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Q:
Schwartz, a painter, offers to sell a painting entitled "The Riverside Damsel" to Grimgerde for $50. Grimgerde responds that she needs more time to think about Schwartz's offer. Then Schwartz dies and the value of the painting escalates. Grimgerde calls Schwartz's widow, Waltraute, and says "I accept Schwartz's offer." Which of the following statements is true?
A. There is a binding contract entitling Grimgerde to the painting.
B. There is a binding contract entitling Grimgerde to the painting if she did not know Schwartz was dead when she called Waltraute.
C. There is no binding contract entitling Grimgerde to the painting under any circumstances.
D. There is no binding contract entitling Grimgerde to the painting unless Grimgerde actually pays Waltraute the $50.
Q:
Walter puts an ad in the paper as follows: "$500 reward for the return of my golden ring." Albrecht finds the ring and returns it to Walter, but he refuses to pay Albrecht the $500. Which of the following statements is true regarding this case?
A. Because the ad was merely a solicitation of offers, there was no contract until Walter accepted Albrecht's offer to find the ring.
B. Albrecht may not recover the money because he did not contact Walter before he began his search.
C. Because Albrecht did not pay Walter to keep the offer open, Walter is free to revoke and need not pay Albrecht anything.
D. The ad was an offer for a unilateral contract, which Albrecht accepted by returning the ring; Walter is therefore bound to pay Albrecht the $500.
Q:
To avoid problems, many courts hold a contract to be bilateral:
A. only as a last possible resort.
B. whenever possible.
C. in a way different from the approach taken by the "Restatement."
D. occasionally.
Q:
Bob Hunter, a merchant, makes an offer to Linda, another merchant, to buy 1,000 of her widgets in a signed letter containing all necessary terms of the offer. The letter states that Hunter will keep the offer open for three weeks from the day the offeree receives it. One week later, Hunter writes Linda another letter attempting to revoke his offer. Linda writes Hunter a letter accepting Hunter's original offer before she receives his revocation. What is the result?
A. Linda's acceptance is effective and a contract is created.
B. Hunter's revocation is effective and no contract is created.
C. Promissory estoppel prevents the formation of a contract in this situation.
D. Since it is an option offer, it cannot be revoked.
Q:
Gavin tells Rod that he will pay him $400 to paint his house. Rod starts to paint, intending to accept. Halfway through his paint job, Gavin tells Rod that he wants to revoke the offer. Under this scenario:
A. Gavin is not allowed to revoke because the contract is unilateral.
B. Gavin is allowed to revoke, but is liable to Rod for the reasonable value of benefit received.
C. Gavin may not revoke because the contract is bilateral.
D. Gavin is allowed to revoke if he finds Rod's efforts half-hearted or ineffective.
Q:
The doctrine of promissory estoppel does not require:
A. a promise.
B. a significant reliance on a promise.
C. an injustice as a result of reliance.
D. a consideration.
Q:
A subcontractor's bid:
A. is considered an offer.
B. can be revocable.
C. can be withdrawn even if the general contractor has relied on it.
D. is considered to be a part of a shrinkwrap agreement.
Q:
An offeree who attempts to accept after an offer has terminated is making:
A. an offer.
B. a solicitation.
C. a revocation.
D. a counteroffer.
Q:
If an offer does not state a time for acceptance, it is:
A. valid for a reasonable time, which depends on the circumstances of the offer.
B. valid for 10 days from the day the offer is made.
C. valid for 20 days from the day the offer is received by the offeree.
D. valid until the offeree accepts it.
Q:
Which of the following basic requirements must be met, for an offer to sell goods to be a firm offer?
A. It must contain assurances that it'll be revocable.
B. The offeror must be a merchant.
C. It must have been made orally.
D. It is revocable for the period of time stated in the offer.
Q:
In an option contract:
A. a separate contract for the limited purpose of holding the offer open is created.
B. the offeree is bound to accept the offer.
C. a joint contract is created for the limited purpose of keeping the offer open.
D. the offeree has purchased the right to accept within the stated period.
Q:
Advertisements for rewards, such as for the return of lost property, information, or the capture of criminals, are generally:
A. held to be invitations but not offers.
B. held to be offers for unilateral contracts.
C. held to be offers for bilateral contracts.
D. held to be firm offers.
Q:
In an auction:
A. acceptance occurs when an offeror makes the highest bid.
B. bidders are treated as offerors, making offers the seller is free to accept or reject.
C. an item cannot be withdrawn from sale prior to acceptance.
D. the seller is required to accept the final offer when the auction is advertised as being "with reserve."
Q:
According to the CISG, an offer:
A. must be directed to a specific person.
B. must express the quality of the goods to be valid.
C. is not valid, if it impliedly provides means of determining the quantity of the goods.
D. is sufficiently definite, though it lacks the price terms.
Q:
Beck tells his mom that he is thinking of selling his vintage coupe to his neighbor, Sam, for $100. Beck's mom calls Sam and tells him about her conversation with Beck. Sam then calls Beck and tells him that he accepts his offer. Under these circumstances:
A. the offer has been effectively communicated.
B. the offer has been conditionally tendered.
C. the offer has not been communicated.
D. the offer violates the UCC's rule against third-party interveners in quasi-contracts.
Q:
Which of the following statements about shrinkwrap contracts is true?
