Deck 10: Introduction to Contracts

Question 1

Contracts for the sale of fabric, automobiles, computers, furniture, and paper clips would all be governed by Article 2 of the Uniform Commercial Code.

Answer 1

True

Question 2

When Olga asks Sven if he wishes to sell his Harley motorcycle, he replies that he would not sell it "for less than $2,000." Olga replies, "I accept," and hands him $2,000. A contract exists.

Answer 2

False

Question 3

Nunnsky's Retail sent out newspaper inserts advertising wool suits for $50. In fact, the store had only two, out-of-style suits for sale at this price. Their other wool suits started at $175. This constitutes bad faith in its advertising, so consumers may have protection through state consumer protection statutes.

Answer 3

True

Question 4

Lucy and Rick sign a contract in which Lucy agrees to deliver 10 boxes of chocolates in exchange for Rick's promise to pay $5 per box. Lucy delivers the candy. Rick pays for the goods. This contract is fully executory.

Question 5

Regarding contracts, in seeking to determine whether there is a meeting of the minds, the courts look to how a reasonable person would objectively view the language or actions of the parties.

Question 6

Robert offers to buy a car from Jane for $400. Jane must accept this offer in order to form an enforceable contract.

Question 7

Some of the elements of a contract are acceptance, consideration, legality, and capacity.

Question 8

April put an advertisement in the newspaper advertising the sale of her computer for $500. Simultaneously, six people responded to the ad by mail with formal written acceptances. April is bound on all six contracts to sell her computer for $500.

Question 9

All oral contracts are quasi-contracts until they are completely executed.

Question 10

A letter of intent summarizes progress made during business negotiations, but more importantly, it creates a binding contract.

Question 11

Alex promises to pay $100 to anyone who finds his lost watch. Kate finds and returns the watch to Alex after hearing of the reward money. Alex and Kate have an enforceable unilateral contract.

Question 12

Valerie promises Teresa that she will pay Teresa $75 if Teresa will clean Valerie's house by noon on Saturday. If Teresa cleans the house by noon on Saturday and Valerie pays the $75, then this is an implied, bilateral, executory contract.

Question 13

In a unilateral contract, one party makes a promise that the other party can accept only by actually doing something.

Question 14

The element of a contract that states the parties must be adults of sound mind is consent .

Question 15

One purpose of contract law is to determine which agreements are worthy of legal enforcement.

Question 16

Under a contract, Danielle is required to paint a room with paint chosen by the homeowners, the Flynns. After Danielle paints the room according to the contract requirements, her duties under the contract are discharged.

Question 17

A valid contract can legally be voided by either party.

Question 18

Revocation is the withdrawal of an offer by the offeror.

Question 19

When promissory estoppel is used by the courts, it is because there is NOT an enforceable contract present.

Question 20

Mary goes into Honest Harry's Electronics and purchases a TV. Mary agrees to pay for the TV in 30 days on the store's "30 days same as cash" plan. This is an executory contract.

Question 21

Nella offers to sell her crop of strawberries, which have just been picked, to Morgan's Market. Since Nella does not specify a time limit for acceptance, Morgan's can accept the offer at any point in time.

Question 22

The basic distinction between an executory contract and an executed contract is that

A)one is enforceable, the other is not.
B)only one promise is involved in an executory contract.
C)one is legal, the other is not.
D)all parties have fulfilled their obligations in an executed contract.

Question 23

A forbearance is, in essence, the opposite of an act.

Question 24

Jerry offers to shovel the snow from Ben's driveway for $35. Ben replies "OK." This is an example of

A)an implied, unilateral contract.
B)an express, unilateral contract.
C)an implied, bilateral contract.
D)an express, bilateral contract.

Question 25

Candy, Inc. signed an agreement with Sweet Plantation. Under the contract, Candy, Inc. agreed to purchase all the sugar cane Sweet Plantation grew during the coming season for $0.16 per pound. This contract will be unenforceable due to its vagueness.

Question 26

Tim sent an email to Belinda offering to sell his car to her for $5,000. Belinda texted Tim back offering to pay $4,000 for the car. A valid contract did not exist because

A)Belinda should have accepted Tim's offer orally.
B)consideration was not present in the negotiations.
C)the contract was not for a lawful purpose.
D)Belinda did not accept Tim's offer; she is still negotiating.

Question 27

Agreeing not to open a competing business could be consideration.

