Reference no: EM13512174

1. Lisa and Chad had been dating for several years. Chad gave Lisa an expensive birthstone ring for her birthday. Despite the lengthy courtship, Chad unceremoniously dumped Lisa the day after her birthday. Lisa went out to a club with a few friends, where the group had a few drinks. Obviously intoxicated and distraught, Lisa said, I'll sell this ring for $5.00 to anyone who agrees to give Chad a black eye. Lisa's friend Ty quickly said, I accept. A contract probably hasn't been formed because of what basic principle of contract law

A. Freedom of contract
B. Quasi-contracts
C. Objective theory of contracts
D. Plain-meaning rule

2. Ty and Cher went out for dinner to discuss a business venture the two had been discussing. Cher had a few glasses of wine, and became visibly intoxicated. Ty and Cher continued to discuss the venture, and the two formed a contract in which Ty received 80% of the profits resulting from the venture, and Cher received 20% of the profits, even though Cher agreed to invest the majority of the money. Ty agreed to contribute her expertise and services to the venture. When Cher wakes up the next morning, she realizes her terrible mistake. Cher's best chance at avoiding the contract with Ty is to assert that

A. she didn't know what she was doing at the time the contract was formed.
B. she was drunk at the time the contract was formed.
C. the contract is unconscionable.
D. the contract is illegal.

3. 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 likely be able to recover

A. compensatory damages only.
B. nominal damages only.
C. punitive damages only.
D. both compensatory damages and consequential damages.

4. Elliot and Richard went out to paint the town. Both Elliot and Richard were known to be pranksters, and nobody in town ever took either of them seriously. Elliot and Richard started talking to Steve in a local tavern. Elliot and Richard told Steve that they owned the Brooklyn Bridge, and would sell it to him for $10,000. Elliot and Richard even wrote out the terms of the agreement on a cocktail napkin. Steve agreed to the terms of the contract. Steve honestly believed that a contract had been formed, and he could sue Elliot and Richard if they failed to uphold the terms of the contract. A contract probably doesn't exist because

A. Elliot and Richard lacked the capacity to contract.
B. Steve lacked the capacity to contract.
C. no reasonable person would have believed a contract was formed.
D. Elliot and Richard were intoxicated.