MULTIPLE CHOICE (60%) 1. Which of the following could you reasonably expect your risk management supervisor to indicate as the most effective use of a business contract? a. an aid for a court to interpret a business arrangement b. a tool for the management of liability exposure a means of limiting warranties for defective products d. a mechanism limiting alternative dispute resolution c. 2. With respect to a contract, what is the function of an express term? a It gives effect to the parties intentions. b. It brings an existing contract to an end. c. It explicitly states contractual promises. d. It implicitly states contractual promises. 3. Which of the following would a law professor most likely state is the preferred means of ensuring each party to a contract knows its obligations and the obligations of the other party? a. b. The rules of plain meaning are followed. The essential implied contractual terms are expressed. The rules of construction are often conflicting. d. The essential terms of a contract are articulated. c. 4. With respect to the content of a contract, in what way are assumptions and terms different from one another? a Assumptions can be given legal weight. b. Terms are attributed with legal weight. Terms may be expressed in vague language. d. Assumptions are typically expressed. c. 5. In contract law, what is meant by the term "rules of construction"? a b a rule limiting evidence concerning a contract's contents a basis for relieving parties from their contractual obligations a guiding principle for interpreting the terms of a contract a contractual term stating that the contract is complete as written c d. 6. Why is a reference in a contract to "best quality" considered to be nebulous? a Exactly what is best quality becomes a subjective element. b. The language is ambiguous and requires interpretation. c. The use of unclear language will cause a contract to fail. d. Exactly what is best quality arises as an objective element. 7. A court hearing a contractual dispute has determined that an ambiguous term must be construed against the party drafting the agreement. Which of the following would the judge most likely state in his decisio as being the policy rationale for the court's finding? a The common law rules of construction apply. b. The rules of construction require use of the best language available