Business Law: Text & Cases, Chapter 16

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1

Alice and Bart enter into a contract for the sale of Canyon Ranch. To be enforceable, this contract must be

a. ​substantiated by reliable, external evidence.

b. ​signed in a sufficient manner by both parties.

c. ​in writing or evidenced by a written memorandum.

d. ​all of the choices.

c. ​in writing or evidenced by a written memorandum.

2

In an exchange of e-mails, Rob, a landlord, and Sam agree to a lease of a certain apartment for one year. Under the Statute of Frauds, this lease is enforceable provided

a. ​the e-mail is signed by the party against whom enforcement is sought.

b. ​the parties print and sign a hard copy of a document titled “Lease.”

c. ​there is outside evidence, such as a security deposit, of the lease.

d. ​no one else signs a lease for the apartment before Sam moves in.

a. ​the e-mail is signed by the party against whom enforcement is sought.

3

Ray agrees to buy one hundred pounds of almonds from Sol. To be enforceable, the agreement must be in writing if the almonds cost at least

a. ​$50.

b. ​$250.

c. ​$499.

d. ​$500.

d. ​$500.

4

Ben makes an appointment for a $50 haircut, buys a bike for $250, and agrees to work for Coding Associates for one year for $5,000 per month, starting at the beginning of next month. To be enforceable, a writing is required for

a. ​the appointment.

b. ​the purchase.

c. ​the employment agreement.

d. ​none of the choices.

c. ​the employment agreement.

5

Air Flo, Inc., and Banyan Grove Apartments enter into an oral contract in which Air Flo agrees to provide air-conditioning and heating maintenance for Banyan Grove’s facilities for two years. This contract is enforceable by

a. ​Air Flo.

b. ​Banyan Grove.

c. ​any third party, such as a HVAC supplies provider.

d. ​none of the choices.

d. ​none of the choices.

6

Grain Co-op, LLC and Hearty Cereals, Inc., discuss the terms of a contract for periodic deliveries of corn. Grain faxes Hearty a memo on Grain’s letterhead that summarizes the points on which they agreed, including a two-year term. Grain begins to perform, and Hearty accepts the deliveries but refuses to pay.

Refer to Fact Pattern 16–1. The transaction between Grain and Hearty falls within the provision of the Statute of Frauds involving

a. ​collateral promises.

b. ​the one-year rule.

c. ​sales of goods.

d. ​secondary contracts.

b. ​the one-year rule.

7

Grain Co-op, LLC and Hearty Cereals, Inc., discuss the terms of a contract for periodic deliveries of corn. Grain faxes Hearty a memo on Grain’s letterhead that summarizes the points on which they agreed, including a two-year term. Grain begins to perform, and Hearty accepts the deliveries but refuses to pay.

Refer to Fact Pattern 16–1. Between Grain and Hearty, this contract is most likely enforceable against​

a. ​neither party.

b. ​Grain only.

c. ​Hearty only.

d. ​Grain and Hearty, at least to the extent of the performance.

d. ​Grain and Hearty, at least to the extent of the performance.

8

Grain Co-op, LLC and Hearty Cereals, Inc., discuss the terms of a contract for periodic deliveries of corn. Grain faxes Hearty a memo on Grain’s letterhead that summarizes the points on which they agreed, including a two-year term. Grain begins to perform, and Hearty accepts the deliveries but refuses to pay.

Refer to Fact Pattern 16–1. Between Grain and Hearty, there is​

a. ​an oral contract only.

b. ​a pre-contract only.

c. ​a written contract.

d. ​no contract.

c. ​a written contract.

9

ActioNOW and Becca enter into an oral contract in which Becca agrees to work on a project for ActioNOW for eighteen months. This contract is enforceable by

a. ​ActioNOW.

b. ​Becca.

c. ​any third party, such as ActioNOW’s clients.

d. ​none of the choices.

d. ​none of the choices.

10

Colin and Delta Water Company enter into an oral contract under which Delta agrees to provide Colin with lifetime employment. This contract may be enforceable by

a. ​Colin only.

b. ​Delta only.

c. ​any interested third party, such as a Delta supplier.

d. ​either Colin or Delta.

d. ​either Colin or Delta.

11

Guardian Security, Inc., and Hedge Fund Corporation enter into an oral contract under which Guardian agrees to provide security services for Hedge’s offices for as long as Hedge needs them. This contract may be enforceable by

a. ​none of the choices.

b. ​Hedge only.

c. ​any interested third party, such as a Hedge shareholder.

d. ​either Guardian or Hedge.

d. ​either Guardian or Hedge.

