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Business Law Exam 3

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Quiz on Business Law Exam 3, created by Marissa Boretz on 09/11/2014.
Marissa Boretz
Quiz by Marissa Boretz, updated more than 1 year ago
Marissa Boretz
Created by Marissa Boretz over 9 years ago
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Resource summary

Question 1

Question
To make an offer, the offeror must appear to intend to create a binding obligation
Answer
  • True
  • False

Question 2

Question
Generally, advertisements, catalog prices, and circulars are offers that can be accepted
Answer
  • True
  • False

Question 3

Question
Social invitations can be offers
Answer
  • True
  • False

Question 4

Question
Advertisements that call for an act may be deemed to be a unilateral contract
Answer
  • True
  • False

Question 5

Question
If an offer is indefinite or vague, no contract arises from an attempt to accept it
Answer
  • True
  • False

Question 6

Question
Contractual intention is determined by objective standards
Answer
  • True
  • False

Question 7

Question
An otherwise vague contract may be clarified by references in the contract to other documents or agreements
Answer
  • True
  • False

Question 8

Question
An agreement cannot be enforced if it does not set forth every contractual detail
Answer
  • True
  • False

Question 9

Question
Contract terms may not be implied from conduct
Answer
  • True
  • False

Question 10

Question
When it is claimed that a contract is too indefinite to be enforced, a court will do its best to find the intent of the parties and thereby reach the conclusion that the contract is not too indefinite
Answer
  • True
  • False

Question 11

Question
A "best efforts" clause is always deemed too indefinite to be enforceable
Answer
  • True
  • False

Question 12

Question
A requirements contract is too vague to be a legally-enforceable agreement
Answer
  • True
  • False

Question 13

Question
An output contract is too vague to be a legally-enforceable agreement
Answer
  • True
  • False

Question 14

Question
An offer is effective only if it is communicated by the offeror in person
Answer
  • True
  • False

Question 15

Question
An offer gives the offeror the power to bind the offeree by contract
Answer
  • True
  • False

Question 16

Question
A revocation of an offer is ordinarily effective only when it is communicated to the offeree
Answer
  • True
  • False

Question 17

Question
Offers, acceptances of offers, and revocations of offers are all effective when mailed in a properly addressed envelope bearing the proper amount of postage
Answer
  • True
  • False

Question 18

Question
An option contract is a binding promise to keep an offer open for a stated period of time or until a specified date
Answer
  • True
  • False

Question 19

Question
An option is itself a contract to refrain from revoking an offer
Answer
  • True
  • False

Question 20

Question
A firm offer is an offer that states that it is to irrevocable, or irrevocable for a stated period of time
Answer
  • True
  • False

Question 21

Question
If the offeree purports to accept an offer but in so doing makes any change to the terms of the offer, such action is a counteroffer that rejects the original offer
Answer
  • True
  • False

Question 22

Question
If no time is stated for the duration of an offer, it continues indefinitely if the offer relates to durable goods or land
Answer
  • True
  • False

Question 23

Question
If an offer does not state how long it shall remain open, it remains open for ten days
Answer
  • True
  • False

Question 24

Question
If either the offeror or offeree dies or becomes mentally incompetent before the offer is accepted, the offer is automatically terminated
Answer
  • True
  • False

Question 25

Question
An acceptance must be absolute and unconditional
Answer
  • True
  • False

Question 26

Question
The fact that there has been a series of contracts between the parties and that one party's offer has always been accepted before by the other does not create any legal obligation to continue to accept subsequent offers
Answer
  • True
  • False

Question 27

Question
A party to existing contract can modify the agreement without the other party's actual acceptance or approval
Answer
  • True
  • False

Question 28

Question
Acceptance of an offer to form a unilateral contract need not be communicated to the offeror to be effective
Answer
  • True
  • False

Question 29

Question
A properly mailed acceptance takes effect when mailed, even if it never is received by the offeror
Answer
  • True
  • False

Question 30

Question
At an auction sale, a statement made by the auctioneer to draw forth bids constitutes an offer
Answer
  • True
  • False

Question 31

Question
The willingness of an offeror to enter into a contractual agreement regarding a particular subject is expressed by a(n)
Answer
  • offer
  • acceptance
  • contract
  • agreement

