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Q:
On Tom's eighteenth birthday, he decides that he no longer wants to keep a car he bought from U-Pick Autos, when he was seventeen. His right to disaffirm the deal will depend on
A.the car's condition when Tom bought it.
B.the car's current condition.
C.whether Tom acts within a reasonable period of time.
D.whether U-Pick has the right to disaffirm.
Q:
Cielo is fifteen. In most states, Cielo would be considered a minor because she is under the age of
A.sixteen.
B.eighteen.
C.twenty.
D.twenty-one.
Q:
Boyd is a minor. As a minor, Boyd has the capacity to enter into
A.an invalid contract.
B.an unavoidable contract.
C.a valid contract.
D.no contract.
Q:
Ken relinquishes the right to his son Lee's control, care, custody, and earnings. This act is
A.a disaffirmance.
B.an emancipation.
C.a ratification.
D.restitution.
Q:
Cherry and Basil are minors who marry each other. Their minority status may be terminated under the laws of
A.all states.
B.most states.
C.some states.
D.no states.
Q:
Windshield Repair Shop (WRS) promises to pay Vincent $1,000 a week to work for WRS. Vincent accepts and quits his job with Ultra Glass. WRS fails to provide a job for Vincent. Vincent has a cause of action based on
A.an illusory promise.
B.a release.
C.past consideration.
D.promissory estoppel.
Q:
Fact Pattern 9-3
Dex and Carmen are in an auto accident. Dex offers Carmen $2,000 if she promises not to pursue her potential legal claim against Dex. Carmen agrees. Later, Carmen discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury.
Refer to Fact Pattern 9-3. In Carmen's suit against Dex to recover her repair and medical expenses, Carmen will most likely recover
A.half the amount to pay the costs over what Dex already paid Carmen.
B.nothing.
C.the estimated amount to pay those costs and any other liability.
D.the exact amount to pay those costs and no more.
Q:
Fact Pattern 9-3
Dex and Carmen are in an auto accident. Dex offers Carmen $2,000 if she promises not to pursue her potential legal claim against Dex. Carmen agrees. Later, Carmen discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury.
Refer to Fact Pattern 9-3. The agreement between Dex and Carmen is
A.a covenant not to sue.
B.an accord and satisfaction.
C.a release.
D.promissory estoppel.
Q:
Webline Retail Sales, Inc., promises its salaried employees a bonus at the end of the year if management thinks it is warranted. This promise is
A.enforceable.
B.unenforceable because it is not supported by consideration.
C.unenforceable because the dollar amount is missing.
D.unenforceable because the employees are paid salaries.
Q:
Todos Ltd. agrees to supply United Steel, Inc., with minerals from Venezuela. When the government is unexpectedly overthrown in a revolution, Todos can obtain the goods only at a much higher price. United agrees to pay but later files a suit to recover the difference. The court will most likely rule that
A.a change in government is a risk ordinarily assumed in business.
B.an unforeseen difficulty supported the contract modification.
C.Todos engaged in extortion or the so-called holdup game.
D.Todos had a preexisting duty to supply the goods at the initial price.
Q:
Baked Goods Company agrees to supply Comida Caf with all the corn chips that it requires for a year. A sudden demand for ethanol results in a shortage of corn, and the price rises sharply. Baked Goods asks Comida to pay a higher price for the chips. This request is
A.invalid as an attempt at extortion or the so-called holdup game.
B.invalid under the preexisting duty rule.
C.valid as a risk ordinarily assumed in business.
D.valid due to the unforeseen difficulty of the sudden price increase.
Q:
Fact Pattern 9-2
Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate.
Refer to Fact Pattern 9-2. If, as Brad claims, the consideration in this problem is inadequate, it may indicate a lack of
A.accord in Brad's satisfaction with the value of the deal.
B.bargained-for exchange or mutual assent.
C.flexibility on the part of College Credit to accommodate Brad's needs.
D."heft," "substance," or "weight" in the terms of the contract.
Q:
Fact Pattern 9-2
Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate.
Refer to Fact Pattern 9-2. "Adequacy" of consideration refers to
A."how much" consideration is given.
B.legally sufficient value in the eyes of the law.
