Deck 16: The Form and Meaning of Contracts

Question 1

The Uniform Commercial Code (UCC) states that contracts for the sale of goods costing $500 or more are not enforceable without being evidenced by writing or other specified evidence.

Answer 1

True

Question 2

According to the Uniform Commercial Code (UCC), _____.

A) the sale of goods between two parties is always legal
B) the doctrine of promissory estoppel will always overrule a written contract
C) the sale of goods costing $500 or more is not enforceable without a writing or other specified evidence
D) there is no need for the formality of writing during sales transactions

Answer 2

C
Explanation: The Uniform Commercial Code states that contracts for the sale of goods costing $500 or more are not enforceable without a writing or other specified evidence.

Question 3

Although the statutes of frauds of all the states are not the same, most states require only a memorandum of the parties' agreement; they do not require that the entire contract be in writing or that the writing be in a single document.

Answer 3

True

Question 4

If two parties used a form contract, and one of the parties drafted the contract, ambiguities are resolved against the party who drafted the contract.

Question 5

Many states require contracts to pay debts barred by a bankruptcy discharge or the statute of limitations to be evidenced by a writing.

Question 6

Oral evidence can be introduced to help a court resolve ambiguities in a written contract.

Question 7

Many states require contracts to pay a commission on the sale of real estate to be evidenced by a writing.

Question 8

According to the Uniform Commercial Code (UCC), if goods are specially manufactured for the buyer and not suitable for sale to others in the normal course of the seller's business, and the seller has made a substantial beginning in manufacturing them or has entered into a binding agreement to acquire them for the buyer before learning that the buyer is denying the existence of a contract, the contract between the parties must be in writing in order to be enforceable.

Question 9

If the parties used a form contract, or the contract is partly printed and partly written, the printed terms control the written terms if the two conflict.

Question 10

Long-term bilateral contracts need not be in writing to be enforceable, since contracts that call for performance over a considerable period of time are more important to the contracting parties, and the terms of such contracts are therefore more likely to be recalled by them.

Question 11

The parol evidence rule says that a party can vary the terms of a written contract by introducing evidence of terms allegedly agreed on prior to, or contemporaneous with writing.

Question 12

Contracts that are traditionally required to be in writing by the statute of frauds are:

A) bilateral contracts that are capable of being performed within a year of their formation.
B) contracts for the transfer of an interest in land.
C) bilateral contracts that have been fully performed by both parties.
D) contracts for the sale of goods costing less than $500.

Question 13

On March 10, Martin entered into an oral contract with Wilson. Under the oral contract, they agreed that Wilson will work for Martin for two years for a salary of $50,000 per year. Wilson quit his job the next day so that he could join Martin. But on March 12, Martin called Wilson and repudiated the contract, stating that he had decided not to hire him after all. If Wilson decides to sue, which of the following is most likely to be true?

A) Wilson may use the doctrine of promissory estoppel to show that he had materially relied on the oral promise and will suffer serious losses if the promise is not enforced.
B) Wilson cannot sue Martin because there was no written contract.
C) Oral contracts are completely voidable and have no weight in the court.
D) Wilson can sue Martin for false imprisonment and unintentional tort because Wilson did not have a written contract, and this becomes the best alternate course of action.

Question 14

If an oral contract is declared to be unenforceable under the statute of frauds and one of the parties has rendered some performance under the contract that conferred benefits on the other party, he or she can recover the reasonable value of the performance on an express contract theory.

Question 15

In most states, the statute of frauds makes oral contracts that come within its provisions _____.

A) void
B) illegal
C) unenforceable
D) valid

Question 16

In some cases, part performance of a contract for the sale of land takes the contract out of the coverage of the statute of frauds.

Question 17

The statutes of frauds adopted by the states are patterned after the original statute of frauds adopted in Germany in 1787.

Question 18

The U.N. Convention on the International Sale of Goods has decided that a writing is:

A) required for contracts over $1,000.
B) not required for the enforcement of oral international contracts.
C) always required.
D) for contracts of specially-manufactured goods.

Question 19

If the writing in a contract is clearly incomplete, a party can introduce proof of consistent oral terms that "fill the gaps" in the writing.

Question 20

In most states, the statute of frauds makes oral contracts that come within its provisions void or voidable, not unenforceable.

Question 21

Which of the following is a basic Code writing requirement for contracts?

A) The entire contract must be signed by both parties and a third party who will not gain monetarily from the exchange.
B) The written evidence should indicate the quantity of goods sold.
C) The written evidence should be compulsorily signed by both the parties.
D) The terms of the contract and the parties' signatures should be contained in more than one document.

