Question 1

For a contract to be valid, its subject matter must be lawful. A contract is illegal and unenforceable if its subject matter:

Accepted Answer

A)  violates the common law 
B)  is contrary to public policy 
C)  violates state or federal statutory law 
D)  none of the other choices 
E)  all of the specific choices are correct 
A)  violates the common law 
B)  is contrary to public policy 
C)  violates state or federal statutory law 
D)  none of the other choices 
E)  all of the specific choices are correct

Question 2

____ means that the contract basically has been fulfilled and payments must be made.

Accepted Answer

A)  Serious performance 
B)  Final performance 
C)  Adequate performance 
D)  Material fulfillment 
E)  none of the other choices are correct 
A)  Serious performance 
B)  Final performance 
C)  Adequate performance 
D)  Material fulfillment 
E)  none of the other choices are correct

Question 3

The remedy of ____ may be used to prevent unjust enrichment.

Accepted Answer

A)  restitution 
B)  specific performance 
C)  real performance 
D)  fair compensation 
E)  equal parts 
A)  restitution 
B)  specific performance 
C)  real performance 
D)  fair compensation 
E)  equal parts

Question 4

In general, if there is an error in a contract and if the other party should have known of the error:

Accepted Answer

A)  the contract cannot be enforced to allow one party to profit from a simple error 
B)  the contract will still be enforced so long as both parties had the chance to read the contract 
C)  some states will still enforce the contract 
D)  the state Supreme Court will have to decide if the contract should be enforced 
E)  none of the other choices are correct 
A)  the contract cannot be enforced to allow one party to profit from a simple error 
B)  the contract will still be enforced so long as both parties had the chance to read the contract 
C)  some states will still enforce the contract 
D)  the state Supreme Court will have to decide if the contract should be enforced 
E)  none of the other choices are correct

Question 5

In unilateral contracts, performance is acceptance of an offer.

Accepted Answer

A) True 
 B)False

Question 6

Nguyen promised to paint Carara's house for $2,000 in the next month. When he got behind in his work, he asked if she would hire someone else instead, and Carara agreed. This is:

Accepted Answer

A)  rescission 
B)  novation 
C)  accord and satisfaction 
D)  discharge by operation of law 
E)  equitable remedy 
A)  rescission 
B)  novation 
C)  accord and satisfaction 
D)  discharge by operation of law 
E)  equitable remedy

Question 7

Bart was supposed to deliver 100,000 firecrackers to Lisa by June 1, but his factory explodes in April so suspends operations. The contract:

Accepted Answer

A)  has suffered a novation 
B)  has incurred a rescission 
C)  has incurred the failure of a condition precedent 
D)  has incurred an accord 
E)  none of the other choices 
A)  has suffered a novation 
B)  has incurred a rescission 
C)  has incurred the failure of a condition precedent 
D)  has incurred an accord 
E)  none of the other choices

Question 8

In a famous old case Sherwood v. Walker, Sherwood sold Walker a cow for $80 that both believed could not produce calves. When it was later discovered the cow could calve, which made her much more valuable, Sherwood sued to get the cow back. You would expect the Supreme Court of Michigan ruled for:

Accepted Answer

A)  Walker; it was a valid contract; he keeps the cow 
B)  Sherwood; he did not get the cow back, but got the price for the more valuable animal 
C)  Sherwood; the contract violated the statute of frauds and so the contract was canceled 
D)  Sherwood; there was a mutual mistake as to an important fact, so the contract was void 
E)  Walker and imposed punitive damages on Sherwood for bringing a nuisance suit 
A)  Walker; it was a valid contract; he keeps the cow 
B)  Sherwood; he did not get the cow back, but got the price for the more valuable animal 
C)  Sherwood; the contract violated the statute of frauds and so the contract was canceled 
D)  Sherwood; there was a mutual mistake as to an important fact, so the contract was void 
E)  Walker and imposed punitive damages on Sherwood for bringing a nuisance suit

Question 9

When making an offer, the offeror must:

Accepted Answer

A)  intend to obligate other parties 
B)  discuss her offer with more than one party 
C)  express a desire to be bound 
D)  avoid unjust enrichment of the offeror 
E)  comply with the Uniform Commercial Code 
A)  intend to obligate other parties 
B)  discuss her offer with more than one party 
C)  express a desire to be bound 
D)  avoid unjust enrichment of the offeror 
E)  comply with the Uniform Commercial Code

Question 10

The parol evidence rule allows oral testimony to revise the terms of contracts written more than one year ago.

Accepted Answer

A) True 
 B)False

Question 11

A voidable contract never was or will be a valid contract.

Accepted Answer

A) True 
 B)False

Question 12

If parties to a contract wish to substantially modify their legal obligations under the contract, they must obtain approval of the court.

