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Q:
Gabriel applies for a home loan and, Mark signs the agreement promising to pay off the debt in case Gabriel fails to do so. In this case Mark is:
A. the cosigner.
B. the oblige.
C. the obligor.
D. the assignor.
Q:
Matrix, Inc. is the general mortgage contractor of a large commercial building project. They subcontracted with Acme Flooring, Inc. to have flooring installed throughout the building. When Matrix failed to make payments to Acme as agreed, Acme stopped working. Commercial Bank, the lender for the project, orally promised Acme that Commercial would pay whatever Matrix failed to pay Acme if Acme would resume work. Acme finished the flooring but was still not paid. Which of the following is true under the Statute of Frauds?
A. Commercial Bank is not obliged to pay Acme as the promise must be written and signed.
B. Commercial Bank's promise enhanced its mortgage interest, hence it to should pay Acme.
C. Commercial Bank is not obliged to pay to Acme since Matrix was not a party to its promise.
D. Commercial Bank's promise did not involve the actual lending of money.
Q:
Charlie orally promises Holly that he will marry her. He also states that if they ever get divorced, then he will transfer one-half of his assets to Holly. They marry and divorce within a year. Which of the following is true of Charlie's promise to Holly?
A. The promise qualifies to be an oral contract and is hence legally enforceable.
B. The promise is legally enforceable to the extent it does not involve the transfer of land ownership.
C. The promise is not legally enforceable unless Holly proves that the promise influenced her decision to marry him.
D. The promise is not legally enforceable since it was not written.
Q:
A major flaw of the click-on process is that it functions for online contracts, but not for online advertisements.
Q:
The Uniform Electronic Transactions Act created a new set of legal rules governing electronic contracts.
Q:
The FACT Act focuses on contracts that involve the sale of computer software, multimedia products, and any other type of computer information.
Q:
Which of the following is true of the Statute of Frauds?
A. It states that all contracts have to be in writing to be enforceable in the court of law.
B. It decrees oral contracts to be invalid and hence not upheld or enforceable by law.
C. It states that certain types of contracts have to be in writing to be enforceable.
D. It maintains that agreements can be oral while contracts have to be in the written format.
Q:
Henry orally contracts with Faith to write special accounting software that usually takes three years to complete. What is the legal status of this agreement?
A. It is enforceable because Henry cannot complete writing the software within a year.
B. It is unenforceable since the contract is not written and signed.
C. It is enforceable, but only to the extent of work Henry completes within the first year of the contract.
D. It is unenforceable since the contract involves a tangible work product.
Q:
Donna entered into an oral contract with Ava to purchase a house from Ava, with $500 per month payments for the next 10 years. Donna moved into the house, remodeled it, and did extensive repairs. At the end of 10 years, Ava refused to convey title to the house to Donna and produced evidence at the resulting trial that the fair market rental value for the house averaged $800 per month over the 10-year period. Which of the following is true according to the Statute of Frauds?
A. Donna is entitled to the ownership of the house since she had an oral contract with Ava.
B. Donna cannot claim ownership of the house since there was no written contract with Ava.
C. Donna can claim ownership since she remodeled the house relying on the oral contract.
D. Donna is not entitled to the ownership of the house since she was paying below the fair value.
Q:
It is necessary for written agreements to always be signed by both parties.
Q:
Facsimile signatures are as valid as original signatures under contract law.
Q:
Alice's attorney is preparing her will. Witnesses are required when Alice signs her will.
Q:
A notary is not authorized to read the document when providing acknowledgment of a signature.
Q:
The provisions of Article 2 of the Uniform Commercial Code apply when a cyber-agreement deals with goods.
Q:
Reed needed expensive medical treatment for the injuries he suffered in a fire that ravaged his home. Lacking medical insurance and unable to obtain a bank loan, Reed turned to Lance, a local person known for his gambling prowess. Lance offered Reed $15,000 if Reed would repay him $23,000 in 36 monthly installments of $521 each. According to the laws in Reed's state, the maximum amount of annual interest that can be charged on loans is 20%. Explain whether Lancet's loan was legal.
Q:
Ron, a fast-talking, used car salesperson, convinced Maureen, an elderly semi-invalid, to purchase an automobile worth $500 for $12,000. When Maureen later refused to pick up the car or pay the bill, the used car dealer sued her. Discuss the case.
Q:
Irene buys Shawn's second hand furniture and they sign a contract on a Sunday. However, the contract mentions that Irene will collect the furniture on Tuesday and will pay the consideration to Shawn at that time. Analyze the legality of the contract considering that the state where Irene and Shawn live are not very restrictive about prohibiting all business activity on Sundays.