Question 32

Question
If not an offer, the first statement made by one of two persons is most properly termed a(n):
Answer
  • option
  • acceptance
  • invitation to negotiate
  • contract

Question 33

Question
A customer went into a store and saw a beautiful leather jacket bearing a price tag of $29. The customer handed the cahsier a $50 bill and said, "I accept, We have a deal." The cashier then noticed the price tag and told the customer an error had been made and that the price was $229. In this case:
Answer
  • the customer validly accepted the stores offer
  • the price tag was a firm offer
  • no contract was formed because the customer's offer was refused
  • the customer is the offeree

Question 34

Question
A customer requested a price from a carpenter on a teak cabinet to be built according to the buyer's specifications. Because teak wood is difficult to obtain, the customer agreed to pay the cost of the wood plus $175 and the carpenter agreed to build it. Which of the following is correct?
Answer
  • Although the price is somewhat unclear, the parties have entered into a contract
  • This is an agreement to agree, and is not binding
  • This agreement fails for indefiniteness
  • The carpenter is bound by the agreement, but not the customer

Question 35

Question
An offer that is indefinite may be clarified by reference to another writing through
Answer
  • incorporation
  • reference
  • annotation
  • indexing

Question 36

Question
An agreement that consists of two or more parts and calls for corresponding performance of each part by the parties is called a
Answer
  • partial contract
  • divisible contract
  • performance contract
  • divided

Question 37

Question
If an offeree accepts an offer before it is effectively revoked
Answer
  • a void contract is formed
  • a voidable contract is formed
  • an unenforceable contract is formed
  • a valid contract is formed

Question 38

Question
A(n) ___________ contract is a contract to buy all requirements of the buyer from the seller
Answer
  • output
  • essentials
  • necessaries
  • requirements

Question 39

Question
Under the Uniform Commercial Code (UCC); a firm offer applies to:
Answer
  • a written, signed offer by a merchant to buy or sell goods
  • an unwritten but definite offer to buy or sell goods
  • a written, signed offer by anyone to buy or sell goods
  • an unlimited, stipulated period of time

Question 40

Question
A counteroffer is a(n):
Answer
  • acceptance of the original offer
  • rejection of the original offer
  • acceptance of the original offer and invitation to further negotiate
  • a revocation of the original offer

Question 41

Question
A said to B, "I'll give you $100 for that bracelet." B replied, "$135." A said, "no thanks." B then said that B accepted the $100, but A was no longer interested and said there was no contract. B insists there is a contract. Result?
Answer
  • A's offer of $100 was open and accepted by B, thereby forming a contract
  • B's counteroffer of $135 terminated A's offer of $100
  • B's statement, "$135." was a negotiating statement that did not terminate A's original offer of $100
  • A's offer of $100 was irrevocable

Question 42

Question
An offer is terminated upon rejection by the offeree unless
Answer
  • the period of time for which the offeror agreed to keep the offer open has not yet expired
  • the offeror renews the offer
  • the offeree revokes the rejection
  • the offeree makes a counteroffer

Question 43

Question
If no termination date is specified for an offer, the offer will remain open
Answer
  • for one year
  • for six months
  • for a reasonable period of time
  • until someone accepts the offer

Question 44

Question
If an offeree dies before the offer has been accepted, the offer:
Answer
  • may be rejected by the surviving spouse of the offeree
  • may be accepted by the surviving spouse of the offeree
  • is automatically revoked by the death of the offeree
  • may be accepted by the guardian appointed for any minor children of the offeree

Question 45

Question
In general, an acceptance occurs when:
Answer
  • A particular form of words is stated to the offeror
  • a particular mode of expression is made to the offeror
  • the offeree reserves the right to reject the offer
  • a clear expression of the offeree's agreement to be bound by the terms of the offer occurs

Question 46

Question
When an offer has been accepted:
Answer
  • a subsequent revocation of the offer may serve to nullify the resulting contract
  • a contract is formed, assuming that all of the other elements of a contract are present
  • either party may withdraw from the resulting contract without consent
  • the acceptance is executory

