Q&A Hero

Q: Mr. Blue wishes to sell his home to Mr. Green. The court will refuse to recognize and enforce the agreement between Mr. Blue and Mr. Green.

Q: The statute of frauds applies exclusively to executory contracts.

Q: Arnold promised to sell his car to Adams in lieu of full payment of his debt. However in the written contract, Adams had forgotten to specify which car he wants to sell. Is there any remedy?

Q: There is a requirement that all contracts be in writing.

Q: A signature is sufficient to form the basis of authenticity of a written contract.

Q: Davis owes a $5 million debt to the C Bank. He also owes $2 million to Samuel. However right now, Davis is having trouble paying either loan. C Bank is willing to finance Davis's debt, but only if Samuel co-signs. Samuel, who fears that he'll get nothing on his $2 million loan if Davis doesn't get some help from the bank, is willing to do so. Thus, C Bank, Samuel and Davis complete a three-party agreement in which the bank agrees to finance the $5 million debt, Davis agrees to pay it back at a certain rate over a certain term, and Samuel agrees to pay the debt "in the event that Davis first defaults." Is this agreement covered by the statute of frauds? Why or why not?

Q: Ned and Bill complete an oral contract for the sale of land from Ned to Bill for $100,000. Bill pays Ned the $100,000, and then begins to build his house on the land. At this point, Ned says that the deal is off and refuses to convey the deed to Bill. In doing so, Ned relies on the statute of frauds. Is this agreement enforceable by Bill?

Q: Jones goes to a clothing store and orders $1000 worth of clothing on credit. The salesperson writes up a receipt describing the terms of the deal, but Jones does not sign anything. Three days later, the store delivers $750 worth of clothing, which Jones accepts. One day later, however, Jones decides that he doesn't want the clothing. When the store insists that he has to pay the full $1000, Jones pleads the statute of frauds. Does the statute of frauds give Jones a defense against payment here?

Q: In entering into contracts for services, customers might be influenced by statements made by sales representatives. Businesses offering services often use standardized form contracts. Under the parol evidence rule, pre-contract statements made in these circumstances are effectively unenforceable. How can a business effectively and ethically use standardized form contracts and the parol evidence rule?

Q: Ward is attempting to introduce oral evidence in an action relating to a written contract between Ward and Weaver. Weaver has pleaded the parol evidence rule. Ward will be prohibited from introducing parol evidence if it relates to: A. a modification made several days after the contract was executed. B. a change in the meaning of an unambiguous provision in the contract. C. fraud in the inducement. D. an obvious error in drafting.

Q: Abel hired Carr to restore Abel's vintage car for $800. The terms of their oral agreement provided that Carr was to complete the work within 18 months. Actually, the work could be completed within one year. Can Abel insist that the work be completed within a year instead of the 18 months? A. No, because the agreement covers services with a value in excess of $500. B. No, because the agreement covers a time period in excess of one year. C. Yes, because personal service contracts are exempt from the statute of frauds. D. Yes, because the work can be completed within one year.

Q: A written agreement was signed by two parties and it was intended to be their entire agreement. The parol evidence rule will prevent the admission of evidence that is offered to: A. prove the existence of a contemporaneous oral agreement that modifies the contract. B. prove the existence of a subsequent oral agreement that modifies the contract. C. explain the meaning of an ambiguity in the written contract. D. establish that fraud had been committed in the formation of the contract.

Q: Subsequent agreements are treated in what way under the parol evidence rule? A. Subsequent agreements are admissible under the parol evidence rule B. Subsequent agreements are not admissible unless they were filed with a governmental agency C. Subsequent agreements are not admissible since they attempt to modify an integrated contract D. Subsequent agreements are not admissible unless that involve two international parties

Q: April and Brian entered into a completely integrated written contract. Before the written contract was completed, April made an oral statement to Brian regarding the terms of the contract. This statement was not contained in the written contract. Under the parol evidence rule, evidence of April's oral statement would be admissible if it were used to: A. create a completely new agreement. B. introduce an ambiguous term in the written contract. C. prove an additional term consistent with the written agreement. D. change the terms of the written contract.

