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Business Law Ch6-10 MCQs




Question;Questions;1.;T/F: Each contract should cover a singular;promise and if multiple promises are involved, multiple contracts should be created;2.;T/F: Boris sky dives out of a plane and gets;hung up in a tree, hopelessly suspended and swinging precariously in his;parachute from the branches of the tree. Natasha sees that be is in trouble and;comes to his rescue. Once Boris is safely on the ground, he gratefully promises;to give Natasha half of his life savings account. When he changes his mind;Natasha will probably be unsuccessful in enforcing his promise;3.;T/F: Most oral agreements will be enforceable as;contracts by courts;4.;T/F: An option contract has to do with a;contract that gives one of the parties a choice of consideration to accept;5.;T/F: Duress must be based on a physical threat;and not an economic one;6.;T/F: An option contract refers to the choices;that one has when entering into a contract;7.;T/F: Larry has had a few beers and is starting;to get a bit drunk. He isn't acting strange and he's conducting conversations;with others slurring only an occasional word or two. Larry, should he enter;into a contract in this state would be considered mentally incompetent and his;contract would be void;8.;T/F: Generally, mutual mistakes will often lead;to the court allowing an avoidance of a contract, however, a unilateral mistake;is not usually grounds to cancel a contract;9.;T/F: Amanda, a recent university graduate;needed a car to get to her new job. To help Amanda secure a loan for the car;Ted, a friend, agreed to pay the loan should Amanda default. Ted's promise is;enforceable as long as he goes to the bank, declares his promise to guarantee;Amanda's loan in front of witnesses and shakes hands on the deal giving his;word;10.;T/F: Contractual consideration is defined as the;thought process a party uses to decide whether or not to accept the offer and;enter into a contract;11.;T/F: The legal detriments exchanged by the;parties must be equal, or reasonably close to equal, for consideration to be;valid;12.;Helen's cat Fluffy has run away and she places;reward posters throughout her neighborhood. Mark sees the reward poster and;spends the next six hours searching for Fluffy. While Mark is searching the;neighborhood, Fluffy gets hungry and comes home, what type of contract is this;and what is Mark entitled to for his work?;13.;Where a promise can only be accepted by the;performance of the person to whom it is offered is an example of what type of;contract?;14.;If the offer specifies no time limit in which to;accept how much time does the offeree have to accept?;15.;Josh is negotiating the sale of his car with;Jonathan. Jonathan asks if the car has ever been in an accident and Josh;replies, "No, it has never been in an accident." In fact, the car was;nearly totaled the year before when Sheila, Josh's girlfriend, driving Josh's;car, hit a wet spot and skidded into a pole. She had it repaired without;telling him about the accident. Josh has committed what?;16.;Brandi orally tells landscaper Mike "If you;trim my bush I'll pay you $50.00." Mike trims her bush. What type of;contract was this?;17.;Bud calls Lou and says, "I'll sell you my;car for a thousand bucks, interested?" Lou says, "I'll look it up on;the Internet. If the Blue Book price is close, I'll pay you $1000 in the;morning." At sunrise Lou shows up with $1000.00, What is Bud required to do;according to the laws of contracts?;18.;What type of contract is formed to remedy unjust;enrichment?;19.;Mike is walking through a parking lot and finds;Kathy lying unconscious. He puts her in his car and takes her to the hospital.;The hospital saves her life and when she becomes conscious they present her;with a bill, Kathy will be required to pay based on what type of contract?;20.;With regard to the court, adequacy of;consideration means?;21.;Dick has made a statement that the average;person would realize is puffery. Dick is guilty of?;22.;In Leonard v. Pepsico, the court ruled against;Leonard and refused to enforce the purchase of a Harrier Jet because?;23.;Abel sends Baker a letter: "I offer to;perform consulting services for six months at $100/month." Baker signs;I agree." This contract fits into which category?;24.;A contract in which one party may either;disaffirm or enforce a contract is?;25.;Helsel goes to see a physician concerning a;particularly harsh flu. The doctor examines him prescribes medication, and;gives him a bill for medical services. This agreement falls into which category;of contracts?;26.;The