A. The label on the shrinkwrap states that by removing the shrinkwrap, the buyer accepts the terms of the software seller's licensing agreement.
B. Shrinkwrap contracts are enforceable even when the terms violate contract rules such as unconscionability.
C. The practice of using shrinkwraps never raises ethical problems like those involved in the use of small print, complex, or "hidden" language.
D. Critics point out that all the consumers understand the contract before accepting the terms and conditions.
Q:
Ads for the sale of goods at a specified price are considered as ________ by the courts.
A. giving everyone who sees the ad the power to bind into a contract
B. solicitation of an offer
C. an unfair offer
D. invitations to negotiate
Q:
Advertisements are regulated outside of contract law by:
A. the UCC.
B. the Restatement.
C. the Federal Trade Commission.
D. the CISG.
Q:
Under the UCC, a sales contract can be created:
A. if the contract is reduced to writing.
B. in any manner sufficient to show agreement, including conduct.
C. when the offeror forms subjective intent to contract.
D. when the contract contains the price terms.
Q:
When parties fail to expressly agree on the terms of a sales contract:
A. the contract is automatically void.
B. the contract will fail if the court finds that the parties are acting as though they have a contract and it is impossible to point to a particular moment in time when the contract was created.
C. the contract will not be enforceable under the UCC.
D. the contract will not fail if the court finds that the parties intended to make a contract and that their agreement is complete enough to allow the court to reach a fair settlement of their dispute.
Q:
In an agreement between two parties, if the facts indicate that a term was left out because the parties were unable to reach an agreement about it, it would probably mean that:
A. the CISG must fill in the gaps only if the price terms are left in the agreement.
B. the party's intent to contract and CISG must fill in any gaps left in the agreement.
C. the UCC must fill in any gaps left in the agreement.
D. the intent to contract is absent, and no contract was created.
Q:
Kyle offered to sell Pam 500 television sets. Kyle is the:
A. offeree.
B. agent.
C. offeror.
D. distributor.
Q:
When the offeror does not specifically indicate what he/she was willing to do and what he/she wanted the offeree to agree to do in return, his/her behavior will probably be classed as:
A. a quasi-contract.
B. an offer.
C. an invitation to negotiate.
D. an invitation to bid.
Q:
Which of the following must be present for an offer to have a legal effect?
A. Invitation to offer
B. Communicating the intention to make an offer
C. Invitation to negotiate
D. Definiteness
Q:
Which of the following authorities requires that, at minimum, the terms of the offer must be sufficiently clear so that what was promised can be determined?
A. The UCC only.
B. The common law and the Restatement.
C. The UCC and the Restatement.
D. The CISG and the UCC.
Q:
If an offeree accepts the offer but complains about the terms of the offer, a rejection is implied.
Q:
An offeree who makes an inquiry about the terms of the offer has made a counteroffer, and has terminated the offer by rejecting it.
Q:
If the subject matter of a proposed contract is destroyed without the knowledge of either party after the making of an offer but before its acceptance, the offer cannot be terminated.
Q:
To determine whether the offeror has created a present intent to contract, courts consider:
A. how the offer was made.
B. whether the offeror has communicated it to the offeree.
C. the intent of the parties subjectively.
D. the status of the person who has made the offer.
Q:
The general rule is that an offeror cannot revoke an offer at any time prior to acceptance if he has promised not to revoke for a stated period of time.
Q:
In a bidding process the owner of the project or a general contractor who wants to farm out a portion of a large job to a subcontractor are generally held to have made an invitation to offer.
Q:
An offer by itself does not include terms that limit its life.
Q:
The timing of prior dealings is relevant when determining a reasonable time for acceptance, if the parties have dealt with each other on a regular basis.
Q:
An option contract is created when the offeree gives the offeror something of value in exchange for a promise not to revoke the offer for a stated period of time.
Q:
The modern trend is for courts to tolerate more open and missing terms in offers.
Q:
When the parties to a contract do not expressly agree on all the terms of their contract, it prevents the creation of a contract.
Q:
The CISG is similar to the UCC in that it considers an offer sufficiently definite if it lacks price terms.
Q:
The courts have generally held that ads for the sale of goods at a specified price are treated as invitations to negotiate or to make an offer.
