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MGT401 Test 3 multiple choice Questions




Question;1.;James threatens to hit Kenneth on the head with a baseball;bat unless Kenneth signs a contract agreeing to pay James $300 for his latest;painting. Because of the threat, Kenneth signs the contract.;A) This contract is voidable at Kenneth's option.;B) James has committed physical duress against Kenneth.;C) This is an example of economic duress.;D) All of the above.;2.;A contract was made for 125 bales of cotton to arrive on a;ship named "Peerless" from Bombay. Unbeknownst to either party to the;contract, there were two ships named "Peerless," both of which were;sailing from Bombay. One sailed in October and the other in December. The buyer;had in mind the ship sailing in October, but the seller had in mind the ship;sailing in December. Each party held his belief in good faith. When the goods;failed to arrive on time, the buyer sued for breach of contract.;A) The seller is in breach and must pay damages.;B) The seller is guilty of fraud in the inducement for;failing to disclose to the buyer which ship would contain the goods.;C) No contract exists due to mutual mistake of fact as to;the existence or identity of the subject matter of the contract.;D) Two of the above, (a) and (b).;3.;Sam wants to sell his Golden Retriever to Jordan. Sam tells;Jordan that the dog is three years old and that he will point, back, and;retrieve. Although the dog is three years old and will point at birds, he will;not back (honor another dog's point). Jordan relies on these statements and;purchases the bird dog. The buyer has most probably been a victim of;A) duress.;B) undue influence.;C) fraud in the inducement.;D) fraud in the execution.;4.;Stewart entered into a contract with Will to have Will build;a 10-unit apartment complex on Elm Street in Randolph County. Unknown to both;parties, this land had recently been rezoned and only single-unit dwellings can;be constructed.;A) This is a mutual mistake of law.;B) This is a unilateral mistake of fact.;C) Stewart is obligated to buy land elsewhere and have the;complex constructed on property zoned for apartments.;D) Will is liable to Stewart since Will is a contractor.;5.;Albert found a stone in his yard and took it to Bob, a;jeweler, for evaluation. Although Bob knew what the stone was, he told Albert;that he wasn't sure as to the nature of the stone, but that he thought it was a;topaz. Bob then offered to buy the stone for $25 and Albert agreed. Later;Albert found out the stone was an uncut diamond worth about $700.;A) The sale was a valid contract that should be enforced by;the law.;B) This contract can be voided based upon fraud in the;execution.;C) This contract can be voided based upon fraud in the;inducement.;D) This contract can be voided based upon mistake as to the;identity of the subject matter.;6.;Aunt Ellie promises her 21-year-old nephew, Robbie, that she;will pay him $100 if he quits smoking for a month. If Robbie does, is there a;binding contract?;A) No, because Robbie gave no benefit to Aunt Ellie.;B) No, because Robbie did not suffer any detriment.;C) Yes, because stopping smoking will benefit Robbie's;health.;D) Yes, because Robbie gave up a legal right.;7.;Mary agrees to sew Georgia's prom dress for $50 plus costs.;After making this deal, Georgia decides that she wants ruffles around the neck;and calls Mary who says it will now cost $60. When Mary finishes the dress;(with ruffles), Georgia must pay;A) $50, since that is the original agreement.;B) $50, since a modification must be in writing.;C) $60, since the modified agreement is supported by;additional consideration.;D) $60, since any subsequent agreement is enforceable.;8.;Wayne helped Hank study all night for an important exam.;After Hank got an A on the exam, he told Wayne, "I will give you $10 for;helping me study for the exam last night." Wayne said, "Thanks, I'll;take it.;A) There is no contract because there is no mutual assent.;B) There is no contract because there is no valid;consideration.;C) There is no contract because $10 is reasonably inadequate;consideration.;D) There is a contract with sufficient consideration.;E) There is no contract because there is no mutual assent.;There is no contract because there is no valid consideration. There is no;contract because $10 is reasonably inadequate consideration. There is a;contract with sufficient consideration.;9.;Andrew agrees to paint Betty's house for $500. Two days;after he starts the job, he decides that $500 isn't enough money. He refuses to;finish the job unless Betty agrees to pay him $100 more. What law applies to;this fact situation?;A) The acceptance of additional money to settle a disputed;claim is supported by consideration.;B) A past obligation is sufficient consideration for a new;promise.;C) Andrew was already obligated to paint the house. He gives;no additional consideration in return for Betty's promise to pay more money.;D) Betty has made a promise in exchange for a forbearance.;10.;Claudia sells her highly successful hair salon to Carl. In;the sales contract, Claudia agrees never to open a hair salon in the world.;Which of the following best describes this contract clause?;A) Void as an illegal primary restraint.;B) Valid as a reasonable restraint on trade.;C) An unenforceable restraint against public policy.;D) Binding as fair protection.;11.;Don has an employment contract with Dunkirk Ice Cream. He;sells ice cream and novelty ice cream products for Dunkirk as a full-time;employee. He has nine children and needs more money, so he takes a part-time;job with a competitor. "After