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Q:
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.
Q:
Kathy and Tom have entered into a contract in which Mike has been named and included as an intended beneficiary by Kathy. Should Tom or Kathy breach the contract, Mike may sue both Tom and Kathy for breach of contract.
Q:
Mel is under contract with a textbook publisher to write an instructor's 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.
Q:
Substantial performance will be enforced only if the deviation from complete performance is not material to the contract.
Q:
A rescission of a contract may occur when either party chooses to end the agreement.
Q:
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.
Q:
Specific performance is almost always available when a real estate contract is involved.
Q:
Liquidated damages must be directly related to the breach of contract they are compensating the nonbreaching party for.
Q:
Assignments require the consent and agreement of all parties to the contract.
Q:
Beth has a contract with Annie in which Annie is to deliver 1,000 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 in accordance with the agreement. Beth may sue for an anticipatory repudiation.
Q:
In an assignment or delegation, any third-party rights or duties occur after the contract is formed.
Q:
When an assignment is made, the assignee has the right to reform the contract and change the obligor's rights and duties as the assignee wishes.
Q:
Kent Corp. (KC), a general contractor building a new dorm at a university, contracted with Fine Rugs Inc. (FRI) to have a certain grade of industrial rugs installed in the dorm. The contract price was $180,000. After the rugs were installed, KC was dissatisfied with the rug quality. FRI insisted that the rugs installed were appropriate to the contract specifications and demanded full payment. KC sends FRI a check for $120,000, which KC believes is the proper value for the rugs installed, and marks the check "Paid in Full." FRI writes "Under Protest" on the check and deposits it. FRI may now, in most states, successfully sue KC for the balance of $60,000.
Q:
Impossibility of performance is subjective, meaning that one of the parties may unilaterally decide that performance is impossible, thus discharging the contract.
Q:
When a party breaches a contract, the nonbreaching party always has the option of seeking legal or equitable remedies.
Q:
Unless a contract for services calls for unique personal services, that contract cannot be discharged by impossibility.
Q:
A party to a contract may be discharged from performance due to operation of law if the other party unilaterally alters the contract.
Q:
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.
Q:
When a party successfully sues for an equitable remedy for a breach of contract, that party does not receive a monetary award.
Q:
When an accord and satisfaction is agreed to, the original obligation subject to the accord is immediately discharged.
Q:
Pablo has entered into a contract to paint Linda's portrait. The next day, Pablo is called by the White House to paint the official portrait of the first family. Since it will be impossible for Pablo to do both simultaneously, Pablo calls Salvador and asks him to substitute for him and paint Linda's portrait. Because Salvador is a world-famous artist with paintings hanging in the New York Metropolitan Museum of Art and the Louvre in Paris, Salvador does not have to get Linda's permission for this novation as long as none of the contract terms and conditions are changed.
Q:
In some states, a statute of limitations is called a statute of _______.
Q:
When one party has failed to perform his or her duties under a contract, that party is said to be in total _______.
Q:
Damages agreed to when the contract is written and prior to any actual breach are called ________ damages.
Q:
A court order to refrain from performing a particular act is known as _______.
Q:
Robert and Philip are the named beneficiaries under Alan's insurance policy. Robert and Philip would specifically be considered to be ________ beneficiaries.
Q:
Reasonableness of an offer requires that the offeror have an objective intent to contract when making the offer.
Q:
Language such as "provided that" or "unless" in a contract that triggers a performance obligation is called a _______.
Q:
Appointing another person to perform one's duties under a contract is called a _______.
Q:
When the parties perform their obligations in good faith in order to complete the contract, this completion is called _______.
Q:
Jon owns two cars. He says to Rachel, "I'll sell you either car for $8,000." This is a valid offer.
Q:
A minor's contract for actual necessities does not require that the minor be mentally competent for the contract to be valid.
Q:
Duress must be based on a physical threat and not an economic one.
Q:
If an offer does not specify a required type or form of acceptance, the offeree is required to provide a written acceptance for valid mutual assent to be proved.
Q:
Under most circumstances, acceptance cannot be imposed or inferred from an offeree's silence after receiving an offer.
Q:
Uncle Buck has lent you $10,000 for tuition and living expenses. The agreement was oral. This contract violates the statute of frauds, so it is unenforceable and you need not repay the loan.
Q:
Jeff goes to a car dealership and the salesperson tells him that the car he's looking at is a great car and an excellent value. The statements made by the salesperson, if untrue, will not be adequate to create either an innocent misrepresentation or a fraudulent misrepresentation.
