Reference no: EM132262545

1. Randy offered to sell his truck to Maraya for $10,000. In making the offer Randy said, “If you want to buy the truck, leave a note under the windshield wiper.” Maraya left a message on Randy’s answering machine accepting the offer to buy the truck. Under the common law,

a. a contract has been formed because the means of acceptance was reasonable.

b. a contract has been formed because of detrimental reliance.

c. a contract has not been formed because the means of acceptance was not as prescribed.

d. a contract has not been formed because of the equal dignities rule.

2. Joan mailed a letter to Sam on May 1 offering to buy his 1958 Corvette. Sam received the offer on May 5. On May 6, Sam sent a letter to Joan accepting the offer. On May 7, Joan called Sam and revoked her offer. Joan received the acceptance on May 8. Which statement is correct?

a. A contract was formed on May 6.

b. A contract was formed on May 8.

c. There is no contract, because as of May 7 Joan lacked the intent to form a contract.

d. A contract wasn’t formed since Joan revoked the offer before she received the acceptance.

3. Manuel owned a cabin and 3,000 acres of land. He agreed in writing to sell the cabin and “as much land as needed to create a rural atmosphere” to Aluah for $180,000. If Aluah sues to enforce the agreement, she will probably:

a. win, as the courts will decide how much land is needed to create a rural atmosphere.

b. win, as Manuel would have to prove less than 3,000 acres was intended.

c. lose, as the contract is not definite enough to enforce.

d. lose, as there was no meeting of the minds.

4. Despite the general rule allowing minors to disaffirm their contracts, some states have passed special statutes that make minors liable for which of the following?

a. Educational loans.

b. Medical and dental expenses.

c. Insurance policies.

d. All of the above.

5. In most states a person is given full legal capacity to enter into contracts when he or she becomes before reaching the age of majority.

a. Released

b. Emancipated

c. Employed

d. Freed

e. Acknowledged

6. Dilbert has not been declared incompetent by a court, but he is suffering from an insane delusion that a magical gnome named Pele appears on his front lawn every afternoon and predicts the future. Yesterday, Pele told Dilbert that if he purchased “a huge tract of land in Dallas,” he would be happy ever after. Today, Dilbert entered a contract to purchase a huge tract of land in Dallas, following Pele’s advice. Which of the following statements is true?

a. The contract to purchase is void, because it was made on Pele’s advice.

b. The contract to purchase the land is voidable, because Dilbert has not been declared insane.

c. The contract to purchase the land is valid, because the seller didn’t know Pele suggested it.

d. None of the above.

7. On his 17th birthday, Peter makes a contract to purchase an LED television. In a state in which the age of majority is 18, which of the following actions would be a ratification of the contract?

a. One week before his 18th birthday, Peter telephones the seller and says, “I intend to keep my promise to you in our contract.”

b. Three days after his 18th birthday, Peter telephones the seller and says, “I intend to keep my promise to you in our contract.”

c. Before his birthday Peter behaves as though he intends to be bound by the contract, but two days after his 18th birthday, he calls the seller and says, “The deal’s off.”

d. None of the above are ratification.

8. A person who has legal ________ to contract is one who has the mental ability to understand his or her rights and obligations under a contract and, therefore, will presumably be able to understand how to comply with the terms of the agreement.

A) Capacity

B) Understanding

C) Consideration

D) History

E) Ratification

9. Which of the following best describes the requirement of legality in contracts?

a. The parties must be represented by an attorney.

b. The purpose and subject matter of a contract must be legal.

c. The court makes its decision regarding legality without reference to public policy issues.

d. All of the above.

