Q&A Hero

Q: Consideration does not require that the benefits and sacrifices promised between the parties be legal.

Q: Promising not to sue is not forbearance.

Q: Mike and Mickey live at the opposite ends of Texas, some 750 miles apart. They want to make a contract via computer rather than using paper since this will be faster and more convenient. Considering the three current model codes, what steps must Mike and Mickey take under each to make a legal binding agreement?

Q: Shelly met with an auto accident and was admitted in a hospital, as she had suffered severe injuries. She informed the hospital staff that she was covered under accident insurance, and that the insurance company would pay for the medical bills. The insurance agent arrives and empathizes with Shelly. He informs her that the insurance will cover every cost and that she will have to sign some papers for the insurance company to start the procedures. The papers that Shelly signs are actually an agreement that the insurance company will pay only 30 per cent of the medical bills, since Shelly was driving recklessly. Analyze the case.

Q: Uncle Joe promises Mary a new car on her birthday. This is a contract.

Q: Danny agrees not to go duck hunting if "Save the Ducks" pays him $100. This is forbearance on Danny's part.

Q: Alpha Oil Company sends an offer by fax to Zeno Refining Co. to sell 10,000 barrels of crude oil at $35 per barrel, and mentions it will hold the offer open for Zeno. Four months after receiving Alpha's offer, Zeno faxes an acceptance to Alpha. However, at this time the market price of crude oil has risen to $40 per barrel. Discuss the situation.

Q: Juliana offers in writing to sell her book collection to Linda for $15,000. Three days later, before Linda accepts, Juliana dies and her heirs tell Linda that the $15,000 offer is revoked and that they will not sell the collection for less than $20,000. One week after the original offer was made by Juliana, Linda sends a signed acceptance of Juliana's $15,000 offer. Has the contract been formed? Explain.

Q: Melinda is considering opening a fast-food business across the street near a university campus. Melinda needs to secure $100,000 in loans to open her business. The owner of the land promises her that she has two months to accept his offer of $50,000 for the land. Discuss how Melinda can ensure that the owner does not sell the land to another buyer.

Q: Joseph offered to sell Chelsea his bicycle for $100. Chelsea told Joseph she would be happy to buy his bicycle, and asked if the price included an extra tire. Joseph said there was no extra tire. Chelsea then agreed to pay $100 for the bicycle, but Joseph refused to sell stating that he now wanted $125 for the bicycle and that Chelsea had made a counteroffer when she mentioned an extra tire. Discuss whether or not Joseph may insist on receiving $125 for the bicycle.

Q: Girard University offered Steamer Ferris a professional position. Girard offered to provide Steamer a house and to pay him an annual salary of $50,000 plus benefits for teaching three classes per semester. Steamer agreed to the contract as long as Girard would also provide an administrative position for his wife. Discuss the agreements between the parties.

Q: Todd offered in writing on Monday to sell his desk to Mike for $150. Todd's offer stated that unless Mike rejected Todd's offer by Thursday, it would be considered accepted. Mike did not reply until Saturday, when he rejected the offer and refused to buy the desk. Todd insists that Mike is bound to purchase the desk since he did not reject the offer by Thursday. Discuss the validity of the contract and the legal obligation of Mike.

Q: According to the E-Sign Act: A. diverse areas such as database contracts, software licensing agreements, customized software formulation, and the rights to multimedia commodities are covered. B. the participants must concur on the use of an electronic medium to create their contractual relationship. C. e-contracts that are entered into over the Internet will be valid, provided that the parties to the e-contract have agreed that electronic signatures will be used.