Q:
An option contract is a contract that gives one of the parties a choice of consideration to accept.
Q:
The mailbox rule determines when a contract is considered to be deemed accepted by the offeree, thus depriving the offeror of the right to revoke the offer.
Q:
Boris skydives from a plane and gets tangled in a tree, hopelessly suspended and swinging precariously in his parachute from the branches of the tree. Natasha sees that he 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.
Q:
If Bill Gates goes into a car dealership and buys every car on the lot at the sticker price, the dealer has suffered no contractual detriment because he's in the business of selling cars and got full price.
Q:
The mailbox rule provides that the acceptance of an offer is generally effective upon receipt of the acceptance when sent in a commercially reasonable manner.
Q:
According to the mailbox rule, a revocation is valid the moment that it is mailed.
Q:
For a binding contract to exist, not only must there be agreement but the agreement must be supported by ___________.
Q:
For a contract to be enforceable, it must meet the requirement of __________; that is, both the subject matter and the performance of the contract must be legal.
Q:
In many states, if a person has been declared incompetent, contracts that person enters into are classified as void ________ or not valid from the onset.
Q:
The legal term for guilty knowledge that is an element of fraudulent misrepresentation is _______.
Q:
Consideration in a small or minimal amount that is written into a contract but never actually paid is called ________ consideration.
Q:
If a 17-year-old enters into a contract to purchase a car, that contract is ________ at the minor's option until he or she reaches the age of 18.
Q:
A basic fact or assumption in a contract is said to be ________ to the contract.
Q:
Use of unfair coercion to force a party into a contract constitutes _______.
Q:
A contract that is so blatantly unfair that it shocks the objective conscience would be rendered unenforceable and subject to the defense of _______.
Q:
Tina's dog has run away. She places reward posters throughout the neighborhood and places an ad in the local newspaper. Ted, her good friend, sees Tina's dog wandering and takes the dog back to Tina's house without ever seeing a poster or the newspaper advertisement. After he leaves her home, he then sees a reward poster. If he returns and demands the reward, is Tina obligated to pay?
Q:
In 1975, Denise purchased a used Volkswagen Beetle from Don. At the sale, Don produced a title to the car that said it was a 1972 car. In 1976, Denise sold the car to Ed, delivering a title stating that the car was a 1972 Volkswagen Beetle. Both titles were genuine and issued by the proper state office. In the 1970s, Volkswagen Beetles underwent essentially no body changes and, quite frankly, the cars were indistinguishable from year to year except to experts. When Ed takes the car to his mechanic for some routine maintenance, he is told that the car is actually a 1970, not a 1972, model. Ed immediately calls Denise and accuses her of fraud. Denise calls Don and is told that the car was indeed a 1970 car but he had replaced the motor with a new 1972 motor and had the car reregistered for the year of the new engine, an act which at the time was legal in their state. Has Don committed an actionable wrong? Has Denise committed any form of an actionable wrong?
Q:
What does the parole evidence rule say, and how does it affect contracts?
Q:
When a store places an advertisement in a newspaper or runs an ad for broadcast on the radio, what are the store's obligations if a customer arrives at the store and demands to purchase the item at the advertised price? Be complete.
Q:
For the formation of a valid contract, the broad underlying requirement that the parties must reach an agreement using a combination of offer and acceptance and that the assent must be genuine is known as ___________ assent.
Q:
Courts enforce contracts only if each party had the legal capacity to enter into a contract. Which classes of persons have limited power to contract?
Q:
In the case Lucy v. Zehmer, the parties were two farmers who had been drinking whiskey in a bar and handwrote an agreement to sell Zehmer's farm for $50,000. Zehmer claimed that he was drunk and joking and never intended to sell the farm. What did the court decide, and what does this famous case establish about mutual assent?
Q:
In Raffles v. Wichelhaus, the court refused to enforce the contract for a boatload of cotton, shipped to but refused by Wichelhaus, because:
A. the parties made a mutual mistake with regard to which ship named Peerless the cotton was to be shipped on and the two ships sailed in different months.
B. the parties made a mutual mistake with regard to the quality of the cotton as each ship carried different grades of cotton.
C. despite there being two ships named Peerless sailing on different dates, the contract was oral and violated the statute of frauds.
D. Raffles knew that there were two ships named Peerless but failed to notify Wichelhaus, thus committing a fraudulent misrepresentation due to the withholding of a material fact.
Q:
What is the mailbox rule, and how does it apply in the following situation? Explain whether acceptance is effective and a contract is formed.