10. When a person who makes a misrepresentation has no knowledge about the falsity of the claim, it is said that the person lacked ________.

a. Scienter

b. Plotting

c. Information

d. Premeditation

e. Planning

11. Rose is 17 in a state where majority age is 18. She purchased a prom dress from Your Special Day. She wore it to the prom and then attempted to return it to the store, claiming that she was a minor and that she was entitled to a refund. The dress had clearly been worn and had a purple stain which Rose claimed was from grape juice. Additionally, a few days before she turned 18, Rose purchased a used car from Sal's Car Savings. She had a deal whereby she paid $100 per month on the car. She drove the car and made payments for six months after she turned 18. Rose then returned the car to Sal's Car Savings, informed the owner that she was under 18 when she entered into the contract to purchase the car, and told the owner that she was returning the car for a full refund. Sal's Car Savings claimed the car was a necessity. Rose and her parents disagreed claiming that the parents were ready and willing to provide a car to Rose, and that she only purchased the car from Sal's Car Savings because she liked that particular style and color. When purchases of the dress and car were made, the sellers knew that Rose was under the age of 18.Which of the following is true if Rose a minor and her parents asserting that the car was a necessary?

a. Even if a minor disaffirms a contract for a necessary, the minor will still be held liable for the reasonable value of the necessary.

b. Whether or not parents would buy the item at issue is irrelevant in addressing a claim that an item was a necessary.

c. A minor may not disaffirm a contract for a frivolous matter that is clearly not required.

d. The claim will have no effect because the law does not recognize the concept of necessaries when minors are involved.

e. Social status is irrelevant as a matter of law in addressing a claim that an item was a necessary.

12. Zeb suffers from delusions that he is from the planet Zaltar. Zeb's contract with DigiTV, his digital television service provider, has expired. After comparing his past payments to the potential savings from satellite television provider SatTV, Zeb decides to sign a two-year contract with SatTV. After six months with SatTV, Zeb realizes he paid less with DigiTV and he now wants to be released from his contract with SatTV. Is the SatTV contract legally binding on Zeb?

a. Yes, although Zeb may suffer from mental problems, Zeb appears to still understand the nature of the contract and the obligations it imposes.

b. No, because he did not ratify the contract.

c. Yes, because, even though Zeb understands the nature of the contract and the obligations it imposes, Zeb did not disaffirm the contract within a reasonable period of time.

d. No, because contracts with mentally incapacitated persons are void.

e. No, because contracts with mentally incapacitated persons are void, unless expressly ratified.

13. When Kim was hired by Exclon, Inc. she signed an agreement which included the following term:

Kim agrees that during the two-year period following termination of this Agreement, she will not compete with Exclon within a twenty-five mile radius of the corporate office.

This agreement is called:

a. exculpatory.

b. a covenant not to compete.

c. usurious.

d. a Sunday provision.

14. When duress is at issue, the needed for legal consent has been removed by the specifics of the threat.

a. Consideration

b. Knowledge

c. Realization

d. Free will

e. Specifics

15. Jack agrees to lease his home to Jane for nine months, with the lease to begin six months from the signing of the contract. Under the statute of frauds:

a. the lease is not required to be in writing.

b. the lease is required to be in writing.

c. the parol evidence rule renders the contract voidable.

d. a contract is not formed, as there is no current agreement

16. Wallco entered into a contract to buy 100 desks from Desks R Us. The agreement was in writing on a printed form. The contract form provided that payment is due on receipt of the goods. The parties, however, typed the following provision on the printed form, “Payment is due 30 days after receipt of the desks.” Which term will be enforced?

a. The printed term since the term was actually printed on the contract.

b. The typed term since it is the best evidence of the parties’ true intention.

c. Neither term since the terms conflict.

d. The typed term because the contract is interpreted in favor of the party who didn’t prepare the contract.

17. The beneficiary of a life insurance policy is generally:

a. a creditor beneficiary.

b. an incidental beneficiary.

c. a donee beneficiary.

d. a debtor beneficiary.

18. A promisor may prevent an assignment by convincing the court that:

a. the assignment would materially change the promisor’s burden or risk under the contract.

b. the assignor did not obtain the promisor’s consent prior to the assignment.

c. the assignor did not obtain the promisor’s consent in writing.

d. All of the above.

19. Zoe agrees to purchase Antonia’s land so that she can build a golf course. They write a contract, and Zoe transfers the deed to Antonia. Antonia pays Zoe the entire purchase price. Zoe and Antonia have discharged their contract by:

a. Breach

b. Lapse of time

c. Performance

d. Concurrence