Question 47

Question
If an offer requires that acceptance be communicated by a specific date and the acceptance is properly dispatched by the offeree on the final date,
Answer
  • no contract is formed, since the offeror will undoubtedly receive the dispatched acceptance after the deadline for acceptance
  • a contract is formed, but the contract is voidable at the election of the offeror
  • the acceptance is timely and a contract is formed, even though the offeror actually receives the acceptance by the deadline specified for acceptance
  • the acceptance is timely and a contract is formed, but only if the offeror actually receives the acceptance by the deadline specified for an acceptance

Question 48

Question
In an auction _________, the auctioneer takes bids as a gent for the seller with the understanding that no contract is formed until the seller accepts the transaction
Answer
  • without reserve
  • with reserve
  • without preserve
  • with preserve

Question 49

Question
At an auction sale, each bid is:
Answer
  • a counteroffer to the auctioneer's offer of the merchandise
  • an acceptance of the auctioneer's offer
  • an invitation to negotiate
  • an offer

Question 50

Question
Arthur made a bid at an auction by calling out of the amount of $250. The auctioneer ackowledged Arthur's bid. There were no higher bids, and before the fall of the auctioneer's hammer, Arthur announced that he was withdrawing the bid. The auctioneer said that it was too late for Arthur to withdraw his bid, because the bid had already been acknowledged. What is the result?
Answer
  • Arthur's bid is an ordinary offer that can be revoked
  • Arthur's bid is firm and cannot be withdrawn
  • Since the auctioneer had in fact acknowledged Arthur's bid, the bid became an option exercisable at the election of the seller
  • Since the auctioneer had in fact acknowledged Arthur's bid, a contract had been formed by way of offer and acceptance; accordingly, Arthur's subsequent attempt to withdraw his bid was ineffective

Question 51

Question
Certain persons cannot make contracts that will bind them
Answer
  • True
  • False

Question 52

Question
Contractual capacity can exist even though a party does not understand every provision of the contract
Answer
  • True
  • False

Question 53

Question
Ordinarily, every party to a contract is presumed to have a contractual capacity until the contrary is shown
Answer
  • True
  • False

Question 54

Question
Discriminatory and punitive in-capacities have largely disappeared
Answer
  • True
  • False

Question 55

Question
Factual incapacity is imposed because of the class or group to which a person belongs
Answer
  • True
  • False

Question 56

Question
A factual incapacity may exist when, because of a mental condition caused by medication, drugs, alcohol, illness, or age, a person does not understand that a contract is being made or understand its general nature
Answer
  • True
  • False

Question 57

Question
Generally, when a person of legal age makes a contract with a minor, the contract is voidable by either party
Answer
  • True
  • False

Question 58

Question
When a minor avoids contracts, the minor always must return the other contracting parties to their original financial positions
Answer
  • True
  • False

Question 59

Question
The "necessaries" of minors are precisely defined by law
Answer
  • True
  • False

Question 60

Question
When necessary medical care is provided to a minor, a parent is liable at common law for the medical expenses provided the minor child
Answer
  • True
  • False

Question 61

Question
At common law, a minor cannot be held contractually liable for his or her necessary medical expenses when the parent is unable or unwilling to pay
Answer
  • True
  • False

Question 62

Question
Ratification consists of any words or conduct of a former minor manifesting an intent to be bound by the terms of a contract made while a minor
Answer
  • True
  • False

Question 63

Question
A contract made by an incompetent person after a guardian has been appointed is voidable
Answer
  • True
  • False

Question 64

Question
An incompetent person may ordinarily avoid a contract in the same manner as a minor
Answer
  • True
  • False

Question 65

Question
A person who has drunk too much alcohol at a party and signs a contract may be able to rescind that contract
Answer
  • True
  • False

Question 66

Question
A unilateral mistake as to a fact does not affect the contract when the mistake is unknown to the other contracting party
Answer
  • True
  • False

Question 67

Question
The seller of a painting is not bound by the sales contract if the painting purchased was considered of little value and only later discovered to be valuable to the surprise of both buyer and seller
Answer
  • True
  • False

Question 68

Question
A party who speaks with a reckless disregard for the truth not knowing of the falsity of his or her words cannot be liable for fraud
Answer
  • True
  • False

Question 69

Question
Fraud requires a misstatement of either a fact or an option
Answer
  • True
  • False

Question 70

Question
Fraud requires intent that the listener rely on the false statement of fact
Answer
  • True
  • False

