Question 1

Stephen offers Theresa $1,000 for her collection of rare coins. She accepts. If a dispute arises, a court would likely​

Accepted Answer

A)  ​enforce the deal after questioning the adequacy of consideration. 
B)  ​not question the adequacy of the consideration. 
C)  ​rewrite the deal after questioning the adequacy of consideration. 
D)  ​set aside the deal after questioning the adequacy of consideration. 
A)  ​enforce the deal after questioning the adequacy of consideration. 
B)  ​not question the adequacy of the consideration. 
C)  ​rewrite the deal after questioning the adequacy of consideration. 
D)  ​set aside the deal after questioning the adequacy of consideration.

Question 2

Under a contract with Valley Vineyard, Walsh begins grading a terraced hillside for the planting of grapes. Halfway through the project, Walsh asks for $5,000 over the contract price, claiming an increase in the "cost of doing business." Valley agrees but later refuses to pay. Valley's agreement to pay more is​

Accepted Answer

A)  ​unenforceable because Walsh's performance was a preexisting duty. 
B)  ​unenforceable because Valley's promise was illusory. 
C)  ​enforceable. 
D)  ​unenforceable because Walsh's request modified the contract. 
A)  ​unenforceable because Walsh's performance was a preexisting duty. 
B)  ​unenforceable because Valley's promise was illusory. 
C)  ​enforceable. 
D)  ​unenforceable because Walsh's request modified the contract.

Question 3

Fact Pattern 9-1
Sports Bar & Grill and Tea & Tarts Bakery are adjacent businesses with adjoining parking lots. Sports Bar offers Tea & Tarts a discount on purchases if the bakery will not tow the cars of Sports Bar's patrons who park in the bakery's lot.
​
-Refer to Fact Pattern 9-1. Sports Bar's discount is legally sufficient consideration​

Accepted Answer

A)  ​because it is a promise of something of value. 
B)  ​only if Sports Bar adds a cash rebate. 
C)  ​only if Tea & Tarts uses it. 
D)  ​under no circumstances. 
A)  ​because it is a promise of something of value. 
B)  ​only if Sports Bar adds a cash rebate. 
C)  ​only if Tea & Tarts uses it. 
D)  ​under no circumstances.

Question 4

​Intoxicated but capable of comprehending the consequences of her actions, Cricket signs a contract to sell her phone app design to Download, Ltd. This contract is

Accepted Answer

A)  ​unenforceable because Cricket was intoxicated. 
B)  ​enforceable. 
C)  ​unenforceable if Cricket disaffirms it. 
D)  ​unenforceable if Download disaffirms it. 
A)  ​unenforceable because Cricket was intoxicated. 
B)  ​enforceable. 
C)  ​unenforceable if Cricket disaffirms it. 
D)  ​unenforceable if Download disaffirms it.

Question 5

Fact Pattern 9-2
Sal contracts with Tasty Pizza to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract.
-Refer to Fact Pattern 9-2. Sal and Tasty​

Accepted Answer

A)  ​may rescind their entire contract. 
B)  ​may rescind their contract to the extent that it is executory. 
C)  ​must perform their entire contract. 
D)  ​must perform the part of their contract that is executory. 
A)  ​may rescind their entire contract. 
B)  ​may rescind their contract to the extent that it is executory. 
C)  ​must perform their entire contract. 
D)  ​must perform the part of their contract that is executory.

Question 6

Service Corporation markets its service to less educated consumers. In considering the unconscionability of a Service contract, a court will likely consider all of the following except​

Accepted Answer

A)  ​a buyer's level of education. 
B)  ​the parties' relative bargaining power. 
C)  ​the price of a service. 
D)  ​the seller's level of education. 
A)  ​a buyer's level of education. 
B)  ​the parties' relative bargaining power. 
C)  ​the price of a service. 
D)  ​the seller's level of education.