owner of an office building hires an;architect to produce renovation plans for a $5,000 fee. The owner retains the;plans once the fee is paid. What source of law governs this contract?;27.;Digital signatures are recognized under state;statutes that have passed what act?;28.;Hyde hires an arsonist to set a warehouse on;fire for $1,000. This agreement is legally?;29.;Holmes Hats agrees to sell 100 top hats to a;formal wear store and deliver them no later than April. This agreement falls;into what category of contracts?;30.;The owner of a warehouse contracts with;Satellite Services for the purchase and installation of satellite dishes at the;warehouse. the contract allocated $8,000 for the satellite and $2,000 for installation.;Which source of law governs this contract?;31.;When two parties agree to use an;electronic-commerce method for a transaction, what sets out procedural;guidelines that recognize electronic records and signatures under the law?;32.;A contract that meets all of the statutory;requirements to form a contract but is subject to a legal defense is what kind;of an agreement?;33.;Cardozo Candies agrees to sell 100 boxes of;chocolate to a retail store and deliver them in one week. This agreement falls;into what category of contracts?;34.;What actions by parties are events of;termination of an offer?;35.;What events of termination of an offer via;operation of law?;36.;T/F: When a party successfully sues for an;equitable remedy for a breach of contract, they do not receive a monetary award;37.;T/F: When an accord and satisfaction is agreed;to, the original obligation subject to the accord is immediately discharged;38.;T/F: Nominal damages are rarely awarded in;contract cases;39.;T/F: Craig is a licensed plumber and has a;contract to install a replacement toilet for Mary. When Craig realizes that he;has booked two appointments simultaneously, he calls Brian, another licensed;plumber and asks him to install Mary's toilet. Craig has assigned his duties to;Brian;40.;T/F: A party to a contract may be discharged;from performance due to operation of law if the other party unilaterally alters;the contract;41.;T/F: Restitution is classified as an equitable;remedy;42.;T/F: When an assignment is made, the assignee;has the right to reform the contract and change the obligor's rights and duties;as they wish;43.;T/F: Impossibility of performance is subjective;meaning that one of the parties may unilaterally decide that performance is;impossible, thus discharging the contract;44.;T/F: Specific performance is almost always;available when a real estate contract is involved;45.;T/F: Beth has a contract with Annie in which;Annie is to deliver 1000 hand decorated beverage holders in 60 days. When Beth;calls the Psychic Hotline for her weekly reading, the psychic informs her that;she has entered into a contract and the other party will not perform all the;conditions and specifications as per the agreement. Beth may sue for an anticipatory;repudiation;46.;T/F: Mel is under contract with a textbook;publisher to write a teachers manual to accompany a new textbook. The contract;states that the instructor's manual is to be completed by August 1. On July 1;the publisher calls Mel and asks for an update. Mel states that he's working;hard and making progress. He then states that the August 1 deadline is;doable but it's going to be tough". Based on Mel's statement the;textbook publisher may claim an anticipatory repudiation and find another author;to complete the project;47.;T/F: A rescission of a contract may occur when;either party chooses to end the agreement;48.;T/F: Burt has contracted with Mel to put a;concrete driveway on Mel's property. If Burt delegates the duty of laying the;driveway to Chuck, and Chuck does an unacceptable job, Mel may sue Burt for;damages;49.;T/F: Lance is an avid bicyclist and sends in a;$150 fee to participate in an across the state ride in the Midwest. A week;before the ride, he breaks his leg. Unless the contract specifically provides;for no refunds under any conditions, he will be able to receive a refund based;on impossibility;50.;T/F: Generally, courts do enforce a strict;compliance standard for contact conditions;51.;T/F: Anticipatory repudiation may be used when a;party has knowledge that either a complete or a partial breach will occur by;the other party;52.;T/F: Incidental beneficiaries are known about;when the contract is entered into;53.;List three ways of discharge by mutual consent;54.;You have booked a hotel room for conference at a;rate of $100 per day for five days. When you arrive to check in you are told;that the hotel is