Day 1: An antique dealer e-mails an offer to sell a highly collectible Art Nouveau glass vase to a collector for $1,500.
Day 2: Collector receives the offer, prints out the e-mail, writes "ACCEPTED, 1 Art Nouveau glass vase for $1,500. Collector," and faxes Dealer the acceptance.
Day 3 (9 a.m.): Dealer's assistant receives Collector's fax, but Dealer is out of the store all morning.
Day 3 (12 p.m.): Realizing he can get much more for the vase at auction, Dealer calls Collector to revoke his offer.
Day 3 (1:30 p.m.): Collector's acceptance fax is delivered to Dealer.
Q:
In which of the following situations will the court enforce a contract?
A. Tinker offers to sell his car to Evers. Evers asks for some time to decide, and Tinker gives him until 6 p.m. At 4 p.m. Evers sees Chance driving the car and is told that Tinker sold it to him. Evers calls Tinker at 4:30 p.m. and says "I accept."
B. Jan offers to sell his boat to Dean. Dean asks for 24 hours to decide, and Jan agrees. At midnight, the boat sinks, although neither Jan nor Dean knows it has sunk. Dean calls Jan before the 24 hours elapse and says "I accept."
C. Martin offers to sell his horse to Lewis for $1,000. Lewis replies that $1,000 is too much and says, "I'll give you $850 for her." Martin says no, and Lewis replies, "Okay, I'll give you $1,000."
D. Fred offers to sell his car to Wilma. Wilma asks for more time, and Fred says she can have until 10 o'clock the next morning. For Fred to keep the offer open to her, Wilma gives him $50, which is nonrefundable. Fred dies during the night, and after hearing that Fred died, Wilma calls Fred's heirs at 9 o'clock the next morning and accepts Fred's offer.
Q:
In Lucy v. Zehmer, the two parties were drinking in a bar when Lucy offers to buy Zehmer's farm. After some negotiation a written contract was executed. Zehmer claimed that the whole episode was only a joke and he never intended to sell the farm. The court determined that:
A. since Zehmer claimed to be "high as a Georgia pine" and it was only the liquor talking, there was no contract.
B. since the contract was written without lawyers present, it was likely not really serious, so no contract was actually formed.
C. because the terms were fair, the parties are bound by the contract regardless of their intent or capacity.
D. because negotiations and modifications to the written agreement lasted between 30 and 40 minutes, it appeared that both parties were serious, so even if Zehmer had no objective intent to sell the farm, he is still bound by his actions and the contract is enforceable.
Q:
Which of the following is not required for promissory estoppel to apply?
A. The promise made must be reasonable.
B. The promise made must be relied on by the promisee to the promisee's detriment.
C. The promisor must suffer an injustice if the promise isn't enforced.
D. The promisor must know that the promisee is likely to rely on the promise.
Q:
In Stevens v. Publicis, S.A., the courts addressed the statute of frauds issue of what constitutes a writing in today's cyber world and determined that:
A. technology aside, a writing must contain an original signature to create a true contract.
B. since e-mail could be written by anyone, an e-mail must be followed by a document with an original signature.
C. an e-mail with the sender's typed signature shows an intent to authenticate the contents and satisfies statute of frauds requirements.
D. the statute of frauds requires that certain contracts be in writing to be enforceable but does not address or concern itself with signatures.
Q:
In Leonard v. PepsiCo Inc., the court ruled against Leonard and refused to enforce the purchase of a Harrier jet because:
A. the advertisement specifically referred to the accumulation of points to purchase items in the catalog and the Harrier was not listed in the catalog.
B. the sale of a Harrier jet, still used by the military, would jeopardize national security, so Pepsi's ad could not be taken seriously.
C. Leonard did not accumulate points but instead purchased them, which violated the rules of the offer.
D. Leonard did not accept the offer in the manner specified and required in the offer, so his acceptance was defective and void.
Q:
Bill has voluntarily organized office birthday parties for the past 10 years because he enjoys making people happy. One day, Brenda, his boss, tells him that he's been doing such a great job that she's going to pay him an extra $200 next month. However, when Bill gets his check, it's the same amount that it has always been. Which of the following is correct?
A. Brenda's promise is enforceable because it is based on a bargained-for exchange.
B. Brenda's promise is unenforceable because it is based on past consideration.
C. Brenda's promise is enforceable because Bill performed a service for the company and should be paid even if it's not part of the job description.
