Q&A Hero

Q: Jonathan's Soccer Mart (JSM) advertises a pair of boots on sale. The normal price is $150 and the sale price should have been $135, but the advertisement says $15. Josh walks into the store, picks up a pair of the boots, and puts $15 on the counter, demanding to purchase the boots at the advertised price. Which of the following is correct? A. JSM must sell the boots at the advertised price. B. Josh has accepted JSM's offer to sell. C. JSM has made an ambiguous offer. D. Josh has made an 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: If the offer specifies no time limit in which to accept: A. the offeree has 10 days to accept. B. the offeree has 30 days to accept. C. the offeree has an unlimited time to accept as long as a revocation has not been made. D. the offeree has a reasonable time to accept.

Q: Big Time Appliance advertised 46-inch plasma TVs for $10 to the first 50 buyers on Friday. This ad is: A. not a valid offer because it is not a specific commitment to sell. B. not a valid offer but, rather, invites the buyer to make an offer. C. a valid offer because it is specific enough to constitute a unilateral contract. D. a valid offer because it requires a certain manner of acceptance.

Q: Aimee is a 21-year-old college student. Her parents are worried about her being away from home, so they tell her that if she goes through both the fall and spring semesters without drinking alcohol, they will buy her a new car. Aimee does in fact complete both semesters without drinking. A. Aimee gets the car because she performed exactly as required under her parents offer. B. Aimee gets the car because a quasi-contract is formed due to her parent's unjust enrichment. C. Aimee is not entitled to the car because her benefit far outweighed her detriment. D. Aimee is not entitled to the car because she's healthier, so she suffered no detriment.

Q: Hillary is a nerdy bookworm couch potato who rarely goes out of her home except to go to her job as a deskbound CPA. She wears a sweater almost every day, including during the summer, and is always complaining about being cold. Edmund, a co-worker, tells Hillary that he will give her $1 million if she climbs Mt. Everest. Edmund doesn't believe that she'd even give the offer a second thought. Hillary, without saying anything to anyone, starts an intensive training program to whip herself into shape, and six months later, during her vacation, she climbs Mt. Everest. Upon returning to work, she presents Edmund a picture of herself on the summit of Mt. Everest and demands her $1 million. Edmund tells her that they never had a contract so he owes her nothing, and Hillary claims that the money is owed based on promissory estoppel. A. Promissory estoppel applies only if Edmund is very rich, because $1 million is a lot of money. B. Promissory estoppel applies whether Edmund is rich or not. C. Promissory estoppel does not apply because Edmond had no reason to believe that Hillary would rely on his promise. D. Promissory estoppel does not apply because Hillary must announce that she accepts his offer for it to create an obligation to pay.

Q: Most advertisements in the mass media are not offers because they: A. do not contain a specific commitment to sell. B. are specific enough to constitute a unilateral contract. C. require that the consumer accept the offer in a specific manner. D. contain a specific commitment to sell.

Q: If you give a truthful answer to a question during contract negotiations, but something then happens that makes that answer now false, you are not obligated to notify the other party unless he or she asks the question again.

Q: The legal detriments exchanged by the parties must be equal, or reasonably close to equal, for consideration to be valid.

Q: To be valid, offers must meet all of the following criteria except: A. clear. B. reasonable. C. serious. D. communicated.

Q: Aiden says to Bob, "I'll sell you this rare book for $1,000." Aiden is the: A. assentor. B. assentee. C. offeror. D. offeree.

Q: Jon works for a major bank. The revised employee handbook that he received 5 years ago says that all employees with 25 years of service will receive a retirement party. He is about to hit 25 years of service and has announced his retirement. His manager tells him that the company, on the basis of his years of service, will throw him a party and present him with a gold watch. Jon retires on his 25th anniversary, and his manager announces that the company will not throw the party or give him the watch. A. Because of past consideration, no party or watch is owed. B. The company is required to throw the party, but no watch is owed. C. The company is required to present him with the watch, but no party is owed. D. The company is required to present him with the watch and throw him the party.