Question 71

Question
In order for fraud liability to arise, the listener must actually rely on the false statement of fact
Answer
  • True
  • False

Question 72

Question
Ordinarily, a party to a contract has no duty to volunteer information to the other party
Answer
  • True
  • False

Question 73

Question
As a general rule, the nondisclosure of information that is not asked for does not impose fraud liability or impair the validity of a contract
Answer
  • True
  • False

Question 74

Question
A claim of undue influence will be unsuccessful unless the contracting parties have a close relationship of trust
Answer
  • True
  • False

Question 75

Question
A contract obtained by physical duress is void
Answer
  • True
  • False

Question 76

Question
Contractual capacity is the ability to
Answer
  • read and write
  • sign a written contract
  • understand that a contract is being made and to understand its general nature
  • understand the legal meaning of the contract being made

Question 77

Question
A person lacks contractual capacity if
Answer
  • the person is a chronic alcoholic
  • the person is a drug addict
  • because of mental impairment, the person does not comprehend that a contract is being made or understand its consequences
  • all of the above

Question 78

Question
The key time for determining whether a party lacked contractual capacity is
Answer
  • the time the contract was made
  • the time the value of the bargain becomes clear
  • the time set for performance of the contract
  • the time the plaintiff expresses dissatisfaction with the contract terms

Question 79

Question
The maximum amount of time that a minor has to disaffirm a contract is
Answer
  • one year from the date of agreement
  • 30 days from learning of his or her right to disaffirm
  • the age of majority
  • a reasonable period of time after reaching the age of majority

Question 80

Question
A minor cannot avoid a contract to purchase a car if the:
Answer
  • car has been destroyed
  • car has been damaged
  • car is used for non-commercial purposes
  • minor is able to return the car but does not do so

Question 81

Question
A minor cannot avoid a contract that has been
Answer
  • ratified
  • signed
  • processed
  • disallowed by the court

Question 82

Question
When a minor avoids a contract to purchase a car
Answer
  • the parents of the minor are liable for the purchase price
  • a relative who cosigned the contract is liable for the purchase price
  • a friend to whom the minor loaned the car is liable for thepurchase price
  • the automobile insurance company is liable for the purchase price

Question 83

Question
The obligation of a cosigner is discharged by:
Answer
  • the minority status of one of the parties
  • the majority status of one of the parties
  • the courts declaration of the contract's provision of necessaries
  • the payment of the debt

Question 84

Question
In which of the following cases is a contract between A and B binding?
Answer
  • A makes a mistake of material fact, and the mistake is unknown by B
  • A and B make the same mistake of the material fact
  • A recklessly but honestly misrepresents a material fact
  • A innocently misrepresents a material fact

Question 85

Question
An agreement is not binding when:
Answer
  • one party makes a mistake regarding a material fact
  • both parties make a mistake regarding a material fact
  • one party makes a mistake of law
  • all of the above

Question 86

Question
A contract based on a mutual mistake in judgement is:
Answer
  • voidable by the adversely affected party
  • not voidable by the adversely affected party
  • void ab initio
  • none of the above

Question 87

Question
All of the following statements refer to an element of fraud except:
Answer
  • the defendant desired to obtain a financial benefit
  • the defendant made a false statement
  • the defendant knew that the statement was false or was recklessly indifferent regarding its truth
  • the defendant intended for the other party to rely on the false statement

Question 88

Question
Jack sells Jim a used car that Jack falsely described as having been driven only 12,000 miles. Fraud has occurred if:
Answer
  • Jim bought the car solely because of its color
  • Jim knew that the mileage was more than 12,000 miles
  • Jim relied upon Jack's statement
  • Jack is a merchant

Question 89

Question
I believe that I own a very valuable vase. I tell you this information and state that I will sell it to you for $800. I sell the vase to you, and you later find out that the vase is worth only $200. Fraud:
Answer
  • has occurred
  • has not occurred
  • can always be based upon a statement of opinion or value
  • none of the above

Question 90

Question
A finding of undue influence would most likely not occur in a contract between
Answer
  • parent and child
  • attorney and client
  • neighbor and neighbor
  • guardian and ward

Question 91

Question
An apparently voluntary agreement may in fact not be voluntary if:
Answer
  • undue influence is present
  • physical duress is present
  • economic duress is present
  • all of the above