C.the intangible value to a contracting party of a thing exchanged.
D.the substantiality of the consideration exchanged.
Q:
Fact Pattern 9-2
Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate.
Refer to Fact Pattern 9-2. A court is most likely to evaluate the adequacy of consideration if
A.a thing exchanged has no intangible value to one of the parties.
B.something exchanged is not of direct economic or financial value.
C.the items exchanged were of unequal value.
D.there is a gross disparity in the value of the consideration exchanged.
Q:
Quality Steel Corporation files a suit against Rite Tool Company, claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if
A.it is obvious that the consideration is adequate.
B.Rite Tool asserts that there is adequate consideration.
C.something of value passed between the parties.
D.the consideration is worth more than $100.
Q:
Fact Pattern 9-1
Dave's Hobby Town and Eva's Yarn Shoppe are adjacent stores with adjoining parking lots. Dave offers Eva a discount on purchases from Dave's store if Eva will not tow the cars of Dave's customers who park in Eva's lot.
Refer to Fact Pattern 9-1. Eva's forbearance from towing is legally sufficient consideration
A.because it is a promise of something of value.
B.only if Dave's customers park in Eva's lot.
C.only if Eva's customers cannot park in her lot because it is full.
D.under no circumstances.
Q:
Fact Pattern 9-1
Dave's Hobby Town and Eva's Yarn Shoppe are adjacent stores with adjoining parking lots. Dave offers Eva a discount on purchases from Dave's store if Eva will not tow the cars of Dave's customers who park in Eva's lot.
Refer to Fact Pattern 9-1. Dave's discount is legally sufficient consideration
A.because it is a promise of something of value.
B.only if Dave adds a cash rebate.
C.only if Eva uses it.
D.under no circumstances.
Q:
A severable contract is unenforceable as a violation of public policy.
Q:
An illegal contract is valid if the parties to it were unaware of the illegality.
Q:
An exculpatory clause in an employment contract is not enforceable if the clause is against public policy.
Q:
Adhesion contracts are often held to be contrary to public policy.
Q:
A covenant not to compete in the sale of an ongoing business is unenforceable.
Q:
A covenant not to compete is enforceable only if it is necessary to restrain trade.
Q:
If the purpose of a licensing statute is to protect the public from unlicensed practitioners, a contract with an unlicensed professional is illegal.
Q:
A usurious contract involves the purchase and sale of usable goods.
Q:
If there is a statute that prohibits a certain action, a contract to do it is unenforceable.
Q:
A guardian can enter into legally binding contracts on behalf of a mentally incompetent person.
Q:
A person who enters into a contract when he or she is intoxicated can void the contract if the terms are obviously favorable to the other party.
Q:
Parents are ordinarily liable for the contracts made by their minor children, even if the children acted on their own.
Q:
A minor's right to disaffirm a contract terminates sixty days after the contract's date.
Q:
Contractual capacity refers to the legal ability to enter into a contract.
Q:
An adult may avoid any contract with a minor.
Q:
A minor may disaffirm a contract only if the subject matter is illegal.
Q:
A minor may disaffirm a contract only after attaining the age of majority.
Q:
The doctrine of promissory estoppel requires a clear and definite promise.
Q:
A covenant not to sue is against public policy.
Q:
A covenant not to sue is the substitution of a contractual obligation for a legal action.
Q:
A release does not require consideration to be legally binding.
Q:
In most states, a release requires a signed writing.
Q:
An accord and satisfaction requires that the amount of a debt be certain.
Q:
An illusory promise is a promise that is enforceable without consideration.
Q:
A promise to pay for an act that has already occurred is enforceable because the event is certain.
Q:
Normally, a court of law will not question the adequacy of consideration.
Q:
Inadequate consideration may indicate undue influence.
Q:
Rescission is the substitution of one party to a contract for a third party, who agrees to assume the contractual duties.
Q:
Unforeseen difficulties that justify a demand for additional compensation include risks ordinarily assumed in business.
Q:
A promise to do something that one has a prior legal duty to do is not consideration.
Q:
A bargained-for exchange is one of the elements of consideration.
Q:
To be legally sufficient, consideration must include something of economic value.
