Richland College – Business Law:
ASSIGNMENT #2 (25 POINTS) – DUE: Oct. 29, 2019 (before TEST #2)
CHAPT. 8 – Agreement and Consideration in Contracts
1. A bilateral contract in one in which:
Two promises are exchanged.
A promise is given in return for an act.
A third party guarantees the promise of one of the parties.
A unilateral contract accompanies an exchange of promises.
2. Which of the following elements need not be proved to establish that an implied contract exists?
The defendant could have rejected the goods or services but did not.
The defendant was unable to and could not have rejected the goods or services.
The plaintiff provided some good or service to the defendant.
The plaintiff expected payment for some good or service and the defendant should have known this.
3. Ordinarily, an agreement is evidenced by:
An offer alone.
An offer plus an acceptance of that offer.
A valid acceptance only.
4. If Kim tells George, “You know, I’ve been thinking about selling my iPod for under $100,” this constitutes:
A valid offer.
A preliminary negotiation.
A statement of intent.
5. Filomena offers to sell Rhonda her rare book collection for $3,500. Rhonda states, “I like your book collection but I will not pay $3,500 for it, I’ll only pay $2,750,” what would Rhonda’s statement be called?
A contingent offer.
6. A shrink-wrap agreement is one whose terms are:
disclosed on the outside of a shrink-wrapped product so that the buyer can review them before purchasing the product.
typically favorable to the buyer so that the seller does not have to contend with returned, unwrapped packages.
found inside a box in which the goods are packaged.
an agreement wrapped in a plastic substance.
7. Consideration is usually broken down into two parts, something of legally sufficient value and:
Some kind of income redistribution.
Some kind of coercive behavior.
A clear moral hazard.
A bargained-for exchange.
8. Rescission may be defined as:
The substitution of one contract party for another.
The revision of contract terms to reflect trade usage.
The full performance of a contract.
The unmaking of a contract to return the contract parties to the positions they occupied before the contract was made.
9. In order for a court to apply the doctrine of promissory estoppel, four requirements must be met. Which of the following elements is not required?
Justice must not be served by enforcing the promise.
There must be a clear and definite promise.
There must have been substantial reliance on this promise.
The promisee must have justifiably relied on the promise.
CHAPT. 9 – Capacity, Legality, and Enforceability
1. A definition of the term contractual capacity would be:
The ability to enter into a void contract.
The ability to enter into a contractual relationship.
The ability to mitigate contractual damages.
The ability to physically write a contract.
2. The general rule with respect to minors who enter into contracts is:
All such contracts are void.
All such contracts are valid.
Some contracts may be avoided by the minor.
Such contracts may be avoided by the adult party to the contract.
3. A usurious contract is one that involves:
Hazardous chemical materials.
An illegally high rate of interest.
Surrogate motherhood contracts.
4. In an exculpatory clause:
One party agrees that the other party is not mentally incompetent.
One party releases the other party from liability in the event of monetary or physical injury, no matter who is at fault.
One party is able to sue the other party based on the clear fault of the other party.
Both parties agree to use arbitration, not adjudication, to settle any disputes arising under the contract containing the clause.
5. Mistakes of fact occur in two forms. What are they?
Associated and disassociated.
Linear and nonlinear.
Unilateral and bilateral (mutual).
Recessive and dominant.
6. Which of the following is not an element of fraud?
There must be an intent to deceive.
The innocent party must have justifiably relied on the misrepresentation.
The misrepresentation must concern a material fact.
The innocent party must be under twenty-one years of age.
7. If a party to a contract has an intent to deceive the other party, this is known as:
8. Which of the following is not covered by the Statute of Frauds?
A contract for the sale of a new college history textbook that costs $210.
A contract for the sale of land.
A contract for the sale of a new car.
A contract for the sale of the right to cut trees on your land in order to sell the timber.
CHAPT. 10 – Contract Performance, Breach, and Remedies
1. The transfer of contract rights to a third person is known as:
2. When you transfer contractual duties to someone else, this is known as:
3. An intended third party beneficiary cannot enforce a contract against the original parties:
Until the rights of the third party have vested.
Unless both of the parties that formed the contract consent to the action.
Unless one of the parties that formed the contract consents to the action.
For two years after the contract was formed.
4. The most common way to discharge, or terminate, contractual duties is by:
5. If, three weeks before you and Lester are supposed to close your deal for the sale a twenty-acre tract of land, Lester calls you and says, “The deal is off!” Lester has:
Substantially performed the contract.
Anticipatorily repudiated the contract.
Discharged the contract by reformation.
Discharged the contract by novation.
6. Suppose that William and Laverne did not cancel their contract, but Laverne’s house burned down before William could paint it. In this case, the contract:
Is terminated by operation of law.
Is terminated by bankruptcy.
Is terminated by performance.
Is terminated by an unspecified lapse.
7. Consequential damages are:
damages in a very small amount, usually $1, to show that the plaintiff did suffer a legal harm.
special, foreseeable damages that compensate for a loss that does not directly or immediately result from a breach of contract.
damages that compensate a party for actual losses.
damages that punish a breaching party.
8. Liquidated damages may be defined as:
damages to compensate a small technical harm.
an unspecified dollar amount payable in case of breach of contract.
a punishment for a default on a contractual term.
a specific dollar amount to be paid in the event of a future default or breach of contract.
1. Suppose that Jennifer agrees to tutor Sal’s children during the summer. After one week, Jennifer decides that she can’t handle the children and refuses to tutor them any longer. If Sal sues Jennifer for specific performance, as opposed to seeking damages for Jennifer’s alleged breach, what would a court likely do or order and explain why? (HINT: review pp. 297-298 of text).
2. Cody signs and returns a letter from Dora, referring to her sale of the Bar-D Ranch and its price. When Cody attempts to complete the deal, Dora refuses, claiming that they have no contract. Cody claims they do have a contract because both he and Dora intended to enter into an enforceable contract. What standard would a court use to determine whether these parties intended to enter into an enforceable and valid contract? (HINT: review pp. 217-218 of text)