Q: Which of the following is admissible with respect to a partially integrated contract? A. Evidence that seeks to make the contract completely divisible. B. Evidence that resolves ambiguities in the contract. C. Evidence that the contract is unconditional on the happening of some event. D. Evidence that contradicts the contract's provisions.

Q: A fully "integrated" contract under the parol evidence rule is one that: A. is intended by the parties to include both goods and services. B. is intended by the parties to include several agreements. C. is intended by the parties to be a preliminary statement of their agreement. D. is intended by the parties to be the complete, final statement of their agreement.

Q: A merger clause is also known as an: A. interpretation clause. B. interrogation clause. C. integration clause. D. instrumental clause.

Q: Bruce told Adam that he was selling his house in Syracuse, New York. Adam sent Bruce an e-mail containing an offer of $300,000 for the house. Bruce responded via e-mail that he wanted $315,000 for the house. After further e-mails, the parties finally agreed on a sale with a price of $310,000. A series of e-mails contained the terms of the sale, and all included a salutation containing their typewritten names. However, Bruce later decided to sell the house to Marty for $325,000. Adam sued Bruce, claiming that Bruce breached their contract for the sale of the house. Most likely, Adam will: A. lose, because the contract does not meet the statute of frauds. B. lose under the parol evidence rule. C. win, because the essential terms of the contract were set forth in the signed e-mails. D. win, because of the partial performance exception to the statute of frauds.

Q: Mr. Green and Mr. Blue contract orally to transfer 500 widgets for $1000. Mr. Blue sends Mr. Green a receipt one week after the agreement. If Mr. Green now refuses to recognize the agreement a court will find what? A. That a memorandum of understanding was created by the receipt sent by Mr. Blue and an enforceable agreement exists B. That no agreement exists because there is no typed agreement according to the statute of frauds C. There is no enforceable agreement because the receipt was not sent at the same time as the agreement D. The agreement is not enforceable because the Secretary of State did not approve the agreement

Q: The Parol Evidence rule is relevant only in cases: A. that are oral in nature. B. where parties have expressed an agreement. C. of the sale of goods. D. subsequent modification do not have a suitable consideration.

Q: Sammy entered into an oral contract with Macaulay for sale of goods amounting to $900. Sammy paid the amount. But Macaulay refused to deliver the goods. Sammy thus suffered serious losses because of Macaulay's breach of contract. Sammy sued Macaulay. At the same time Macaulay took the defense under statute of frauds. Under which principle is Sammy protected? A. Tortious liability B. Vicarious liability C. Part performance D. Promissory estoppel

Q: The underlying purpose of the statute of frauds is to: A. prevent frauds in general. B. corroborate the existence of the oral contract. C. punish those who commit frauds. D. make fraud illegal.

Q: Which of the following is a uniform state law designed to remove "barriers to electronic commerce validating and effectuating electronic records and signatures"? A. Uniform Electronic Transactions Act (UETA) B. Electronic Signatures in Global and National Commerce Act (E-Sign) C. Electronic Communications Privacy Act (ECPA) D. Graham-Leach-Bliley Act (GLBA)

Q: The Electronic Signatures in Global and National Commerce Act (E-Sign): A. invalidates agreements between parties conducting transactions by electronic means. B. states that electronic transactions on subjects covered by the statute of frauds require an additional writing. C. overrides state laws that are inconsistent with the UETA. D. creates barriers to e-commerce by invalidating electronic records and digital signatures.

Q: If it is not indicated in the memorandum, where should the parties sign to make it enforceable? A. Right corner B. Left corner C. Bottom D. Any place on memorandum

Q: The Uniform Commercial Code changed the traditional statute of frauds rule by making it: A. easier to satisfy that rule. B. mandatory to have contracts in writing. C. apply to service contracts only. D. apply to real estate contracts only.