Question 92

Question
Generally, a promise is legally enforceable even if nothing is given or received for the promise
Answer
  • True
  • False

Question 93

Question
Consideration is what a promisor demands and receives as the price for a promise
Answer
  • True
  • False

Question 94

Question
The fact that the consideration supplied by one party is slight when compared with the burden undertaken by the other party is immaterial
Answer
  • True
  • False

Question 95

Question
Consideration always must be an act or the promise to perform an act
Answer
  • True
  • False

Question 96

Question
Consideration is the bargained-for exchange between the parties to a contract
Answer
  • True
  • False

Question 97

Question
One promise may serve as consideration for many return promises
Answer
  • True
  • False

Question 98

Question
A promise to make a gift is enforceable
Answer
  • True
  • False

Question 99

Question
Charitable subscriptions by which individuals make pledges to finance the construction of a college building, a church or another structure for charitable purposes are binding to the extent that the donor should have reasonably realized that the charity was relying on the promise in undertaking the building program
Answer
  • True
  • False

Question 100

Question
True considerations occurs only when the value of one promise is equal to the value of the promise given by the other party
Answer
  • True
  • False

Question 101

Question
The promise of a creditor to refrain from collecting a debt is consideration for a promise by the debtor to modify the terms of the transaction
Answer
  • True
  • False

Question 102

Question
Forbearance may constitute consideration
Answer
  • True
  • False

Question 103

Question
An illusory promise creates a bilateral contract
Answer
  • True
  • False

Question 104

Question
A promise that in fact does not impose any obligation on the promisor is known as an elusive promise
Answer
  • True
  • False

Question 105

Question
A binding contract cannot contain a cancellation provision
Answer
  • True
  • False

Question 106

Question
Ordinarily, doing or promising to do what one is already under legal obligation to do is not consideration
Answer
  • True
  • False

Question 107

Question
A second promise to pay a contractor a higher amount on the original contract may be enforceable
Answer
  • True
  • False

Question 108

Question
In a contract for the sale of goods, any modification made by the parties to the contract must be supported by consideration to be binding
Answer
  • True
  • False

Question 109

Question
With regard to an unliquidated debt, payment by the debtor of less than the amount claimed by the creditor is consideration for the latter's agreement to release or settle the claim
Answer
  • True
  • False

Question 110

Question
If a merchant receives and cashes a check for partial payment of a debt and the check bears the notation that the amount is in full payment of a disputed sum, the total debt is released
Answer
  • True
  • False

Question 111

Question
Sara Student wished to pay off her $5,000 student loan. If she sends in a check for $3,000 and the creditor cashes the check, the debt will be fully satisfied provided the check is marked "paid in full."
Answer
  • True
  • False

Question 112

Question
In a composition of creditors, the various creditors of a single debtor mutually agree to accept a fractional part of their claims in full satisfaction of the claims
Answer
  • True
  • False

Question 113

Question
Past benefits already received by a promisor cannot be consideration for a later promise
Answer
  • True
  • False

Question 114

Question
In most states, promises made to another based on moral obligation lack consideration and are not enforceable
Answer
  • True
  • False

Question 115

Question
The doctrine of promissory estoppel is also known as the doctrine of beneficial reliance
Answer
  • True
  • False

Question 116

Question
Under the doctrine of promissory estoppel, a promisor may be prevented from asserting that his or her promise is unenforceable because the promisee gave no consideration for the promise
Answer
  • True
  • False

Question 117

Question
Damages recoverable in a case of promissory estoppel are determined by the profits that the promisee expected
Answer
  • True
  • False

Question 118

Question
Will the law enforce every promise
Answer
  • Yes, in all cases
  • Yes, with or without consideration
  • Generally yes, if consideration is given for the promise
  • Yes, but only if there is no consideration

Question 119

Question
Consideration is:
Answer
  • the concern shown by the other contracting party
  • what is demanded by the promisor as the price for the promise
  • a stand number of dollars
  • the concern of both contracting parties for the protection of the environment

Question 120

Question
Under the ______ approach, consideration is defined as a benefit received by the promisor or detriment incurred by the promisee
Answer
  • pro-con
  • I win, you lose
  • gain-loss
  • benefit-detriment