full and that they overbooked and cannot supply you with a;room. You are forced to go to the only hotel in town with available rooms and;pay $150 per night. If you sue for damages you entitled to what amount?;55.;Max has contracted with Lew to have his house;painted. The contract specifically stated that the job was to be completed by;8/25. Lew completes the job on 8/26. Max has suffered no loss due to the delay.;The job was otherwise done exactly to all contract requirements and;specifications. If Max sues Lew for breach of contract due to the missed;completion date, were the courts to award damages, what type of damages would;most likely be awarded?;56.;In a delegation situation, the nondelegating;party is called the?;57.;Lon has just come home from serving in the;Marines and contracts with a local car dealership to purchase a car. The car;must be ordered and payment is to be made when the car arrives. The next day;Lon receives orders to return to active duty. Realizing that he doesn't need;the car, he brings Tony to the dealership and asks that Tony substitute for;him. Lon will take delivery and ownership of the car and Lon will pay the;dealership upon delivery. The dealership agrees to have Tony substitute for;Lon. What has occurred?;58.;Punishment damages are called;59.;Fred's Flooring (FF) contracts with Harry;homeowner to install wood flooring throughout Harry's home. Harry was to;purchase the flooring and the contract was solely for installation. Payment was;to be 20% at the time that the work commenced and 80% once the flooring was;installed. Harry purchased the flooring materials and paid the 20%, so FF began;work. When FF was half way completed, Harry realized that he didn't have the;money to pay FF upon completion so he bolted the doors and refused access. If;FF wants to rescind the contract and be paid for work completed, FF would sue;for;60.;When one party fails to perform under an;agreement, the failing party has what the contract?;61.;Anticipatory repudiation can occur in which of;the following ways?;62.;Coopers agrees to prepare and file an income tax;return for young for $500. Coopers fails to file the return on time. Which of;the following types of breaches describes this senario?;63.;Which remedy covers foreseeable indirect losses;suffered by the nonbreaching party?;64.;Rockefeller hires Pablo to paint his portrait;due to Pablo's reputation as an excellent painter. Pablo breaches the;agreement. Which of the following is Rockefeller's probable remedy?;65.;What are two forms of equitable relief;66.;Which remedy covers losses of actual damages;suffered by the nonbreaching party?;67.;Louis agrees to sell Stevens a rare coin;collection for $10,000. When Stevens shows up with the money, Louis changes his;mind and refuses to sell it to him. Which of the following is Stevens' probable;remedy?;68.;When the parties in a contract perform the;obligations in good faith and complete the contract, the parties are said to;have what the contract?;69.;In cases where the parties agree to a contract;and pursue good faith performance but one party cannot give perfect;performance, the law still recognizes the party's right to discharge the;contract through?;70.;Name three ways a party may discharge their;obligation for a contract?;71.;Kitchen Clean contracts to provide services for;Chef Rave's restaurants at a rate of $1,000 per month to begin on January 2. On;February 2, Chef Rave is unhappy with the work. He sends a check for $500 along;with a letter notifying Kitchen Clean that he is unhappy, canceling the;contract and only willing to pay half-price. Kitchen Clean receives the letter;deposits the check, and sues Chef Rave for the balance owed. What event of;discharge occurred in the Chef Rave v Kitchen Clean case?;72.;Name three methods of discharging a contract;through operation of law?;73.;The doctrine of what allows one party to;discharge the contract through less-than-perfect performance;74.;Name three ways you can discharge a contract;75.;Kitchen Clean contracts to provide services for;Chef Rave's restaurants at a rate of $1,000 per month to begin next month. In;the interim, Chef Rave hears of a cheaper cleaning service, and Kitchen Clean;hears to Chef Rave's bad temper and slow payment habits. The parties mutually;agree to cancel the contract before it begins. The parties have discharged;their contract via what method?;76.;Name three methods of discharging a contract;through operation of law;77.;Pilgrim Industries scheduled its annual sales;meeting at Celestial City Resort from Jan. 5 to 10. In addition to meeting and;hotel rooms, the resort