Question 7

A promise made in return for an act or event that has not yet taken place can be fully enforceable.​

Accepted Answer

A) True 
 B)False

Question 8

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients, to whom Oscar will aggressively market Payroll's services. This deal is​

Accepted Answer

A)  ​enforceable. 
B)  ​void. 
C)  ​voidable at the option of either party. 
D)  ​voidable at the option of the party having less bargaining power. 
A)  ​enforceable. 
B)  ​void. 
C)  ​voidable at the option of either party. 
D)  ​voidable at the option of the party having less bargaining power.

Question 9

Parties are usually free to bargain as they wish.​

Accepted Answer

A) True 
 B)False

Question 10

Fagin and Gage agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gage can​

Accepted Answer

A)  ​enforce the agreement. 
B)  ​obtain damages in the amount of his partner's share of the illegal profits. 
C)  ​obtain damages in the amount of his own share of the illegal profits. 
D)  ​none of the choices. 
A)  ​enforce the agreement. 
B)  ​obtain damages in the amount of his partner's share of the illegal profits. 
C)  ​obtain damages in the amount of his own share of the illegal profits. 
D)  ​none of the choices.

Question 11

Centre City Properties, Inc., owns and manages a warehouse. DIY Home Improvement Stores agrees to lease the warehouse for six years. Under the lease, DIY is obligated to pay all of the utility costs. Two years into the term, DIY asks Centre City to modify the lease to provide that the utility costs will be split equally between them. The landlord agrees, but later decides it does not want to share the costs and refuses to pay. Is Centre City bound to its agreement to share the utility costs? Why or why not?​

Accepted Answer

Centre City Properties, Inc., the landlo

Question 12

Essentially, adequacy of consideration concerns the fairness of the bargain.​

Accepted Answer

A) True 
 B)False

Question 13

Fact Pattern 9-2
Sal contracts with Tasty Pizza to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract.
-Refer to Fact Pattern 9-2. The next day, Sal changes his mind and again offers to deliver Tasty's products. Tasty is willing to deal, but for a new price. Sal and Tasty​

Accepted Answer

A)  ​may agree to a new contract, but it cannot include a new price. 
B)  ​may agree to a new contract that includes the new price. 
C)  ​must perform their original contract. 
D)  ​must perform the part of their original contract that is executory. 
A)  ​may agree to a new contract, but it cannot include a new price. 
B)  ​may agree to a new contract that includes the new price. 
C)  ​must perform their original contract. 
D)  ​must perform the part of their original contract that is executory.

Question 14

Baylor obtains a loan from City Bank at 24.5 percent interest. Their state's usury statute limits interest rates to a 22.0 percent maximum. Baylor's contract with the bank is enforceable only if​

Accepted Answer

A)  ​Baylor does not attempt to disaffirm it. 
B)  ​the bank does not attempt to disaffirm it. 
C)  ​both Baylor and the bank knew of the state limit. 
D)  ​none of the choices. 
A)  ​Baylor does not attempt to disaffirm it. 
B)  ​the bank does not attempt to disaffirm it. 
C)  ​both Baylor and the bank knew of the state limit. 
D)  ​none of the choices.

Question 15

A release does not require consideration to be legally binding.​

Accepted Answer

A) True 
 B)False

Question 16

Omni Insurance Company violates a state licensing statute when selling a policy to Petra, in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute, Petra can​

Accepted Answer

A)  ​do nothing with respect to the policy. 
B)  ​enforce the policy or recover the amount of the premiums paid. 
C)  ​only enforce the policy. 
D)  ​only recover the amount of the premiums paid. 
A)  ​do nothing with respect to the policy. 
B)  ​enforce the policy or recover the amount of the premiums paid. 
C)  ​only enforce the policy. 
D)  ​only recover the amount of the premiums paid.

Question 17

While biking, Jolene is injured when Kirby carelessly causes them to crash. Kirby's insurance company offers Jolene $50,000 to release Kirby from liability, and she accepts. Later, Jolene learns that her injuries are more serious than she realized. The release is​

Accepted Answer

A)  ​enforceable. 
B)  ​unenforceable because Jolene's injuries are unforeseeably difficult. 
C)  ​unenforceable because Kirby has a preexisting duty to pay. 
D)  ​unenforceable because the release is an illusory promise. 
A)  ​enforceable. 
B)  ​unenforceable because Jolene's injuries are unforeseeably difficult. 
C)  ​unenforceable because Kirby has a preexisting duty to pay. 
D)  ​unenforceable because the release is an illusory promise.