Question 121

Question
When there is no consideration for a promise, the agreement is:
Answer
  • a quasi contract
  • equitable
  • not binding
  • unethical

Question 122

Question
Courts will consider the adequacy of consideration when:
Answer
  • one party clearly has the better of the deal
  • one party has more business experience than the other
  • one party claims to have been defrauded
  • one party shows a much lower price nationally-advertised on television

Question 123

Question
Which of the following can be consideration for a promise?
Answer
  • Refraining from beating one's spouse
  • Promising to refrain from beating one's spouse
  • Refraining from smoking cigarettes
  • Refraining from using cocaine

Question 124

Question
For a bilateral contract to be enforceable there must be:
Answer
  • mutuality of obligation
  • an illusory promise
  • forbearance
  • adequacy of consideration

Question 125

Question
Examples of illusory promises include:
Answer
  • cancellation provisions
  • apparent promises
  • conditional obligations
  • real obligations

Question 126

Question
A cancellation provision:
Answer
  • makes a promise illusory
  • gives a person a free way out
  • is limited to the terms set forth by the provision
  • none of the above

Question 127

Question
A contract in which one party agrees to purchase goods from another contingent upon the purchaser's ability to locate suitable financing is said to
Answer
  • be illegal
  • result from undue influence
  • contain a waiver
  • contain a conditional promise

Question 128

Question
Ordinarily, a promise to perform an existing legal obligation is:
Answer
  • not consideration
  • binding if the promisor promises to perform with extra care
  • binding if the promisor promises to perform to suit the personal satisfaction of the promisee
  • binding if the promisee would experience substantial loss due to breach of the promise

Question 129

Question
Which of the following is not consideration for a present promise
Answer
  • a good faith adjustment
  • compromise and release of claims
  • the promise to pay one's child support obligation, consistent with pre-existing court order
  • the performance of requested act

Question 130

Question
A landowner's promise to p ay a contractor a bonus to complete construction of a building according to the terms of a pre-existing contract between the landowner and the contractor is:
Answer
  • binding if the promise is in writing
  • binding, since the promise is made by a non-merchant
  • binding, since the promise is made to a merchant
  • ordinarily not binding on the promisor

Question 131

Question
An agreement to pay reasonable additional compensation to a contractor for the performance of pre-existing contract when the contractor faces extraordinary circumstances caused by unforeseen difficulties is called a:
Answer
  • good-faith adjustment
  • bribe
  • compensatory allowance
  • relief payment

Question 132

Question
The effect of the making of a partial payment to satisfy an admitted debt is an example of the rule that:
Answer
  • past benefits cannot be consideration for a later promise
  • a conditional promise may be consideration
  • doing what one is already under a legal obligation to do is not consideration
  • consideration must be adequate to be binding

Question 133

Question
The rule that doing or promising to do what one is already legally bound to do is not consideration applies to part payment made in satisfaction of a(n) ______ debt
Answer
  • unliquidated
  • superfluous
  • non-superfluous
  • liquidated

Question 134

Question
Consideration is not required in
Answer
  • contracts for the sale of goods
  • employment contracts
  • agreements to modify employment contracts
  • agreements to modify contracts for the sale of goods

Question 135

Question
When a debtor tender a check stating "paid in full" and the creditor cashes the check, the debt:
Answer
  • is always discharged
  • may be discharged if it is a liquidated debt
  • may be discharged if it is an unliquidated debt
  • is never discharged

Question 136

Question
Which of the following is not a necessary element of promissory estoppel?
Answer
  • The promisor and the promisee must engage in a bargained-for exchange
  • The promisor must intend or should reasonably expect that the promisee will rely on the promise
  • The promisee must in fact rely on the promise in some definite and substantial manner
  • Enforcement of the promise is the only way to avoid injustice

Question 137

Question
What damages are recoverable in a case of promissory estoppel
Answer
  • profits that the promisor expected
  • profits that the promisee expected
  • an amount necessary to restore the promisee to the position he or she would have been in had the promisee not relied on the promise
  • an amount necessary to restore the promisor to the position he or she would have been in had the promisor not relied on the promise

Question 138

Question
An agreement is illegal when either its formation or performance is a crime or tort, or its contrary to public policy
Answer
  • True
  • False

Question 139

Question
When an agreement is illegal, parties are usually not entitled to help from the courts
Answer
  • True
  • False