12

Ed orally agrees with Far East Restaurant to provide delivery service to its customers for six months. This contract is enforceable by

a. ​none of the choices.

b. ​either Ed or Far East.

c. ​any interested third party, such as a Far East customer.

d. ​Far East only.

b. ​either Ed or Far East.

13

Nate promises to pay for dental services provided by Otto to Polly. Nate receives no personal benefit for the promise. To be enforceable, the promise must be in writing if

a. ​Nate promises to pay only if Polly does not pay.

b. ​Nate assumes primary financial responsibility for the cost.

c. ​Otto’s services will be provided in installments with separate payments.

d. ​Polly also promises to pay.

a. ​Nate promises to pay only if Polly does not pay.

14

Lewis tells a representative of Musical Instruments, Inc., that he will pay for Nora’s trumpet if she does not. Lewis does not secure any personal benefit for this promise. This promise is enforceable as a contract

a. ​any of the choices.

b. ​only if Nora agrees to it.

c. ​only if the value of the trumpet is more than $500.

d. only if it is in writing.​

d. only if it is in writing.​

15

Flo agrees to assume a debt owed by Guitars Inc. to Home Bank. The agreement is not in writing. To be enforceable under the “main purpose” rule, the promise must be for the benefit of

a. ​any third party, such as a Guitars Inc. customer.

b. ​Flo.

c. ​Guitars Inc.

d. ​Home Bank.

b. ​Flo.

16

Merl buys a tablet for $500, running shoes for $200, and a set of the Game of Crowns books for $100. To be enforceable as a contract, a writing is required for the purchase of

a. ​the books, the shoes, and the tablet.

b. ​the shoes and the tablet only.

c. ​the tablet only.

d. ​the books only.

c. ​the tablet only.

17

Pumps, Inc., agrees to assume a debt of Quality Parts Company to Reliable Finance LP. The agreement is not in writing. To be enforceable, the promise must be for the benefit of

a. ​all of the choices.

b. ​Pumps.

c. ​Quality.

d. ​Reliable.

b. ​Pumps.

18

Daredevil Rides Inc. owes debts to Equipment Repair Company and Food Supplies, Inc. Equipment orally agrees to assume Daredevil’s debt to Food to prevent the concessionaire from filing a suit against Daredevil. This agreement is enforceable by

a. ​none of the choices.

b. ​Daredevil, Equipment, or Food.

c. ​Daredevil only.

d. ​Equipment only.

b. ​Daredevil, Equipment, or Food.

19

Dick’s Burgers n’ Shakes enters into an oral contract with Restaurant Equipment Warehouse (REW) for REW’s sale to Dick’s of a single-spindle milkshake mixer for $300. Assuming the terms can be proved, the contract is enforceable by

a. ​Dick’s or REW.

b. ​the manufacturer of the mixer.

c. ​any third party with a material interest, such as one of Dick’s suppliers.

d. ​none of the choices.

a. ​Dick’s or REW.

20

Eleanor offers Flossy the amount of an investment in Flossy’s start-up business venture if she marries Eleanor’s son Glen. This promise is enforceable

a. ​only if it is in writing.

b. ​only if the amount of the investment is more than $500.

c. ​only if Glen agrees to marry Flossy.

d. ​under no circumstances.

a. ​only if it is in writing.

21

Retail Company and Sales Wholesale Corporation enter into a contract for a sale of beach toys for $5,000. To be enforceable, the contract should be in writing and identify

a. ​the source of payment.

b. ​the price.

c. ​the terms of payment.

d. ​the quantity.

d. ​the quantity.

22

Rough Canyon Adventures, Inc., and Sturdy Stuff Inc. enter into an oral contract for Sturdy’s sale to Rough of five rafts for $2,000 each. Before Rough takes possession of the rafts, this contract is enforceable by

a. ​Sturdy only.

b. ​Rough only.

c. ​any interested third party, such as a Rough tour guide or client.

d. ​none of the choices.

d. ​none of the choices.

23

Hal’s Hardware Inc. and Ideal Tools Corporation sign a written contract for a sale of goods. To be enforceable, this written contract must include

a. ​a correct title, such as “Purchase Order” or “Sales Invoice.”

b. ​a date, such as “October 2017” or “10/2017.”

c. a quantity term, such as “50 hammers” or “100 boxes of assorted nails.”​

d. ​the parties’ contact information.

c. a quantity term, such as “50 hammers” or “100 boxes of assorted nails.”​

24

Physicians Clinic orders by phone seven boxes of single-use latex gloves from Quality Medical Supplies, Inc. After three boxes are delivered and accepted, Physicians Clinic repudiates the contract. Quality Medical can enforce the contract to

a. ​any extent because the order was placed orally.

b. ​no extent because the order was placed orally.

c. ​the extent of the three accepted boxes.

d. ​the extent of the four undelivered boxes.

c. ​the extent of the three accepted boxes.

