Deck 6: Contracts: Overview, Definition, Categories, and Source of Law

Question 1

This ancient Babylonian document covered contract law.

A) Code of Hammurabi
B) Magna Carta
C) The Sumerian Code
D) Laws of Eshnunna

Answer 1

Code of Hammurabi

Question 2

__________ is a medieval European law established a uniform and unbiased system for deciding commercial disputes across borders and political boundaries.

A) The Magna Carta
B) The Great Schism
C) The Lex Meracatoria
D) The Max Stratum

Answer 2

The Lex Meracatoria

Question 3

Kailen is a huge fan of Justin Bieber. She pays him $140.00 to purchase his hair clippings from a recent haircut. Which statement is correct according to contract law?

A) Kailen's agreement will be evaluated by the courts to determine if it was wise before courts will enforce it.
B) Under the theory of freedom to contract, the courts will support the rights of the individual to contact and not interfere.
C) Under the theory of freedom to contract, the courts will support the agreement if it is in writing.
D) Under the theory of good faith and fair dealings, the court will support the agreement as long as they determine that Justin Bieber did not take advantage of Kailen.

Answer 3

Under the theory of freedom to contract, the courts will support the rights of the individual to contact and not interfere.

Question 4

__________ is a model law that most states have adopted to govern service contracts and real estate contracts.

A) Lex mercatoria
B) Treatises
C) Uniform Commercial Code
D) Restatement (Second) of Contracts

Question 5

How many states have adopted the Uniform Commercial Code?

A) All
B) 42
C) All but Louisiana
D) Less than 10

Question 6

The court determined Jimmy John's non-competition clause was all the following except

A) Highly broad and overreaching
B) Completely reasonable
C) Unfairly targeted low wage worker
D) Prevented sandwich makers and delivery drivers from employment elsewhere

Question 7

Becker Corporation hires a social media influencer, Bekah, to use their product and post about it on social media. This is an example of which type of an agreement?

A) Employment
B) Marketing
C) Sales
D) Digital

Question 8

NASA hires Connor, an Aerospace Engineer, to research and to develop a wing design to increase the speed of rockets in outer space. This is an example of what type of agreement?

A) Employment
B) Invention assignment
C) Patent
D) Intellectual property agreement

Question 9

To fund a new building project, Kuhl Corporation enters into a contract with Bank of Highlander to lend them the money. This is an example of which type of agreement?

A) Employment
B) Service
C) Invention
D) Loan agreement

Question 10

In the United States, the law presumes that every contract is entered into with

A) Good faith
B) Wisdom
C) Equal benefit
D) Reasonableness

Question 11

"Honesty in fact and the observance of reasonable commercial standards of fair dealing" is the definition of good faith according to

A) Statute
B) The Uniform Commercial Code and common law
C) U.S. Constitution
D) Executive orders

Question 12

In the case of United States v. Apple, the court determined that the Sherman Antitrust Act

A) Made all restraints of trade illegal
B) Made no restraints of trade illegal
C) Made only unreasonable restraints of trade illegal
D) Made only unduly burdening restraints of trade illegal

Question 13

Valerie promised to mow Laura's yard for Laura's promise to pay her $50.00 to mow it. This is an example of what type of contract?

A) Unenforceable
B) Voidable
C) Unilateral
D) Bilateral

Question 14

The Schalaefer Law Firm promises to pay $4000.00 a month for office space from Waymeier Properties for their promise to provide the space and all utilities. This is an example of a _____________ contract.

A) Unenforceable
B) Voidable
C) Bilateral
D) Unilateral

Question 15

Evan promises to pay Joseph $100.00 if he does not swear for the entire weekend. This is an example of a __________ contract.

A) Unenforceable
B) Voidable
C) Bilateral
D) Unilateral

Question 16

Most business contracts are bilateral because they are enforceable before the other party performs because

A) One party does not have to wait to see if the other person will breach the agreement before taking action.
B) Unilateral contracts are illegal.
C) It makes lawsuits much quicker.
D) The Uniform Commercial Code states that bilateral contracts are preferred in the business world.

Question 17

This rule requires that some agreements must be in writing to be a contract.

A) Statute of Repose
B) Statute of Limitations
C) Statute of Frauds
D) Statute of Contracts

Question 18

Purchasing a soda from a soda machine is an example of a __________ contract.

A) Express
B) Implied
C) Applied
D) Supplied

Question 19

Oral contracts, also sometimes known as a "handshake" contract are not preferred in the business environment because

A) They are not actually contracts.
B) Most businesses prefer written contracts to minimize risk and uncertainty as it can be difficult to prove the terms of the contract without a writing.
C) Oral contracts tend to be more expensive.
D) The court, when pressed, will not uphold the terms of the contract.

Question 20

Cell phone contracts are an example of which type of contract?

A) Oral
B) Verbal
C) Transactional
D) Relational

Question 21

John is hired for a long term project where he is tasked with the job of increasing exposure of millennials to the power of shopping local rather than buying online or from big business. His contract specifically states what areas of mass communication he must use, the specific demographics of the target audience and the end goals desired. It further states that he will use an expense account to cover the costs of travel and expenses related to his job. John's contract is an example of what type of contract?

A) Oral
B) Verbal
C) Transactional
D) Relational

Question 22

The best business practice for those tasked with creating a contract is to

A) Define any unclear terms within the contract itself
B) Use general terms so as to make the contract flexible and open to interpretation
C) Always operate from a superior bargaining power to exert pressure.
D) Create a contract that has a lot of loopholes.