Q:
In deciding a contract dispute, courts look to the subjective intent of the parties.
Q:
The main thing that courts look for in deciding whether the parties entered into a contract is a "meeting of the minds" between the parties.
Q:
Courts have traditionally said they are contract makers, not enforcers.
Q:
Discuss the importance of having contracts in today's market economy.
Q:
How does the Uniform Commercial Code define "merchant"? Why does the UCC distinguish between merchants and non-merchants?
Q:
Explain the differences and similarities of the categories used to classify contracts by their enforceability: valid, unenforceable, voidable, void.
Q:
(p. 179, 180) Jerry's Juice Joint sends Mango Mart an order for 20 cases of mangoes at $100 per case. Mango Mart sends Jerry's an acknowledgement form accepting the order. Using concepts discussed in this chapter, describe the type of contract between Jerry's and Mango Mart.
Q:
What is a quasi-contract?
Q:
Regarding promissory estoppel most courts:
A. follow the requirements for promissory estoppel set forth in the "Restatement (Second) of Contracts" because the "Restatement" is the law.
B. follow the requirements for promissory estoppel set forth in the "Restatement (Second) of Contracts" despite the fact that the "Restatement" does not carry the force of law.
C. do not follow the requirements for promissory estoppel set forth in the "Restatement (Second) of Contracts" despite the fact that the "Restatement" carries the force of law.
D. do not follow the "Restatement" as it does not carry the force of law.
Q:
A quasi contract is:
A. a contract that has been fully performed.
B. a contract where terms are stated orally only.
C. contract like duties imposed by the court to prevent unjust enrichment.
D. an agreement which contains all but one of the basic elements needed to form an enforceable contract.
Q:
Joe pays Ann to mow his lawn and Ann mows Danna's lawn by mistake. Danna peeps out her window and sees Ann mowing, yet says nothing to Ann about her mistake since Danna needs to have her lawn mowed. When Ann approaches Danna for payment, Danna refuses, arguing that she had never asked Ann to mow her lawn. Under these circumstances, Ann can recover payment from Danna under:
A. void contract.
B. quasi contract.
C. executory contract.
D. express contract.
Q:
The doctrine of promissory estoppel:
A. makes the contracts unenforceable.
B. does not make promises enforceable.
C. protects bargains, not reliance.
D. protects reliance, not bargains.
Q:
Fran promises to reimburse Tim $700 for a new scooter for his own use. After Tim delivers the scooter, Fran refuses to pay Tim. Tim may recover under the doctrine of:
A. unjust enrichment.
B. executory contract.
C. unilateral contract.
D. promissory estoppel.
Q:
Pete offered Liz a job at his new law firm. In anticipation, Liz quit her job at Mega Firm, bought a new computer and invested in a new set of law books. Shortly before her anticipated start date with Pete's firm, Pete informed Liz that he had changed his mind, and no longer wanted her. Liz may recover under the doctrine of:
A. unjust enrichment.
B. promissory estoppel.
C. unilateral contract.
D. express contract.
Q:
When two parties have directly, but orally, stated all of the terms of a contract at the time it was formed, they have:
A. executed the contract.
B. made an express contract.
C. made an implied contract.
D. not made an enforceable contract.
Q:
Which of the following is intended to avoid unjust enrichment?
A. A bilateral contract
B. A quasi contract
C. A void contract
D. An express contract
Q:
An executory contract is a contract:
A. which has been fully performed by all parties.
B. where executive privileges are implied.
C. which has not yet been fully performed by all parties.
D. where one party performs on the basis of a promise made by the other.
Q:
A promise exchanged for an act is an example of a:
A. a bilateral contract.
B. a unilateral contract.
C. an implied contract.
D. a quasi-contract.
Q:
John tells Sally he will sell her his car for $1,000. Sally agrees to buy the car on John's terms. The contract between John and Sally is:
A. unilateral and executory.
B. bilateral and voidable.
C. bilateral and executory.
D. unilateral and implied.
Q:
Ted makes a deal with Ella to sell her his farm. They shake hands to "seal the deal," but do not put the agreement in writing. The contract is:
A. voidable but enforceable.
B. void.
C. valid.
D. unenforceable.
Q:
Ben makes an agreement with Bob for Bob to steal Professor Smith's laptop computer. The agreement between Ben and Bob is:
A. voidable.
B. void.
C. valid.
D. unenforceable.
Q:
An oral contract which was required by contract law to be in writing is:
A. void.
B. voidable.
C. unenforceable.
D. valid.
Q:
Elroy is fifteen years old and makes an agreement with Dave to buy Dave's mp3 player. The agreement:
