Question 1

Rex contracts with Spicy Pizza to deliver its products.After the deal has been partially performed,both parties inform each other that they would like to cancel the contract.Rex and Spicy may rescind
A) their entire contract.
B) their contract to the extent that it is executory.
C) none of their contract.
D) their contract to the extent that it has been executed.

Accepted Answer

Rescission allows parties to cancel a contract, but only to the extent that it is still executory, meaning that the obligations of both parties have not been fully performed. If the contract has been partially performed, the parties can only rescind the portion of the contract that has not yet been performed. Therefore, option B is the correct answer.

Question 2

Allen promises to pay Barb,his niece,$5,000 if she obtains her degree at City University,where she is in her third year.Barb graduates.Allen must pay Barb because
A) Barb was already at City.
B) obtaining a degree benefits Barb.
C) a job can be hard to find after college.
D) Barb obtained a degree at City.

Accepted Answer

Allen promises to pay Barb if she obtains her degree at City University, and Barb has indeed obtained her degree from City University. Therefore, Allen must pay Barb according to their agreement.

Question 3

If a contract between two parties is avoided
A) both parties are released from it.
B) both parties must fully perform their obligations under it.
C) the parties' contractual obligations are postponed.
D) the parties are bound to negotiate another contract on the same subject.

Accepted Answer

When a contract is avoided, it means that it is legally cancelled or set aside. As a result, both parties are released from their obligations under the contract. This is the most common and straightforward consequence of contract avoidance.

Question 4

On May 1 Raj offers to staff Sam's Sandwich Shop with food preparers and servers for a certain price,and promises to keep the offer open until June 1.On May 3 Raj mails Sam a letter revoking the offer.Sam receives the letter on May 5 and responds on May 6.Raj's revocation of the offer became effective on
A) May 3.
B) May 5.
C) May 6.
D) no date because the offer is irrevocable.

Accepted Answer

The answer of On May 1 Raj offers to staff...

Question 5

Owen decides to sell his ranch,Pine Ridge,in a live auction.When the auctioneer puts the property up for bids,it will be
A) an offer.
B) an invitation to submit offers,not an offer itself.
C) a preliminary negotiation,not an offer.
D) an agreement to agree,not an offer.

Accepted Answer

The auctioneer putting the property up for bids is an invitation to submit offers, not an offer itself. The bids made by potential buyers are offers, but the initial act of the auctioneer is not considered an offer.

Question 6

Luke puts his motorcycle up for sale via a post on an online auction site.This is
A) an offer.
B) an invitation to negotiate,not an offer.
C) a statement of future intent,not an offer.
D) a preliminary negotiation,not an offer.

Accepted Answer

Luke's post is not a definite and unconditional promise to sell his motorcycle at a certain price or under certain terms. It is an invitation for potential buyers to start negotiations, make offers, and possibly reach an agreement. Therefore, it is not an offer but an invitation to negotiate.

Question 7

Alyssa hires Bret to mow Alyssa's lawn every Friday.Although they do not discuss the terms of payment,after each of the first three Friday mows,Alyssa pays Bret on Saturday.The payment term is
A) express.
B) implied.
C) illusory.
D) void.

Accepted Answer

The payment term is implied because it was not explicitly discussed but can be inferred from Alyssa's actions of paying Bret on the Saturday following the mow.

Question 8

Pastries Inc.sends Rollo its catalogue showcasing a variety of baked goods for certain prices.This is
A) an offer.
B) an invitation to negotiate,not an offer.
C) an advertisement,not an offer.
D) a request,not an offer.

Accepted Answer

The answer of Pastries Inc.sends Rollo its catalogue showcasing a...

Question 9

Oceans Inc. ,a seafood distributor,agrees to buy from Paul,a commercial fisherman,any "overstock" of fish that Paul catches in excess of his legal limit.This agreement is most likely
A) enforceable.
B) illusory.
C) void.
D) voidable.

Accepted Answer

The agreement is likely void because it involves the purchase of fish caught in excess of legal limits, which is illegal and unenforceable.