Question 28

What element of a contract refers to both parties receiving some measurable benefit?

A)consideration
B)capacity
C)consent
D)legality

Question 29

Software clickwrap and browsewrap agreements limiting the manufacturer's maximum responsibility to a refund of the purchase price even if the software destroys your hard drive have generally been found to be binding against consumers.

Question 30

Mike made the following offer to Mick: "I will pay you $500 if you agree to paint my house." Mick replied that he would. At this point, the contract is an

A)executed, bilateral, express contract.
B)executory, bilateral, implied-in-law contract.
C)executed, unilateral, express contract.
D)executory, bilateral, express contract.

Question 31

Patty is a poor college student struggling to work and keep up with her studies. Fred, her uncle, promises to pay Patty support of $200 per month for the next six months. Although Fred didn't ask her to, she quits her current job in order to devote full time to her studies for the next six months. Fred makes one payment and then stops with no explanation. If Patty sues, what is the likely result?

A)Fred would win, as he did not ask Patty to quit her job.
B)Patty would win, as a contract was formed when Fred promised to pay her the support.
C)Fred would win, as family members cannot sue each other for breach of an oral promise.
D)Patty may win under the doctrine of promissory estoppel.

Question 32

A completed act can be the basis for consideration.

Question 33

Larry goes to his barber who has cut his hair for the past several years. The barber proceeds to cut his hair as they talk about the most recent snow storm to hit the area. This is an example of a

A)unilateral, implied contract.
B)bilateral, implied contract.
C)unilateral, express contract.
D)bilateral, express contract.

Question 34

Miles purchased a lawnmower with an attached warning that said, "The manufacturer is not responsible in the case of an injury caused by the lawnmower." If Miles is injured because of a defect in the mower and sues the lawnmower manufacturer, he will most likely

A)lose, as he agreed to not hold the lawnmower manufacturer liable.
B)lose, as he assumed the risk.
C)win, as this warning would be unenforceable.
D)win, as all lawnmower manufacturers are strictly liable.

Question 35

Courts distinguish between mere gifts between parties and legally binding commitments by the element of consideration .

Question 36

When Myrtle comes home from work one evening, she finds that her yard has been mowed and trimmed. Later, a man comes to collect for the yard work done. Myrtle refuses to pay for the work since she has never seen the man before and did not hire him to do her yard work. Which of the following answers is most accurate?

A)This is an implied, unilateral contract and she must pay the price requested by the man.
B)This is an express, voidable contract that either party may avoid.
C)The court would order Myrtle to pay the reasonable value of the yard work because of the benefit conferred on her.
D)Myrtle would not have to pay for the yard work.

Question 37

A promise to do (or not do)something in the future counts as consideration.

Question 38

Which of the following is NOT required to establish promissory estoppel?

A)a promise made by the defendant
B)a promise made by the plaintiff in response to the defendant's promise
C)reliance on the defendant's promise
D)All of these are required.

Question 39

If the offer does not specify a type of acceptance, the offeree may accept in any reasonable manner and method.

Question 40

The two basic elements of consideration are intention and agreement.

Question 41

The courts will find an implied contract when

A)justice demands it.
B)conduct of the parties indicates they intended an agreement.
C)there is promissory estoppel.
D)there is undue influence.

Question 42

Dick offers to sell Jane his 1955 Thunderbird convertible. Before Jane can accept the offer, lightning strikes the car and it is totally destroyed. Which of the following is true?

A)Jane can still accept the offer and John must find a 1955 Thunderbird to sell.
B)The offer is terminated by law.
C)Dick can still revoke his offer so long as he does so before Jane accepts.
D)Jane can still accept the offer. She will be entitled to the insurance proceeds.

Question 43

Which of the following is an example of an implied contract?

A)Alberto visits his physician to be treated for a sinus infection. They do not discuss payment, but the following week Alberto receives a bill from his physician for services rendered.
B)Midori offers to sell a necklace to Patricia for $50; Patricia agrees to pay $50 for the necklace.
C)Amy tells her neighbor Tom, "If you rake up my leaves, I'll bake you a batch of brownies." Tom accepts the offer.
D)Miguel wants to purchase his first home. When he found the perfect place, he signed a contract for purchase and closed on the home within a month.