Question 18

A covenant not to compete is enforceable only if it is necessary to restrain trade.​

Accepted Answer

A) True 
 B)False

Question 19

A court adjudicates Henry mentally incompetent and appoints Inez to be his guardian. Later, without Inez's knowledge, Henry signs a contract to sell his farm to Jason for its real market value. The contract is​

Accepted Answer

A)  ​enforceable if Henry comprehended the consequences. 
B)  ​enforceable if Henry knew the market value of the farm. 
C)  ​enforceable if Henry was the record owner of the farm. 
D)  ​void. 
A)  ​enforceable if Henry comprehended the consequences. 
B)  ​enforceable if Henry knew the market value of the farm. 
C)  ​enforceable if Henry was the record owner of the farm. 
D)  ​void.

Question 20

Holly, a real estate broker licensed only in Iowa, concludes a sale of farmland in Illinois. Holly can​

Accepted Answer

A)  ​collect the commission if it has not been paid. 
B)  ​keep the commission if it has already been paid. 
C)  ​foreclose on the property to obtain any unpaid amount. 
D)  ​none of the choices. 
A)  ​collect the commission if it has not been paid. 
B)  ​keep the commission if it has already been paid. 
C)  ​foreclose on the property to obtain any unpaid amount. 
D)  ​none of the choices.

Stephen offers Theresa $1,000 for her collection of rare coins. She accepts. If a dispute arises, a court would likely

Intoxicated but capable of comprehending the consequences of her actions, Cricket signs a contract to sell her phone app design to Download, Ltd. This contract is

Fact Pattern 9-2 Sal contracts with Tasty Pizza to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract. -Refer to Fact Pattern 9-2. Sal and Tasty

Service Corporation markets its service to less educated consumers. In considering the unconscionability of a Service contract, a court will likely consider all of the following except

A promise made in return for an act or event that has not yet taken place can be fully enforceable.

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients, to whom Oscar will aggressively market Payroll's services. This deal is

Parties are usually free to bargain as they wish.

Fagin and Gage agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gage can

Essentially, adequacy of consideration concerns the fairness of the bargain.

Baylor obtains a loan from City Bank at 24.5 percent interest. Their state's usury statute limits interest rates to a 22.0 percent maximum. Baylor's contract with the bank is enforceable only if

A release does not require consideration to be legally binding.

Omni Insurance Company violates a state licensing statute when selling a policy to Petra, in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute, Petra can

While biking, Jolene is injured when Kirby carelessly causes them to crash. Kirby's insurance company offers Jolene $50,000 to release Kirby from liability, and she accepts. Later, Jolene learns that her injuries are more serious than she realized. The release is

A covenant not to compete is enforceable only if it is necessary to restrain trade.

A court adjudicates Henry mentally incompetent and appoints Inez to be his guardian. Later, without Inez's knowledge, Henry signs a contract to sell his farm to Jason for its real market value. The contract is

Holly, a real estate broker licensed only in Iowa, concludes a sale of farmland in Illinois. Holly can

Law and Legal Reasoning

Business and the Constitution

Courts and Alternative Dispute Resolution

Tort Law

Criminal Law and Cyber Crime

Business Ethics

Nature and Terminology

Agreement in Traditional and E-Contracts

Defenses to Contract Enforceability

Third Party Rights and Discharge

Breach of Contract and Remedies

Intellectual Property Rights

Internet Law, Social Media, and Privacy

The Formation of Sales and Lease Contracts

Performance, Breach, and Warranties of Sales and Lease Contracts

Agency Relationships in Business

Small Businesses and Limited Liability Companies

Corporations

Filters

Exam 9: Consideration, Capacity, and Legality

Stephen offers Theresa $1,000 for her collection of rare coins. She accepts. If a dispute arises, a court would likely​

