Question 1

Pavers, Inc., contracts with a QuikStop store to repave the store's parking lot for a certain price. The requirements of this, and any other, contract include

Accepted Answer

Consideration is a necessary element of a contract, which refers to something of value that is exchanged between the parties in a contract. In this case, the price agreed upon for the repaving of the parking lot is the consideration. B, C, and D are important factors in a contract, but they do not relate specifically to the requirement of consideration.

Question 2

On behalf of the jazz group Fusion, their manager Greg agrees to a performance in Hillside Amphitheatre on July 4. Hillside sends a written copy of the agreement to Greg to be signed. If Greg signs the copy, the parties will have

Accepted Answer

An express contract is created when the parties to the agreement have fully expressed the terms of the contract by words, whether written or oral. In this case, the agreement between Hillside and Greg is in writing and when Greg signs the copy, it will constitute an express contract.

Question 3

K'Nect, Inc., makes an offer to Lori to enter into a contract to work as a salesperson for a certain salary plus commission for ninety days subject to a one-year renewal based on her performance. Lori accepts the offer. A valid contract requires

Accepted Answer

A valid contract requires an offer and an acceptance. The other options listed are not necessary requirements for a valid contract.

Question 4

Field Construction, Inc., contracts with Mesa Ranch to build a new horse barn on Mesa's property for which Mesa agrees to pay. The elements of this, and any other, contract include

Accepted Answer

Legality is an essential element of any contract. It means that the subject matter of the agreement must be lawful and not prohibited by law. In this case, the contract between Field Construction, Inc. and Mesa Ranch to build a horse barn must comply with relevant laws and regulations. The other options, capability, necessity, and marketability, are not crucial elements of a contract.

Question 5

On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil says that he has changed his mind. These parties had

Accepted Answer

When Neil said that he would pay Outdoor $500 if they completed certain tasks by Friday, it formed a unilateral contract. This means that Outdoor was obligated to complete the tasks by Friday, and if they did so, Neil was obligated to pay $500. Once Outdoor began to perform the tasks, the unilateral contract was in effect. Neil cannot simply change his mind and back out of the contract. Therefore, Outdoor could hold Neil to his promise of payment.

Question 6

Clay offers to pay Dian $50 for a golf lesson for Ewan. They agree to meet on Friday to exchange the cash for the lesson. These parties have

Accepted Answer

A bilateral contract is a promise for a promise. In this scenario, both parties have promised to exchange something of value (cash for a golf lesson). They have mutually agreed upon the terms of the contract, indicating a bilateral contract.

Question 7

Jan tells Lee she will give him her old car if he babysits her son Mark weekday evenings for six months. Lee agrees. Jan and Lee have formed

Accepted Answer

A bilateral contract is a promise for a promise, meaning both parties have made promises to each other. In this scenario, Jan promised to give Lee her old car and Lee promised to babysit Jan's son Mark for six months. Therefore, it is a bilateral contract.

Question 8

Bob claims that Carla breached their contract for tutoring. Carla responds that she never intended to enter into a contract with Bob. The intent to enter into a contract is determined with reference to

Accepted Answer

The objective theory of contracts is used to determine the intent to enter into a contract. Under this theory, the intention of the parties is determined by their outward expressions of assent rather than their internal thoughts or beliefs. In other words, the focus is on what a reasonable person in the position of the other party would have understood from the communications and conduct of the parties. This is the most commonly used theory in contract law.

Question 9

Foster promises to buy Gideon's trumpet for $75. Gideon is

Accepted Answer

Gideon is the promisee because he is the one to whom the promise (to buy the trumpet for $75) is made.

Question 10

Evie agrees to work for Far East Shipping, Ltd., as a translator. In determining whether a contract has been formed, an element of prime importance is

Accepted Answer

The parties' intent is a crucial element in determining whether a contract has been formed. In this case, both parties must have intended to enter into a contract for Evie to work as a translator for Far East Shipping, Ltd.

