Question 1

1. Bill downloaded an antivirus software from the Internet. Under the Uniform Commercial Code (UCC), the software is a:

   good.

   service.

   good-faith warranty.

   mixture of goods and services.

2 points

Question 2

1. According to the rule of _____, if a promisee's performance was rendered before the promisor's promise was made, then it can never serve as consideration, even though it may meet the "legal value" part of the test.

   past consideration

   preexisting duty

   forbearance

   promissory estoppel

2 points

Question 3

1. Agreements that create a conflict between a public employee's personal interests and public duties are illegal.

   True

   False

2 points

Question 4

1. Minors are generally held liable on aquasi contractbasis for the reasonable value of necessaries furnished to them.

   True

   False

2 points

Question 5

1. The elements of misrepresentation are ordinarily given as misrepresentation of a material fact justifiably relied on to the detriment of the person relying.

   True

   False

2 points

Question 6

1. All courts hold that cashing a "payment in full" check discharges the obligation of debt under the Uniform Commercial Code.

   True

   False

2 points

Question 7

1. A contract is voidable even if duress and undue influence are exerted on a party after entering into a contract.

   True

   False

2 points

Question 8

1. If one or both parties to a form contract are nonmerchants, the additional terms proposed by one of the parties are treated as:

   void.

   proposals for addition to the contract.

   revocation.

   expressly conditional.

2 points

Question 9

1. A liquidated debt is one that is due and certain, which means that there is no dispute about the existence or the amount of the debt.

   True

   False

2 points

Question 10

1. A key point of differentiation between duress and undue influence lies in the:

   net worth of the contract in question.

   time at which the contract was signed.

   relationship between the parties at the time of the contract.

   type of property in question.

2 points

Question 11

1. Jake had grown tired of working on the family farm and was considering moving away. However, his parents told him, "If you'll stay and help us, we'll leave you the farm when we die." As a result, Jake decided to stay on the farm and worked there for the next twenty years. However, when his parents finally died, Jake learned that they had left the farm to his brother, Nathan. Jake filed suit against his parents' estate to enforce their promise of leaving him the farm. Which of the following would be true of this scenario?

   Nathan and the parents' estate should be allowed to defeat Jake's claim to the farm by arguing that the parents' promise was enforceable because Jake gave consideration for the promise.

   The work that Jake did on the farm before his parents made their promise is sufficient consideration to make their promise enforceable.

   Jake's parents' promise is not enforceable because it was illusory.

   Jake's parents' promise would be enforceable under the doctrine of promissory estoppel.

2 points

Question 12

1. Consumer protection laws regulate advertisements outside of contract law.

   True

   False

2 points

Question 13

1. Barry is eleven years old and makes an agreement with Laurel to buy Laurel's music player. The agreement is _____.

   executed

   unenforceable

   unilateral

   voidable

2 points

Question 14

1. The practical difference between the remedies for misrepresentation and fraud is that:

   a victim of misrepresentation can sue for punitive damages, whereas a victim of fraud cannot.

   a victim of fraud can sue for punitive damages as well as for damages from the tort of deceit.

   a victim of fraud cannot sue for punitive damages.

   a victim of misrepresentation cannot rescind the contract.

2 points

Question 15

1. Even if the facts and circumstances surrounding a case indicate that the parties reached an agreement, that agreement must be involuntary to be enforceable.

   True

   False

2 points

Question 16

1. Even if the facts and circumstances surrounding a case indicate that the parties reached an agreement, that agreement must be involuntary to be enforceable.

   True

   False

2 points

Question 17

1. "One who waits too long to complain has indicated satisfaction with the agreement despite the initial lack of true consent" is the idea behind the doctrine of:

   ratification.

   forbearance.

   rescission.

   emancipation.

2 points

Question 18

1. Advertisements for rewards, such as for the return of lost property, information, or the capture of criminals, are generally held to be:

   invitations but not offers.

   offers for unilateral contracts.

   offers for bilateral contracts.

   firm offers.