Q: The _____ has unified, streamlined, and refined the legal principles regarding such diverse areas as reverse engineering, consumer protection, shrinkwrap licenses, fair use, and consumer warranties. A. Law Enforcement Access to Entity Information Act B. Discovery of Electronically Stored Information Act C. Uniform Computer Information Transactions Act D. Secured Electronic Transactions Act

Q: _____ occurs when one party does not say something about certain facts that he or she is under an obligation to reveal. A. Passive fraud B. Fraud inducement C. Fraud in inception D. Active Fraud

Q: A _____ is a mistake made by only one of the contracting parties and does not offer sufficient grounds for rescission or renegotiation. A. Unilateral mistake B. Mutual mistake C. Binding mistake D. Bilateral mistake

Q: _____ occurs when the dominant party in a special relationship uses excessive pressure to convince the weaker party to enter a contract that greatly benefits the dominant party. A. Business compulsion B. Physical duress C. Undue influence D. Economic duress

Q: When Garibaldi rented an office from Jonas, he agreed, as the landlord, to pay a fair share of the expenses in redecorating the office. After the project was completed, Jonas refused to pay any of the expenses. Analyze the situation in case Garibaldi files a lawsuit against Jonas for breach of contract.

Q: Dale offers via newspaper advertisement a $100 reward for the return of his dog. Henry, who never saw the newspaper advertisement, finds that a dog has strayed into his garden. Henry checks the dog's collar that has a tag with Dale's address and returns the dog, not knowing of the offer. Is Henry legally entitled to the $100 reward? Explain.

Q: Brett offers to dust and vacuum all the rooms in Arlene's apartment for $45. Arlene says she will accept his offer if he lowers his fee to $40. Arlene has: A. made an unequivocal acceptance. B. made a counteroffer. C. demonstrated the mirror image rule. D. entered into an option contract.

Q: Delivery of unordered merchandise through the mail: A. can be considered as gifts the receiver does not have to pay for. B. requires that the receiver contact the sender and return the goods. C. is an implied acceptance of the offer to sell goods. D. requires that the receiver pay for the goods.

Q: Mercedes receives a box of unordered office supplies in the mail. What is her legal obligation? A. She must return it. B. She must report this to the local postal inspector. C. She must pay for it. D. She may consider it a gift.

Q: An option contract: A. removes the possibility of revocation through death or insanity of the offeror. B. is valid only if in return for the agreement to hold the offer open, the offeror receives no money or something else of value from the offeree. C. is a contract that permits a party to lease real property while at the same time holding an option to purchase that property. D. is an agreement that binds an offeror to a promise to hold open an offer with no time limit specified.

Q: While looking for apartments, Brittany finds one that she likes. The building manager agrees to an option contract in which he will hold the apartment for Brittany for four days in return for $100. At the end of the fourth day, Brittany finds another apartment that she likes better and signs a lease with its building manager. Because Brittany's contract with the original building manager is an option contract, the building manager: A. is under no legal obligation to return more than $50 to Brittany. B. is under legal obligation to return Brittany's $100 payment. C. is under legal obligation to return half of Brittany's $100 payment. D. is under no legal obligation to return Brittany's $100 payment.

Q: Booksellers, Inc. agrees in writing to hold an offer open to Smallville City Library, the selling of 20,000 books at $5 each. Booksellers specifically mentions that Smallville has 60 days to accept this offer. However, before the 60 days have passed, Booksellers sells all the books to Universal Library for $7 each. Which of the following is true of this situation? A. Smallville cannot file a legal claim since an offer may be revoked prior to acceptance. B. Smallville can file a legal claim since Booksellers have revoked a firm offer. C. Smallville had not paid any of the purchase prices and hence cannot file a lawsuit. D. Smallville can bring a lawsuit since Booksellers engaged in bait-and-switch tactics.

Q: An agreement in which one party consents to sell to a second party all of the goods that party makes in a given period of time is ____. A. a requirements contract B. a current market price contract C. a cost-plus contract D. an output contract

Q: Highflight Foundation offers $1 million to the makers of the first private spacecraft to fly to the moon and back. Spaceview, Inc. succeeds in producing the first private spacecraft to fly to the moon and back, but Highflight refuses to pay. Is Highflight bound by its offer? A. Highflight is not bound unless there is a written and signed contract with Spaceview. B. Highflight is bound since Spaceview performed the required action. C. Highflight is not bound since the moon is not under U.S. legal jurisdiction. D. Highflight is bound since Spaceview had a firm offer.