Q:
For consideration to have "legally sufficient value," it must consist of goods or money.
Q:
In contract law, "consideration" refers to the time that a party takes to evaluate a deal.
Q:
In contract law, "consideration" refers to the courtesy that one party shows another in negotiating a deal.
Q:
An invitation to negotiate-"can you afford this?" -is an offer.
Q:
An invitation to submit bids-"how much would you charge to do this work?" -is an offer.
Q:
An expression of opinion-"your customers will like this"-is an offer.
Q:
An offeror's subjective intent determines the effectiveness of an offer.
Q:
An offer must be practical to be effective.
Q:
An effective offer requires reasonably certain terms.
Q:
An agreement is evidenced by a single event: an acceptance.
Q:
Myra owns a house, which she advertises for sale for $200,000. On May 1, Nicole offers Myra $180,000 for the house. On May 5, Myra delivers to Nicole a form that includes additional terms but does not state a price. At 9 a.m. on May 6, Nicole signs the form and gives it to Odell, her administrative assistant, with instructions to mail it. At 10 a.m., Myra calls to tell Nicole that the deal is off. The next day, Odell mails the signed form to Myra. When Myra refuses to sell the house, Nicole files a suit against her, alleging breach of contract. Myra claims that there was no contract. What are arguments supporting each party's position? What is the court likely to rule? Explain.
Q:
On May 1, Brand Name Industries, Inc. (BNI), sent Carol a letter, via overnight delivery, offering to employ her to audit BNI's financial statements for the current year for $10,000. In the letter, BNI stated that Carol had ten days to accept. On May 5, Carol sent BNI a fax that stated, "The price for the audit seems too low. Would you consider paying $12,000?" BNI received the fax. The next day, Dan offered to conduct the audit for $8,000. On learning of Dan's offer, Carol immediately e-mailed BNI, agreeing to do the work for $10,000. BNI received this e-mail on May 7. Explain why BNI and Carol do, or do not, have a contract.
Q:
Consumer Payments Processing Corporation (CPPC) and Mall Kiosk Company make a deal for CPPC's services, via e-records. Under the UETA, an e-record is considered received when
A.it enters the recipient's processing system in a readable form.
B.the recipient is aware of its receipt.
C.the recipient is aware that it has been sent.
D.it leaves the sender's control.
Q:
Beyond-the-Sea Corporation and Homeport Company make a deal for Homeport's products, via e-records. Under the UETA, an e-record is considered sent when it
A.is signed and encrypted, and will be sent without changes.
B.is stored in the sender's back-up system.
C.is composed on the sender's computer.
D.leaves the sender's control.
Q:
On behalf of Bay Oyster Company, Celia types her name at the bottom of an e-mail purchase order and submits the order to Deepwater Parts Company. Under the UETA, qualifying Celia's name as her "signature" is
A.attribution.
B.cybernotarization.
C.acceptance.
D.agreement.
Q:
Jaime and Kip, consumers, transact a deal over the Internet. Their contract does not mention the UETA. The UETA covers
A.none of the contract.
B.only the part of the contract that involves computer data.
C.only the part of the contract that does not involve computer data.
D.the entire contract.
Q:
Michelle gives out a business card with an e-mail address on it. According to the comments that accompany the UETA, it may be reasonable to infer that Michelle has consented to
A.transact business electronically.
B.submit to the jurisdiction of any selected forum.
C.accept and respond to any correspondence sent to that address.
D.nothing.
Q:
Order Processing Corporation and Pinpoint Data, Inc., enter into a contract online in a state that has enacted an unmodified version of the UETA. With regard to the E-SIGN Act
A.the E-SIGN Act does not preempt this version of the UETA.
B.the E-SIGN Act preempts this version of the UETA.
C.the "fit" between the acts is an issue for a court to determine.
D.the two acts "cancel" each other's application.
Q:
Lively Toys Store and Movin' Products Company (MPC) enter into an e-contract under which MPC agrees to ship a case of electronic, remote-controlled bugs to Lively Toys, which agrees to pay on delivery. The Uniform Electronics Transactions Act (UETA)
A.denies the enforcement of such contracts.
B.does not apply to such contracts.
C.preempts all other laws with respect to such contracts.
