Question 1

A noncontractual promise may be enforceable where there has been justifiable reliance on the promise.

Accepted Answer

This principle is known as promissory estoppel, where a promise made without consideration can still be enforced if the promisee relied on it to their detriment.

Question 2

The court in the Weichert Co. Realtors v. Ryan case held that the performing party was entitled to recoup the reasonable value of the services rendered under:
A) an express contract.
B) quantum meruit.
C) promissory estoppel.
D) Article 2 of the UCC.

Accepted Answer

The court held that the performing party (Weichert Co. Realtors) was entitled to recoup the reasonable value of the services rendered under quantum meruit. Quantum meruit is a theory of recovery where a party can seek payment for the value of services rendered in the absence of an express contract.

Question 3

A contract is a binding agreement that the courts will enforce.

Accepted Answer

A contract is a legally binding agreement between two or more parties, and if one party fails to fulfill their obligations, the other party can seek legal remedies to enforce the contract.

Question 4

A contract in which both parties exchange promises is a:
A) voidable contract.
B) bilateral contract.
C) unilateral contract.
D) quasi contract.

Accepted Answer

In a bilateral contract, both parties exchange promises, which creates obligations for each party to perform. A voidable contract is a contract that can be legally avoided or canceled by one party. A unilateral contract is a contract in which only one party makes a promise, with the other party only able to accept the offer by performing the action or fulfilling the terms. A quasi contract is not a true contract, but instead is a legal remedy used to prevent one party from unjustly enriching themselves at the expense of another.

Question 5

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by:
A) Article 2 of the UCC.
B) state common law.
C) federal statute.
D) the law of quasi contract.

Accepted Answer

Contracts for employment are typically governed by state common law.

Question 6

Alice makes a material misrepresentation of fact to Betty, and based upon the misrepresentation, Betty enters into a contract. Alice now thinks that the contract is not fair to her. This contract is voidable at Alice's option.

Accepted Answer

A contract induced by fraud (material misrepresentation of fact) is voidable at the option of the innocent party, not the party who made the misrepresentation. Alice cannot void the contract simply because she thinks it is not fair to her.

Question 7

Ron says to Mark, "If you design and landscape my front lawn by the time I return from Paris next month, I will pay you $5,000." Mark does not respond but has the landscaping done by the time Ron returns. This is an example of a unilateral contract.

Accepted Answer

This is an example of a unilateral contract because only Ron has made a promise, and Mark's performance is the acceptance of that offer. Mark did not need to communicate his acceptance for the contract to be binding.

Question 8

The concept of consideration in contract law includes:
A) that each party to a contract must unintentionally exchange a legal benefit.
B) an inducement to each party to make a return exchange.
C) that each party takes out an insurance bond if the possibility of damages is above $500.
D) All of these.

Accepted Answer

Consideration in contract law refers to something of value given by each party to induce the other to enter into the agreement. It does not have to be unintentional, nor does it require an insurance bond for damages.

Question 9

An implied in fact contract is formed by conduct.

Accepted Answer

An implied in fact contract is formed by the parties' conduct, rather than by express agreement. This can be shown by their actions and the circumstances of the situation.

Question 10

The Weichert Co. Realtors v. Ryan case found that the parties formed an express contract by mutually manifesting assent to the essential terms.

Accepted Answer

The answer of The Weichert Co. Realtors v. Ryan case...

Question 11

Alice makes a material misrepresentation of fact to Betty, and based upon the misrepresentation, Betty enters into a contract. Betty now realizes she was deceived and wants to get out of the contract. This contract is voidable at Betty's option.

Accepted Answer

A misrepresentation of fact can make a contract voidable at the option of the party who was deceived (Betty in this scenario). This means that Betty has the choice to either uphold the contract or to rescind it based on the misrepresentation.

Question 12

Contracts are governed primarily by statute, including the UCC.

Accepted Answer

The answer of Contracts are governed primarily by statute, including...

Question 13

James offers to sell his fishing boat to Brenda for $3,000. Brenda says she will apply for a loan and will buy the boat within a week. A contract is formed:
A) when Brenda tells James she will buy the boat.
B) when Brenda gets the money from the credit union.
C) when Brenda applies for the loan at the credit union.
D) only when James gets the $3,000.

Accepted Answer

A contract is formed when both parties come to an agreement on the terms and conditions of the sale. In this scenario, the agreement is made when Brenda tells James she will buy the boat for $3,000. Payment is a separate issue and does not affect the formation of the contract.

Question 14

Mike, a plumbing contractor, was hired to correct a stoppage in the sewer line at Sarah's house. During his work, he discovered numerous leaks in a rusty, defective water pipe that ran parallel with the sewer line. To meet public regulations, the water pipe had to be replaced either then or later, when the yard would have to be redug. Mike replaced the water pipe and Sarah inspected the work daily and did not object to the extra work. When Mike finished, Sarah refused to pay for the water pipe replacement since that was not what she originally hired Mike to do and she had never specifically agreed to that work. Sarah must pay Mike for his labor and materials costs for both the sewer and water line repair.

