1. Which of the following contains all the elements of a written agreement that can be enforceable under law?
A. "Silvie Nader and Henry Shay are parties involved in this contract for the purchase of hand-knit sweaters on Wednesday, June 17. Signed, Henry Shay and Silvie Nader."
B. "Full Agreement by Henry Shay and Silvie Nader. Henry agrees to purchase from Silvie six of Silvie's hand-knit sweaters at $45 each. Signed, Silvie Nader, and Henry Shay."
C. "Henry Shay agrees to purchase hand-knit sweaters for $45 apiece. Signed, Henry Shay."
D. "Silvie agrees to mail six hand-knit sweaters at $45 apiece to the house on Wednesday, June 17. Signed, Silvie Nader."
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2. Mercedes receives a box of unordered office supplies in the mail. What's her legal obligation?
She may consider it a gift
19. Better Houses Inc. has been contracted to build an addition on the Joyners' house. It built half of the addition and then unexpectedly announced that it wasn't going to finish the job. Better Houses' decision to stop the job is called a/an
A. constructive breach of contract.
B. substantial performance.
C. repudiation of contract.
D. abandonment of contractual obligations.
19. Better Houses Inc. has been contracted to build an addition on the Joyners' house. It built half of the addition and then unexpectedly announced that it wasn't going to finish the job. Better Houses' decision to stop the job is called a/an
A. constructive breach of contract.
B. substantial performance.
C. repudiation of contract.
D. abandonment of contractual obligations.
18. _______ requires that both parties return to the other any consideration already received or pay for any services or materials already rendered.
A. Termination by waiver
B. Novation
C. General release
D. Mutual rescission
17. On June 29, Henry contracts to purchase American flags, which Henry intends to sell at the annual Fourth of July fireworks event, from Liz. The contract doesn't specify a delivery date. Liz delivers the flags on July 7. Henry sues for breach of contract. Which of the following will most likely happen?
A. Henry will win because of the equal dignities rule.
B. Liz will win because the contract didn't specify a delivery date.
C. Liz will win because she delivered within a reasonable time.
D. Henry will win because of the standard construction rule.
16. 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. Fair and Accurate Credit Transactions Act
C. Uniform Computer Information Transactions Act
D. Uniform Electronic Transactions Act
15. Sagan is borrowing money from Big Bank. His friend Leda, who works for Graille Systems, signs the loan agreement, promising to pay the debt if Sagan doesn't. In this scenario, _______ is the obligee and Sagan the obligor.
A. Big Bank
B. Leda
C. Sagan
D. Graille Systems
14. Esther lives with a caregiver on whom she is greatly dependent and trusts. The caregiver persuades Esther to sign a contract with the caregiver that greatly favors the caregiver. If the contract is set aside, it will likely be on what grounds?
A. Undue influence
B. Mistake
C. Duress
D. Fraud
13. One name for a promise made by one party to pay another person's debts, if that person fails to pay the debt, is
A. condition precedent.
B. signature requirement.
C. collateral contract.
D. prenuptial agreement.
12. The doctrine of _______ restricts a party from denying that a promise was made under certain conditions, even though consideration hasn't been exchanged to bind an agreement.
A. privity
B. promissory estoppel
C. enforceability
D. Statute of Frauds
11. 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. compensatory damages.
B. consequential damages.
C. specific performance.
D. punitive damages.
10. Which of the following is true of consequential damages?
A. They're awarded as a measure of punishment for the defendant's wrongful acts.
B. They cover any expenses paid out by the innocent party to prevent further loss.
C. They're the sum of money equal to the real financial loss suffered by the injured party.
D. They result from a breach due to special circumstances that exist with a particular contract.
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9. Which of the following is a necessary element both for fraud and for misrepresentation?
A. A hidden problem
B. The intent to deceive
C. A fiduciary relationship
D. A false statement
8. Which of the following beneficiaries has no enforceable legal rights?
A. Incidental
B. Insurance
C. Creditor
D. Donee
7. Edwin, Marketing VP of Amalgamated Sales Inc. writes a letter dated August 1 to Bargain Stores Inc. offering to sell candy to Bargain Stores at $50 per case for the next 30 days. Bargain Stores then contracts with local retailers based on the offer from Amalgamated. Ten days later, Amalgamated receives an offer from Dandy Stores Inc. to purchase this same candy at a price of $75 per case. Can Amalgamated withdraw its offer to Bargain Stores?
A. Yes, the offer was simply an invitation to negotiate.
B. No, this is only an option.
C. No, this is a firm offer.
D. Yes, the offer may be withdrawn since it lacks consideration.
6. Rosa sends an offer to Kellen that requires acceptance 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. Under traditional common law rules, has Kellen accepted Rosa's offer?
A. No, since the offer specified a particular manner of acceptance that wasn't used
B. Yes, since acceptance sent in any form—even if early or delayed—confirms the offer
C. Yes, since FedEx was faster than the U.S. mail
D. No, since the acceptance was delivered by a private rather than a public delivery service
5. 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 because he was married to Sara.
B. not entitled to the proceeds because he doesn't have privity of contract.
C. entitled to the proceeds as an intended beneficiary.
D. entitled to the proceeds as an incidental beneficiary.
4. Joe pays for his food at the drive-thru window as he receives it. The payment and the receipt of the food are _______ conditions.
A. spontaneous
B. precedent
C. concurrent
D. subsequent
3. 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. There was no contract.
B. Payment was a condition precedent to service.
C. Service and payment were conditions concurrent.
D. Service was a condition precedent to payment.