​Intoxicated but capable of comprehending the consequences of her actions, Cricket signs a contract to sell her phone app design to Download, Ltd. This contract is

Fact Pattern 9-2 Sal contracts with Tasty Pizza to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract. -Refer to Fact Pattern 9-2. Sal and Tasty​

Service Corporation markets its service to less educated consumers. In considering the unconscionability of a Service contract, a court will likely consider all of the following except​

A promise made in return for an act or event that has not yet taken place can be fully enforceable.​

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients, to whom Oscar will aggressively market Payroll's services. This deal is​

Parties are usually free to bargain as they wish.​

Fagin and Gage agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gage can​

Essentially, adequacy of consideration concerns the fairness of the bargain.​

Baylor obtains a loan from City Bank at 24.5 percent interest. Their state's usury statute limits interest rates to a 22.0 percent maximum. Baylor's contract with the bank is enforceable only if​

A release does not require consideration to be legally binding.​

Omni Insurance Company violates a state licensing statute when selling a policy to Petra, in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute, Petra can​

While biking, Jolene is injured when Kirby carelessly causes them to crash. Kirby's insurance company offers Jolene $50,000 to release Kirby from liability, and she accepts. Later, Jolene learns that her injuries are more serious than she realized. The release is​

A covenant not to compete is enforceable only if it is necessary to restrain trade.​

A court adjudicates Henry mentally incompetent and appoints Inez to be his guardian. Later, without Inez's knowledge, Henry signs a contract to sell his farm to Jason for its real market value. The contract is​

Holly, a real estate broker licensed only in Iowa, concludes a sale of farmland in Illinois. Holly can​

Law and Legal Reasoning

Business and the Constitution

Courts and Alternative Dispute Resolution

Tort Law

Criminal Law and Cyber Crime

Business Ethics

Nature and Terminology

Agreement in Traditional and E-Contracts

Defenses to Contract Enforceability

Third Party Rights and Discharge

Breach of Contract and Remedies

Intellectual Property Rights

Internet Law, Social Media, and Privacy

The Formation of Sales and Lease Contracts

Performance, Breach, and Warranties of Sales and Lease Contracts

Agency Relationships in Business

Small Businesses and Limited Liability Companies

Corporations

Filters

Stephen offers Theresa $1,000 for her collection of rare coins. She accepts. If a dispute arises, a court would likely

Intoxicated but capable of comprehending the consequences of her actions, Cricket signs a contract to sell her phone app design to Download, Ltd. This contract is

Fact Pattern 9-2 Sal contracts with Tasty Pizza to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract. -Refer to Fact Pattern 9-2. Sal and Tasty

Service Corporation markets its service to less educated consumers. In considering the unconscionability of a Service contract, a court will likely consider all of the following except

A promise made in return for an act or event that has not yet taken place can be fully enforceable.

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients, to whom Oscar will aggressively market Payroll's services. This deal is

Parties are usually free to bargain as they wish.

Fagin and Gage agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gage can

Essentially, adequacy of consideration concerns the fairness of the bargain.

Baylor obtains a loan from City Bank at 24.5 percent interest. Their state's usury statute limits interest rates to a 22.0 percent maximum. Baylor's contract with the bank is enforceable only if

A release does not require consideration to be legally binding.

Omni Insurance Company violates a state licensing statute when selling a policy to Petra, in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute, Petra can

While biking, Jolene is injured when Kirby carelessly causes them to crash. Kirby's insurance company offers Jolene $50,000 to release Kirby from liability, and she accepts. Later, Jolene learns that her injuries are more serious than she realized. The release is

A covenant not to compete is enforceable only if it is necessary to restrain trade.

A court adjudicates Henry mentally incompetent and appoints Inez to be his guardian. Later, without Inez's knowledge, Henry signs a contract to sell his farm to Jason for its real market value. The contract is

Holly, a real estate broker licensed only in Iowa, concludes a sale of farmland in Illinois. Holly can