When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam. Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer.
1. Tom and Zeke go out to a restaurant for dinner. Tom orders a steak, and Zeke orders lasagna. After they've finished eating, they pay their bill. Assuming all parties performed in the order they were required to under this contract, which of the following is true?
A. Payment was a condition precedent to service.
B. Service and payment were conditions concurrent.
C. There was no contract.
D. Service was a condition precedent to payment.
2. Jack and Jane formed a contract in which Jack agreed to sell Jane a large amount of apples. Jack knew that Jane planned to resell the apples at the farmers' market the following weekend. Jack failed to deliver the apples as promised. Jane will most likely be able to recover
A. compensatory damages only.
B. both compensatory and consequential damages.
C. punitive damages only.
D. both nominal and punitive damages.
3. Denise orally authorizes Shaun to sell her house. Shaun enters into a written agreement with Eric to sell him the house for $140,000. Both Shaun and Eric sign the contract. Denise learns of the agreement after the fact and decides she doesn't want to sell. If the contract is ruled unenforceable, the most likely reason is the __________ rule.
A. best evidence
B. equal dignities
C. fairness
D. parol evidence
4. James leases an apartment to Kyle for $900 per month rent. The written lease contains no prohibition
against assignment, nor does it expressly permit assignment. Kyle assigns his rights to Harley without any consideration. James finds out and objects. The assignment is
A. valid because there's no consideration for the assignment.
B. invalid because James didn't consent to the assignment.
C. invalid because the lease didn't expressly permit assignment.
D. valid because the written lease didn't prohibit it.
5. Elmer borrows money from Big Bank, who then assigns the promissory note and mortgage to Financial Institution for valuable consideration. Elmer isn't given notice of the assignment and continues to pay Big Bank. Financial Institution files suit, claiming Elmer is in default because Elmer failed to pay monthly payments to Financial Institution. Which of the following statements is true?
A. Financial Institution was obligated to give notice to Elmer of the assignment.
B. Big Bank must forgive Elmer's loan because they failed to notify him.
C. Financial Institution must pay Big Bank for the payments Elmer made.
D. Elmer is in default to Financial Institution because he didn't pay them.
6. Horatio agrees to paint Stella's house for $1,000. Horatio fails to paint, and Stella hires Winston to paint the house for $1,000. Stella sues Horatio for breach of contract. Stella likely will receive __________ damages.
A. liquidated
B. consequential
C. nominal
D. punitive
7. Tom and Zeke enter into a contract for Tom to paint Zeke's house for $1,000. The contract doesn't
specify a time for performance by Tom. Six years later, Tom shows up with a bucket of paint, paints the
house, and demands payment. Which of the following is true?
A. Tom couldn't have breached the contract because the contract didn't specify a time for performance, and he did do the painting work.
B. The contract was unenforceable because it didn't specify a time for performance.
C. The contract violates the statute of frauds.
D. Tom breached the contract because he didn't perform within a reasonable time.
8. Jessica orally agrees that she will sell 400 pairs of flip-flops to a customer for $600. This agreement is
A. unenforceable because all necessary elements aren't met.
B. enforceable because all necessary elements are met.
C. unenforceable because of the statute of frauds.
D. unenforceable because of the parol evidence rule.
9. Sara purchases life insurance on her own life and makes her husband, Dean, the beneficiary. Sara dies. Dean applies to the insurance company for payment of the proceeds. The insurance company denies payment, pointing out that Dean didn't sign the contract and therefore doesn't have privity of contract. Dean is
A. entitled to the proceeds as an incidental beneficiary.
B. entitled to the proceeds because he was married to Sara.
C. entitled to the proceeds as an intended beneficiary.
D. not entitled to the proceeds because he doesn't have privity of contract.
10. Which of the following acts is designed to cut down on identity theft related to the use of credit cards?
A. E-Sign Act
B. Uniform Electronic Transactions Act
C. Fair and Accurate Credit Transactions Act
D. Uniform Computer Information Transactions Act
11. Paul enters into a contract with Harry. Paul agrees to put a new roof on Harry's house, and Harry agrees to pay Paul $5,000. Paul is late on a payment to Sam's Supply House and tells Sam's Supply House that he will pay when he receives money from Harry. Sam's Supply House has heard this from Paul before and didn't receive money. To ensure Paul pays his payment from the money Harry pays him, Sam's Supply House can
A. require an accord and satisfaction be entered into.
B. tell Harry that Paul is indebted to Sam's Supply House, which automatically makes them a creditor beneficiary entitled to the payment.