Q: Anthony offers to sell a computer to Salvador for $900 if Salvador replies by e-mail only, sent no later than noon on Saturday. On Saturday, Salvador is unable to access his e-mail, so he mails an acceptance at the post office before noon. Which of the following is true of the situation? A. A legal contract exists since Salvador's acceptance was sent by noon on Saturday. B. No contract exists since Salvador's acceptance is not effective until reviewed. C. Anthony is legally bound to the contract since Salvador's e-mail malfunction was no fault of his own. D. A legal contract does not exist since the mode of acceptance specified in the offer was not used.

Q: Rosa sends an offer to Kellen that requires acceptance to be made by U.S. mail. Kellen accepts in a timely manner but sends the acceptance by FedEx which delivers the acceptance to Rosa two days faster than the U.S. mail would. Has Kellen accepted Rosa's offer? A. No, since the offer specified a particular manner of acceptance that was not used. B. Yes, since FedEx was faster than the U.S. mail. C. No, since the acceptance was delivered by a private rather than a public delivery service. D. Yes, since acceptance sent in any form, even if early or delayed confirms the offer.

Q: Soft Feet, Inc. manufactures shoes. Walk Style, Inc. is a retailer of shoes. Soft Feet offers to sell Walk Style 1,000 pairs of shoes at $5 per pair with delivery to be made by October 31. Walk Style accepts but the acceptance requires delivery to be made by October 20. What is the legal status of Walk Style's October 20 delivery date? A. It is does not comply with the elements of a contract. B. It binds the offeror to accept the conditions about the delivery date. C. It is effective only if the original offeror accepts. D. It is invalid under the mirror image rule.

Q: A "click-on" acceptance is a valid method of accepting an e-contract.

Q: ________________ is the first of the four elements of a valid contract. A. Consideration B. Capacity C. Mutual assent D. Legality

Q: Silas, upset because his new car broke down, yells that he would "sell this piece of junk for $100." Ida overhears Silas and says, "I accept and will pay you $100." Silas A. must sell his car for $100 since his statement was clear and definite. B. need not sell his car for $100 since he was clearly angry. C. must sell his car for $100 but only if he were speaking directly to Ida. D. must sell his car for $100 because his anger does convey serious intent.

Q: Hazel offers to sell her home to Mandisa for "about $100,000 plus closing costs." Mandisa accepts Hazel's offer but a dispute arises concerning the precise dollar amount of the purchase price. How will a court resolve this dispute? A. The court will declare the purchase price and terms too indefinite to create a binding contract. B. The court will determine a reasonable price to be paid by Mandisa. C. The court will appoint a licensed real estate appraiser to determine the price to be paid by Mandisa. D. The court will require Mandisa to pay the average of her price and Hazel's price.

Q: Matrix Corporation, manufacturers of computers, agrees in advance to purchase from Chipmaster, Inc., all the computer chips that Matrix needs for the next year at current average market prices. Matrix later does not purchase any computer chips that year. Can Chipmaster enforce the agreement made with it? A. Yes, this is a requirement contract. B. No, the price is not sufficiently defined. C. No, the agreement to purchase is illusory. D. Yes, this is an output contract.

Q: An option contract holds an offer open for an agreed period of time.

Q: A merchant's firm offer can exceed three months in duration.

Q: A lease option permits a party to lease real property while at the same time holding an option to purchase that property.

Q: An e-contract is as valid as a paper contract.

Q: UCITA covers diverse areas such as database contracts and software licensing agreements.

Q: Leo offers to sell his ranch to Iris for $500,000, but before Iris accepts, Leo dies. Leo's heir has no obligation to honor the contract.

Q: On June 7, Sagan mails an acceptance of Randi's mailed offer to her. The acceptance is received by Randi on June 10. The acceptance occurred on June 7.