Question 10

For a contact to be considered valid and enforceable,the parties to a deal must
A) necessarily have it in writing.
B) manifest their voluntary consent to the same bargain.
C) know with certainty what kinds of promises will be enforced.
D) subjectively intend to agree to the terms.

Accepted Answer

In order for a contract to be valid and enforceable, the parties must show that they have voluntarily agreed to the same bargain through their actions and words. This is known as mutual assent or a meeting of the minds. While it is recommended to have contracts in writing for clarity and proof, it is not always necessary for a contract to be valid. The parties must also know what promises are being enforced, which is achieved through a clear and definite understanding of the terms. Subjective intention is not enough to form a valid contract, as the parties must outwardly demonstrate their agreement.

Question 11

Fresh Agro Inc.offers to deliver produce to Growers' Market for a certain price.Fresh's intent to extend an offer is determined by reference to Fresh's
A) market assumptions.
B) all of the choices.
C) subjective,unexpressed intentions.
D) words and actions.

Accepted Answer

The intent to extend an offer is determined by reference to words and actions of the offeror, in this case, Fresh Agro Inc. Market assumptions and subjective, unexpressed intentions may not necessarily indicate an offer being made.

Question 12

Under a contract with Valley View Villas,a residential development,Weng begins grading a terraced hillside.Halfway through the project,Weng asks for $5,000 over the contract price,claiming an increase in the "cost of doing business." Valley View agrees.This agreement to pay more is
A) unenforceable because Weng's performance was a preexisting duty.
B) unenforceable because Valley View's promise was illusory.
C) enforceable.
D) unenforceable because Weng's request modified the contract.

Accepted Answer

Under contract law, a promise to pay more for the same performance is unenforceable if the party was already obligated to perform under the original contract terms, as it constitutes a preexisting duty.

Question 13

Kent tries to start his car with no success.He yells that he will sell the car to anyone for $10.Livy,a passerby,hears Kent's yell.This is not an effective offer because it lacks
A) communication.
B) definite terms.
C) serious intent.
D) practicality.

Accepted Answer

The answer of Kent tries to start his car with...

Question 14

Kim promises to pay Leo $500 to install a sump pump in Kim's warehouse.Leo completes the installation.The act of installing the pump
A) imposes a moral obligation on Kim to pay Leo.
B) imposes no obligation on Kim unless she is satisfied with the job.
C) is not sufficient consideration because it is not goods or money.
D) is the consideration that creates Kim's obligation to pay Leo.

Accepted Answer

The act of installing the sump pump is the consideration that creates Kim's obligation to pay Leo. This is because consideration can be any act or promise that has value and is bargained for by both parties. In this case, Kim promised to pay Leo $500 in exchange for Leo installing the sump pump. Leo completed his end of the bargain, which creates an obligation for Kim to fulfill her promise and pay him the agreed-upon amount.

Question 15

Fay offers to pay Grey $50 for a tennis lesson for Hetty.They agree to meet the day after tomorrow to exchange the cash for the lesson.These parties have
A) a bilateral contract.
B) a third-party contract.
C) a unilateral contract.
D) no contract.

Accepted Answer

A bilateral or two-party contract is formed when both parties exchange promises to perform some act. In this case, Fay agrees to pay Grey $50, and in exchange, Grey agrees to give Hetty a tennis lesson. This creates a mutual obligation for both parties, indicating the formation of a bilateral contract.

Question 16

Rue offers to pay Sari to deliver certain documents within thirty minutes.Sari can accept the offer only by completing the task within the deadline.If she does,Rue and Sari will have
A) a bilateral contract.
B) a unilateral contract.
C) a void contract.
D) an executive contract.

Accepted Answer

This is a unilateral contract as only Sari has the obligation to perform within the required time frame. Rue's obligation is only to pay Sari if she completes the task within the deadline.

Question 17

Corner Store posts on its website an offer of a reward for information leading to the apprehension of a certain criminal.This offer could normally be terminated by
A) a post on the website.
B) a notice in the local newspaper.
C) a sign in the store.
D) apprehension of the criminal.

Accepted Answer

A post on the website is the most direct and effective way to terminate an offer posted on the website.

