Business Law: Text & Cases, Chapter 11

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1

Lark promises to buy Mac’s used textbook for $60. Lark is

a. ​an executor.

b. ​an offeree.

c. ​a promise.

d. ​a promisor.

d. ​a promisor.

2

Smith & Jones, Accountants, agrees to perform an audit for Brick & Mortar Stores, Inc. Whether or not this agreement meets all of the requirements of a contract, the parties are likely to follow the rules of contract law because they

a. ​want to avoid potential disputes.

b. ​are conscious of those rules.

c. ​are not conscious of those rules.

d. ​have a moral obligation to do so.

a. ​want to avoid potential disputes.

3

Jim tells Dana that he will take her out to lunch on Thursday. Jim has made Dana​

a. ​a prediction.

b. ​a promise.

c. ​a bilateral contract.

d. ​a void contract.

b. ​a promise.

4

In a divorce proceeding, Jonas promises to pay a certain amount of child support to Kelly every month until their daughter Lois is eighteen years old. Jonas’s obligation with respect to this promise is

a. ​moral, not legal.

b. ​legal, not moral.

c. ​legal and moral.

d. ​neither legal nor moral.

c. ​legal and moral.

5

Movers LLC promises to deliver a certain couch to Nora, who promises to pay for the service. If Movers does not perform, it may be required to

a. ​cease business.

b. ​make another promise.

c. ​pay money damages.

d. ​perform a different service.

c. ​pay money damages.

6

Bob claims that Carla breached their contract for tutoring. Carla responds that she never intended to enter into a contract with Bob. The intent to enter into a contract is determined with reference to

a. ​the intentional theory of contracts.

b. ​the objective theory of contracts.

c. ​the personal theory of contracts.

d. ​the subjective theory of contracts.

b. ​the objective theory of contracts.

7

Foster promises to buy Gideon’s trumpet for $75. Gideon is

a. ​an offeree.

b. ​an offeror.

c. ​a promisee.

d. ​a promisor.

c. ​a promisee.

8

Lucy agrees to work for Mung Manufacturing, Ltd., as a Chinese/ English/ French translator. In determining whether an employment contract has been formed, which of the following would the court be least likely to consider?

a. the parties’ intent to form a contract

b. the law in the jurisdiction of Mung's corporate headquarters

c. the duration of the work

d. Lucy's language capabilities

d. Lucy's language capabilities

9

The requirements of a contract do not include

a. consideration.

b. capacity.

c. legality.

d. practicality.

d. practicality.

10

A valid contract requires

a. a price and a subject.

b. a duration and termination provision.

c. an offer and an acceptance.

d. specific quality standards.

c. an offer and an acceptance.

11

Field Construction, Inc., contracts with Mesa Ranch to build a new horse barn on Mesa’s property for which Mesa agrees to pay. The elements of this, and any other, contract include

a. ​capability.

b. ​legality.

c. ​necessity.

d. ​marketability.

b. ​legality.

12

Moe asserts that a deal he entered into with Nina to sponsor and host a motivational conference for independent sales representatives is an unenforceable contract. Defenses to the enforcement of a contract include

a. ​a desire not to perform.

b. ​insufficient capital.

c. ​preliminary indications of unsatisfactory results.

d. ​the lack of a party’s voluntary consent.

d. ​the lack of a party’s voluntary consent.

13

Jana tells Levi she will give him an Xbox if Levi promises to do Jana’s chores for a month. Levi promises to do the chores but has not yet begun to do them. Jana and Levi have formed

a. a bilateral contract.

b. a unilateral contract.

c. a void contract.

d. an unenforceable contract.

a. a bilateral contract.

14

Ray promises to give Steve his iPod in exchange for Steve’s promise to pay Ray $50. Later, they exchange the device for the funds. A contract was created when

a. ​Ray offered to sell his iPod.

b. ​Ray exchanged his iPod for $50.

c. ​Steve promised to pay Ray for the iPod.

d. ​Steve paid Ray $50 for the iPod.

c. ​Steve promised to pay Ray for the iPod.

15

On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil says that he has changed his mind. These parties had

a. ​an expired contract when Neil said that he had changed his mind.

b. ​a quasi contract when Neil said that he would pay for certain work.

c. ​a unilateral contract as soon as Outdoor began to perform.

d. ​no contract.

c. ​a unilateral contract as soon as Outdoor began to perform.

16

Wilson buys a lottery ticket. Wilson has accepted an offer for

a. ​a bilateral contract.

b. ​a unilateral contract.

c. ​a void contract.

d. ​an unenforceable contract.

b. ​a unilateral contract.

17

Ren offers to pay Sara to pick up and deliver certain business documents within thirty minutes. Sara can accept the offer only by completing the task within the deadline. If she does, Ren and Sara will have

a. ​a bilateral contract.

b. ​a unilateral contract.

c. ​a void contract.

d. ​an executive contract.

b. ​a unilateral contract.

18

Clay offers to pay Dian $50 for a golf lesson for Ewan. They agree to meet on Friday to exchange the cash for the lesson. These parties have

a. ​a bilateral contract.

b. ​a unilateral contract.

c. ​a void contract.

d. ​an executive contract.

a. ​a bilateral contract.

19

Lana applies for a firefighter’s job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is “an employment offer conditioned on the applicant passing the exam.” This letter is

a. a bilateral contract that Lana accepted by applying for the job.

b. a quasi contract on which Lana can rely for employment.

c. an offer which will become firm in the event Lana meets the condition precedent.

d. no contract.

c. an offer which will become firm in the event Lana meets the condition precedent.