Question 44

John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky Derby. Prince Charming came in last, much to John's frustration and embarrassment. John exclaims in a loud voice, "I'm selling that horse to the first person who hands me $100!" John has

A)made an offer to anyone within hearing distance and will be bound by his offer to the first person who produces $100.
B)made a firm offer and will be bound by his offer for a reasonable period of time.
C)made an acceptance to the first person who can produce $100.
D)not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer.

Question 45

Bob signed an agreement with Joe under which Bob agreed to purchase all the hay that Joe grew during the coming growing season. This contract will be

A)unenforceable due to its vagueness.
B)unenforceable due to the difficulty of devising an appropriate remedy for a breach.
C)enforceable as long as both parties act in good faith and Bob doesn't suddenly demand more hay than what was reasonably estimated.
D)unenforceable unless state real estate law makes an exception.

Question 46

Walter enters a dentist office and points to a damaged tooth. The dentist, Matt, treats the tooth. If Walter refused to pay and Matt sued,

A)Walter would win as there was no contract.
B)Walter would win because of the UCC.
C)Matt would win; this is an implied contract.
D)Matt would win in quantum meruit .

Question 47

Noah tells Ivy he is willing to sell his comic book collection to her for $100. Ivy says no, she would rather save her money to buy a new cell phone. What just happened?

A)termination by expiration
B)termination by rejection
C)termination by revocation
D)termination by operation of law

Question 48

Collector Carl displays his beer can collection at the local swap meet. Mary sees the collection and is interested in buying it. Carl says he will sell the collection for $1,500. Mary says she really likes the collection but is only willing to pay $1,000. Which of the following is correct?

A)Mary's counteroffer terminates Carl's offer of $1,500.
B)If Carl rejects Mary's counteroffer, she can still accept Carl's offer of $1,500.
C)Neither offer is valid. Who would ever pay $1,000 or $1,500 for a beer can collection?
D)Mary's offer is an option contract and she cannot revoke the offer.

Question 49

If an offer specifies no time limit in which to accept,

A)the offeree has 30 days to respond.
B)the offeree has 10 days to respond.
C)the offer is not valid and therefore it does not matter when the offeree responds.
D)the offeree has a reasonable period during which to accept.

Question 50

Which of the following types of property would be considered "goods" under the Uniform Commercial Code?

A)a promissory note
B)a stock
C)a patent
D)a computer

Question 51

Jaime offered to buy Kevin's bike. Jamie is the

A)offeree.
B)offeror.
C)mortgagor.
D)trustee.

Question 52

Madison purchases several 50-pound bags of mulch at the local gardening store. An employee carries the bags of mulch to Madison's truck and loads them into the back for her. Will Article 2 of the UCC govern the contract in this situation?

A)No, this is a mixed contract because Madison is paying for both goods and labor.
B)Yes, because the primary purpose of this contract is the sale of goods.
C)No, this is an express contract because both parties explicitly state their intentions.
D)Yes, because Article 2 of the UCC governs all bilateral contracts.

Question 53

What type of contract is a possible remedy for an injured plaintiff in a case with no valid contract, when the plaintiff can show benefit to the defendant, reasonable expectation of payment, and unjust enrichment?

A)an express contract
B)an implied contract
C)a quasi-contract
D)a unilateral contract

Question 54

An express contract

A)must be in writing.
B)may be inferred by the conduct of the parties involved.
C)has both parties setting forth their intentions.
D)is not valid in many states.

Question 55

The intent of the offeror to extend an offer to the offeree is generally determined by reference to

A)the beliefs of the offeror.
B)the subjective intention of the offeror.
C)the assumptions of the offeror.
D)the words and conduct of the offeror.

Question 56

Which of the following represents a unilateral offer?

A)"I will pay you $50 if you mow my lawn."
B)"I will pay you $50 if you promise to trim that tree."
C)"I will pay you $50 for your CD player."
D)"I will pay you $50 for your backpack."

Question 57

Jennifer has offered to sell her laptop computer for $500 to Jack. She tells Jack that the computer is only six months old but, in fact, it is three years old, and Jennifer wants to unload the lemon. Jack agrees to buy the computer based on Jennifer's representations. This contract is

A)a void agreement because of the fraud involved.
B)a voidable contract, one that Jack can void.
C)a voidable contract, because it is unilateral.
D)a void contract because of the UCC.