Q: A memorandum on the sale of goods that does not indicate the _____ of goods to be sold will not satisfy the UCC's writing requirement. A. quality B. quantity C. delivery D. cost

Q: The "confirmatory memorandum" exception to the UCC's statute of frauds provision: A. requires that the memorandum be signed by the party to be bound. B. requires that the memorandum be sent within ten days after the contract is made. C. applies even though the memorandum does not satisfy the UCC's writing requirement. D. requires that both parties to the contract be merchants.

Q: King sent Foster, a real estate developer, a signed offer to sell a specified parcel of land to Foster for $200,000. King, an engineer, had inherited the land. Foster telephoned King the same day that he received his letter and accepted the offer. Which of the following statements concerning the contract is correct under the statute of frauds? A. No contract was formed because Foster did not sign the offer. B. No contract was formed because King is not a merchant. C. A contract was formed, although it would be enforceable only against King. D. A contract was formed but it is unenforceable.

Q: The marriage provision in the statute of frauds is inapplicable in agreements that involve: A. post-nuptial promises. B. oral one-sided promises of marriage. C. mutual promises to marry. D. pre-nuptial promises.

Q: In order to satisfy the statute of frauds, the parties' writing must be: A. signed by both parties. B. in legalese. C. signed by the "party to be charged." D. compressed into a single document.

Q: Which of the following is true regarding the statute of frauds' writing requirement? A. The writing must be contained in one document. B. The writing must be signed by both parties. C. The writing must be signed by the buyer. D. The writing must indicate the parties' identities.

Q: Whose signatures are needed in order to satisfy the statute of frauds? A. Only the signatures of witnesses to the agreement are required. B. Only the signature of the party, attempting to enforce the contract, is required. C. Only the signature of the party against whom enforcement is being sought. D. Only the signature of the third party to the contract, the beneficiary, is required.

Q: A contract that cannot be performed within one year from the day on which it comes into existence: A. is within the statute of frauds. B. need not be in writing. C. is called a unilateral contract. D. is essentially illegal.

Q: A bilateral contract is "taken out of the statute of frauds" when: A. it is completed within a year from the day of its existence. B. it is fully performed by at least one party. C. it is put in writing. D. it has strict rules of performance.

Q: Guy and Boyd make an oral contract whereby Guy agrees to sell Boyd, 480 widgets (goods) at a price of $480. Later, the parties want to modify the contract so that the price would become $520. This modification: A. must be in writing. B. must be oral because the first contract was oral. C. can be oral but need not be. D. is unenforceable because the first contract is unenforceable.

Q: With regard to an agreement for the sale of real estate, the statute of frauds: A. does not require that the agreement be signed by all parties. B. does not apply if the value of the real estate is less than $500. C. requires that the entire agreement be in a single writing. D. requires that the purchase price be equal to the value of the real estate.

Q: Smith and Benson make an oral contract for the sale of some land at a price of $500,000. After paying Smith $400,000 of the purchase price, Benson takes possession of the land. One month later, Smith wants to boot Benson off the land. His argument is that the parties' oral agreement is unenforceable under the statute of frauds. Which of the following is most correct? A. Smith is correct, because the contract is for an amount greater than $500. B. Smith is correct, because this is an oral contract for the sale of real estate. C. Smith is incorrect, because the contract is for an indefinite period of time. D. Smith is incorrect, because Benson paid part of the purchase price and took possession.

Q: Which statement about the statute of frauds is true? A. All contracts must be in writing in order to be enforced. B. Contracts for the sale of goods for $500 or more must be in writing in order to be enforced. C. Contracts for the sale of land for $500 or more must be in writing in order to be enforced. D. All employment contracts must be in writing in order to be enforced.

Q: On May 1, Dix and Wilk entered into an oral agreement by which Dix agreed to purchase a small parcel of land from Wilk for $450. Dix paid Wilk $100 as a deposit. The following day, Wilk received another offer to purchase the land for $650, the fair market value. Wilk immediately notified Dix that Wilk would not sell the land for $450. If Dix sues Wilk for specific performance, Dix will: A. prevail, because the amount of the contract was less than $500. B. prevail, because there was part performance. C. lose, because the fair market value of the land is over $500. D. lose, because the agreement was not in writing and signed by Wilk.