Q: According to the UCC, a contract comes into existence if any reasonable means is used to communicate the acceptance.

Q: Omar offers to sell a motorcycle to Adanne for $10,000. Adanne replies, "I will pay $10,000 if you overhaul the engine." Adanne's reply is within the mirror image rule's requirements.

Q: Josephine offers to sell Russell her car for $5,000. Russell rejects her offer but a day later, before Josephine has taken any additional action, communicates an acceptance. Josephine must sell Russell her car for $5,000.

Q: A newspaper advertisement addressed to "Ohio residents only" would be a private offer.

Q: Henry sends an e-mail to Bernice regarding the sale of his truck to her for a price "to be determined in good faith." Henry has made a valid offer.

Q: Most of the time, an advertisement is specific enough to constitute an offer.

Q: Acorn Outfitters advertises a large tent, usually selling for $250, to be sold to the first customer the next morning for $25. Samuel is the first in line but Acorn claims that the tent has already been sold. Acorn has engaged in a bait-and-switch confidence game.

Q: An acceptance becomes complete as soon as the offeror hears the words of acceptance spoken by the offeree.

Q: Emerson, a wealthy man, has a special seal made that contains his family crest and motto. Emerson places the seal impression next to his name on every contract that he signs in order to prove that other contracts containing a signature without the impression are forgeries. Discuss the type of contract Emerson makes.

Q: Fraser entered into a written contract with the Plastica Company to purchase 100 plastic black bats for a Halloween party he was hosting. The terms of the contract called for Plastica to deliver all 100 bats by October 25. On October 20, Fraser received from Plastica 85 plastic bats and 15 paper red bats. A letter accompanying the shipment stated, "We no longer make plastic black bats. For the inconvenience, we will charge you 15 percent less than the price we originally agreed upon." Was the contract between Fraser and Plastica an executed contract? Explain.

Q: In the case of an open offer, there must be serious intent, clear and reasonably definite terms, and communication to the offeree.

Q: Teri sends an offer to Morris to sell her car for its Blue Book value. Morris is the offeror.

Q: A current market price contract is one in which the market is determined by references to the price of goods on a specific date.

Q: Foster Aircraft Co. has agreed with the U.S. government to rapidly produce a new fighter aircraft in exchange for specified production expenses and a 10% profit. This is a cost-plus contract.

Q: Jackie takes her car to the All Clean Car Wash and watches the employees mistakenly give her car a special $30 hand wax treatment rather than the $5 spray wax she requested. Jackie refuses to pay $30 saying that she requested a service that would cost her only $5. Analyze the case.

Q: Ruben promises to pay Talana $200 if she steals Jessica's business law textbook. Talana steals the business law book but Ruben, who now feels guilty for his act, refuses to pay Talana and asks her to return the book. Discuss ways in which Reuben has breached the contract.

Q: Georgia purchases what proves to be a defective product from ZBest Enterprise to give to her best friend, Sarah, on her birthday. Georgia refuses to take legal action against ZBest because she is afraid of confrontation. Sarah, wanting to help Georgia, and angry at ZBest, wants to sue ZBest. Discuss the options Sarah has to sue the company.

Q: Shannon offered a $50 reward for the return of a lost kitten. When Mark found the kitten and returned it to Shannon, she refused to give him the reward because he had not promised to find the kitten before he went looking for it. Analyze the case.

Q: Charleen goes to Big Basket Supermarket and fills her cart with food, pushing it up to a checkout line. Discuss the type of contract Charleen and Big Basket have.

Q: A contract implied by the direct or indirect acts of the parties is known as a(n): A. express contract. B. implied-in-fact contract. C. unilateral contract. D. void contract.

Q: The quasi-contract: A. does not result from the mutual assent of the parties. B. can be applied even when one party bestows a benefit on another unnecessarily. C. cannot be imposed by a court. D. can be implemented to obtain payment for an act that a party simply feels should be done.

