agreement.
d. a wrap-on agreement.
Q:
Mark is creating a Web site through which he will enter into contracts over the Internet. Important terms to include in his offers include
a. provisions specifying the remedies if the contract is breached.
b. a detailed history of his business.
c. glowing reviews from former customers.
d. his educational background.
Q:
Quality Sales Corporation enters into contracts over the Internet. Quality can protect itself against disputes involving these contracts by making important terms
a. reasonably clear.
b. difficult to notice.
c. impossible to find.
d. standardized.
Q:
Crafted Iron Works, Inc., offers to design, make, and sell City Transit Agency fourteen streetcars. Crafted authorizes a particular mode of communication, but City Transit sends an acceptance via a substituted means. This acceptance is effective when it is
a. in transit.
b. received.
c. sent.
d. written.
Q:
Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Relay's acceptance by e-mail will be considered effective when
a. received.
b. sent.
c. followed up by a confirmation letter sent by regular mail.
d. composed on a Relay computer.
Q:
Shasta offers to sell a used hay baler to Roberto, but receives a letter of acceptance from Quito, who has no relation to Roberto. A valid contract exists between
a. Shasta and Roberto.
b. Shasta and Quito.
c. Roberto and Quito.
d. none of the choices.
Q:
Liz offers to sell Jock her iPad for $500 without any accessories. Under the mirror image rule, Jock's response will be considered an acceptance if the terms of the acceptance
a. exactly mirror those of the offer.
b. change the items offered, but do not change the price.
c. change the price, but do not change the items offered.
d. change both the price and the items offered.
Q:
Jack offers to sell Ben a new car for $10,000. Ben accepts the offer and sells his old car so that he will have money for the new one. Jack's offer is probably
a. revocable because the terms of the offer were not definite.
b. irrevocable because Ben sold his old car because of justifiable reliance on Jack's offer to sell him a new car.
c. revocable because any offer is revocable.
d. irrevocable because Jack's offer represents an opinion contract.
Q:
Lovett County Bank offers to lend money to Kino, the owner of Java Stop, at 15 percent interest. Before Kino accepts, a state statute is enacted prohibiting loans at rates greater than 12 percent. Kino and the bank have
a. have a contract for a loan at 15 percent interest.
b. have a contract for a loan at 12 percent interest.
c. have a contract for a loan at 0 percent interest.
d. no contract for a loan.
Q:
Wally offers to sell a certain used forklift to Valu Lumber Outlet, but Wally dies before Valu accepts. Most likely, Wally's death
a. did not affect the offer.
b. shortened the time of the offer but did not terminate it.
c. extended the time of the offer.
d. terminated the offer.
Q:
Signe offers to sell Thomas her textbook but conditions the sale on Thomas accepting the offer by March 1. Signe may revoke the offer
a. before Thomas accepts the offer.
b. before March 1, whether or not Thomas has accepted the offer.
c. only after Thomas accepts the offer.
d. only after March 1.
Q:
On May 1 Jill offers to sell Andrea a herd of sheep. On May 3 Jill mails Andrea a letter revoking the offer. Andrea receives the letter on May 5. Jill's revocation of the offer to sell the sheep became effective on
a. May 1.
b. May 3.
c. May 4.
d. May 5.
Q:
Laredo advertises a reward for the return of his lost dog. Mikayla, who does not know of the reward, finds and returns the dog. Mikayla cannot recover the reward, because she
a. did not confer a benefit on Laredo by returning the dog.
b. did not know of the reward when she found and returned the dog.
c. does not need the money.
d. returned the dog.
Q:
Pastry Dough, Inc., sends its catalogue to Octavio and includes a "personalized" letter inviting him to buy any item in it at the advertised price. This is
a. an offer because of the "personalized" letter.
b. an offer because there is no room for price negotiation.
c. an offer only if Octavio previously bought items from Pastry Dough.
d. not an offer.