Question 140

Question
If an illegal agreement has already been performed parties can sue for damages
Answer
  • True
  • False

Question 141

Question
If a contract appears to be legal on its face, it will be enforceable even if it was entered into for an illegal purpose
Answer
  • True
  • False

Question 142

Question
When parties are not equally guilty, the least guilty party is granted relief when it is in the public interest
Answer
  • True
  • False

Question 143

Question
Even if part of a contract is illegal, the court may enforce a divisible, legal part of the contract
Answer
  • True
  • False

Question 144

Question
If a contract can be interpreted in two ways, one legal and the other illegal, the court will assume that the legal meaning was intended unless the contrary is clearly indicated
Answer
  • True
  • False

Question 145

Question
An agreement that calls for the comission of a civil wrong is illegal and void
Answer
  • True
  • False

Question 146

Question
In every contract there exists an expressed covenant of good faith and fair dealing
Answer
  • True
  • False

Question 147

Question
A provision in a contract that gives what the court believes is too much of an advantage over a buyer may be held void as unconscionable
Answer
  • True
  • False

Question 148

Question
Ordinarily, a court will not consider whether a contract is fair or unfair
Answer
  • True
  • False

Question 149

Question
Company wide standardized form contracts imposed on a "take-it-or-leave it" basis by a party with superior bargaining strength are called contracts of collusion
Answer
  • True
  • False

Question 150

Question
Substantive unconscionability has to do with matters of freedom of assent
Answer
  • True
  • False

Question 151

Question
When a court finds a clause of a contract unconscionable at the time it was made, it may enforce the remainder of the contract
Answer
  • True
  • False

Question 152

Question
Agreements that are contrary to public policy are not binding
Answer
  • True
  • False

Question 153

Question
Courts are quick to invalidate contracts on the ground that they are contrary to public policy because such contracts are so offensive to society
Answer
  • True
  • False

Question 154

Question
Legislation commonly requires that an installment-sale contract specify the cash price, down payment, finance charges and insurance costs
Answer
  • True
  • False

Question 155

Question
Legislation commonly requires that an installment-sale contract specify the cash price, down payment, finance charges and insurance costs
Answer
  • True
  • False

Question 156

Question
An unlicensed insurance broker who cannot personally recover a fee because of the absence of a license can effectively circumvent the statutory requirements by having a friend who is a licensed broker bill for the services and collect the payment for him
Answer
  • True
  • False

Question 157

Question
To stabilize the industry, manufacturers of the same or similar products may agree that each will market to its product in a specified geographic area of the country and will not market its product in the territory assigned to other manufacturers.
Answer
  • True
  • False

Question 158

Question
Agreements not to compete are void
Answer
  • True
  • False

Question 159

Question
A non-competition covenant may be held invalid because of vagueness concerning the duration and geographic area of restriction
Answer
  • True
  • False

Question 160

Question
When a nationally-known neurosurgeon in Chicago, Illinois sells her practice, the contract may specify that the seller will not practice within a 100-mile radius of Chicago for one year
Answer
  • True
  • False

Question 161

Question
Fees charged by a lender for the reasonable expense of making a loan, such as the cost of appraising property, are treated as interest for purposes of usury law
Answer
  • True
  • False

Question 162

Question
In most states the usury laws apply to loans made to both individuals and corporations
Answer
  • True
  • False

Question 163

Question
In the case of an illegal contract, both parties usually are prohibited from seeking relief in the courts
Answer
  • if the illegal contract has not been performed
  • if the contract has been partially performed
  • if the contract has been fully performed
  • all of the above

Question 164

Question
Agreement that are illegal are
Answer
  • enforceable if one party acted in good faith
  • voidable by one of the parties
  • void
  • voidable by either party

Question 165

Question
Which party to an illegal agreement may get relief from the court
Answer
  • Plaintiff
  • Defendant
  • the less-guilty party, when public interest is advanced by granting relief
  • a doctor who was unlicensed at the time of the making of an agreement for the provision of medical services, but who later obtained a proper license

Question 166

Question
An illegal provision in a contract
Answer
  • causes the entire contract to be voidable
  • causes the entire contract to be rescinded
  • can be ignored by the parties in their performance of the remaining provisions of the contract, assuming that the remaining portions of the contract can stand on their own
  • can be ignored by the parties, because an illegal provision in a contract is not deemed substantial

