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.

Accepted Answer

Article 2 of the Uniform Commercial Code governs the sale of goods, which includes all types of tangible personal property, such as fabric, automobiles, computers, furniture, and paper clips.

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.

Accepted Answer

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.

Accepted Answer

Nunnsky's Retail engaged in false advertising and violated the principle of good faith, which may be protected by state consumer protection laws.

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.

Accepted Answer

The contract is not fully executory because both parties have performed their obligations. Lucy delivered the chocolates and Rick paid for them. The contract is fully executed.

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.

Accepted Answer

This is the principle of objective intent in contract law. Courts consider how a reasonable person would understand the terms and actions of the parties involved in order to determine if there was an agreement or meeting of the minds.

Question 6

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

Accepted Answer

For a contract to be enforceable, there must be an offer by one party and an acceptance of that offer by the other party.

Question 7

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

Accepted Answer

These are indeed some of the essential elements of a contract. Acceptance refers to both parties agreeing to the terms of the contract, consideration is the exchange of something of value between the parties, legality ensures that the contract does not violate any laws or public policy, and capacity refers to the ability of both parties to enter into the contract, such as being of legal age and mental 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.

Accepted Answer

The six people have made offers to buy the computer, but April is not bound to accept all six offers. She is free to accept or reject any offer, unless she has specifically stated otherwise in her advertisement or there was a prior agreement with any of the six people. Therefore, until April accepts one of the written acceptances, she is not bound on any contract.

Question 9

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

Accepted Answer

All oral contracts are not quasi-contracts, but are instead considered to be valid contracts just like written contracts. Quasi-contracts are implied in law and arise in situations where one party may unjustly benefit from another's actions or property, and are not actual contracts agreed to by both parties. Furthermore, an oral contract is considered to be executed once all of its terms have been fulfilled by both parties.

Question 10

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

Accepted Answer

A letter of intent is a document that outlines the key terms and preliminary agreements reached during business negotiations. It is not typically binding, and its purpose is to serve as a roadmap for further negotiations and agreements. However, certain provisions within a letter of intent may be binding, such as confidentiality or exclusivity clauses. To create a binding contract, a formal agreement or contract must be drafted and signed by all parties involved.

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.

Accepted Answer

This is an example of a unilateral contract, which is a promise to pay upon the completion of a specific act. Kate completed the act (finding and returning the watch) and therefore has fulfilled the terms of the contract. Alex is obligated to pay her the promised reward.

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.

Accepted Answer

This is an example of an express, bilateral, executed contract. It is express because the terms are clearly stated and agreed upon. It is bilateral because it involves a promise in exchange for an act. It is executed because both parties have fulfilled their obligations.

Question 13

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

Accepted Answer

In a unilateral contract, one party (the offeror) makes a promise that the other party (the offeree) can accept only by actually doing something. This is in contrast to a bilateral contract, where both parties exchange promises and are obligated to fulfill them.

Question 14

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

Accepted Answer

The element of a contract that states the parties must be adults of sound mind is capacity, not consent. Capacity refers to the legal ability of a party to enter into a contract, while consent refers to the agreement of the parties to the terms of the contract.

Question 15

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

Accepted Answer

Contract law exists to provide a framework for legally enforceable agreements. It sets out the requirements for a valid contract and ensures that parties to a contract can rely on the legal system to enforce their agreements. In determining which agreements are legally enforceable, contract law considers factors such as the presence of mutual assent, consideration, and capacity to contract.

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.

Accepted Answer

Once Danielle fulfills the specific duty of painting the room with the homeowners' chosen paint, she has fulfilled her obligations under the contract and is discharged.

Question 17

A valid contract can legally be voided by either party.

Accepted Answer

A valid contract can only be voided under certain circumstances such as fraud, duress, or misrepresentation. It cannot be voided by either party at will.

Question 18

Revocation is the withdrawal of an offer by the offeror.

Accepted Answer

Revocation is the withdrawal of an offer, so the statement is true.

Question 19

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

Accepted Answer

Promissory estoppel is used as a substitute for consideration in situations where a contract is not enforceable due to lack of consideration or other reasons.

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.

Accepted Answer

An executory contract is one in which some performance is yet to be completed. In this case, Mary has agreed to pay for the TV in 30 days, which means she still has to perform her obligation. Therefore, it is an executory contract.

Quiz 10: Introduction to Contracts