Q:
Jon says to Kristy, "I would like to sell you my sports memorabilia collection." This is not an offer because it
a. does not describe the subject matter sufficiently.
b. does not include a price term.
c. only expresses an opinion.
d. only invites Kristy to negotiate.
Q:
Beth goes to Dr. Carlton for surgery. Carlton says that Beth should be fully healed within a week. Beth is not healed within a week. With respect to breach of contract, Carlton is
a. liable.
b. not liable, because surgery is not a proper subject for a contract.
c. not liable, because the statement was an opinion.
d. not liable, but Beth is excused from paying Carlton.
Q:
Mary admires Julia's collection of scarves. Julia says "I might sell you a few someday, if I get tired of them." Julia's statement is
a. an effective offer.
b. not an effective offer because it has not been communicated to Mary.
c. not an effective offer because the Julia does not show a serious intent to be bound.
d. an acceptance.
Q:
Jacqi tells Kenneth, who does not know how to perform comedy, that she will tutor him in the subject for $500. As an offer, this is
a. effective.
b. not effective, because comedy is not a serious subject.
c. not effective, because Jacqi's tutoring will be subjective.
d. not effective, because Kenneth has no knowledge of the subject.
Q:
Peter and Ray are riding their horses together. Peter jokingly tells Ray that Ray's horse is too slow. Ray laughs and jokingly responds "Yes, he is too slow! I would sell him for $5!" Peter hands Ray $5. This is
a. a valid acceptance because Peter gave Ray the money in a reasonable time.
b. a valid acceptance because there is consideration on both sides.
c. not a valid acceptance because Ray's offer was made in jest.
d. not a valid acceptance because Ray's horse is worth more than $5.
Q:
May tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby who owns Nick's Pre-owned Autos, hands May $10. This is
a. a valid acceptance because May is seriously frustrated.
b. a valid acceptance because Nick is a car dealer.
c. not a valid acceptance because May does not seriously intend to sell.
d. not a valid acceptance because Nick is a car dealer.
Q:
Fresh Fast Service, Inc., offers to deliver produce to Growers' Market's customers for a certain price. Fresh's intent to extend a serious offer to Growers' Market is determined by reference to
a. Fresh's assumptions.
b. Fresh's beliefs.
c. Fresh's intentions.
d. what a reasonable person in Growers' position would conclude Fresh's words and actions meant.
Q:
The UETA does not require the use of security procedures to verify changes to electronic documents and to correct errors.
Q:
Under the UETA, an e-signature of a notary public is not sufficient to notarize a document.
Q:
The E-Sign Act does not preempt the uniform version of the UETA.
Q:
Under the UETA, a contract is unenforceable if it is solely in electronic form.
Q:
The primary purpose of the Uniform Electronic Transactions Act (UETA) is to remove barriers to e-commerce.
Q:
A record is an interaction between two or more people relating to business, commercial, or governmental activities.
Q:
Under the UETA, a typed name at the end of an email message is not considered an e-signature.
Q:
Under federal law, an e-signature is enforceable only if the contracting parties have agreed to use e-signatures.
Q:
Under federal law, an electronic signature can be as valid as a signature on paper.
Q:
Under the Electronic Signatures in Global and National Commerce Act, a signature may not be denied legal effect solely because it is in electronic form.
Q:
Browse-wrap terms require a user to affirmatively indicate his or her consent.
Q:
Browse-wrap terms are arguably not enforceable.
Q:
Not all of the terms presented in shrink-wrap agreements have been enforced.
Q:
A shrink-wrap agreement is an agreement whose terms are expressed inside a box in which the goods are packaged.
Q:
A click-on agreement is an agreement whose terms are expressed inside a box in which the goods are packaged.
Q:
The agreement resulting from a buyer clicking on a box containing the words "I agree" is known as a click-on agreement.
Q:
A forum-selection clause indicates the forum, or location, for the delivery of goods purchased online.