Question 167

Question
An agreement to slander a third person would not be enforceable because slander is a(n)
Answer
  • crime
  • civil wrong
  • infringement of privacy
  • assualt

Question 168

Question
Dealing honestly, reasonably and in good faith
Answer
  • is implied in every contract for services
  • is implied in every contract for the sale of goods
  • is an expressed obligation in every contract
  • both a and b

Question 169

Question
A contract that is deemed to be too harsh or oppressive to one of the contracting parties may be unenforceable under the concept of
Answer
  • unilateral influence
  • bilateral influence
  • unconscionability
  • conscionability

Question 170

Question
One element involved in the determination of unconscionability is
Answer
  • the comparative bargaining power of the parties
  • the opportunity to make a contract for better terms with someone else
  • the course of the economy after the contract is made
  • whether a loss will be sustained by performance of the contract

Question 171

Question
The validity of a contract is not affected by
Answer
  • the effect of the contract on the community
  • unconscionability
  • the absence of good faith
  • the fact that the contract turned out to be a bad bargain for one of the parties

Question 172

Question
Today, what is an important element in determining the validity of a contract
Answer
  • the Uniform Contract Code
  • whether the agreement might harm the public welfare
  • whether the contract is wise or foolish
  • whether the contract operates unequally between the parties

Question 173

Question
Which of the following types of contracts might be unenforceable as contrary to public policy
Answer
  • a contract that is contrary to the protection of the public, welfare, health or safety
  • a contract that is contrary to the protection of the person
  • a contract that is contrary to the protection of recognized social institutions
  • all of the above

Question 174

Question
Public policy
Answer
  • can be precisely defined
  • is frequently used by the courts as a reason to invalidate contracts
  • is protections from that which violates any established interest of society
  • all of the above

Question 175

Question
Private lotteries, which generally are held to be illegal, involve three elements
Answer
  • prize, chance, and consideration
  • return, skill and wager
  • prize, skill and consideration
  • attractive return, minimal involvement and skill

Question 176

Question
Which of the following is not illegal?
Answer
  • an office football "pool" with a cash entry fee and cash prize
  • a raffle with an entry fee to win a car
  • a "giveaway" to every tenth person who buys meat at a butcher shop
  • a "giveaway" to every tenth person entering a department store

Question 177

Question
The failure to have a license will not render agreements void if the license
Answer
  • is based on formal education
  • is required for engaging in a particular business or trade
  • is a regulatory license
  • is readily obtainable by anyone who offers payment of a required fee

Question 178

Question
Which of the following agreements represent(s) an unreasonable restraint of trade?
Answer
  • a combination to create a monopoly
  • an agreement to obtain a "corner" on market
  • an association of merchants to increase prices
  • all of the above

Question 179

Question
An agreement to restrain trade may be void on the grounds that it is
Answer
  • fraudulent
  • contrary to public policy
  • illegal lobbying
  • unfair to merchants

Question 180

Question
An agreement to restrain trade may be void on the grounds that it is
Answer
  • fraudulent
  • contrary to public policy
  • illegal lobbying
  • unfair to merchants

Question 181

Question
An agreement to compete is enforceable
Answer
  • in the sale of bussiness
  • between competitors
  • in contracts for the sale of goods
  • in contracts for the sale of securities

Question 182

Question
In an employment contract, agreements not to compete are
Answer
  • illegal
  • uniformly held to be in the public interest and therefore legal
  • valid only if the restriction protects the employee
  • valid, if the restriction is reasonable and necessary for the protection of the former employer

Question 183

Question
When money is loaned at a greater rate of interest than is allowed by law, ______ is committed
Answer
  • usury
  • credit misfeasance
  • petty theft
  • credit malfeasance

Question 184

Question
Which of the following is not an example of a state penalty for violating usury law?
Answer
  • restricting the lender to the recovery of the loan but no interest whatsoever
  • allowing the lender to recover the loan principal and interest up to the maximum contract rate
  • restricting the lender to the recovery of the loan plus seventy-fifty percent (75%) of the interest
  • requiring the lender to pay as a penalty, double the interest the borrower paid on a usurious loan
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