Q: 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.

Q: Generally, for an acceptance to create a noncommercial contract, the acceptance must be without qualifications or conditions.

Q: After an offer is made, the offeror may revoke that offer at any time, even if the offeree has not been given a reasonable period of time to decide whether or not to accept.

Q: Should an adult find out that he or she has entered into a contract with a minor, the adult may disaffirm the contract if the adult does so before the minor reaches the legal age.

Q: Ike has orally agreed to paint Tina's portrait. The oral agreement is for the portrait to be completed in nine months. Even if the portrait actually takes 13 months to complete, the agreement will be enforceable.

Q: 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.

Q: It is not possible for a total stranger with no ties to the alleged victim to commit undue influence over another.

Q: An agreement to purchase $499 worth of land does not have to be in writing to be enforceable.

Q: In Harley-Davidson Motor Co. v. PowerSports Inc., the court permitted PowerSports to retain its Harley-Davidson franchise because PowerSports' decision to become a publicly owned corporation had nothing to do with its commitment to sales and service and thus was deemed not material to the negotiations, so no fraud occurred.

Q: If Peter owns two different cars and says to Amy, "I'll sell you my car for $5,000," this offer is unclear.

Q: In Advanced Technology Services Inc., v. KM Docs, LLC, company employees signed an employment agreement that contained a noncompetition covenant, a nonsolicitation agreement, and a nondisclosure agreement. It also contained a severability clause. The employees, who resigned and started their own competing company, claimed that the noncompetition agreement was too broad and the entire agreement was unenforceable. What did the court determine about the severability of the contract?

Q: The term option contract refers to the choices that one has when entering into a contract.

Q: Larry has had a few beers and is starting to get a bit drunk. He isn't acting strange, and in conducting conversations with others he's slurring only an occasional word or two. Larry, should he enter into a contract in this condition, would be considered mentally incompetent and his contract would be void.

Q: Ronald is 17 years old and contracts to purchase a car and make monthly payments for three years. He may disaffirm the contract at any time prior to his 18th birthday.

Q: 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.

Q: Alan lives in a beachfront home, and one morning he discovers an adult woman who has washed up on shore and is unconscious. Alan takes her into his home and administers aid to her. She awakens after a few hours but has amnesia, not knowing who she is or how she ended up washed ashore on his property. Alan cares for her for two weeks, and then her memory returns. She fell overboard while sailing with her wealthy parents on their yacht. She tells him that her name is April, and she provides him with contact information for her parents. Naturally, when Alan calls, they are ecstatic. They tell Alan that they will fly in to pick her up the next day and that he should tally up his expenses and they will reimburse him for his costs. When they arrive, Alan gives them the cost sheet, which they refuse to pay. Does Alan have any rights against the parents? Does Alan have any rights against April?

Q: What are the categories of contracts in the following scenario?

Q: Why is it so important that the law of contracts be ordered and strong, particularly with regard to the business world?

Q: Randy is home when a landscaping crew enters his yard and begins working on his front garden beds and lawn. Randy did not hire the crew, but he allows them to continue working. Explain whether Randy will have to pay for the work.

Q: In Chattler v. U.S., a passport applicant claimed that the government breached its contract with her when it failed to process her application in a timely manner, even after she paid a fee for expedited processing. Chattler asserted that the expedited process was a valid offer that she accepted by paying the $60 fee. How did the court rule, and what must be present to find mutual assent?

Q: A consulting contract between a management consulting firm and a software company is governed by what source of law? A. common law B. statutory law C. the Uniform Commercial Code D. law at equity

Q: Real estate deeds and mortgages that require a seal to be enforceable are considered: A. quasi-contracts. B. implied contracts. C. informal contracts. D. formal contracts.

Q: In lawsuits that involve both goods and services, how is the proper source of law to enforce and govern the agreement established?