2 points

Question 19

1. A promise exchanged for an act is an example of a(n) _____.

   bilateral contract

   unilateral contract

   implied contract

   quasi contract

2 points

Question 20

1. Jane tells Mark that she would pay him $50 if Mark finds her lost bag. This is an example of a _____.

   bilateral contract

   unilateral contract

   contingent contract

   multilateral contract

2 points

Question 21

1. An offeror can minimize problems with the timing of acceptances since he or she has the power to control the conditions under which the offer can be accepted.

   True

   False

2 points

Question 22

1. The doctrine of promissory estoppel does NOT require a(n):

   promise.

   significant reliance on a promise.

   injustice as a result of reliance.

   consideration.

2 points

Question 23

1. Lou enters into an agreement with LaFancy Inc., an event management company, to coordinate her wedding in June for the sum of $10,000. In March, Lou calls LaFancy to tell the company the deal is off, because she thinks she can do a better job herself. LaFancy sues Lou, and Lou argues lack of consideration as a defense. Which of the following statements holds true of this scenario?

   LaFancy has given consideration.

   LaFancy had a legal duty to plan Lou's wedding even before the agreement was signed.

   Lou can enforce LaFancy's promise to her.

   Lou was the only promisor in this contract.

2 points

Question 24

1. A counteroffer:

   impliedly rejects an offer.

   does not affect the material terms of the contract.

   is a mirror-image of the offer.

   is an inquiry into the terms of the offer.

2 points

Question 25

1. A voidable contract is necessarily unenforceable.

   True

   False

2 points

Question 26

1. A person lacking mental capacity must return the other party to status quo when:

   the other party becomes aware of the person's lack of mental capacity.

   the person lacking mental capacity has already enjoyed the product of the agreement.

   the other party was unaware of the person's lack of mental capacity.

   the person lacking mental capacity has passed on the product of the agreement to someone else.

2 points

Question 27

1. Fraud in the execution involves misstatements about the content or legal effect of something usually contained in a form or preprinted contract.

   True

   False

2 points

Question 28

1. Brian offers to sell Jerry his house, but a hurricane destroys the house before Jerry accepts the offer. What would be the possible outcome of this offer?

   A written statement must be produced to the court of law to terminate the offer.

   If the offer is not revoked within a week after the incident took place, the offer is considered to be open and Jerry can claim the recovery charges.

   Jerry must be paid the recovery charges for losing the house as he had already been offered by Brian.

   The offer is terminated when the house is destroyed as it happened without the knowledge or fault of either of the parties.

2 points

Question 29

1. An offer by itself does not include terms that limit its life.

   True

   False

2 points

Question 30

1. Capacity to contract is presumed and a party claiming incapacity bears the burden of proof.

   True

   False

2 points

Question 31

1. According to the Uniform Commercial Code, if the original agreement requires any modification to be in writing, an oral modification:

   is unenforceable.

   is enforceable.

   can be enforced if the value of the goods exceeds $500.

   can create legal value.

2 points

Question 32

1. Courts grant equitable remedies to those who seek to enforce grossly inadequate bargains on the grounds that such persons are entitled to the special treatment equity affords.

   True

   False

2 points

Question 33

1. Forbearance occurs when:

   a debtor and two or more creditors agree to accept a stated percentage of their liquidated claims against the debtor.

   someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration.

   promises are worded in a way that allows the promisor to decide whether or not to perform the promise.

   there is no dispute about the existence or the amount of the debt.

2 points

Question 34

1. An offeree may accept an offer within a reasonable time by any reasonable means of communication if the:

   parties are dealing over the telephone.

   offeror suggests a method or a place of communication in the offer.

   written offer is lost in transit.

   offer merely suggests a method or place of communication.