Q: An informal contract is also known as a(n): A. void contract. B. quasi-contract. C. implied-in-fact contract. D. simple contract.

Q: Eloise made a contract in January that gave her until the end of the year to complete her work on a new computer system for Dexter. In mid-July, Eloise is working on the computer system. The contract in July is: A. executory. B. unenforceable. C. being expressed. D. executed.

Q: Donita, 34, and Terry, 25, enter a contract which stipulates that Donita will allow Terry to occupy her apartment for six months, beginning next month. Terry has agreed to pay a rent of $100 per month. Discuss the elements that make this contract legally binding for Terry and Donita.

Q: Mark was speeding on the highway when he and John had a car accident and suffered serious head injuries. As a result, John's memory was affected and he could not remember any of the incidents on the day of the crash, including the fact that Mark's rash driving caused the car crash. At the hospital, Mark, who has suffered minor injuries, convinces John that the crash was no one's fault and just bad luck. John is empathetic and signs a contract with Mark stating that neither party would sue the other for damages. However, Lily, who was with John in the car, knows that Mark was responsible and challenges the contract in court, in addition to filing a lawsuit against Mark. Analyze the case.

Q: Beth, 15, enters into a written contract with Joan, also 15. In the contract, Beth agrees to do Joan's math homework for two weeks for $50, which Joan agrees to pay at the end of the two-week period. This contract is: A. implied-in-law. B. void. C. unenforceable. D. voidable.

Q: Which of the following cannot be upheld by a court of law because of some rule of law? A. Unenforceable contract B. Valid contract C. Voidable contract D. Void contract

Q: Henrietta offers a $500 reward for the return of Fifi, her lost dog. Silas finds and returns the dog. This is an example of a(n): A. bilateral contract. B. unilateral contract. C. quasi-contract. D. unenforceable contract.

Q: Webtel Services, Inc. and Acme Co. sign a document which states that Webtel Services will create a web page for Acme and that Acme will pay for this work. This is an example of a(n): A. void contract. B. unilateral contract. C. express contract. D. implied-in-law contract.

Q: In terms of written contracts, which of the following statements is true? A. A written contract has to be a formal preprinted agreement. B. A written contract cannot be keystroked or scrawled. C. Sales slips and receipts are not forms of written contracts. D. A written contract can be a notation or a memorandum.

Q: A(n) _____ type of contract may be canceled by one of the parties. A. unenforceable B. void C. voidable D. valid

Q: The rule that an innocent party is not permitted to take advantage of a breach by deliberately raising the level of damages that the other party will have to pay as a consequence of the breach is known as: A. duty to mitigate. B. punitive damages. C. equitable remedies. D. specific performance.

Q: The _____ is a model set of laws designed to govern almost all commercial transactions. A. Uniform Contract Law Code B. Uniform Common Code C. Uniform Civil Code D. Uniform Commercial Code

Q: In terms of "contracts and other agreements", which of the following statements is true? A. The courts have been agreeable to the enforcement of social agreements. B. All agreements are contracts, but not all contracts are agreements. C. An agreement may or may not be legally enforceable. D. To be enforceable, an agreement must be in written form.

Q: Matrix, Inc. contracts with Smalltown Economic Development Corp. to build a factory in Smalltown that will employ 10,000 workers. Matrix later breaches this contract. Smalltown citizens who are unemployed sue Matrix for breach of its contract. Matrix's best defense to citizen suits involves the legal doctrine of: A. unenforceable contracts. B. executed contracts. C. privity of contract. D. implied-in-fact contract.

Q: Which of the following contracts should be in writing to be enforceable in courts under the Statute of Frauds? A. Contracts that can be completed within one year. B. Contracts to pay the debt of another. C. Contracts involving sale of all types of goods. D. Contracts in consideration to employment.

Q: The quasi-contract concept may be applied as a means of obtaining payment.

Q: _____ outlines the laws and the procedures followed by merchants in commercial transactions. A. Contract law B. Commercial law C. Trade law D. Mercantile law