was to provide an ice-skating pond for Pilgrim's annual;employee hockey game. Two months before the meeting, the resort is hit with a;devastating fire, and no hotel or meeting rooms are available. the;Pilgrim-Celestial contract is discharged via the doctrine of;78.;In cases where the parties have agreed to a certain;service at a certain price, but one party finds that he or she cannot provide;perfect performance, the law recognizes what as an event of discharge, so long;as the party acted in good faith and that any deviation from the contract did;not materially alter the contract;79.;What is the most common way in which parties;discharge a contract?;80.;Kitchen Clean contracts to provide services for;Chef Rave's restaurants at a rate of $1,000 per month to begin next month.;After the first cleaning, Kitchen Clean complains that the conditions of the;exhaust hoods were worse than either party knew. The parties agree to a new;agreement for $1,500 per month during months when the hoods required cleaning;and $1,000 for all other months. The parties have discharged their original;contract via what method?;81.;Pilgrim Industries scheduled its annual sales;meeting at Celestial City Resort from Jan. 5 to 10. In addition to meeting and;hotel rooms, the resort was to provide an ice-skating pond for the Pilgrim's;annual employee hockey game. In the weeks before the meeting, the resort is hit;with its worst heat wave on record. Although hotel and meeting rooms are;available, there is not possibility of ice skating at the site. If a court;finds that one of Pilgrim's principal purposes in the agreement was the;inclusion of an ice-skating pond, the Pilgrim-Celestial contract could be;discharged via the doctrine of?;82.;T/F: Shovels R Us sends a purchase order to Acme;Snow Shovel, Inc. for 500 shovels to be delivered by September 30, 2010, in time;for the winter season. Acme returns an acknowledgment form indicating that the;shovels would be delivered on March 1, 2011. The acknowledgement letter forms a;valid contract;83.;T/F: Just as in the common law, the UCC;recognizes the concept of anticipatory repudiation allowing a breach to be;declared prior to performance being due;84.;T/F: UCC risk of loss provisions will govern the;terms of a contract even if the parties have specified risk allocation in the;contract;85.;T/F: The 2003 revisions to the UCC have only been;adopted by about half of the states;86.;T/F: If the seller ships conforming goods, the;buyer has a duty to accept them and may not reject the goods;87.;T/F: Wrongfully revoking an acceptance will;constitute a breach of contract by the buyer;88.;T/F: If a party has been delivered nonconforming;goods and has rejected them, if they are forced to cover in order to maintain;business operations, they may sue the seller for the difference in price plus;consequential damages;89.;T/F: If a buyer knowingly accepts nonconforming;goods, they may still sue the seller for monetary damages based on the;nonconformity;90.;T/F: The United Nations Convention on Contracts;for the International Sale of Goods does not recognize a formal writing;requirement similar to the UCC statute of frauds requirement;91.;T/F: The UCC permits a contract to be considered;formed entirely by the parties' conduct even if no definite time of formation;can be determined;92.;T/F: The mirror image rule is not enforced under;UCC standards;93.;T/F: On February 1st, Frank's Fedora;Manufacturers sends an offer to Metropolitan Outfitters by letter with all;price, quality, quantity and delivery terms clearly stated, indicating that the;offer will remain open until October 1st. On September 1st Metropolitan sends;an acceptance of the offer to Frank's with no material alterations to any of;the stated terms in the offer. The acceptance makes the contract valid and;enforceable;94.;In a shipping contract, the risk of loss passes;to the buyer when what happens?;95.;In the absence of a specific contract provision;regarding the details of payment the UCC provides that;96.;In Merchants Acceptance, Inc. v. Jamison;Jamison ordered encyclopedias and the contract specified that delivery was to;be made to Jamison's home. Instead the encyclopedias were delivered to her post;office box and she never received them. She refuses to pay for them and is sued;97.;In a destination contract, risk of loss passes;to the buyer when?;98.;Contracts for the sale of goods are governed by;Article what of the Uniform Commerce Code;99.;The underlying policy of the Uniform Commerce;Code is to promote the what of a business transaction?


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