Accepted Answer

A) True 
 B)False

Question 13

Even if misrepresentation is innocent, the party who engaged in misrepresentation is liable for losses suffered by the party who received the bad information.

Accepted Answer

A) True 
 B)False

Question 14

Two promises or an exchange of promises are involved in bilateral contracts.

Accepted Answer

A) True 
 B)False

Question 15

Basic elements of a contract must include:

Accepted Answer

A)  legal capacity 
B)  agreement 
C)  consideration 
D)  genuine consent 
E)  all of the other choices 
A)  legal capacity 
B)  agreement 
C)  consideration 
D)  genuine consent 
E)  all of the other choices

Question 16

Generally a minor cannot disaffirm which contract?

Accepted Answer

A)  for an educational loan 
B)  for insurance 
C)  for a bank account 
D)  for enlisting in the Army 
E)  none of the other choices may be disaffirmed 
A)  for an educational loan 
B)  for insurance 
C)  for a bank account 
D)  for enlisting in the Army 
E)  none of the other choices may be disaffirmed

Question 17

Acceptance of an offer must be unequivocal or ____.

Accepted Answer

A)  final 
B)  written 
C)  unwritten 
D)  equivocal 
E)  none of the other choices are correct 
A)  final 
B)  written 
C)  unwritten 
D)  equivocal 
E)  none of the other choices are correct

Question 18

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 refusal to promise to do something or to refrain from doing some specific thing 
E)  none of the other choices are correct 
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 refusal to promise to do something or to refrain from doing some specific thing 
E)  none of the other choices are correct

Question 19

Twenty years after you leave college you are rich and famous. Your college calls on you for a $10 million gift to renovate a classroom building and name the building in your honor. You tell them you will be glad to give the gift because you learned so much and that is why you are successful. A year later the building is renovated and the college asks for the money. You decide to spend it on a new jet and tell the college to get stuffed. You:

Accepted Answer

A)  do not have to pay the money, promises of gifts do not create contracts 
B)  do not have to pay the money unless your promise was in writing and for a specific date 
C)  have to pay an amount equal to how much has been spent on the renovation work to date, not the full amount 
D)  have to pay the money under the rule of promissory estoppel 
E)  have to pay the money under the rule of unliquidated debt 
A)  do not have to pay the money, promises of gifts do not create contracts 
B)  do not have to pay the money unless your promise was in writing and for a specific date 
C)  have to pay an amount equal to how much has been spent on the renovation work to date, not the full amount 
D)  have to pay the money under the rule of promissory estoppel 
E)  have to pay the money under the rule of unliquidated debt

Question 20

If communication of an offer occurs after the act of acceptance:

Accepted Answer

A)  a proper acceptance can take place 
B)  a delayed acceptance takes place 
C)  a proper acceptance did not take place 
D)  the offeror must behave as though a proper acceptance took place if the offeree insists 
E)  the court system will decided whether proper acceptance can take place after the fact 
A)  a proper acceptance can take place 
B)  a delayed acceptance takes place 
C)  a proper acceptance did not take place 
D)  the offeror must behave as though a proper acceptance took place if the offeree insists 
E)  the court system will decided whether proper acceptance can take place after the fact

Exam 10: Contracts

For a contract to be valid, its subject matter must be lawful. A contract is illegal and unenforceable if its subject matter:

____ means that the contract basically has been fulfilled and payments must be made.

The remedy of ____ may be used to prevent unjust enrichment.

In general, if there is an error in a contract and if the other party should have known of the error:

In unilateral contracts, performance is acceptance of an offer.

Nguyen promised to paint Carara's house for $2,000 in the next month. When he got behind in his work, he asked if she would hire someone else instead, and Carara agreed. This is:

Bart was supposed to deliver 100,000 firecrackers to Lisa by June 1, but his factory explodes in April so suspends operations. The contract:

In a famous old case Sherwood v. Walker, Sherwood sold Walker a cow for $80 that both believed could not produce calves. When it was later discovered the cow could calve, which made her much more valuable, Sherwood sued to get the cow back. You would expect the Supreme Court of Michigan ruled for:

When making an offer, the offeror must:

The parol evidence rule allows oral testimony to revise the terms of contracts written more than one year ago.

A voidable contract never was or will be a valid contract.

If parties to a contract wish to substantially modify their legal obligations under the contract, they must obtain approval of the court.

Even if misrepresentation is innocent, the party who engaged in misrepresentation is liable for losses suffered by the party who received the bad information.

Two promises or an exchange of promises are involved in bilateral contracts.

Basic elements of a contract must include:

Generally a minor cannot disaffirm which contract?

Acceptance of an offer must be unequivocal or ____.

An offer is:

If communication of an offer occurs after the act of acceptance:

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