Question 11

Bo signs a lease with Capri Apartments to lease a studio apartment for the next year for $650 per month. Daisy signs on Capri's behalf. Bo and Capri have

Accepted Answer

Bo and Capri have entered into an express contract because they have clearly stated the terms of their agreement in the lease. It is signed by both parties and includes the essential elements of a contract (offer, acceptance, consideration).

Question 12

Lane applies for a firefighter's job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is "an employment offer conditioned on the applicant passing the exam." This is

Accepted Answer

The letter is offering a unilateral contract, meaning the offer can be accepted only by performance (in this case, passing the medical exam). Upon passing the exam, Lane can accept the offer and a valid contract will be formed. Until then, there is no contract.

Question 13

Wilson buys a lottery ticket. Wilson has accepted an offer for

Accepted Answer

Wilson has accepted an offer for a unilateral contract, which is a promise in exchange for performance. By buying a lottery ticket, Wilson is performing the required action to potentially receive the promised reward of winning the lottery.

Question 14

When a rainstorm erupts outside Rita's Gift Shop, Rita and Shaw enter into an implied contract to split the revenue from Shaw's sale of umbrellas to Rita's customers. The terms of this contract are defined by

Accepted Answer

An implied contract is based on the conduct and actions of the parties involved rather than an explicit agreement. In this scenario, Rita and Shaw have acted in a way that implies an agreement to split the revenue from umbrella sales. This agreement is defined by their conduct rather than any specific words or intentions. The unforeseeable storm may have created the opportunity for the agreement, but it does not define the terms of the contract. The subjective intent of the parties is also not relevant as an implied contract does not require explicit statements of intent.

Question 15

Moe asserts that a deal he entered into with Nina to sponsor and host a motivational conference for independent sales representatives is an unenforceable contract. Defenses to the enforcement of a contract include

Accepted Answer

The lack of a party's voluntary consent is a defense to the enforcement of a contract. If a party was not fully aware of what they were agreeing to, or if they were coerced into agreeing, the contract may not be enforceable. The other options given - a desire not to perform, insufficient capital, and preliminary indications of unsatisfactory results - are not valid defenses to the enforcement of a contract.

Question 16

Ren offers to pay Sara to pick up and deliver certain business documents within thirty minutes. Sara can accept the offer only by completing the task within the deadline. If she does, Ren and Sara will have

Accepted Answer

In a unilateral contract, only one party makes a promise, while the other has to fulfill an act in order to accept the offer. In this scenario, Ren is making a promise to pay Sara if she completes the task within the deadline. Thus, it is a unilateral contract.

Question 17

Vicky asks Walt, a cobbler, to repair a pair of boots. There is no discussion of a price, and Vicky and Walt do not sign any documents. After the repair, Walt hands Vicky a bill. With respect to Vicky's obligation to pay the bill, this is

Accepted Answer

This is an example of an implied contract because although no explicit agreement was made regarding price, there was an implicit understanding that Vicky would pay for the repair services rendered by Walt.

Question 18

Marketing Inc. offers to create a campaign to increase N'Ice Creamery, Inc.'s online business. N'Ice agrees to pay for the service. These parties have

Accepted Answer

An express contract is formed when the parties have explicitly agreed to the terms and conditions of the contract. In this case, N'Ice Creamery and Marketing Inc. have agreed to enter into a contractual relationship where Marketing Inc. will provide advertising services in exchange for payment from N'Ice. Therefore, they have an express contract.

Question 19

Flo tells Ginger during a phone call that she will buy her textbook from last semester for $65. Ginger agrees. These parties have

Accepted Answer

This is an express contract because the agreement between Flo and Ginger was explicitly stated and agreed upon by both parties.

Question 20

Ray promises to give Steve his iPod in exchange for Steve's promise to pay Ray $50. Later, they exchange the device for the funds. A contract was created when

Accepted Answer

A contract was created when Steve promised to pay Ray for the iPod, as this constitutes an offer and acceptance, forming a binding agreement.

Quiz 7: Nature and Terminology