D.supports the enforcement of such contracts.
Q:
Dino and Elle engage in a transaction that involves e-documents. The E-SIGN Act applies if those documents include
A.a divorce decree or a prenuptial agreement.
B.a health-insurance termination.
C.an agreement subject to Article 2 of the Uniform Commercial Code.
D.an eviction or a foreclosure.
Q:
Nero and Oona negotiate a contract. Nero prints out a hard copy to review before both parties sign the electronic form of the contract. Neither party signs the hard copy. Under the Electronic Signatures in Global and National Commerce Act (E-SIGN Act), the signatures can
A.be denied effect because they are in electronic form.
B.be denied effect because Nero has not signed a hard copy.
C.be denied effect because Oona has not signed a hard copy.
D.not be denied effect because they are in electronic form.
Q:
Overnight Delivery Service delivers a package to Pam. At the request of Overnight's delivery person, to acknowledge receipt Pam signs a digital pad. This signing creates
A.a cybernotarized signature.
B.a digitized handwritten signature.
C.an asymmetric cryptosystemic signature.
D.a public-key infrastructure digital signature.
Q:
Mica buys "Nature," a movie, through Open View, an online entertainment vendor. Before completing the purchase and downloading "Nature," Mica must review a warning not to make and sell a copy of it. This warning is
A.a browse-wrap term.
B.a click-on agreement.
C.a shrink-wrap agreement.
D.none of the choices.
Q:
Final Foto, Inc., makes photo and video editing software, which includes a shrink-wrap agreement. Gert buys a package of the software. With respect to the contract for the software's purchase, the shrink-wrap agreement may not be enforced if
A.Gert does not read it.
B.Gert learns of it after contracting.
C.Gert learns of it before contracting.
D.the quality of the software is poor.
Q:
Lightspeed Corporation makes computers, each of which is packaged with a shrink-wrap agreement. Milo buys a Lightspeed desktop. The shrink-wrap agreement is most likely enforceable if
A.Milo buys the computer directly from Lightspeed.
B.Milo expressly agrees to the terms in the shrink-wrap agreement.
C.Milo reads the shrink-wrap agreement.
D.the terms in the shrink-wrap agreement concern warranties.
Q:
Magic Math Corporation makes business accounting software, which is packaged with a shrink-wrap agreement. National Distribution Company distributes the software to retailers, including an Office Stuff store, where Peg buys a package of it. The parties to the shrink-wrap agreement are
A.Magic Math and National Distribution only.
B.Magic Math and Peg only.
C.Magic Math, National Distribution, Office Stuff, and Peg.
D.Office Stuff and Peg only.
Q:
Jelly Jar Company includes in its online offers a provision that indicates any disputes arising under the contract must be resolved in Kansas. Lena, a resident of Maine, accepts Jelly Jar's offer. If a dispute arises, a court will most likely rule that it must be resolved in
A.Kansas.
B.Kansas or Maine.
C.Maine.
D.the location selected by the first party to file a suit.
Q:
Deb buys a song through eSongs, an online music vendor. Before completing the purchase and downloading the song, Deb must agree to a provision not to sell copies of the song. This provision is
A.a browse-wrap term.
B.a click-on agreement.
C.a shrink-wrap agreement.
D.none of the choices.
Q:
Flem, a user of GameCenter.com's Web site, can download gaming software for free if he first clicks on "I accept" after viewing certain terms. This is
A.a contract that does not include the terms.
B.a contract that includes the terms.
C.not a contract but the terms are enforceable.
D.unenforceable.
Q:
Bret enters into a contract with Collegiate University over the Internet to take an online course titled "Internet Law." This is an e-contract because
A.the contract was entered into over the Internet.
B.the contract was formed between a student and a university.
C.the contract will be performed online.
D.the subject matter of the contract is "Internet Law."
Q:
Tomato Farms (TF) offers to sell United Grocers, Inc., a boxcar load of tomatoes. The offer is sent via fax. An acceptance is required urgently. It would be most reasonable for United to accept via
A.a fax, a letter, or a phone call to TF within two weeks.
B.a fax sent to TF as soon as the offer is received.
C.a letter mailed to TF within two days.
D.a phone call to TF within five business days.