Question 23

Long complex sentences embedded with legal terminology, hidden clauses, and that uses obscure terms is called

A) Statutory analysis
B) Plain-English
C) Legalese
D) Academic contracting

Question 24

A complete and well-written contract should contain all of the following except

A) Definitions
B) Clauses
C) Termination conditions
D) Philosophy

Question 25

Attorneys who play an active role in helping the business person translate the important terms of the contract are called

A) Esquire
B) Barristers
C) Strategically qualified attorneys
D) Monopolistic attorneys

Question 26

Emily is an attorney for Claxton Corporation that hired her to negotiate contracts for them. Emily should do all the following during the negotiating process except,

A) Listen to the parties
B) Ask questions of the parties
C) Evaluate the potential risks and benefit
D) Exercise an exclusive decision-making function

Question 27

Amaya is a new attorney who is focusing on business matters especially contract negotiations. When she is hired by Holshauser Industries to negotiate all of their product purchase contracts for their car detailing business, as a strategically qualified attorney, she should do all the following except,

A) Use strong-arm techniques to exploit maximum advantage over opposing interests
B) Translate legal terminology to explain to clients
C) Analyze the "big picture" to determine the effect
D) Draft customized contracts to fit the specific needs of the client

Question 28

Corey, a strategically qualified attorney for Adams Corporate Concepts, negotiates all of their contracts. He routinely uses a form or template to create any contract. Which one of the following statements is true?

A) Templates are the preferred method of creating a contract because it creates uniformity in contract structure.
B) Customized contracts are the preferred method of creating a contract because it allows the contract to be tailored to meet the specific, personal needs of the client.
C) Templates are the preferred method of creating a contract because it is a cost-cutting measure.
D) Customized contracts are the preferred method of creating a contract because an attorney can bill more time to the client and thus make a lot more money for himself.

Question 29

Karla is a CEO of Brinkman Corporation which designs, builds and markets slot machines for casinos. Karla's professional career has focused on marketing and employee relations but she is not really knowledgeable about the intellectual property law and protections in the United States that heavily dominates this industry. Which statement is correct?

A) Karla should focus only on the areas in which she is familiar and rely on the strategically qualified attorney to understand the law and the industry.
B) Karla is a legally astute manager because she is focusing her talents and efforts on other relevant matters of which she is skilled.
C) Karla should always divide and delegate skill sets, as a CEO would become ineffective if she dedicated time learning the industry.
D) Karla should have superior knowledge of the law as it relates to her business and work proactively with legal counsel tofind ethical and effective business solutions.

Question 30

Bill is a very skilled attorney with a very strong background in Latin. Therefore, when he writes contracts for his clients, he uses as much legalese and Latin legal terminology as possible. Which statement below is correct?

A) Whenever possible, an attorney should avoid legalese and instead use plain-English to make contracts easier to understand.
B) Whenever possible, an attorney should use as much legalese so as to make the contract difficult to understand by anyone except an attorney.
C) Whenever possible, an attorney should use as many Latin terms in a contact so that it looks professional.
D) Contracts must contain as much legalese as possible to make it clear and enforceable.

Question 31

A(n) __________ in a contract contains supplementary information such as compensation schedules, incentive programs and confidentiality agreements.

A) Preamble
B) Appendix
C) Clause
D) Definition

Question 32

In Walker v. Carter, the court determined that contracts that cannot possibly be completed in less than a year

A) Must be in writing to be enforceable
B) Can be verbal, but recommended that a writing makes the terms easier to determine if in writing
C) Must be enforced as a verbal agreement after testimony by both sides
D) Stated that a verbal contract is enforceable as long as it is fair to both sides

Question 33

Gelissa receives a car as a graduation gift from her grandma. Two days after her grandma gives her the car it breaks down and costs Gelissa a substantial amount of money to repair. Can Gelissa sue her grandma for damages from a breach of contract as her grandma gave her a defective car?

A) Yes, as long as the repairs were reasonable.
B) No, a contract was never formed as it lacked a key element of a contract, consideration.
C) No, common law dictates one can never sue grandma.
D) Yes, as long as she can prove that her grandma was negligent in purchasing the car.

Question 34

Bekah and Connor are newly engaged love birds starting to plan their wedding. The first item of business is finding a reception hall for the reception. At Goodhue Hall, the manager hands them the following contract to read and sign if they want to reserve the hall:A. Be it here known that the party of the first party shall herein be referred to as, Bekah and Connor., the rentors Furthermore, the party of the second part shall henceforth be referred to as Goodhue Hall, the lessors, have agreed on this date, May 14^th, 2019 to be bound by the following covenants and restrictions.B. WHEREAS, Goodhue Hall wishes to enter into a contract with Bekah and Connor for rental of Goodhue Hall on December 31^st, 2020.C. Hall: means the front room, both bathrooms, the kitchen, front lobby and small dressing room. It specifically excludes the second floor rooms and the basement. Tables and Chairs: means the 8' round tables and white padded chairs.D. Goodhue Hall agrees to rent the hall and 15 table s and 100 chairs on December 31^st, 2020 from 10:00 am until 11:00pm for $5000.00 payable in one lump sum no later than six months before the event.E. The attached drawing describes the layout for the tables and chairs for the day of the rental.For each section of the proposed contract, label and define the terms and structure. Additionally, comment on the writing style of A and explain if this is the appropriate structure of a contract.

Question 35

Explain why it is important for legally astute businesspeople to work with strategically qualified attorneys when drafting a contract.

Question 36

Explain the significance of the United States tradition of upholding and enforcing contracts because of the freedom to contract.