Question 22

According to the leading object doctrine, promises of third parties to a contract who are primarily motivated by a desire to secure some personal benefit:

A) fall outside the scope of the guaranty contract within the statute of frauds.
B) are covered by the statute of frauds.
C) are estopped from recovery.
D) have to be in writing to be enforceable within the guaranty contract.

Question 23

Terry and Farah have an oral contract for the sale of 100 books at $30 per book. If Terry delivers the books and Farah accepts them, or if Farah pays for the books and Terry accepts payment, which of the following is true?

A) Terry can raise the statute of frauds defense to enforce the remainder of the contract.
B) Both Terry and Farah can raise the statute of frauds defense as it is a complete performance.
C) Neither Terry nor Farah can raise the statute of frauds defense as the agreement has been performed at least partially.
D) Farah can raise the statute of frauds defense to enforce the remainder of the contract.

Question 24

When parties to an oral contract have both fully performed their obligations under the contract, the parties are:

A) allowed to rescind the contract.
B) not allowed to rescind the contract.
C) allowed to seek compensatory damages.
D) not allowed to recover the value of the performance in quasi contract.

Question 25

Leroy writes a letter that says, "I agree to sell to Jay five modern art paintings," and he signs the letter. Jay is an art dealer and he receives this writing from Leroy and does not object in writing within 10 days of receiving it. Which of the following is true according to the Uniform Commercial Code?

A) Leroy would have a good statute of frauds defense because Jay has not signed the contract.
B) Jay has lost his statute of frauds defense because he did not object to the contract.
C) The contract will be considered void because of the lack of written evidence from Jay.
D) Leroy will be prevented by the statute of frauds to take the case to the court.

Question 26

The equitable doctrine of _____ allows some parties to recover under oral contracts that the statute of frauds would have ordinarily rendered unenforceable.

A) estoppel by representation of fact
B) estoppel by record
C) proprietary estoppel
D) promissory estoppel

Question 27

The parol evidence rule refers to the:

A) oral evidence given by the defendant during a hearing.
B) idea that when the parties have expressed their agreement in a complete, unambiguous writing, the writing is the best evidence of their intent.
C) rule that perjury in criminal sentences is a non-bailable offense.
D) use of the equitable doctrine of promissory estoppel to prevent parties from seeking compensation under the statute of frauds.

Question 28

A publisher makes an oral deal with an author, where the author agrees to write a new "Introduction to Marketing" book. They agree that the book is due in two years. In this scenario, the contract is most likely to be _____.

A) legally enforceable
B) unenforceable
C) rescinded by a court
D) illegal

Question 29

If an oral contract has been declared unenforceable under the statute of frauds, yet one of the parties has rendered some performance under the contract that conferred benefits on the other party, he or she can recover the reasonable value of the performance in _____.

A) collateral enforcement
B) quasi contract
C) guaranty contract
D) promissory estoppel

Question 30

Under the Electronic Signatures in Global and National Commerce Act (E-Sign), _____.

A) there are no specific rules that businesses must follow when seeking consumer consent to electronic contracts
B) the price and procedures for withdrawing consent must be spelled out to the customer
C) e-businesses are permitted to impose consent withdrawal fees on consumers in all situations
D) a digital signature does not have the same effect as one written in ink on paper

Question 31

When a contract is partly printed and partly written, _____.

A) the written terms control the printed terms if the two conflict
B) ambiguities are resolved in favor of the party who drafted the contract
C) the printed terms control the written terms
D) any presence of ambiguities renders the contract void and unenforceable

Question 32

In an executory bilateral contract, most courts hold that:

A) if a contract has been fully performed by one side, the promise of the other party is enforceable even if it cannot be performed within a year.
B) even if a contract has been fully performed by one side, the other party may choose to not enforce its side of the contract.
C) even if a contract has been fully performed by one side, the other party has no legal obligation to enforce its side unless it is in writing.
D) if a contract has been partially performed by one side, the promise of the other party is enforceable if it is communicated orally.

Question 33

Miriam makes an oral agreement with John to sell him 200 acres of prime farmland for a mere $500. Their agreement is:

A) enforceable and not voidable in accordance with the statute of frauds.
B) covered by the statute of limitations.
C) enforceable only if promissory estoppel applies.
D) unenforceable as real estate contracts need to be in writing.

Question 34

In an insurance contract, if one of the two parties involved drafted a contract, _____.