A. is executed.
B. cannot be cancelled.
C. is unilateral.
D. is voidable.
Q:
A promise exchanged for a promise is an example of:
A. a bilateral contract.
B. a unilateral contract.
C. an implied contract.
D. promissory estoppel.
Q:
As used in the UCC, the concept "reasonable":
A. is a practical standard used to gauge what people really do in the marketplace.
B. is a theoretical concept based on the "reasonable person standard" of tort law.
C. refers to the capacity to contract.
D. refers to what a reasonable person would do in the marketplace.
Q:
Christy downloaded a music software program from the Internet. Under the UCC, the software is:
A. a good.
B. a service.
C. a good faith warranty.
D. a mixture of goods and services.
Q:
If there is no UCC rule governing a particular contract problem:
A. freedom of contract is obtained.
B. unconscionable contract is assumed.
C. unjust enrichment is assumed.
D. the common law is applicable.
Q:
Which of the following is correct regarding the definition of "Merchant" by UCC?
A. It sometimes imposes a higher standard of behavior on merchants than non-merchants.
B. It always imposes the same standards on merchants and non-merchants.
C. It regards everyone covered by the UCC as a merchant.
D. It deals only with nonprofessional sellers.
Q:
Which of the following is correct regarding the CISG?
A. Its fundamental goal is to unify and codify the law on sale of goods among contracting parties from different states in the United States.
B. It provides rules governing the formation of international contracts and regulates the transfer of goods under those contracts.
C. It focuses on which terms of the offer and acceptance are the same.
D. It applies to commercial and consumer transactions.
Q:
The UCC differs from the United Nations Convention on Contracts for the International Sale of Goods (CISG) in that:
A. the UCC does not require contracts to be in writing, CISG requires contracts for the sale of goods in excess of $500 to be in writing.
B. the CISG applies to the sale of consumer transactions while the UCC governs both consumer and commercial transactions.
C. the UCC holds merchants to higher standards in some circumstances, while the CISG does not make a distinction between merchants and non-merchants.
D. the CISG applies to both consumer and commercial transactions, while the UCC applies only to commercial sales of goods.
Q:
In a contract involving elements of both goods and services, a court will determine whether Article 2 of the UCC applies by:
A. asking which element predominates.
B. balancing the need to apply a uniform standard with the interest of justice.
C. asking if the contract is barred by public policy.
D. using the criteria of reasonableness.
Q:
Compared with common law, the UCC:
A. is more rigid.
B. is more likely to find that parties have a contract.
C. is more concerned with technical rules.
D. applies theoretical rules to deal with what people do in the marketplace today.
Q:
Which of the following statements is true about the UCC?
A. One of the purposes of UCC was to promote fair dealing and higher standards of behavior in the marketplace.
B. The most obvious purpose of UCC was to establish a uniform law to govern commercial transactions that often takes place within the state.
C. In accordance with the intentions of the drafters of UCC, complete uniformity has been achieved.
D. The Code is divided into 10 articles that deal with many of the problems that might ordinarily arise in a commercial transaction.
Q:
Article 2 of the UCC applies to all contracts for the:
A. liquidation of assets.
B. sale of goods.
C. sale of securities.
D. transfer of money between banks.
Q:
The UCC defines "goods" as:
A. intangible personal property.
B. tangible personal property.
C. abstract property.
D. tangible public property.
Q:
A contract is implied when the parties directly state its terms at the time the contract is formed.
Q:
The "Restatement (Second) of Contracts" carries the force of law.
Q:
Unlike contractual liability under the traditional bargain theory, liability under the doctrine of promissory estoppel is based on reliance.
Q:
Which of the following is true about a contract?
A. Any offer made is a contract, though there is no acceptance of the offer.
B. It need not necessarily be entered into by parties having capacity to contract.
C. It must be voluntarily entered into and promise to perform a legal act.
D. It must always be supported by consideration.
Q:
(p. 172, 173) Which of the following is true of the laissez faire economic theories?
A. People in business were unable to limit or shift many of their economic risks by placing clauses in their contracts.
B. The courts were unwilling to interfere with people's private agreements or to do anything that might interfere with the country's growing industrialization.
C. These theories were never considered a part of the public policy in the 19th century.
D. People in business had to face a lot of restrictions while planning the kind of economy that increasing industrialization required.
Q:
Which of the following is a change that took place in the legal system that led to the development of contract law in the process?
A. Courts began to shift their emphasis from protecting consumers and workers to protecting business and promoting industrialization.
B. Courts today are not willing to consider defenses based on inequality of bargaining power between the parties.
C. Courts tend to view with great suspicion, attempts by manufacturers to limit their responsibility for their products by contract.
D. Legislation does not control any contractual relationships. This has been left to private bargaining.
Q:
In a unilateral contract, only one of the parties makes a promise. The other party performs an act in exchange for that promise.