Question 1

Hi-Lite Manufacturing, Inc., orders supplies online from Indigo Parts Company. To complete the order, the buyer is required to click on a button that says, in reference to certain terms, "I agree." This is
A) a click-on agreement.
B) a browse-wrap term.
C) a wrap-on agreement.
D) a shrink-wrap agreement.

Accepted Answer

The act of clicking on a button to agree to certain terms makes it a click-on agreement.

Question 2

Ellen offers to sell her math textbook to Julia for $50. Julia does not respond. Ellen and Julia do not have a contract because they lack the requirement of
A) agreement.
B) capacity.
C) consideration.
D) legality.

Accepted Answer

For a contract to be formed, there must be an agreement between the parties involved. In this case, Julia did not respond to Ellen's offer, therefore there was no agreement and no contract was formed. Capacity, consideration, and legality are not relevant factors in this scenario.

Question 3

Mary admires Julia's collection of scarves. Julia says, "I might sell you a few someday, if I get tired of them." Julia's statement is
A) an effective offer.
B) not an effective offer because it has not been communicated to Mary.
C) not an effective offer because the Julia does not show a serious intent to be bound.
D) an acceptance.

Accepted Answer

Julia's statement is not an effective offer because she does not show a serious intent to be bound. She merely expresses a possibility of selling the scarves in the future, but does not commit to it or specify any terms. Therefore, Mary cannot accept this as a binding offer.

Question 4

Livewire Company and McCoy's Candy, Inc., sign a document that states Livewire agrees to design a We
A) an express contract.
B) no contract.
C) an implied contract.
D) a quasi contract.

Accepted Answer

Livewire and McCoy's Candy have signed a document that outlines the terms and obligations of Livewire to design a website. This written document is a clear indication of an express contract between the two parties.

Question 5

Pastry Dough, Inc., sends its catalogue to Octavio and includes a "per?son?alized" letter inviting him to buy any item in it at the ad?vertised price. This is
A) an offer because of the "person?alized" letter.
B) an offer because there is no room for price negotiation.
C) an offer only if Octavio previously bought items from Pastry Dough.
D) not an offer.

Accepted Answer

The catalogue and personalized letter are simply an invitation to treat, not an offer. The customer still has the option to accept or reject the offer, and there is room for price negotiation.

Question 6

Mark is creating a Web site through which he will enter into contracts over the Internet. Important terms to include in his offers include
A) provisions specifying the remedies if the contract is breached.
B) a detailed history of his business.
C) glowing reviews from former customers.
D) his educational background.

Accepted Answer

Including provisions specifying the remedies if the contract is breached is important in protecting Mark's interests and ensuring that the other party fulfills their obligations under the contract. The other choices are not relevant to the terms of the offer.

Question 7

Beth goes to Dr. Carlton for surgery. Carlton says that Beth should be fully healed within a week. Beth is not healed within a week. With respect to breach of contract, Carlton is
A) liable.
B) not liable, because surgery is not a proper sub?ject for a contract.
C) not liable, because the statement was an opinion.
D) not liable, but Beth is excused from paying Carlton.

Accepted Answer

The answer of Beth goes to Dr. Carlton for surgery....

Question 8

Peter and Ray are riding their horses together. Peter jokingly tells Ray that Ray's horse is too slow. Ray laughs and jokingly responds, "Yes, he is too slow! I would sell him for $5!" Peter hands Ray $5. This is
A) a valid acceptance because Peter gave Ray the money in a reasonable time.
B) a valid acceptance because there is consideration on both sides.
C) not a valid acceptance because Ray's offer was made in jest.
D) not a valid acceptance because Ray's horse is worth more than $5.

Accepted Answer

Ray's offer was made in jest and was not a serious offer. It was not intended as a valid acceptance and therefore Peter's payment of $5 cannot be considered as acceptance of a contract. There is no intention to create legal relations between two parties.

Question 9

Green Grocers, Inc., enters into a contract with Hiway Transport Company for the deliv?ery of a shipment of fresh produce. In a later dispute between these parties over the delivery, the doctrine of quasi contract cannot be used because
A) both of the parties involved are businesses.
B) at least one of the parties had greater bargaining power.
C) the subject of the contract was a service.
D) there is an actual contract covering the subject in dispute.

Accepted Answer

The doctrine of quasi contract is used to create a contractual obligation where there was none before, but there is no need for this when an actual contract exists to cover the subject in dispute. Therefore, option D is correct.