20

Bo signs a lease with Capri Apartments to lease a studio apartment for the next year for $650 per month. Daisy signs on Capri’s behalf as their agent. Bo and Capri have executed a(n):

a. no contract.

b. an express contract.

c. an implied contract.

d. a simple contract.

b. an express contract.

21

On behalf of the jazz group Fusion, their manager Greg agrees to a performance in Hillside Amphitheatre on July 4. Hillside sends a written copy of the agreement to Greg to be signed. If Greg signs the copy, the parties will have

a. ​an express contract.

b. ​an implied contract.

c. ​an implied-in-law contract.

d. ​no contract.

a. ​an express contract.

22

Vicky asks Walt, a cobbler, to repair a pair of boots. There is no discussion of a price, and Vicky and Walt do not sign any documents. After the repair, Walt hands Vicky a bill. With respect to Vicky’s obligation to pay the bill, this is

a. ​an express contract.

b. ​an implied contract.

c. ​a quasi contract.

d. ​no contract.

b. ​an implied contract.

23

When a rainstorm erupts outside Rita’s Souvenir & Gift Shop, Rita and Shaw enter into an oral contract to split the revenue from Shaw’s sale of umbrellas to Rita’s customers. The terms of this contract are defined by

a. the conduct of the parties.

b. the words of the parties.

c. the unforeseeable storm that gave rise to the deal.

d. the unexpressed subjective intent of the parties.

b. the words of the parties.

24

Flo tells Ginger during a phone call that she will buy her textbook from last semester for $65. Ginger agrees. These parties have

a. ​no contract.

b. ​an express contract.

c. ​an implied contract.

d. ​a quasi contract.

b. ​an express contract.

25

Marketing Inc. offers to create a campaign to increase N’Ice Creamery, Inc.’s online business. N’Ice agrees to pay for the service. These parties have

a. ​no contract.

b. ​an express contract.

c. ​an implied contract.

d. ​a quasi contract.

b. ​an express contract.

26

Oceans Inc., a seafood distributor, agrees to buy from Paul, a commercial fisherman, any “overstock” of fish that Paul catches in excess of his legal limit. This agreement is most likely

a. ​enforceable.

b. ​quasi.

c. ​void.

d. ​voidable.

c. ​void.

27

Sales Corporation and Real Properties, Inc., agree to the payment of a commission for the sale of certain property. If this deal has all of the elements necessary for one of the parties to enforce it in court, it is

a. ​a valid contract.

b. ​a voidable contract.

c. ​a voidable contract.

d. ​an unenforceable contract.

a. ​a valid contract.

28

A letter-of-credit agreement between Rural Feed Corporation and Soy Farms, Inc., requires Rural’s bank to pay Soy on receipt of invoices. This is

a. ​a formal contract.

b. ​an informal contract.

c. ​an implied contract.

d. ​a quasi contract.

a. ​a formal contract.

29

Rough Water, LLC, and Schafer enter into a contract for the delivery of a used kayak. Until the kayak is delivered and paid for, these parties have

a. ​an executory contract.

b. ​no contract.

c. ​a quasi contract.

d. ​an executed contract.

a. ​an executory contract.

30

Francie drives into Gage’s Auto Service and asks Gage to replace a tire on her car. After Gage replaces the tire, but before Francie pays for it, any contract between them is

a. ​executed.

b. ​executory.

c. ​void.

d. ​unenforceable.

b. ​executory.

31

Robin claims that her contract with Stroud for tennis lessons is voidable as the lessons were never provided and the tennis club burnt down. If their contract is avoided

a. both parties are released from it.

b. both parties must fully perform their obligations under it.

c. a wholly different contract is agreed to.

d. a wholly different contract is imposed “as if” the parties had agreed.

a. both parties are released from it.

32

Jess, a nurse practitioner, renders aid to Kurt, who is injured and unconscious. Jess can recover the cost of the aid from Kurt

a. ​as if the parties had entered into an actual contract.

b. ​only if Kurt recovers because of the aid.

c. ​only if Kurt was aware of the aid.

d. ​under no circumstances.

a. ​as if the parties had entered into an actual contract.

33

Leila enters into a contract with Metro Taxi Company to work as a cabdriver. Under the plain meaning rule, if the contract’s writing is clear and unequivocal, the meaning of the terms must be determined from

a. ​only evidence not contained in the document.

b. ​any relevant extrinsic evidence.

c. ​only the face of the instrument.

d. ​the later testimony of the parties.

c. ​only the face of the instrument.

34

Susan enters into a contract with Troy to act as his personal sports trainer. If a dispute later arises and the contract contains unclear terms, the rules of contract interpretation will give effect to

a. ​the parties’ intent as expressed in their contract.

b. ​what the promisor claims was the parties’ intent.

c. ​what the promisee claims was the parties’ intent.

d. ​what the parties now agree they intended.

a. ​the parties’ intent as expressed in their contract.

35

Francisca and Garden Estate, Inc., enter into a contract for the use of a Victorian mansion and its grounds for a wedding and reception. If ambiguities appear in the contract, they will be construed against the party who

a. ​drafted the contract.

b. ​has the greater bargaining power.

c. ​made the offer to contract.

d. ​offers the most confusing explanation of the terms.

a. ​drafted the contract.