Question 18

Rona asks Steve,"Do you want to pay me to provide your business with a marketing campaign?" This is
A) an offer.
B) not an offer because the terms are not definite.
C) not an offer because Rona did not express an intent.
D) not an offer because Steve did not respond.

Accepted Answer

The statement lacks definite terms such as price, duration, and specific services, which are necessary for it to be considered a valid offer.

Question 19

Vin admires Will's collection of vinyl records.Vin asks,"Will you sell it?" This statement is
A) an offer.
B) an invitation to negotiate,not an offer.
C) an expression of intent,not an offer.
D) a request,not an offer.

Accepted Answer

Vin's question is a request to know if Will is willing to sell the collection, not an offer to buy it.

Question 20

Sports Bar and Tasty Bakery are adjacent businesses with adjoining parking lots.Sports Bar offers Tasty a discount on purchases if the bakery will not tow the cars of Sports Bar's patrons who park in the bakery's lot.The discount is legally sufficient consideration
A) because it is a promise of something of value.
B) only if Sports Bar adds a cash rebate.
C) only if Tasty uses it.
D) under no circumstances.

Accepted Answer

The discount offered by Sports Bar to Tasty Bakery can be considered legally sufficient consideration because it is a promise of something of value, i.e. a discount on purchases. This promise of value can form the basis of a valid contract. The addition of a cash rebate or Tasty's use of the discount is not necessary for the consideration to be legally sufficient.

Quiz 10: The Formation of Traditional and E-Contracts

Rex contracts with Spicy Pizza to deliver its products.After the deal has been partially performed,both parties inform each other that they would like to cancel the contract.Rex and Spicy may rescind

Allen promises to pay Barb,his niece,$5,000 if she obtains her degree at City University,where she is in her third year.Barb graduates.Allen must pay Barb because

If a contract between two parties is avoided

Owen decides to sell his ranch,Pine Ridge,in a live auction.When the auctioneer puts the property up for bids,it will be

Luke puts his motorcycle up for sale via a post on an online auction site.This is

Alyssa hires Bret to mow Alyssa's lawn every Friday.Although they do not discuss the terms of payment,after each of the first three Friday mows,Alyssa pays Bret on Saturday.The payment term is

Pastries Inc.sends Rollo its catalogue showcasing a variety of baked goods for certain prices.This is

Oceans Inc. ,a seafood distributor,agrees to buy from Paul,a commercial fisherman,any "overstock" of fish that Paul catches in excess of his legal limit.This agreement is most likely

For a contact to be considered valid and enforceable,the parties to a deal must

Fresh Agro Inc.offers to deliver produce to Growers' Market for a certain price.Fresh's intent to extend an offer is determined by reference to Fresh's

Under a contract with Valley View Villas,a residential development,Weng begins grading a terraced hillside.Halfway through the project,Weng asks for $5,000 over the contract price,claiming an increase in the "cost of doing business." Valley View agrees.This agreement to pay more is

Kent tries to start his car with no success.He yells that he will sell the car to anyone for $10.Livy,a passerby,hears Kent's yell.This is not an effective offer because it lacks

Kim promises to pay Leo $500 to install a sump pump in Kim's warehouse.Leo completes the installation.The act of installing the pump

Fay offers to pay Grey $50 for a tennis lesson for Hetty.They agree to meet the day after tomorrow to exchange the cash for the lesson.These parties have

Rue offers to pay Sari to deliver certain documents within thirty minutes.Sari can accept the offer only by completing the task within the deadline.If she does,Rue and Sari will have

Corner Store posts on its website an offer of a reward for information leading to the apprehension of a certain criminal.This offer could normally be terminated by

Rona asks Steve,"Do you want to pay me to provide your business with a marketing campaign?" This is

Vin admires Will's collection of vinyl records.Vin asks,"Will you sell it?" This statement is

Sports Bar and Tasty Bakery are adjacent businesses with adjoining parking lots.Sports Bar offers Tasty a discount on purchases if the bakery will not tow the cars of Sports Bar's patrons who park in the bakery's lot.The discount is legally sufficient consideration