D. Brenda's promise is unenforceable because the situation is governed under the preexisting duty rule.
Q:
With regard to the court, adequacy of consideration means:
A. the consideration exchanged must be exactly equal in value.
B. the consideration exchanged must be reasonably close in value.
C. the court will adjust the consideration if the value exchanged is unfair.
D. the court doesn't care about value as long as the mutual assent is valid.
Q:
Wilma has a valid driver's license but has a tendency to get speeding tickets. Fred tells her that he will pay her $1,000 if she does not get a ticket for one year. Wilma drives very cautiously and goes through one year without a ticket. Is Fred obligated to pay?
A. yes, because Wilma gave up a legal right based on the agreement
B. no, because $1,000 is not an adequate amount based on Wilma's detriment
C. no, because Wilma suffered no detriment in this agreement
D. yes, because a promise is a promise and consideration has nothing to do with this agreement
Q:
Dick has made a statement that the average person would realize is puffery. Dick is guilty of:
A. fraudulent misrepresentation.
B. innocent misrepresentation.
C. undue influence.
D. nothing.
Q:
Which of the following statements may be grounds for a misrepresentation, innocent or fraudulent, to occur?
A. "This car is the best-looking car in its price class."
B. "This is the best car that money can buy."
C. "This car gets 32 miles per gallon in highway driving."
D. "This car has the most comfortable ride you can buy."
Q:
An offer may be terminated in all but which of the following ways?
A. acceptance
B. revocation
C. rejection
D. counteroffer
Q:
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 $1,000 in the morning." At sunrise Lou shows up with $1000.
A. Bud must sell him the car because Lou accepted the evening before when he promised to look up the car's value.
B. Bud must sell him the car because he cannot revoke his offer after Lou accepted.
C. Bud does not have to sell the car because his promise was unclear.
D. Bud does not have to sell the car because the payment is based on past consideration.
Q:
Offers that the offeree partly performed or detrimentally relied on are:
A. irrevocable offers.
B. revocable offers.
C. firm offers.
D. option offers.
Q:
Burns offers Realtor a commission of 10 percent of the sales price if Realtor can find a buyer for the Burns Building for $500,000. Realtor spends funds to research and obtain potential-buyer contact information and locates Walters, who is willing to accept the $500,000 offer to sell from Burns. Before any transaction takes place, Burns revokes his offer to Realtor and refuses to sell the property to Walters. Burns's revocation is:
A. valid.
B. not effective.
C. enforceable.
D. effective.
Q:
Which of the following promises ordinarily need not be in writing to be enforceable?
A. promises made as a part of a prenuptial agreement
B. an agreement to sell a car for $1,500
C. a lease of a warehouse for 24 months
D. a $1,000 agreement with a personal trainer for 10 sessions
Q:
Franz asks Josef if he will paint his office building for $1,000. Josef says he will do the job for $2,000. Josef's response is:
A. a counteroffer.
B. an acceptance.
C. a rejection.
D. a mirror image offer.
Q:
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, was driving Josh's car, hit a wet spot, and skidded into a pole. She had the car repaired without telling him about the accident. Josh has committed:
A. fraudulent misrepresentation.
B. innocent misrepresentation.
C. an unconscionable act.
D. no misrepresentation because he thought he was being truthful and didn't intend to deceive Jonathan.
Q:
Bruno owns a French poodle that he advertises for sale. The dog has a history of viciously biting three neighborhood kids without provocation, as well as one of Bruno's kids. Marge is looking for a dog to be a playmate for her children. When she comes to Bruno's house to see the dog, she sees it playing with Bruno's kids and doesn't ask about the dog's past behavior. She tells Bruno that she's looking for a dog for her kids, and Bruno says nothing. Five minutes after the dog enters her house, it bites one of Marge's kids.
A. Bruno has not committed a fraudulent misrepresentation because silence cannot be considered a fraudulent misrepresentation.
B. Bruno has not committed a fraudulent misrepresentation because Marge didn't specifically ask if the dog bites.
C. Bruno has committed a fraudulent misrepresentation because he withheld a material fact.
D. Bruno has committed an innocent misrepresentation because he didn't state a lie but only withheld all of the truth.
Q:
Applying the parole evidence rule:
A. Written contracts with ambiguous terms are automatically void and cannot be corrected.
B. Oral agreements may be used to change a final written contract if the final written contract isn't exactly conforming to the precontract agreements.
C. Written agreements may be used to change a final written contract if the final written contract isn't exactly conforming to the precontract agreements.
D. A written contract is the final expression of the party's agreement and may not be contradicted by oral or written agreements made prior to the writing.