Q: Sean made an oral promise to sell a piece of land to Sean. Sean took a huge loan from the bank by mortgaging everything he had. After taking almost half the money from Manny, Sean decides that he wants to sell the land to Jason who is offering a higher price for the property. Which of the following doctrines can Manny take recourse to in order to implement his oral contract with Sean? A. Integration B. Subsequent agreement C. Confirmatory memorandum D. Part performance

Q: Most states' statutes of frauds do not require land leases to be in writing unless they: A. involve more than two parties. B. are ancestral property. C. are going to be sold permanently. D. are for a year or more.

Q: Why is the contract for the insurance of a building not covered within the real estate provision of the statute of frauds? A. It does not involve the transfer of interests in land. B. It involves a physical asset. C. It involves two or more parties. D. It need not be in writing.

Q: An oral contract for the sale of land that has been completely performed by the vendor: A. is part of the statute of frauds. B. can be enforced without any writing. C. needs to be signed by the parties. D. has to be testified by witnesses.

Q: Big Bank is a major creditor of Bonwill Department Store. After a major loss in profits due to poor holiday sales, Big Bank decides to help keep Bonwill from bankruptcy. Big bank orally promises Mary Tudor, a supplier to Bonwills, that it will guarantee Bonwill's payment for goods that Mary sells to Bonwill. Most likely, Big Bank's oral agreement: A. is unenforceable under the statute of frauds. B. is unenforceable because it is a collateral contract. C. is enforceable under the "main purpose" or "leading object" exception to the statute. D. is enforceable because a collateral contract is not covered under the statute of frauds.

Q: Jerry and Louise contract for Jerry to sell Louise his farm for $300,000. As part of the deal, Jerry throws in a pound of marijuana seeds, for which Louise is to pay an extra $1000. Louise's plan is to use the seeds to grow a marijuana crop. Is the whole contract or any part of the contract enforceable? Assume that both the sale of marijuana seeds and the cultivation of a marijuana crop are illegal.

Q: Which of the following is true of the statute of frauds? A. It prevents the use of oral evidence to contradict the terms of a written contract. B. It applies to all contracts having consideration valued at $500 or more. C. It requires the independent promise to pay the debt of another to be in writing. D. It applies to all real estate leases.

Q: Jan opens a sandwich shop across the street from another sandwich shop run by Amy. Amy is disturbed by this competition, and she agrees to pay Jan $5000, in exchange for Jan's promise to quit the business and not to engage in a similar business within ten-mile radius of Amy's business. Is this contract legal and enforceable? Why or why not? If the agreement is not enforceable, how might Jan and Amy restructure it to increase its chances of being legal?

Q: What is an exculpatory clause?

Q: Describe the three criteria that need to be fulfilled to enforcing a noncompetition clause.

Q: A contract is said to be _____that is, the legal part can be separated from the illegal partif the contract consists of several promises or acts by one party, each of which corresponds with an act or a promise by the other party. A. implied-in-fact B. voidable C. unenforceable D. divisible

Q: If part of an agreement is legal and part is illegal, the courts will: A. declare the entire agreement to be void. B. ask both the parties to ratify the agreement before considering it for evaluation. C. enforce the legal part so long as it is possible to separate the two parts. D. impose punitive damages on both the parties.

Q: Where no separate consideration is exchanged for the legal and illegal parts of an agreement, the agreement is said to be _____. A. unconscionable B. rescind C. indivisible D. adhesive

Q: Shoddy, the owner of Shoe Repair, was contemplating retirement. He therefore contracted to sell his business to Pauline Parker. Shoe Repair was located in Hoosierburg, Indiana, which has a population of 5,233. Apart from containing a provision entitling Parker to use the Shoe Repair name for the business, the parties' contract included a clause that prohibited Shoddy from opening any competing shoe repair shop in Hoosierburg for a period of one year from the date of the parties' contract. Two months after the date of the contract (and one and one-half months after the sale of the business to Parker had been completed), Shoddy grew tired of retirement. As shoe repair had been his life's work, he opened up a shoe repair shop in Hoosierburg. Parker has sued him in an effort to obtain an injunction against his operation of the competing business, alleging a violation of the parties' contract. How is the court likely to rule? Explain your reasoning.

