Deck 7: Introduction to Contracts

Question 1

A person who discusses the terms of a purchase with a salesperson, pays cash for the purchase, and takes the item with him, is making an unenforceable written contract.

Answer 1

False

Question 2

An enforceable contract results from an agreement that imposes a legal obligation.

Answer 2

True

Question 3

A written contract can be a handwritten note.

Answer 3

True

Question 4

An entire or indivisible contract can contain only two parts, and each is required to be independent of the other.

Question 5

A transaction that is neither oral nor written but is still legally binding is considered an implied contract.

Question 6

An express contract must be in writing and specifically state the agreement of the parties.

Question 7

An executed contract is one in which all terms of the agreement have been fully performed by at least one party.

Question 8

All contracts are agreements, but not all agreements are contracts. The PRIMARY reason is that:

A) certain agreements cannot be enforced by law.
B) certain agreements cannot be licensed under law.
C) agreements do not fall under any classification of contracts.
D) terms of an agreement usually are different from those of a contract.

Question 9

A divisible contract is made up of two or more parts, each part being independent of the others.

Question 10

It is usually advisable to put a contract in writing if the transaction is important, complicated, involves a large amount of money, or will extend over a long period of time.

Question 11

A contract must show mutual agreement, which is also referred to as "a meeting of the minds."

Question 12

Proper form is the requirement that the form of a contract be correct for the terms of the contract to be enforceable.

Question 13

A simple contract is defined as an informal contract made under seal.

Question 14

One reason for creating a contract is for employment.

Question 15

A contract may be extended and revised as needed to reflect the wishes of the parties.

Question 16

Competent parties can be of any age as long as they understand the terms of a contract.

Question 17

The part of the Uniform Commercial Code (UCC) that is relevant to contract law is Article number:

A) 1
B) 2
C) 3
D) 4

Question 18

It is not required for a formal contract to be written under seal.

Question 19

An executory contract is one in which the terms of the agreement have not yet been fully performed.

Question 20

A promise to give up something of value that a person has a legal right to keep or to agree to do something that a person is not legally required to do is known as consideration.

Question 21

The meaning of an implied contract is drawn from the:

A) actions and conduct of the parties.
B) interpretations of a written contract.
C) interpretations of an oral contract.
D) actions of third parties.

Question 22

If an agreement imposes a legal obligation, then it is a(n):

A) enforceable contract.
B) unenforceable contract.
C) a negated concurrence.
D) a void contract.

Question 23

The parties to a contract must have a clear understanding of what they are undertaking; that is, the contract must show:

A) mutual agreement.
B) legality of purpose.
C) consideration.
D) competency of the parties.

Question 24

All but one of the following elements is required of an enforceable contract. The exception is:

A) offer and acceptance.
B) mutual agreement.
C) consideration.
D) malafide intention.

Question 25

An indication made by the offeree that he or she agrees to be bound by the terms of the offer is known as:

A) an enforceable offer.
B) a mutual agreement.
C) free consent.
D) acceptance.

Question 26

The seal on a formal contract may consist of any of the following, EXCEPT:

A) the word "Seal.."
B) the letters "L.S."
C) an impression on the paper.
D) a stamped signature.

Question 27

Entering into a contract with persons of legal age and normal mentality is considered within the element of:

A) legality of purpose.
B) competency of the parties.
C) mutual agreement.
D) proper form.

Question 28

To be legally enforceable, a contract must contain the six elements. If one of these elements is missing, the court will usually:

A) enforce the contract.
B) refer the matter to the superior courts.
C) refuse to enforce the contract.
D) validate the contract.

Question 29

If only one party promises something, such as paying a certain amount of money, and the other party promises nothing, then the agreement lacks:

A) consideration.
B) competence.
C) legality of purpose.
D) offer and acceptance.

Question 30

A telephone conversation can result in a(n):

A) informal contract.
B) statutory contract.
C) contingent contract.
D) enforceable oral contract.

Question 31

The element of consideration in a contract refers to the:

A) competence of the parties.
B) purpose of the contract.
C) parties' exchange of promises.
D) form of the contract.

Question 32

Certain contracts, such as those involving the sale of personal property for $500 or more,:

A) must be orally accepted to be enforceable.
B) must be written to be ?enforceable.
C) need not be signed to be enforceable.
D) must be divisible in nature.

Question 33

Legality of purposes is the requirement that a contract:

A) must not violate the law.
B) can be void.
C) may contain a malafide intention.
D) need not be valid.

Question 34

In divisible contracts, the law of sales provides that, "where the circumstances give either party to a contract for sale the right to make or demand delivery in lots, the price, if it can be apportioned, may be demanded for each lot." This is stated under which of the following provisions of the Uniform Commercial Code?

A) UCC 2-305.
B) UCC 2-306.
C) UCC 2-307.
D) UCC 2-308.

Question 35

When a customer asks a merchant to deliver an article to his home with no mention of payment, the buyer implies that he or she will pay the market price of the article when it is delivered or when the bill is presented. This is an illustration of:

A) a simple contract.
B) consideration.
C) an implied contract.
D) a formal contract.

Question 36

A simple contract is not:

A) written.
B) oral.
C) implied.
D) formal

Question 37

An entire contract is also known as a(n):

A) simple contract.
B) indivisible contract.
C) specialty contract.
D) executed contract.

Question 38

An offer is a proposal made by one party (offeror) to another (offeree) that indicates willingness to:

A) enter into a contract.
B) negotiate a service or exchange.
C) consider a service or exchange.
D) reject an offer.

Question 39

The requirement that the form of a contract be correct for the terms of the contract to enforceable is the element of:

A) written form.
B) legal wording.
C) proper form.
D) consideration.

Question 40

Contracts can be created for:

A) only one specific purpose.
B) one or two purposes.
C) only for agreements that involve monetary transactions.
D) any number of purposes.

Question 41

A contract in which some future act or obligation remains to be performed under its terms is known as a(n):

A) executed contract.
B) statutory contract.
C) contingent contract.
D) executory contract.

Question 42

A(n) _____ contract is an agreement that results in an obligation that is legally enforceable.

A) void
B) valid
C) voidable
D) invalid

Question 43

Briefly explain the kinds of contracts.

Question 44

An agreement that lacks one or more of the essential elements of a contract from the very beginning is a:

A) voidable and unenforceable contract.
B) void and unenforceable contract.
C) valid and enforceable contract.
D) void, but enforceable contract.

Question 45

In the event of a dispute involving an oral agreement for the sum of $500, that was entered into for a period of one year , how would the parties establish exactly what was agreed to between them?

Question 46

Describe the conditions that determine the enforceability of a contract.

Question 47

Define "contract" and state the elements of a valid contract.

Question 48

An agreement that may be rejected by one of the parties for a legally acceptable reason is a(n):

A) implied contract.
B) void contract.
C) voidable contract.
D) valid contract.