25

Marketing, Inc., and Nature’s Foods Corporation (NFC) discuss a contract. They exchange “signed” e-mails that summarize the terms on which they agree. Marketing begins to perform, but Nature’s refuses to pay. Between Marketing and Nature’s, the e-mails are

a. ​a post-contract.

b. ​a pre-contract.

c. ​a written contract.

d. ​no contract.

c. ​a written contract.

26

Lucas orally agrees to sell Mountain Spring Water to Natural Beverages, Inc. Lucas notes the terms on a sheet of Mountain Spring stationery and signs it. This agreement is most likely enforceable against

a. ​no one.

b. ​Lucas and Natural.

c. ​Lucas.

d. ​Natural.

c. ​Lucas.

27

Maya and Nick enter into a contract. To be enforceable, the contract must include

a. ​no particular signatures.

b. ​the signatures of both Maya and Nick.

c. ​the signature of the party against whom enforcement is sought.

d. ​the signature of the party who is seeking enforcement.

c. ​the signature of the party against whom enforcement is sought.

28

Don and Evon orally agree on the sale of Don’s Electrical Supplies Company to Evon and jot down the terms on the back of one of Don’s blank invoices, which they both sign. A written memorandum evidencing an oral contract that would otherwise be unenforceable must contain

a. ​all terms.

b. ​the essential terms.

c. ​the preliminary terms.

d. ​the qualitative terms.

b. ​the essential terms.

29

Ranchland Properties and Prairie State Investments sign a written contract for a sale of land. In some states, to be enforceable, this contract must include

a. ​a correct title, such as “Land Transfer” or “Real Estate Agreement.”

b. ​a declaration of the contract’s purpose.

c. ​a statement of the source of financing.

d. ​a description of the land.

d. ​a description of the land.

30

Henry files a suit against Irrigation Services to enforce an oral contract that would otherwise be unenforceable under the Statute of Frauds. The court could enforce such a contract if

a. ​Henry foreseeably and justifiably relied on Irrigation’s promise.

b. ​Irrigation denies the existence of a contract.

c. ​neither party has begun to perform.

d. ​the deal does not involve goods.

a. ​Henry foreseeably and justifiably relied on Irrigation’s promise.

31

Builders Corporation files a suit against Concrete Company to enforce a written contract. If the court finds that the parties intended the contract to be the final statement of their agreement, parol evidence can be admitted to prove​

a. ​an orally agreed-on condition precedent.

b. ​terms discussed before the contract but not contained in it.

c. ​terms discussed at the time of the contract that contradict the written terms.

d. ​nothing.

a. ​an orally agreed-on condition precedent.

32

Charlie and Dill sign a written contract for the sale of Dill’s BBQ Food Truck to Charlie. The parties intend their written contract to be a final statement of the terms of their agreement.

Refer to Fact Pattern 16–2. Later Dill disputes some of the provisions in the deal with Charlie. If the dispute results in litigation, a court will most likely exclude evidence that​

a. supports the written terms.​

b. ​contradicts the written terms.

c. ​duplicates the written terms.

d. ​reinforces the written terms.

b. ​contradicts the written terms.

33

Charlie and Dill sign a written contract for the sale of Dill’s BBQ Food Truck to Charlie. The parties intend their written contract to be a final statement of the terms of their agreement.

Refer to Fact Pattern 16–2. The writing that Charlie and Dill signed is​

a. ​a completely integrated contract.

b. ​a partially divisible contract.

c. ​a partially integrated contract.

d. ​a completely severable contract.

a. ​a completely integrated contract.

34

Alain and Brie sign a contract for the sale of Alain’s Patisserie to Brie. The parties intend their written contract to be a final statement of most, but not all, of the terms of their agreement—Alain must first buy the building from Commercial Properties, Inc., after which Alain and Brie will agree on a price.

Refer to Fact Pattern 16-3. The writing that Alain and Brie signed is

a. ​completely integrated.

b. ​conditionally integrated.

c. ​partially integrated.

d. ​supplementally integrated.

c. ​partially integrated.

35

Alain and Brie sign a contract for the sale of Alain’s Patisserie to Brie. The parties intend their written contract to be a final statement of most, but not all, of the terms of their agreement—Alain must first buy the building from Commercial Properties, Inc., after which Alain and Brie will agree on a price.

Refer to Fact Pattern 16-3. Brie later disputes some of the provisions of the deal with Alain. If the dispute results in litigation, a court will most likely admit evidence of additional terms that are​

a. ​ambiguous.

b. ​consistent.

c. ​contradictory.

d. ​clear.

b. ​consistent.