2 points

Question 35

1. A quasi contract can be best described as:

   a contract that has been fully performed.

   a contract where terms are stated orally only.

   contractlike duties imposed by the court to prevent unjust enrichment.

   an agreement that contains all but one of the basic elements needed to form an enforceable contract.

2 points

Question 36

1. A promise exchanged for a promise is an example of:

   a bilateral contract.

   a unilateral contract.

   an implied contract.

   promissory estoppel.

2 points

Question 37

1. Blue laws are uniform across all states in the country.

   True

   False

2 points

Question 38

1. According to the Uniform Commercial Code (UCC), which of the following statements is true of communication of acceptance?

   Any means deemed reasonable by the court in light of the circumstances is a reasonable means of communication.

   A dispatch that complies with only the stipulated requirements for acceptance is an authorized means of communication.

   Any form of acceptance that is implied by trade usage is a reasonable means of acceptance.

   A means slower and safer than the way the offer was communicated is an authorized means of communication.

2 points

Question 39

1. Beck tells his mom that he is thinking of selling his vintage coupe to his neighbor, Sam, for $100. Beck's mom calls Sam and tells him about her conversation with Beck. Sam then calls Beck and tells him that he accepts his offer. Under these circumstances, _____.

   this is a contract

   the offer has been conditionally tendered

   the offer has not been communicated

   the offer violates the UCC's rule against third-party interveners in quasi contracts

2 points

Question 40

1. The intent to deceive is also known as capacity.

   True

   False

2 points

Question 41

1. If an offeree dispatches both an acceptance and a rejection to an offer, _____.

   the acceptance is effective as soon as it is dispatched and a contract is created

   the rejection is effective as soon as it is dispatched and no contract can be created

   both the acceptance and the rejection are not effective and another response must be issued

   whichever response reaches the offeror first will determine whether a contract is created

2 points

Question 42

1. A minor can disaffirm a contract if:

   he or she has not ratified the contract on reaching majority.

   the contract is for real estate.

   he or she has given a false statement about his or her age.

   he or she has not returned the adult to status quo first.

2 points

Question 43

1. Fran promises to pay Tim $700 for a new scooter for her own use. After Tim delivers the scooter, Fran refuses to pay Tim. Tim may recover the money under the doctrine of _____.

   unjust enrichment

   executory contract

   unilateral contract

   promissory estoppel

2 points

Question 44

1. Laura offered to sell Louis a tract of land. The offer was complete and certain as to all material terms. The offer stated that a telegraphed acceptance was required. Within a reasonable time, Louis telephoned Laura to accept. Which of the following is a true statement about this situation?

   Louis can use promissory estoppel to enforce a contract here.

   Louis's telephone call would be a good acceptance as this case involves a sale of goods.

   Louis has not accepted and there is no contract.

   Louis has accepted because a telephone call is a reasonable means of acceptance.

2 points

Question 45

1. A subcontractor's bid:

   is considered an offer.

   is never revocable.

   can usually be withdrawn even if the general contractor has relied on it.

   is considered to be a part of a shrinkwrap agreement.

2 points

Question 46

1. A(n) _____ is one where both parties involved in a contract are under a mistaken belief about a material fact.

   state of duress

   state of undue influence

   mutual mistake

   unilateral mistake

2 points

Question 47

1. A person could be medically insane but still have the legal capacity to contract.

   True

   False

2 points

Question 48

1. An option contract is created when the offeree gives the offeror something of value in exchange for a promise not to revoke the offer for a stated period of time.

   True

   False

2 points

Question 49

1. A party that enters into an illegal contract can recover the considerations given if the party:

   reports the illegal act to law enforcement after committing it.

   rescinds the contract before any illegal act has been performed.

   demonstrates an unequal bargain due to the illegal contract.

   rescinds the contract immediately after the illegal act has been performed.

2 points

Question 50

1. An acceptance is effective as soon as it is dispatched if the offeree uses:

   only an authorized means of communication.

   only a stipulated means of communication.

   an authorized or a stipulated means of communication.

   any reasonable means of communication.