Q:
Amanda agrees to pay a county official $20,000 personally in exchange for his using public funds to build a public one-half-mile-all-weather road into her farm so that she can attract buyers for her farm. The county official takes $20,000 but never builds the road. Discuss the enforceability of this agreement.
Q:
Suds, Inc., a local self-service laundry, has a large sign on the inside wall reading: "NOT RESPONSIBLE FOR ANY DAMAGE TO OR LOSS OF CLOTHING." Georgia puts her damp clothes in a drier and within three minutes, the clothes are burning due to an excessively hot drier. Suds had failed to perform maintenance on the drier according to the manufacturer's instructions. Discuss in detail Georgia's ability to recover from Suds for her burnt clothing.
Q:
The equal dignities rule provides that when a party appoints an agent to negotiate an agreement that must be in writing, the appointment of the agent must also be in writing.
Q:
After betting $4 million on the outcome of a professional baseball game, Jake wants to make sure that he does not lose his money. He enters an agreement with a team's starting pitcher. The pitcher agrees to throw "fat" home run balls to the other team's batters in exchange for $75,000 from Jake. The pitcher gives up 10 home runs in the first three innings and his team loses the game. Jake refuses to pay him the $75,000 they agreed upon in the contract. If the pitcher sues Jake for breach of contract, which of the following is most likely to be the court's ruling?
A. The contract is divisible and will award the pitcher damages for the legal sections of the agreement.
B. The parties are in pari delicto and will refuse to award the pitcher any damages.
C. The pitcher can be declared less guilty of premeditation and will be awarded the damages.
D. The pitcher maintained his promise as per the contract and hence Jake will have to award the consideration.
Q:
Which of the following is true about the legality of an agreement?
A. An agreement is not divisible if the legal part of a contract can be removed from the illegal part without changing the nature of the contract.
B. The court will not enforce any agreement or contract that is either fully or partially illegal.
C. An agreement can sometimes be partly legal and partly illegal.
D. A court has to enforce both the illegal and the legal part of the contract.
Q:
Larry, a minor, bought a moped from the RU-Ready-2-Drive Used Moped lot. The next day he accidentally ran the moped into a telephone pole and seriously damaged the vehicle. Larry transported the damaged vehicle to RU-Ready-2-Drive and demanded a return on his money. Must RU-Ready-2-Drive comply with his request? Explain.
Q:
Susan, aged 16, owns a rare violin. Eric knows Susan is 16 and contracts with Susan that she will sell him the violin for $1,000 with delivery to take place when Susan is an adult. When Susan seeks to disaffirm this contract, Erin asserts that since delivery is to occur after Susan becomes an adult, she may not disaffirm. Analyze the case.
Q:
Gail buys a car at the age of 17 and makes regular monthly payments until six months after her 18th birthday, when the car is totaled in a wreck. Gail wants to disaffirm the car purchase. The age of adulthood in Gail's state is 18. Discuss.
Q:
Alex, aged 30, appeared to be normal but suffered from the secret delusion that he was a spy for the U.S. government on the trail of terrorists. Alex purchased a new car from Marvel Motors, Inc. and drove it so recklessly "chasing terrorists" that the engine burned up. Alex, not under medical treatment, seeks to rescind the car purchase and have his money returned. Analyze the appropriate solution to this case.
Q:
Before Kramer entered a detoxification center for his alcoholism, he went to an electronics store and spent $500 on a new, nonrefundable television. He had several drinks before he went into the store but was not intoxicated. After he was released from the costly center three months later, Kramer decided to return the television. He believed he could disaffirm the contract because he was intoxicated when he made the purchase. Analyze the case.
Q:
Eve, an experienced automotive engineer, signs an agreement with her employer, Environmental Auto Co., that she will never work in the auto industry after she leaves employment with Environmental. A court considering this agreement:
A. will declare it void, as geographical area is not specified.
B. will enforce the agreement in any event.
C. will only enforce the agreement if it resulted from a bargained-for exchange.
D. will enforce the agreement only if such agreements are customary in the auto industry.
Q:
Which of the following is true of nondisclosure agreement?
A. It requires employees to promise not to reveal any confidential trade secrets, should they leave their present employment.
B. It limits a worker's employment options after leaving his or her present job in order to protect the present employer's confidential matter.
C. It restricts the seller of a business to enter the same type of business during a reasonable time and within a reasonable geographical area.
D. It states that the party who wrote the contract will not be liable for any economic loss or physical injury even if that party caused the loss or injury.