Q: Wayne and Mia are friends in Idaho, where gambling is illegal and they are aware of it. Wayne and Mia bet $1,000 on which day Paradise Creek will flood its banks. They have no financial interest in Paradise Creek. Wayne wins this bet. Mia pays Wayne the $1,000, but later that day regrets it and sues Wayne to get her $1,000 back. The court would probably rule in favor of: A. Mia, since gambling was illegal. B. Mia, because a bet is considered to a form of an implied-in-fact contract. C. Wayne, because he won the bet fair and square, so the court will enforce the wager. D. Wayne, since the court will "leave the parties where it finds them" in cases like this.

Q: In technical legal terms, a party not equally in the wrong is said to be not in _____. A. res ipsa loquitur B. ab initio C. pari delicto D. ad idem

Q: Joe is the owner of the restaurant "Yummy Bites." Neil is an employee of a competitor's restaurant "Mom's Kitchen." Joe pays Neil $1000 to obtain recipes from "Mom's Kitchen." However later, Joe has second thoughts and forbids Neil to obtain such recipes. Joe wants to get his money back. Identify the most accurate statement that might help Joe. A. Joe can recover the amount because he has rescinded the contract before any illegal act has been done by Neil. B. Joe cannot recover the amount because he has entered into an illegal contract. C. Joe cannot recover the amount because such contracts are unenforceable and illegal. D. Joe can recover the amount because the contract between him and Neil is a quasi-contract.

Q: Amy is hired by BigMart as a cashier. At the time of hiring, Amy is required to sign an arbitration agreement under which she agreed to settle any and all claims she might have relating to her employment by final and binding arbitration before a neutral arbitrator and in accordance with BigMart's "Dispute Resolution Rules and Procedures" which is a separate ten-page document containing complex procedural details. Under the agreement, Amy is required to pay for all arbitration-related costs, and BigMart can still sue Amy in civil court for claims arising from her employment. A court will most likely view this agreement as: A. unenforceable since it is a quasi-contract. B. enforceable because it is an arbitration agreement. C. unconscionable because it is an adhesion contract that is oppressive. D. enforceable because it is part of a valid employment agreement.

Q: To determine _____ unconscionability, courts will scrutinize the contract terms themselves to determine whether they are oppressive, unreasonably one-sided, or unjustifiably harsh. A. procedural B. voidable C. substantive D. associative

Q: A _____ is a contract, usually on a standardized form, offered by a party who is in a superior bargaining position on a "take-it-or-leave-it" basis. A. quasi-contract B. contract of adhesion C. executory contract D. bilateral contract

Q: Toby, an Ohio real estate broker, misrepresented to Allen that Toby was licensed in Michigan under Michigan's statute regulating real estate brokers. Allen signed a standard form listing contract agreeing to pay Toby a 6% commission for selling Allen's home in Michigan. Toby sold Allen's home. Under the circumstances, Allen is: A. not liable to Toby for any amount because of the rule of mirror image which needs to be fulfilled for creating a binding contract. B. not liable to Toby for any amount because Toby violated the Michigan licensing requirements. C. liable to Toby only for the value of services rendered under the quasi-contract theory. D. liable to Toby for the full commission under the promissory estoppel theory.

Q: Which of the following is a possible example of procedural unconscionability? A. A clause excluding a seller's liability for consequential damages from a defective good. B. A clause imposing a penalty for failure to deliver the goods on time. C. A high price term in a contract. D. A fine-print price term in a contract.

Q: Courts may decline to enforce unconscionable terms or contracts. This provision has been laid down in: A. Section 12 of UCC. B. Section 208 of UCC. C. Section 4 of UCC. D. Section 208 of Restatement (Second) of Contracts.