Q: What are some examples of contracts in the business context, and how does having an understanding of contract law help business owners and managers?

Q: In Georgia Malone & Company Inc., v. Ralph Rieder et al., Malone was a real estate firm that accused a former potential buyer of selling confidential information Malone had gathered about the sale property. The former buyer sold the information to a competing real estate firm. How did the court rule in the case, and what must a plaintiff show to recover under this equitable theory?

Q: April is at work when a commercial painter's truck pulls up in front of her house. After checking the address on his assignment sheet, the painter starts erecting ladders against April's house and unloading brushes, rollers, and cans of paint. April has not contracted with this company, and the company has mistakenly put the wrong address on the painter's assignment sheet. When April arrives home, the painter is just finishing and he presents her with a bill. Is she obligated to pay? Why or why not?

Q: Aimee goes online and orders a suit for work that consists of a jacket and skirt. This is an example of: A. a divisible contract. B. an entire contract. C. a quasi-contract. D. a formal contract.

Q: An agreement to buy cocaine from a dealer is: A. a valid contract. B. a void contract. C. a voidable contract. D. an unenforceable contract.

Q: An agreement between two adults to pay $300 cash for a bicycle is an example of a contract that is: A. valid. B. void. C. voidable. D. unenforceable.

Q: A contract in which one party may disaffirm or enforce the contract is: A. a valid contract. B. a void contract. C. a voidable contract. D. an unenforceable contract.

Q: Ally, a minor, purchases a car from a used-car dealer. The law allows minors the right to cancel a contract until the time the minor turns 18. The contract between Ally and the dealer is: A. a valid contract. B. a voidable contract. C. a void contract. D. an unenforceable contract.

Q: If one part of the contract becomes illegal or impossible to perform, the remaining contract components remain in effect if: A. the contract is an express contract. B. the contract is an entire contract. C. the contract contains a severability clause. D. the contract is an implied contract.

Q: 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, it presents her with a bill. A. Kathy has to pay based on a unilateral contract. B. Kathy has to pay based on an implied contract. C. Kathy has to pay based on a quasi-contract. D. Mike has to pay because he brought her to the hospital.

Q: When a party to a contract is of proper age and mental competence, it is said that he or she has: A. capacity to contract. B. legal purpose. C. mutual assent. D. consideration.

Q: Will and Kendrick live in a state that requires that contracts involving transactions over $500 be in writing. If they enter a verbal agreement to buy a car for $1,500, this contract is: A. valid. B. void. C. voidable. D. unenforceable.

Q: Aimee goes online and orders a pair of jeans, three T-shirts, and a pair of boots. This is an example of: A. a divisible contract. B. an entire contract. C. a quasi-contract. D. a formal contract.

Q: When an offer and agreement exist between parties, this is called: A. capacity. B. legal purpose. C. consideration. D. mutual assent.

Q: Brandi orally tells landscaper Mike, "If you trim my hedges, I'll pay you $50." Mike trims her hedges. Which of the following is correct? A. This is a unilateral contract. B. This is a bilateral contract. C. This is a formal contract. D. This is a quasi-contract.

Q: When the reason and outcome of a contract are legal, the contract has: A. legal purpose. B. consideration. C. capacity. D. mutual assent.

Q: A professor tells a student that if she writes a 5,000-word paper on the evils of plagiarism by May 13, he will pay the student $750. A. The offer is for a unilateral contract. B. If the student gives the paper to the professor on May 14, the money is owed because the student came close and did get the paper done. C. This contract is enforceable only if it's in writing. D. This contract is enforceable only if the student verbally or in writing accepts the offer prior to beginning the paper.

Q: Which of the following is formed to remedy unjust enrichment? A. implied contract B. contract based on promissory estoppel C. express contract D. quasi-contract

Q: An offer of a reward, if it is fulfilled, forms: A. a bilateral contract. B. a unilateral contract. C. an express contract. D. a quasi-contract.