Q:
Persons who agree to commit criminal acts for a promised consideration are involved in what criminal law defines as a(n):
A. restrictive covenant.
B. in pari delicto.
C. usury.
D. conspiracy.
Q:
Jeanie, a prosecutor, agrees with Martin not to prosecute Martin's son for drunk driving in exchange for Martin employing her in his law firm two years after the drunken driving charge is dismissed. This is a(n):
A. nondisclosure agreement.
B. usurious agreement.
C. agreement to escape liability.
D. agreement to obstruct justice.
Q:
Rodney parks his car at Car Stack Parking Lot, Inc. On the back of the parking stub provided to Rodney, there is a statement typed in large letters: "NOT RESPONSIBLE FOR DAMAGE TO CARS." When Rodney returns, his car has been dented by the Car Stack attendant who was attempting to park more cars on the lot. According to law, the statement on the stub:
A. is enforceable against Rodney in any event.
B. is enforceable against Rodney only if he had the opportunity to park elsewhere.
C. is not enforceable against Rodney in case he instructed the attendant to be careful around his car.
D. is not enforceable against Rodney, since it can be proved to violate public policy.
Q:
Lizzie works as an entertainment journalist. Her editor tells her that she has to produce a story defaming a television celebrity if she wants to retain her job. Once Lizzie has produced the article and publishes it in the newspaper she works for, her editor fires her. Lizzie wants to bring a lawsuit against the editor for firing her. Which of the following is true of this case?
A. Lizzie has committed a crime and hence cannot file a lawsuit.
B. Lizzie can bring forth a lawsuit as her contract with the editor contained all five elements.
C. Lizzie's contract has been executed, hence the court is likely to award her damages for breach of contract.
D. Lizzie has committed a tort and her contract with the editor will not be upheld in the court.
Q:
The illegal practice of charging more than the amount of interest allowed by law is called:
A. libel.
B. in pari delicto.
C. slander.
D. usury.
Q:
Brandon, a recent law school graduate, says he will provide affordable legal services to anyone who needs help. Although his bar exam results are not out yet, Brandon is certain that he has passed. Legally, are his clients required to pay for his legal services before he has received his license?
A. Yes, a court will require that his clients pay in full for any legal services they receive from him.
B. Yes, but if Brandon fails the exam, he must return all consideration to the appropriate clients.
C. No, since it is against the law for anyone without the required state license to offer legal advice.
D. No, because Brandon has acted incompetently.
Q:
All lawn maintenance businesses must pay the state a $200 annual license fee with no other legal regulations. ABC Yards, Inc. fails to pay the license fee. Which of the following is true in case ABC Yards has failed to acquire a license because of the failure to pay the $200?
A. The lack of a license will not necessarily make a contract void.
B. The lack of licenses makes the contracts void under contract laws.
C. All contracts of ABC are voidable, due to their failure to obey the regulation.
D. Only executory contracts by ABC will be voidable.
Q:
Which of the following is true of laws restricting Sunday business?
A. They invalidate all agreements made on Sunday.
B. They validate agreements made on Sunday for delivery of goods on a business day.
C. They validate agreements made on Sunday if the business in question has closed on Sunday.
D. They validate agreements made on Sunday requiring performance on a Sunday.
Q:
Maria, aged 16, from a wealthy family, purchases designer jeans on credit for $300. The true fair market value for the jeans is $75. Which of the following is true of this case?
A. Maria can disaffirm the purchase.
B. She cannot disaffirm as her family is wealthy.
C. She is liable to pay $300 as per contract.
D. She may not disaffirm and is liable for $75.
Q:
Which of the following contracts are not voidable by minors at their option?
A. Executory contracts
B. Contracts for necessaries
C. Contracts with banks for educational loans
D. Contract to purchase land
Q:
The willingness to abide by contractual obligations is:
A. ratification.
B. emancipation.
C. rescission.
D. devolution.
Q:
Ron, aged 20 years and 4 months, purchases a car from Slim's Auto Sales for $2,000. However, Ron returns the car to Slim Auto Sales telling them he does not feel this is the right car for him and that he wants his money back. At the time of disaffirmance Ron was 21, the age at which he is considered an adult in his jurisdiction. Will this disaffirmance be enforceable in the court of law?
A. No, since Ron did not give Slim a signed disaffirmance.
B. Yes, since Ron disaffirmed during the year he reached his adulthood.
C. No, since the disaffirmance must be written when the price exceeds $500.
D. Yes, since the courts and laws always rule in the favor of minors.
Q:
Which of the following is a rule recognized by the Restatement of Contracts?