Q: Which of the following is an example of substantive unconscionability? A. Terms that are stated in "fine print" B. A disparity in bargaining power between the parties C. High-pressure sales tactics D. Unjustifiably harsh terms

Q: _____ is generally taken to mean the absence of meaningful choice together with terms unreasonably advantageous to one of the parties. A. Unconscionability B. Illegality C. Adhesion D. Rescission

Q: Under the doctrine of _____, courts would refuse to grant the equitable remedy of specific performance for breach of a contract if they found the contract to be oppressively unfair. A. unconscionability B. mirror image C. community-of-interest D. contract bar

Q: Which of the following is most likely to be done by a court if it finds that a contract or a term in a contract is unconscionable? A. It will refuse to enforce the entire agreement. B. It will impose punitive damages on the guilty party. C. It will allow the injured party to recover damages. D. It will ask for arbitration in the matter.

Q: An agreement that unreasonably tends to interfere with family relationships will be considered _____. A. implied-in-fact B. valid C. exculpatory D. illegal

Q: Agreements made by unmarried people who are living together: A. are unenforceable regardless of their nature. B. are enforceable if they do not involve the division of property. C. are unenforceable if one of the parties is married to someone else. D. are considered to be against public policy.

Q: Which of the following was NOT taken into account by classical law in assessing contracts? A. Fraud B. Duress C. Misrepresentation D. Fairness

Q: Which of the following is also termed a "liability waiver"? A. exculpatory clause B. nondisclosure agreement C. confidentiality clause D. noncompetition clause

Q: A(n) _____ clause is a provision in a contract that purports to relieve one of the parties from tort liability. A. exculpatory B. implied-in-fact C. quasi D. expressed

Q: An exculpatory clause that protects a person from liability for fraud is: A. valid but unenforceable. B. valid if it is in writing. C. against public policy. D. valid if both parties agree.

Q: Which of the following is true regarding an exculpatory clause? A. It is illegal in nature. B. It is also termed a "release." C. It is invalid in negligence cases. D. It imposes strict liability on the guilty party.

Q: Which of the following constrains the employee from divulging or using certain information gained during his employment? A. nonsolicitation agreement B. nondisclosure agreement C. noncompetition clause D. deed of trust

Q: In which of the following situations is a court is most likely to refuse to enforce a noncompetition clause? A. The clause is not ratified by the employer. B. The employment contract which contains the clause is an implied-in-fact contract. C. The clause restricts employees from engaging in a "common calling." D. The employment contract which contains the clause is a quasi-contract.

Q: Paul is hired by Soprano as a security guard. At the time of hiring, Paul signs an agreement that relieves Soprano from workers' compensation liability. This agreement is most likely: A. enforceable because Paul and Soprano have equal bargaining power. B. unenforceable because it includes intentional torts. C. enforceable so long as the terms of the agreement are conspicuously disclosed. D. unenforceable as a violation of public policy.

Q: Which of the following is NOT a requirement in the enforceability of a noncompetition clause? A. The noncompetition clause must serve a legitimate business purpose. B. The noncompetition clause must be regarding the sale of goods. C. The restriction on competition must be reasonable in time, geographic area, and scope. D. The noncompetition clause should not impose an undue hardship.

Q: Noncompete clauses in contracts: A. are never enforced because they violate anti-trust laws. B. are never enforced because they are unethical. C. are always enforced under the doctrine of "freedom of contract." D. are enforced if found to be reasonable.

Q: Helga owns an insurance business in Idaho. Her clients are all Idaho residents. She later sells her business to Carlos. As part of the deal, the contract contains a noncompete clause that prevents Helga from operating an insurance business anywhere in Idaho, Washington, or Oregon for a period of five years. Six months after this sale, Helga opens an insurance business in Oregon. If Carlos seeks to enforce the noncompete agreement against Helga, will he probably be successful? A. Yes, because this agreement is reasonable. B. Yes, because the clause is not imposing an undue hardship. C. No, because this agreement is not reasonable. D. No, because the agreement is not yet converted into a treaty.