A) ambiguities are solved in favor of the party who drafted the contract
B) ambiguities are solved against the party who drafted the contract
C) the contract will not be legally enforceable
D) a third mutual party should also sign the contract for it to be valid

Question 35

Under the Uniform Electronic Transactions Act (UETA), _____.

A) barriers to e-commerce are removed by giving effect to electronic records and signatures
B) consent and withdrawal are identical to that of the E-Sign Act
C) there are specific rules governing when consent has been given electronically
D) a PIN number used to access an ATM is not considered as a digital signature

Question 36

According to most states, which of the following is true if there is only a memorandum of two parties' agreement?

A) The writing can be in any form but must indicate that the parties had a contract.
B) The entire contract must be in writing and in a single document.
C) The writing cannot be in the form of telegrams or receipts.
D) Both parties' signatures have to appear in the writing.

Question 37

A clothing store has opened a credit account in which Judy, a college student, gets Alice, her older sister, to agree to pay the amount owed on the account if Judy fails to do so. Which of the following statements is true of this scenario?

A) Judy is the obligor, and she is secondarily liable to the clothing store.
B) Alice is the guarantor, and she is primarily liable to make the payments.
C) Judy is the obligor, and she is contractually liable to the guarantor.
D) Alice is the guarantor, and Alice's contract must be in writing to be enforceable.

Question 38

Fernando is the owner of Pick Food Restaurant. He makes an oral agreement with Purple Lotus Works for the design and production of 5,000 unique custom-made dinner plates with the logo of Pick Food Restaurant on them. Purple Lotus reworks its production schedule and creates dies to add Pick Food Restaurant's logo in the designer plates. A week later, Fernando calls Purple Lotus and says that he no longer wants the plates and calls off the deal. In this scenario, it is most likely that:

A) the parties' agreement is at Fernando's disposal because he is the customer.
B) Purple Lotus is protected by the statute of frauds exception for specially-manufactured goods.
C) the parties' agreement is not valid since it was only an oral agreement.
D) the agreement between Fernando and Purple Lotus is unenforceable and Fernando is protected under the statute of frauds.

Question 39

A collateral contract involves:

A) three parties and two promises, one of which is conditional.
B) two parties and two promises, both of which are conditional.
C) two parties and three promises, one of which is conditional.
D) three parties and two promises, both of which are conditional.

Question 40

Which of the following is true of collateral contracts?

A) The obligor is contractually liable to the guarantor.
B) They are covered by the statute of frauds.
C) They are considered to be original contracts.
D) The guarantor is primarily liable to perform his contractual duty.

Question 41

Which of the following is true about the exception to the parol evidence rule?

A) A party can always introduce proof of an oral agreement made before the writing was created.
B) Oral testimony that attempts to show that the contract is illegal is not allowed.
C) A party is allowed to use oral terms to alter, vary, or contradict the written terms of the contract.
D) If the terms of the writing are unclear, oral testimony can be introduced to aid the court in interpreting the writing.

Question 42

Explain the purpose of the parol evidence rule.

Question 43

List the classes of contracts traditionally required to be in writing by the statute of frauds.

Question 44

Explain what a collateral (guaranty) contract is.

Question 45

Which of the following is a recognized exception to the parole evidence rule?

A) Clear contracts
B) Complete writings
C) Voluntary consent
D) Subsequent oral contracts

Question 46

Under the parol evidence rule, parties cannot vary the terms of a(n):

A) written contract by introducing evidence of terms allegedly agreed on prior to, or contemporaneous with the writing.
B) oral contract by introducing evidence of a written agreement.
C) written contract by introducing evidence of another writing signed after the original contract was drafted.
D) oral agreement by publishing notice of a subsequent modification.

Question 47

Describe the effect of a failure to comply with the statute of frauds.

Question 48

Which of the following is true of the parol evidence rule?

A) If the writing in a contract is clearly incomplete, a party can introduce proof of consistent oral terms that "fill the gaps" in the writing.
B) If the written terms of a contract are unclear, the party can use this exception to alter the concerned part of the contract.
C) Oral testimony that attempts to show that a contract is illegal is not allowed.
D) Proof of contradicting oral agreements that were made after the writing was created is illegal and not enforceable.

Question 49

The parol evidence rule:

A) applies to oral contracts and not written ones.
B) only applies to contracts that are valid over one year.
C) is a potential source of danger for parties who reduce their agreements to written form.
D) states that only the monetary terms of the agreement should be included in writing.

Question 50

Explain the relationship between the parol evidence rule and ambiguous contracts.