Question 58

Courts may award damages called quantum meruit , which means

A)"as much as he deserves."
B)"to the letter of the law."
C)"let the buyer beware."
D)"something for something."

Question 59

An agreement in which parties intend to form a valid bargain, but a court declares that some rule of law prevents enforcing it is called

A)a void agreement.
B)a voidable contract.
C)an unenforceable agreement.
D)a quasi-contract.

Question 60

If Morales and Rolfes Supply negotiate for the purchase and sale of a supply of fuel for a three-year period for Morales' business,

A)the contract may indicate a method for determining the price, without stating a definite price.
B)Morales and Rolfes must depend on the UCC's gap-filler provisions to determine a price since the fuel is a "good" covered by Article 2 of the UCC.
C)the contract price must remain the same for the entire three-year contractual period.
D)their contractual requirements regarding definiteness would be the same under the UCC and the common law.

Question 61

Seth told the salesperson at Outdoor Times that he wanted the sleeping bag that was advertised in the Sunday paper; one that would keep him comfortable if the temperature drops to 10 degrees Fahrenheit. The salesperson told Seth they were sold out of that bag, but there were two other styles that would meet his needs and were the same price. Seth insisted he wanted the advertised bag and threatened to sue for breach of contract. Which is true?

A)Outdoor Times is guilty of "bait and swap."
B)Seth will prevail in his case, as Outdoor Times is responsible for having sufficient stock of advertised items.
C)Seth will not prevail, as the advertisement was simply a request for offers.
D)Outdoor Times must provide Seth with a raincheck, ensuring he can buy the same bag at the sales price at a later date.

Question 62

Briefly discuss how an offer can be accepted. Include in your answer the application of the mirror image rule.

Question 63

Yolanda was shoveling snow from her sidewalk, and just to be nice, she also shoveled snow from her neighbor Melody's walk. The next day, Melody promises that she will pay Yolanda $25 for shoveling snow from her walk. Has a contract been created?

A)No, Yolanda had a preexisting duty to shovel Melody's walk.
B)No, past consideration is not valid consideration.
C)Yes, Melody made a promise and that created the contract.
D)Yes, Melody has a moral obligation to pay for the work, even if she didn't request it.

Question 64

Wally owns 200 acres of land. Wally offers to sell the land to Robert for $1,500 per acre. Robert replies that he does not need 200 acres of land but would like to buy 40 acres at $1,500 per acre. Wally agrees to sell but does not identify which 40 acres. Later, Wally refuses to sell any land to Robert. What is the result?

A)Robert wins; this is an enforceable contract with complete and definite terms.
B)Robert wins; the UCC will decide which 40 acres are to be sold.
C)Wally wins; the original offer was not intended to be an offer but merely an invitation to negotiate.
D)Wally wins; this agreement is too indefinite since it does not identify which 40 acres are to be sold.

Question 65

If Becky promises not to drink alcohol until she becomes a legal adult in exchange for Ben's promise of $1,000, the agreement is

A)enforceable because Becky is giving up the right to do something she would otherwise be entitled to do.
B)enforceable because the agreement accomplishes Ben's goal of keeping Becky from drinking.
C)not enforceable because Becky does not have a legal right to drink alcohol.
D)not enforceable because Becky is a minor and could disaffirm the contract.

Question 66

A seller's form clearly states no warranty is included. The buyer's form states that the seller warrants the goods for one year. In this case

A)no contract can be created.
B)the warranty term is a "different term," and the majority of states hold that a contract can be formed but the contradictory terms cancel each other out.
C)the warranty term is an "additional term" that becomes part of the contract in most states.
D)the warranty term is a "different term," which in most states becomes part of the contract unless the seller promptly objects.

Question 67

ACME, Inc. is a software producer that entered into a verbal agreement with XYZ Corporation wherein XYZ agreed to buy ACME's newly developed software. The agreement also provided that ACME would supply training personnel, as well as technical personnel, to work with XYZ employees in installing and learning the software. What law governs this agreement?

Question 68

Travel Lines offered to sell 10 round-trip tickets to Elaine. Travel Lines stated that the acceptance must be in writing by USPS next-day service. Which of the following acceptances will create a contract between Travel Lines and Elaine?

A)Elaine calls Travel Lines and states that she will buy the tickets.
B)Elaine sends a fax to Travel Lines stating she will buy the tickets.
C)Elaine sends a letter by USPS next-day service to Travel Lines stating that she will buy the tickets.
D)All of the these responses will create a contract between Travel Lines and Elaine since they constitute reasonable means of communication.

