Question 1

You are hired to mow a lawn on Saturday. Being busy, you hire your brother to do the job for you and get paid for it. This is:

Accepted Answer

A)  assignment 
B)  delegation 
C)  repudiation 
D)  beneficiary 
E)  none of the other choices 
A)  assignment 
B)  delegation 
C)  repudiation 
D)  beneficiary 
E)  none of the other choices

Question 2

Contracts signed with a door-to-door seller may be voided within three days of signing under a Federal Trade Commission Rule.

Accepted Answer

A) True 
 B)False

Question 3

A lawyer promises to represent you in court for a certain fee but then sends an assistant to handle the case. This is a common, legitimate assignment of duties.

Accepted Answer

A) True 
 B)False

Question 4

When both parties agree that their contractual relationship should be terminated without performance and their obligations are discharged, this is:

Accepted Answer

A)  anticipatory breach 
B)  novation 
C)  accord and satisfaction 
D)  discharge by operation of law 
E)  none of the other choices 
A)  anticipatory breach 
B)  novation 
C)  accord and satisfaction 
D)  discharge by operation of law 
E)  none of the other choices

Question 5

Acceptance of an offer must be ____ or definite.

Accepted Answer

A)  final 
B)  written 
C)  unwritten 
D)  unequivocal 
E)  equivocal 
A)  final 
B)  written 
C)  unwritten 
D)  unequivocal 
E)  equivocal

Question 6

Anticipatory breach:

Accepted Answer

A)  is addressed by U.C.C. Section 2-207, not by the common law 
B)  requires that a valid contract will not be enforced by the courts because of a subsequent illegality 
C)  discharges the duties of the non-breaching party and allows that party to sue for damages from the repudiation 
D)  is prohibited by the U.C.C., but allowed by the common law 
E)  none of the other choices 
A)  is addressed by U.C.C. Section 2-207, not by the common law 
B)  requires that a valid contract will not be enforced by the courts because of a subsequent illegality 
C)  discharges the duties of the non-breaching party and allows that party to sue for damages from the repudiation 
D)  is prohibited by the U.C.C., but allowed by the common law 
E)  none of the other choices

Question 7

Usually, acceptance of an offer is legally effective when the acceptance is received.

Accepted Answer

A) True 
 B)False

Question 8

The ____ evolved in commerce over the centuries.

Accepted Answer

A)  law of invention 
B)  law of commerce 
C)  law of trade 
D)  law of documents 
E)  none of the other choices are correct 
A)  law of invention 
B)  law of commerce 
C)  law of trade 
D)  law of documents 
E)  none of the other choices are correct

Question 9

Mercedes promises to deliver 10,000 cars to Avis by January 30. It does not get the cars delivered because its primary factory was destroyed in a fire. This problem would be called:

Accepted Answer

A)  rescission 
B)  failure of a condition precedent 
C)  failure of a condition concurrent 
D)  failure of a condition subsequent 
E)  impossibility 
A)  rescission 
B)  failure of a condition precedent 
C)  failure of a condition concurrent 
D)  failure of a condition subsequent 
E)  impossibility

Question 10

The ____ controls the terms of the offer when a contract is made.

Accepted Answer

A)  offeree 
B)  offeror 
C)  judge 
D)  contractor 
E)  unbiased third party 
A)  offeree 
B)  offeror 
C)  judge 
D)  contractor 
E)  unbiased third party

Question 11

A court award of $1.00 in damages would be called:

Accepted Answer

A)  compensatory 
B)  expectancy 
C)  liquidated 
D)  punitive 
E)  none of the other choices 
A)  compensatory 
B)  expectancy 
C)  liquidated 
D)  punitive 
E)  none of the other choices

Question 12

An offer is:

Accepted Answer

A)  a suggestion of a price for a good or service 
B)  a legally binding price for a good or service 
C)  an unofficial suggestion of a promise 
D)  a promise to do something or to refrain from doing some specific thing 
E)  a refusal to promise to do something or to refrain from doing some specific thing 
A)  a suggestion of a price for a good or service 
B)  a legally binding price for a good or service 
C)  an unofficial suggestion of a promise 
D)  a promise to do something or to refrain from doing some specific thing 
E)  a refusal to promise to do something or to refrain from doing some specific thing

Question 13

A proposal by the offeree to change the terms of the original offer is a:

Accepted Answer

A)  final offer 
B)  proposal of change 
C)  counteroffer 
D)  reoffer 
E)  suboffer 
A)  final offer 
B)  proposal of change 
C)  counteroffer 
D)  reoffer 
E)  suboffer

Question 14

Smith, who lives in your apartment building, drives you crazy. You agree to give Ratzo $5,000 if he gets rid of Smith for you. After disposing of her, Ratzo returns for his money. You refuse to pay. Ratzo sues you; the court holds the contract is:

Accepted Answer

A)  enforceable and completed; you must pay what is owed 
B)  enforceable, but $5,000 is an unconscionable price, so it revises the contract 
C)  unenforceable because it involves a public servant 
D)  unenforceable because it involves an illegal agreement 
E)  enforceable because evidence proved Ms. Smith was driving everyone crazy 
A)  enforceable and completed; you must pay what is owed 
B)  enforceable, but $5,000 is an unconscionable price, so it revises the contract 
C)  unenforceable because it involves a public servant 
D)  unenforceable because it involves an illegal agreement 
E)  enforceable because evidence proved Ms. Smith was driving everyone crazy

Question 15

Preliminary negotiations are:

Accepted Answer

A)  a clear manifestation of intent to be bound to a contract 
B)  legally an offer 
C)  invitations to negotiate or to make an offer 
D)  binding on offeree 
E)  binding on offeror 
A)  a clear manifestation of intent to be bound to a contract 
B)  legally an offer 
C)  invitations to negotiate or to make an offer 
D)  binding on offeree 
E)  binding on offeror

Question 16

"I want $10,000 for my car," says Sam. "I would love to have it," says Jan. We have an offer that has been accepted to form a contract.

Accepted Answer

A) True 
 B)False

Question 17

In Scheerer v. Fisher, where Scheerer claimed he was cut out of a real estate commission he should have received, the appeals court agreed he should be paid based a measure of expectancy damages.

Accepted Answer

A) True 
 B)False

Question 18

Anne says, "I'll sell you my car for $2,500." Steve says, "I sure would like to buy it." We have an offer and acceptance:

Accepted Answer

A)  and a valid contract 
B)  but no valid contract until delivery time is established 
C)  but no valid contract because the car is only worth $500, which is insufficient consideration 
D)  but no valid contract because no witnesses exist 
E)  none of the other choices; there is no acceptance 
A)  and a valid contract 
B)  but no valid contract until delivery time is established 
C)  but no valid contract because the car is only worth $500, which is insufficient consideration 
D)  but no valid contract because no witnesses exist 
E)  none of the other choices; there is no acceptance

Question 19

When someone accepts an offer by an exchange of mutual promises, what kind of contract has been formed?

Accepted Answer

A)  implied 
B)  unilateral 
C)  executed 
D)  commercial 
E)  none of the other choices 
A)  implied 
B)  unilateral 
C)  executed 
D)  commercial 
E)  none of the other choices

Question 20

An effective offer includes which of the following:

Accepted Answer

A)  a clear intent by the offeror to become contractually bound 
B)  clear and certain basic terms and conditions of the offer 
C)  proper communication of the offer 
D)  all of the other specific choices are correct 
E)  none of the other specific choices are correct 
A)  a clear intent by the offeror to become contractually bound 
B)  clear and certain basic terms and conditions of the offer 
C)  proper communication of the offer 
D)  all of the other specific choices are correct 
E)  none of the other specific choices are correct

Exam 10: Contracts

You are hired to mow a lawn on Saturday. Being busy, you hire your brother to do the job for you and get paid for it. This is:

Contracts signed with a door-to-door seller may be voided within three days of signing under a Federal Trade Commission Rule.

A lawyer promises to represent you in court for a certain fee but then sends an assistant to handle the case. This is a common, legitimate assignment of duties.

When both parties agree that their contractual relationship should be terminated without performance and their obligations are discharged, this is:

Acceptance of an offer must be ____ or definite.

Anticipatory breach:

Usually, acceptance of an offer is legally effective when the acceptance is received.

The ____ evolved in commerce over the centuries.

Mercedes promises to deliver 10,000 cars to Avis by January 30. It does not get the cars delivered because its primary factory was destroyed in a fire. This problem would be called:

The ____ controls the terms of the offer when a contract is made.

A court award of $1.00 in damages would be called:

An offer is:

A proposal by the offeree to change the terms of the original offer is a:

Smith, who lives in your apartment building, drives you crazy. You agree to give Ratzo $5,000 if he gets rid of Smith for you. After disposing of her, Ratzo returns for his money. You refuse to pay. Ratzo sues you; the court holds the contract is:

Preliminary negotiations are:

"I want $10,000 for my car," says Sam. "I would love to have it," says Jan. We have an offer that has been accepted to form a contract.

In Scheerer v. Fisher, where Scheerer claimed he was cut out of a real estate commission he should have received, the appeals court agreed he should be paid based a measure of expectancy damages.

Anne says, "I'll sell you my car for $2,500." Steve says, "I sure would like to buy it." We have an offer and acceptance:

When someone accepts an offer by an exchange of mutual promises, what kind of contract has been formed?

An effective offer includes which of the following:

Todays Business Environment: Law and Ethics

The Court Systems

Trials and Resolving Disputes

The Constitution: Focus on Application to Business

Criminal Law and Business

Elements of Torts

Business Torts and Product Liability

Real and Personal Property

Intellectual Property

Domestic and International Sales

Business Organizations

Negotiable Instruments, Credit, and Bankruptcy

Agency and the Employment Relationship

Employment and Labor Regulations

Employment Discrimination

The Regulatory Process

Securities Regulation

Consumer Protection

Antitrust Law

Environmental Law

The International Legal Environment of Business

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