A. The incompetent party must return all consideration even if the other party knew about the person's impairment.
B. If a contract is executed, the impaired party can void the contract without returning the other party the place he/she was in before.
C. A person's contractual obligations are partially voidable depending upon the severity of his/her mental and physical health.
D. A person's contractual obligations may be voidable if that person suffers from a mental impairment that prevents him or her from acting in a reasonable manner.
Q:
When Julie, aged 27, took flu medication and became very light-headed and confused, Alice, taking advantage of the situation persuaded Julie to sell her $1,000 Rolex watch to her for $100. Julie later realizes what Alice did and decides to take legal action. Which of the following is true as per contract laws?
A. Julie cannot sue Alice since she, as an adult, voluntarily sold the watch.
B. Julie has the right to get her watch back without returning the $100.
C. Alice is allowed to keep the watch and Julie should return the $100.
D. Alice should return the watch and Julie should return the $100.
Q:
Courts can uphold an agreement that is partly legal and partly illegal.
Q:
In some jurisdictions, minors who become _____ means that they cannot void a contract, despite their apparent minority.
A. ratified
B. emancipated
C. abandoned
D. disaffirmed
Q:
_____ are those that have not been fully performed by both parties, may be repudiated by a minor at any time.
A. Contracts for necessaries
B. Shield and sword doctrine
C. Executed contracts
D. Executory contracts
Q:
By signing a nondisclosure agreement, an employee can be deprived of employment in the future in certain geographical areas.
Q:
When both parties to an illegal agreement are equally wrong in the knowledge of the operation and effect of their contract, they are said to be in pari delicto.
Q:
Special statutes allow small loan companies, pawn shops, and other lending agencies that accept high-risk applicants for credit to charge a higher rate of interest.
Q:
Agreements made on Sunday for work to be done or goods to be delivered on a business day are valid and enforceable.
Q:
Melody transfers title of all of her assets to her cousin, Erin and then files for bankruptcy. The transfer of assets is a valid exercise of Melody's ownership rights.
Q:
A restrictive covenant in a contract for the sale of a business will be upheld if it is reasonable in time even if it extends beyond the boundaries of the state where the business is located.
Q:
A nondisclosure agreement requires employees to promise that, should they leave their present place of employment, they will not reveal any confidential trade secrets that they might learn while on their current job.
Q:
Ratification is the willingness to deny contractual obligation.
Q:
A minor may not disaffirm a contract to sell land after becoming an adult.
Q:
A person's contractual obligations may be voidable if that person suffers from a mental impairment that prevents him or her from acting in a reasonable manner.
Q:
A toast with a glass of wine at the time a contract is signed, will allow the contract to be disaffirmed.
Q:
A criminal statute that is obscure or that outlines conduct that is ambiguous may be struck down by the court as void for vagueness.
Q:
The practice of charging less than the amount of interest allowed by law is called usury.
Q:
Carl is tall and looks like he is 21 years old. Carl lies about his age to purchase a home entertainment system for $1,000. In most states Carl may disaffirm his purchase.
Q:
If a minor makes a contract for necessaries, he/she will be liable for the fair value of those necessaries.
Q:
Big Market sells groceries to Jessica, a minor. Jessica may rescind the contract and return the groceries.
Q:
Minors who become emancipated, that is, no longer under the control of their parents, are responsible for their contracts.
Q:
When a minor indicates by a statement an intent to not live up to a contract, that minor is entitled to a return of everything given to the other party.
Q:
A minor enters a contract lying about his age and defrauds the other party. The other party can sue the minor under tort law, rather than contract law.
Q:
Mitchell owed the National Medical Federation $250 for books he had purchased from that organization. He sent the federation a check for $100, writing on the check, "In full payment for the books I purchased." The federation cashed the check but continued to demand the $150 balance. Discuss if the federation was within its rights to do so and whether the federation's actions reflect an accord and satisfaction agreement with Mitchell.
Q:
Sergie orally agrees to pay Zenith Finance Co. a $300 loan debt that was discharged in bankruptcy when Zenith told Sergie that repaying the debt would help him "rebuild his credit" since Zenith would report his payments to credit reporting agencies. Discuss the case.
Q:
Jackie borrowed $1,000 from Uncle John in 1975, with repayment due in 1977. Jackie never repays the loan and Uncle John never attempts to collect it. In 2004, Jackie writes Uncle John a letter stating that she is sorry that she did not repay the debt and encloses a check for $100 toward repayment. Uncle John cashes the check. He dies of a heart attack one week later. Uncle John's heirs find the letter and sue Jackie to collect the remaining $900 balance. Analyze the case.