Q: Something of value that is exchanged as part of an agreement is called: A. mutual assent. B. consideration. C. capacity. D. legal purpose.

Q: In general, contracts for services are governed by: A. state common law. B. state statutory law. C. the Uniform Commercial Code. D. federal law.

Q: At this moment, your contract with your university or college is: A. implied, unilateral, and voidable. B. express, bilateral, and valid. C. implied, bilateral, and valid. D. quasi, unilateral, and voidable.

Q: In general, contracts for the sale of goods are governed by: A. state common law. B. state statutory law based on the Uniform Commercial Code. C. federal regulations. D. the Uniform Commercial Code.

Q: ABC Land Co. is negotiating the sale of an office building to Mega Co. Which laws will govern the contract for the sale of the building? A. hybrid laws B. the Uniform Commercial Code C. state statutory law based on the Uniform Commercial Code D. state common law

Q: A contract that meets one or more specific requirements of construction is considered: A. a formal contract. B. an informal contract. C. a hybrid contract. D. a unilateral contract.

Q: A contract in which each component of the contract is dependent on every other component is called: A. a divisible contract. B. an entire contract. C. a severable contract. D. a voidable contract.

Q: All of the following are examples of formal contracts except: A. negotiable instruments. B. contracts under seal. C. checks. D. a purchase over $500.

Q: Legal purpose means the contract itself does not violate the law.

Q: Helen's cat Fluffy has run away, and she places reward posters throughout her neighborhood. Mark sees one of the reward posters and spends the next six hours searching for Fluffy. While Mark is searching the neighborhood, Fluffy gets hungry and comes home. A. This is a bilateral contract, and Mark is entitled to be compensated for his efforts. B. This is a bilateral contract, and Mark is entitled to nothing because he didn't perform. C. This is a unilateral contract, and Mark is entitled to be compensated for his efforts. D. This is a unilateral contract, and Mark is entitled to nothing because he didn't perform.

Q: When Maria comes home from work, she finds that her yard has been mowed and trimmed. An hour later a man comes to her door to collect payment for the yard work. Maria refuses to pay him because she has never seen him before and had not hired him to do the work. Which of the following is accurate? A. This is an implied, unilateral contract, so she must pay. B. Maria has received unjust enrichment, so a quasi-contract is formed and she must pay. C. The court would make Maria pay the reasonable cost of the work to be fair to both parties. D. Maria would not have to pay anything.

Q: All of the following are necessary elements of a contract except: A. mutual assent. B. capacity. C. writing. D. consideration.

Q: A promise that can be accepted only by the performance of the person to whom it is offered is an example of: A. a bilateral contract. B. a unilateral contract. C. an implied contract. D. a quasi-contract.

Q: A building manager hires a painting company to paint the common areas in the building. The manager will supply all of the paint. This contract is a hybrid contract.

Q: The Uniform Commercial Code (UCC) is law that governs contracts for the sale of goods.

Q: An enforceable contract has four necessary elements: mutual assent, capacity to contract, consideration, and legal purpose.

Q: Elise hires an artist to paint a portrait of her family. This contract is governed by common law.

Q: Sophia stops at a coffee shop after class and orders a latte. This is an example of an implied contract.

Q: A handyman goes to the wrong house by mistake and cleans the gutters while the homeowners are at work. The homeowners will have to pay for the service under the quasi-contract theory of unjust enrichment.

Q: A contract that is not yet complete is called an executed contract.

Q: Under a bilateral contract, there is no contract until the offeree performs the requested act.

Q: A contract for installing a new furnace is an example of a hybrid contract.

Q: Common law governs a contract that involves installation of computer equipment when materials are valued at $75,000 and labor is $10,000.

Q: Any meeting of the minds resulting in mutual assent to do or refrain from doing something is called a contract.

Q: The terms agreement and contract have the same meaning.

Q: A valid contract is one that has all the necessary elements and, thus, can be enforced.