Question 10

Expert Pavers, Inc., contracts with Fabricated Building Corporation to repave Fabricated's parking lot for which Fabricated agrees to pay. The requirements of this, and any other, contract do not include
A) consideration.
B) capacity.
C) legality.
D) practicality.

Accepted Answer

Practicality, while important, is not a legal requirement for a contract. Consideration, capacity, and legality are all essential elements of a valid contract.

Question 11

May tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby who owns Nick's Pre-owned Autos, hands May $10. This is
A) a valid acceptance because May is seriously frustrated.
B) a valid acceptance because Nick is a car dealer.
C) not a valid acceptance because May does not seriously intend to sell.
D) not a valid acceptance because Nick is a car dealer.

Accepted Answer

The answer of May tries to start her new car...

Question 12

Kathryn signs a lease agreement for an apartment. Kathryn has entered into a(n)
A) express contract.
B) implied contract.
C) quasi contract.
D) unenforceable contract.

Accepted Answer

Kathryn has entered into an express contract, which is a contract in which the terms are explicitly stated either in writing or orally. In this case, the terms of the lease agreement are likely spelled out in writing and agreed upon by both parties.

Question 13

Jonah tells Levi he will give him an Xbox if Levi does Jonah's chores for a month. Levi promises to do the chores. Jonah and Levi have formed a
A) bilateral contract.
B) unilateral contract.
C) void contract.
D) unenforceable contract.

Accepted Answer

A bilateral contract is formed when both parties exchange promises to do something for the other. In this case, Jonah promises to give Levi an Xbox if Levi promises to do Jonah's chores for a month. This creates a mutual obligation for both parties, making it a bilateral contract.

Question 14

Jacqi tells Kenneth, who does not know how to perform comedy, that she will tutor him in the subject for $500. As an offer, this is
A) effective.
B) not effective, because comedy is not a serious subject.
C) not effective, because Jacqi's tutoring will be subjective.
D) not effective, because Kenneth has no knowledge of the subject.

Accepted Answer

This offer is effective because it clearly outlines the service being offered (comedy tutoring) and the price ($500). It is up to Kenneth to decide whether or not he wants to pay for Jacqi's expertise in the subject. Whether or not comedy is considered a serious subject is irrelevant to the effectiveness of the offer. Additionally, the subjectivity of Jacqi's tutoring may be a factor, but it does not necessarily make the offer ineffective. Finally, the fact that Kenneth has no knowledge of the subject does not make the offer ineffective, as he is specifically seeking out Jacqi's expertise.

Question 15

Holiday Sales Company and Global Distributors, Inc., enter into a contract for the delivery of imported specialty goods. Until the goods are delivered and paid for, these parties have
A) an executory contract.
B) no contract.
C) a quasi contract.
D) an informal contract.

Accepted Answer

The situation described in the question fits the definition of an executory contract, which is a contract where one or more parties still have performance obligations to fulfill. Until the goods are delivered and paid for, Holiday Sales Company and Global Distributors, Inc. have an executory contract.

Question 16

Wilson buys a lottery ticket at his local gas station. Wilson has accepted an offer for a
A) bilateral contract.
B) unilateral contract.
C) void contract.
D) unenforceable contract.

Accepted Answer

Wilson is entering into a unilateral contract by buying a lottery ticket. This is because he is making a promise to pay for the ticket with the hope of winning the lottery, and the gas station is not making any promises in return. If Wilson does win the lottery, the gas station is obligated to pay him the winnings, but if he does not win, he has no legal claim to any compensation from the gas station.

Question 17

Jon says to Kristy, "I would like to sell you my sports memorabilia collec?tion." This is not an offer because it
A) does not describe the subject matter sufficiently.
B) does not include a price term.
C) only expresses an opinion.
D) only invites Kristy to negotiate.

Accepted Answer

The statement only invites Kristy to negotiate and does not include a specific offer, price term, or sufficient description of the subject matter. Therefore, it cannot be considered a valid offer.

Question 18

Fresh Fast Service, Inc., offers to deliver produce to Growers' Market's customers for a certain price. Fresh's intent to extend a serious offer to Growers' Market is determined by reference to
A) Fresh's assumptions.
B) Fresh's beliefs.
C) Fresh's intentions.
D) what a reasonable person in Growers' position would conclude Fresh's words and actions meant.