all," he reasons, "most stores;carry four or five different brands." His employment contract prohibits;him from competing. If Don sells ice cream for a competitor, will he be in;trouble under his contract?;A) No, it is unenforceable because this is against public;policy.;B) Yes, it is likely to be enforceable while he is employeed;full-time by Dunkirk.;C) No, the prohibition against competing is enforceable only;after he quits Dunkirk.;D) A court would have to rule on the enforceability of the;covenant not to compete since courts are reluctant to enforce such covenants;during a period of employment.;12.;Which of the following would generally be considered a;revenue-raising licensing law?;A) A statute requiring that medical doctors be licensed.;B) A statute requiring that salespeople be licensed, but not;establishing any educational or training requirements.;C) A statute requiring public school teachers to be;licensed.;D) A statute that requires insurance agents to pass a test;before selling insurance in a state.;13.;Which of the following promises in consideration of marriage;would not have to be in writing?;A) In consideration of Joan's promising to marry him, a man;promises to pay her an allowance and to give her all of his property upon his;death.;B) John and Mary mutually agree that their marriage shall;not affect the existing property rights of the other.;C) John and Joan mutually promise to marry each other in a;formal ceremony on June 23.;D) Joan promises to release a money judgment against Steven;in consideration of his marrying her.;14.;Al has a tax service and accounting business in Redwood;City. He decides to move to Center City, which is 150 miles away and sells his;accounting practice to Able and Baker, a CPA firm. In the sales contract, he;agrees that he will refrain from practicing accounting anywhere within a;20-mile radius of Redwood City for a period of one year. However, on weekends;he returns to his house in Redwood City, and when clients call him, he meets;with them in his home.;A) Al is probably in violation of the sales agreement;because the restraint is reasonable.;B) The agreement is invalid, because it is an illegal;restraint on trade.;C) The agreement is illegal, because it is a violation of;public policy.;D) The two-year provision is likely to be held invalid;because it is too long a period of time.;15.;Tim, who is a minor, enters into a contract with Violet, who;is an adult. Which of the following is correct?;A) Violet may not disaffirm the contract.;B) Violet may disaffirm the contract at any time.;C) Violet may disaffirm the contract when Tim becomes an;adult.;D) Tim may ratify the contract at any time during his;minority.;16.;Which of the following promises does not have to be;evidenced by writing?;A) Jones' agreement with Smith to sell his condominium for;$100,000.;B) Stewart's promise to work for Austin for a two-year;period.;C) Dad's promise to the credit union that he will make;payments on his son's truck if his son fails to pay.;D) Mindy's agreement with Susan to buy her bike for $400.;17.;On March 1, 2009, Sara, a student, received a telephone call;from ComputerChip, Inc. offering her a job for one year beginning on June 15;2009. According to the personnel manager, she will have to move to California;and be ready to start work at 8:00 a.m. on June 15, 2009. Should Sara ask for a;letter confirming the telephone conversation if she accepts the offer;immediately?;A) Yes, because the job offer is a collateral promise.;B) Yes, because the job offer is covered by the parol;evidence rule.;C) Yes, because the job offer is for longer than one year;from March 1.;D) No, because the job offer is only for one year starting;on June 15th.;18.;Which of the following would be considered a valid and;legally enforceable agreement?;A) An agreement to pay a legislator to vote for a particular;bill.;B) An agreement under which Arthur agrees to pay Barbara;$3,000 to disparage the product of Arthur's competitor.;C) An agreement by the seller of a service station not to;enter the service station business in Ohio for a period of 30 years after the;sale of his business.;D) An agreement by a car salesman not to sell automobiles or;automobile parts in Marion County for a period of one year after terminating;his employment with a dealership.;19.;Which of the following is not true regarding the contracts;of intoxicated persons?;A) If an intoxicated person is unable to understand the;nature and consequences of his act, then the contract is voidable.;B) The effect of intoxication is generally the same as that;given to contracts that are voidable because of incompetency.;C) Slight intoxication will destroy one's contractual;capacity.;D) Contracts made while a person is too intoxicated to act;in a reasonable manner may be ratified when the intoxicated person regains his;capacity.;20.;Sam, a shopkeeper, dies unexpectedly at the age of 46. His;lifelong business associate, Paul, is appointed the administrator of his;estate. Sam had a personal debt of $8,000 which he owed to Art's Appliance;Store. Paul says to Art, "If there isn't enough money in the estate, I'll;personally see that the bill is paid." Which of the following is correct?;A) The oral statement is enforceable because Paul is the;Administrator.;B) An oral statement such as this is not enforceable because;it is not in writing.;C) An oral statement such as this is enforceable under the;doctrine of implied contract.;D) The oral statement is enforceable because it is a;collateral promise.


Paper#58983 | Written in 18-Jul-2015

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