Accepted Answer

Sarah did not object to the extra work and therefore, she is responsible for paying for the labor and materials costs for both the sewer and water line repair.

Question 15

In addition to the four basic requirements of a contract, which of the following must also occur in order to have a valid contract?
A) The agreement must always be in writing.
B) There must be evidence of undue influence.
C) There must be an absence of invalidating conduct.
D) A legal remedy must be available for there to be a breach.

Accepted Answer

The four basic requirements of a contract are offer, acceptance, consideration, and mutual assent. However, in addition to these, there must also be an absence of invalidating conduct. This means that the contract must not be invalidated by fraud, misrepresentation, duress, undue influence, mistake, or illegality. The agreement does not always have to be in writing and a legal remedy is only necessary if there is a breach, so options A and D are incorrect.

Question 16

The requirement that each party to a contract must intentionally exchange something of value as an inducement to the other party to make a return exchange is known as:
A) mutual assent.
B) consideration.
C) legality of object.
D) contractual capacity.

Accepted Answer

Consideration is the exchange of something of value by each party to a contract. This exchange creates a mutual obligation to perform the promises made in the contract. Mutual assent refers to the agreement of the parties to the terms of the contract, legality of object pertains to the subject matter of the contract, and contractual capacity refers to the ability of each party to understand and enter into the contract. While all of these elements are important to the validity of a contract, consideration is the specific requirement that each party intentionally exchange something of value.

Question 17

A contract to sell life insurance is covered by Article 2 of the Uniform Commercial Code.

Accepted Answer

A contract to sell life insurance is not covered by Article 2 of the Uniform Commercial Code, as this code governs contracts for the sale of goods. Life insurance is considered a service and is therefore not subject to Article 2.

Question 18

A promisee is the person making a promise.

Accepted Answer

A promisee is the person to whom a promise is made or who receives the promise. The person making the promise is called the promisor.

Question 19

George has been declared incompetent by the court and is under the care of his sister. Unknown to his sister, George rents the 10,000-seat civic center for his birthday party. George's contract to rent the civic center is best described as:
A) a void contract.
B) a quasi contract.
C) a voidable contract.
D) an enforceable contract.

Accepted Answer

The answer of George has been declared incompetent by the...

Question 20

Matt says to Lynn, "If you will mow my lawn, I will give you $20." Lynn replies, "O.K." Under these facts, each party is a promisor and each party is a promisee.

Accepted Answer

Both parties are making a promise to each other - Matt is promising to give Lynn $20 if she mows his lawn, and Lynn is promising to mow Matt's lawn. Therefore, both are promisors and promisees.

Quiz 9: Introduction to Contracts

A noncontractual promise may be enforceable where there has been justifiable reliance on the promise.

The court in the Weichert Co. Realtors v. Ryan case held that the performing party was entitled to recoup the reasonable value of the services rendered under:

A contract is a binding agreement that the courts will enforce.

A contract in which both parties exchange promises is a:

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by:

Alice makes a material misrepresentation of fact to Betty, and based upon the misrepresentation, Betty enters into a contract. Alice now thinks that the contract is not fair to her. This contract is voidable at Alice's option.

Ron says to Mark, "If you design and landscape my front lawn by the time I return from Paris next month, I will pay you $5,000." Mark does not respond but has the landscaping done by the time Ron returns. This is an example of a unilateral contract.

The concept of consideration in contract law includes:

An implied in fact contract is formed by conduct.

The Weichert Co. Realtors v. Ryan case found that the parties formed an express contract by mutually manifesting assent to the essential terms.

Alice makes a material misrepresentation of fact to Betty, and based upon the misrepresentation, Betty enters into a contract. Betty now realizes she was deceived and wants to get out of the contract. This contract is voidable at Betty's option.

Contracts are governed primarily by statute, including the UCC.

James offers to sell his fishing boat to Brenda for $3,000. Brenda says she will apply for a loan and will buy the boat within a week. A contract is formed:

In addition to the four basic requirements of a contract, which of the following must also occur in order to have a valid contract?

The requirement that each party to a contract must intentionally exchange something of value as an inducement to the other party to make a return exchange is known as:

A contract to sell life insurance is covered by Article 2 of the Uniform Commercial Code.

A promisee is the person making a promise.

George has been declared incompetent by the court and is under the care of his sister. Unknown to his sister, George rents the 10,000-seat civic center for his birthday party. George's contract to rent the civic center is best described as:

Matt says to Lynn, "If you will mow my lawn, I will give you $20." Lynn replies, "O.K." Under these facts, each party is a promisor and each party is a promisee.