Accepted Answer

The best way to determine Fresh's intent to extend a serious offer to Growers' Market is by analyzing what a reasonable person in Growers' position would conclude Fresh's words and actions meant. This is because the assessment of Fresh's intent should be objective and based on the perspective of the recipient of the offer, rather than Fresh's subjective beliefs or assumptions.

Question 19

Deb buys a song through eSongs, an online music vendor. Before completing the purchase and downloading the song, Deb must agree to a provision stating that she will not make and sell copies of the song. This provision is
A) a browse-wrap term.
B) a click-on agreement.
C) a shrink-wrap agreement.
D) a wrap-on agreement.

Accepted Answer

The provision stating that Deb will not make and sell copies of the song is a click-on agreement, as it requires her to actively click on an "I agree" button before she can complete the purchase and download the song. A browse-wrap term refers to terms that are accessible through a hyperlink, but do not require any active agreement by the user. A shrink-wrap agreement refers to terms that are included inside the packaging of a product, and are only visible once the product has been opened. There is no such thing as a wrap-on agreement.

Question 20

Quality Sales Corporation enters into contracts over the Internet. Quality can protect itself against disputes involving these contracts by making im?portant terms
A) reasonably clear.
B) difficult to notice.
C) impossible to find.
D) standardized.

Accepted Answer

Making important terms reasonably clear is the best way to protect Quality Sales Corporation against disputes involving contracts entered over the Internet. This ensures that the terms are visible and understandable to all parties involved, reducing the likelihood of misunderstandings or disagreements. Making terms difficult to notice or impossible to find could be seen as hiding information or engaging in deceptive practices, which could harm Quality's reputation and legal standing. Standardized terms might not account for unique circumstances or needs of individual customers, which could also lead to disputes.

Quiz 7: Agreement and Consideration in Contracts

Hi-Lite Manufacturing, Inc., orders supplies online from Indigo Parts Company. To complete the order, the buyer is required to click on a button that says, in reference to certain terms, "I agree." This is

Ellen offers to sell her math textbook to Julia for $50. Julia does not respond. Ellen and Julia do not have a contract because they lack the requirement of

Mary admires Julia's collection of scarves. Julia says, "I might sell you a few someday, if I get tired of them." Julia's statement is

Livewire Company and McCoy's Candy, Inc., sign a document that states Livewire agrees to design a We

Pastry Dough, Inc., sends its catalogue to Octavio and includes a "per?son?alized" letter inviting him to buy any item in it at the ad?vertised price. This is

Mark is creating a Web site through which he will enter into contracts over the Internet. Important terms to include in his offers include

Beth goes to Dr. Carlton for surgery. Carlton says that Beth should be fully healed within a week. Beth is not healed within a week. With respect to breach of contract, Carlton is

Peter and Ray are riding their horses together. Peter jokingly tells Ray that Ray's horse is too slow. Ray laughs and jokingly responds, "Yes, he is too slow! I would sell him for $5!" Peter hands Ray $5. This is

Green Grocers, Inc., enters into a contract with Hiway Transport Company for the deliv?ery of a shipment of fresh produce. In a later dispute between these parties over the delivery, the doctrine of quasi contract cannot be used because

Expert Pavers, Inc., contracts with Fabricated Building Corporation to repave Fabricated's parking lot for which Fabricated agrees to pay. The requirements of this, and any other, contract do not include

May tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby who owns Nick's Pre-owned Autos, hands May $10. This is

Kathryn signs a lease agreement for an apartment. Kathryn has entered into a(n)

Jonah tells Levi he will give him an Xbox if Levi does Jonah's chores for a month. Levi promises to do the chores. Jonah and Levi have formed a

Jacqi tells Kenneth, who does not know how to perform comedy, that she will tutor him in the subject for $500. As an offer, this is

Holiday Sales Company and Global Distributors, Inc., enter into a contract for the delivery of imported specialty goods. Until the goods are delivered and paid for, these parties have

Wilson buys a lottery ticket at his local gas station. Wilson has accepted an offer for a

Jon says to Kristy, "I would like to sell you my sports memorabilia collec?tion." This is not an offer because it

Fresh Fast Service, Inc., offers to deliver produce to Growers' Market's customers for a certain price. Fresh's intent to extend a serious offer to Growers' Market is determined by reference to

Deb buys a song through eSongs, an online music vendor. Before completing the purchase and downloading the song, Deb must agree to a provision stating that she will not make and sell copies of the song. This provision is

Quality Sales Corporation enters into contracts over the Internet. Quality can protect itself against disputes involving these contracts by making im?portant terms