Q:
Matrix, Inc. is considering opening a restaurant in Smallville and has located a prime vacant land location that is for sale. Matrix wants to do some market research and obtain financing for construction before purchasing the land but is concerned that a competitor, Zion, Inc., will purchase the land if Matrix does not act immediately. What legal steps should Matrix take, short of purchasing the land now, to prevent Zion from acting before them? Explain.
Q:
Mullroy has complained to the local police about the vandalism in his neighborhood. However, the police have taken little interest to curb the vandalism, much to Mullroy's disappointment. Determined to resolve the problem, Mullroy invites the local sheriff to his daughter's birthday party and offers him free weekend dinners at Mullroy's family restaurant if the sheriff promises to look into the vandalism problem. Discuss the nature of consideration and contract in this case.
Q:
Tim's mother was concerned that Tim would develop cancer if he used tobacco, so she promised Tim $10,000 if he would refrain from any use of tobacco until age 30. Tim did so but his mother refused to give him the $10,000. Does Tim have a legal right to the $10,000? Explain.
Q:
Teller agreed to buy a stolen piano from Luthor, but failed to live up to his part of the deal. Does Luthor have a legitimate cause of action against Teller? Explain.
Q:
Andrew's neighbor, Charles, is selling drugs from his home. Since Andrew is concerned about the well-being of his own family, he offers to pay Charles $60,000 to stop selling drugs. Charles stops but Andrew refuses to pay. Can Charles successfully sue Andrew to force him to pay the $60,000? Explain.
Q:
Sarah promises to give $10,000 for the construction of Save the Butterflies, a local charity, and is publicly honored as a "golden" donor of Save the Butterflies, by putting her name on the "Wall of Honor." Sarah later does not pay the $10,000. Discuss the ways in which Save the Butterflies may legally collect the $10,000 from Sarah.
Q:
Pantia agreed to write software codes for "a reasonable price" for a video game being produced by Mindbinder, Inc. When Pantia submitted a bill for $5,000, Mindbinder believed that a reasonable amount for the work was $3,000 and sent Pantia a check for that amount with a notation on the check, "Payment in full." Discuss the case
Q:
While the Washington family was gone for the weekend, their home was broken into and robbed. The professional boxer who lived next door saw the thief, apprehended him, and forced him to return the stolen possessions. When the Washingtons returned, Mr. Washington told the boxer that he would give him $5,000 for his efforts. The next morning, Mr. Washington decided to give him only $2,000. Which of the following is true of this case?
A. Mr. Washington broke his contract with the boxer.
B. The boxer's act of bravery would be a past consideration.
C. The bargained-for-agreement obligated Mr. Washington to pay the boxer $5,000.
D. Mr. Washington would lose if the boxer brought a suit against him to recover the amount.
Q:
Jemmima agrees to babysit Avery's daughter as often as Avery wishes if Avery cleans Jemmima's house every week. This agreement is:
A. enforceable because it is an option.
B. enforceable because the amount in the contract is not disputed.
C. unenforceable under the doctrine of estoppel.
D. unenforceable because it contains an illusory promise.
Q:
_____ outlaws the unauthorized transfer, possession, or use of a means of identifying another person to violate federal law.
A. Aggravated Identity Theft Act
B. Identity Theft and Assumption Deterrance Act
C. Identity Theft Penalty Enhancement Act
D. Uniform Electronic Transactions Act
Q:
Monty quit his $150,000 annual salary job with Computer Associates in Monterey, California, and moved with his family to Fairfield, Connecticut based upon an oral promise by Software Power to provide reimbursement of all moving expenses and at least three years employment at an annual salary of $250,000 per year. One month after moving, and before being reimbursed for moving, Monty's employment with Software Power is terminated due to a reduction in force caused by lower-than-expected product sales. Can Monty successfully sue Software Power?
A. No, since the promise was oral.
B. Yes, under promissory estoppel.
C. No, since a promise of employment is always subject to market conditions.
D. Yes, but only for the moving expenses that Monty can prove he incurred.
Q:
Edwin, Marketing VP of Amalgamated Sales, Inc., writes a letter dated August 1 to Bargain Stores, Inc., offering to sell candy to Bargain Stores at $50 per case for the next one month. In mid August, Amalgamated receives an offer from Dandy Stores, Inc., to purchase this candy at a price of $75 per case. Can Amalgamated withdraw its offer to Bargain Stores?
A. Yes, the offer may be withdrawn since it lacks consideration.
B. No, as this is a firm offer.
C. Yes, the offer was simply an invitation to negotiate.
D. No, as this is only an option.