Question 69

McCann Construction purchased a poured concrete form from Advance Concrete Forms, Inc. McCann purchased the concrete form by placing a phone call to Advance in Madison, Wisconsin. Advance delivered the concrete form with an invoice stating the terms of the sale required payment within 30 days and a 1 1/2 % interest per month finance charge would be charged on accounts over 30 days. When McCann failed to pay the invoice on time, interest was charged according to this rate. Later, McCann refused to pay the accumulated interest charge, claiming there was not a meeting of the minds regarding the finance charge in any conversation prior to the sale. The trial court concluded that the finance charge was in fact an additional term added by Advance when it accepted McCann's purchase order. Discuss Uniform Commercial Code Section 2-207 in general and with regard to this situation. Does McCann owe the interest accrued?

Question 70

List and briefly describe the seven key characteristics that must be present for a contract to be enforceable.

Question 71

Discuss the requirements of promissory estoppel.

Question 72

In January, Alex promised to pay Y-K Inc. $5,000 if it would refrain from filing suit against him on a breach of contract action. Y-K agreed and accepted a $5,000 check from Alex. Which of the following statements is correct?

A)Y-K's promise to refrain from suing Alex was not supported by legal consideration.
B)Y-K's promise to refrain from suing Alex was supported by legal consideration and is enforceable.
C)This is an accord and satisfaction, and Y-K cannot sue.
D)The courts would apply promissory estoppel in this situation.

Question 73

Briefly discuss the meaning of bilateral, unilateral, executory, and executed contracts.

Question 74

Regarding consideration, an act occurs when a person

A)complies with the law.
B)fulfills an obligation under an existing contract.
C)does something not legally required.
D)All of these are correct.

Question 75

In the historic case of Hamer v. Sidway, the nephew

A)lost, as the Court found there  was no consideration.
B)lost, as the uncle was dead.
C)won, as the Court found there  was consideration.
D)won, as there was a completed gift.

Question 76

What is consideration and what are the two basic elements of consideration?

Question 77

Jack mails an offer to Joan that states, "I offer to sell you my car for $2,000. If I don't hear from you in 10 days, I will assume you are willing to buy the car for the stated price." Jack hears nothing by the deadline and assumes he has a deal. What is the result?

A)Jack has a deal. His offer was intended and contains definite terms.
B)Jack has a deal. Joan should have responded saying she is not interested in the car if she didn't want to be bound to the offer.
C)Joan is not bound. Generally, an offeree must say or do something to accept an offer.
D)Joan is not bound. Ten days is not a reasonable amount of time to consider the offer and accept by mail.

Question 78

What elements are necessary for an offer to be valid? Give two examples of nonoffers.

Question 79

Police Officer Paul apprehends a wanted criminal and then demands the $10,000 reward offered by Crime Stoppers. Which of the following statements is true?

A)Police Officer Paul is not entitled to the reward because past consideration is never valid consideration.
B)Police Officer Paul is entitled to the reward because he puts his life on the line every day.
C)Police Officer Paul is not entitled to the reward because he was under a preexisting duty to make the arrest.
D)Police Officer Paul is not entitled to the reward but may have an argument under promissory estoppel.

Question 80

Preferred Contractors was a general contractor and owner of a condominium complex that was under construction. Barrett, a subcontractor, had been hired by Henderson Plumbing, another subcontractor, to help it complete the plumbing work on the project. When Henderson began using shoddy installation procedures and subsequently fell behind the scheduled completion time for the project, Preferred Contractors urged Barrett to correct Henderson's mistakes and to finish the job. Barrett refused to continue until he knew who would pay him, since he feared Henderson's financial position was shaky. Nonetheless, Preferred Contractors' job superintendent told Barrett to go ahead even if Barrett and Preferred Contractors had no contract because "he would use his influence to try to help Barrett get his money." Barrett finished the work and sent a $7,500 bill to Henderson, which was never paid. When Barrett later sent the bill to Preferred Contractors, these facts emerged: Preferred Contractors told him that due to Barrett's failure to notify Preferred Contractors promptly of Henderson's non-payment, Preferred Contractors had already paid Henderson in full and therefore would not pay twice for the work. Discuss the best possible theory of recovery Barrett may argue.