C. have Paul assign his interests under the contract with Harry to Sam's Supply House.
D. have Harry assign his interests under the contract with Paul to Sam's Supply House.
12. Which of the following is an example of discharge by operation of law?
A. Xavier agrees to paint Rita's house for $1,000. Rita changes her mind and asks Xavier not to paint. Xavier agrees.
B. Xavier agrees to paint Rita's house for $1,000. Before Xavier can paint, Rita's house burns down.
C. Xavier agrees to paint Rita's house for $1,000. Xavier paints, but before Rita pays him, she files bankruptcy. As a result, Xavier doesn't get paid.
D. Xavier agrees to paint Rita's house for $1,000. Rita later tells Xavier that she won't pay him. As a result, Xavier decides not to paint.
13. Collin purchases a house, using a loan from Big Bank. As a condition of the loan, Big Bank requires that Collin purchase life insurance payable to Big Bank, to the extent of the outstanding mortgage, if Collin dies before fully paying the mortgage. Big Bank is
A. an incidental beneficiary but not a donee beneficiary.
B. a creditor beneficiary but not a donee beneficiary.
C. an intended beneficiary but not a donee beneficiary.
D. both a creditor beneficiary and a donee beneficiary.
14. Stan contracts to sell his house to Bonnie for $150,000. Stan then finds a buyer who will pay $200,000 and tells Bonnie he won't perform. Bonnie wants to make Stan honor his contract. The remedy she should seek is
A. punitive damages.
B. compensatory damages.
C. specific performance.
D. consequential damages.
15. Tom and Zeke enter into a contract for Tom to paint Zeke's house for $1,000 by August 5th. Tom
paints half of the house on August 6th, then demands pay. Which of the following is false?
A. The contract doesn't violate the statute of frauds.
B. Zeke may have to pay if payment is a condition precedent to the duty to paint.
C. Tom may not be in breach if the contract doesn't make time of the essence.
D. Tom's duties are discharged under the doctrine of substantial performance.
16. Under the _______ rule, courts generally accept into evidence only the original of a writing, not a copy.
A. parol evidence
B. standard construction
C. best evidence
D. equal dignities
17. Barb and Ned exchange e-mails in which Barb agrees to paint Ned's house for $1,000. Which of the
following statements is true?
A. The contract can't be enforced because electronic contracts aren't legally binding.
B. The contract is enforceable.
C. The contract can't be enforced because there's no handwritten signature.
D. The contract is unenforceable due to the statute of frauds.
18. Warren agrees to paint Abby's restaurant for $1,000. Warren fails to paint. Abby may be entitled to
punitive damages if
A. the contract breached was both written and witnessed.
B. Warren doesn't know how to paint, misrepresented himself as a painter, and never intended to paint.
C. Abby has to pay substantially more than $1,000 for someone else to perform the job.
D. Abby loses profits as a result of the breach.
19. Bella and Connie are struggling to find jobs. They decide they want to open a child daycare center
together. They see a house in the perfect neighborhood with a "For Sale by Owner." They talk to the
owner, reach an agreement, and shake hands. Just before the closing on the house, at which they'll take
ownership of the house, the owner decides not to sell to Bella and Connie. They tell the owner they're
going to sue him for breach of contract. Bella and Connie most likely
A. will win because the owner breached his agreement to sell them the house.
B. won't win because they can find another house that will work just as well.
C. will win because the owner shouldn't have entered into a contract with them if he wasn't sure he wanted to sell the house.
D. won't win because they shouldn't have entered into an oral contract to buy the house.
20. Which of the following is an example of discharge by impossibility?
A. Jason agrees to paint Sheila's house for $1,000. Sheila later tells Jason that she won't pay him. As a result, Jason decides not to paint.
B. Jason agrees to paint Sheila's house for $1,000. Jason paints, but before Sheila pays him, she files bankruptcy. As a result, Jason doesn't get paid.
C. Jason agrees to paint Sheila's house for $1,000. Sheila changes her mind and asks Jason not to paint. Jason agrees
D. Jason agrees to paint Sheila's house for $1,000. Before Jason can paint, Sheila's house burns down.
