Deck 9: Contract Formation

Question 1

A statement of future intent-"I plan to sell my 700-pound sow"-is an offer.

Answer 1

False

Question 2

To be effective,an offer must be communicated to the offeree.

Answer 2

True

Question 3

The only requirement of a valid contract is that it be voluntarily entered into.

Answer 3

False

Question 4

If a contractual promise is not fulfilled,the person who made it is not subject to the sanctions of a court.

Question 5

Parties are not usually free to bargain as they wish.

Question 6

A contract to do something that is prohibited by statutory law is void.

Question 7

A contract is void if one of the parties was intoxicated at the time of its formation.

Question 8

An agreement is evidenced by a single event: an offer.

Question 9

The rules of contract law are often followed to avoid potential disputes.

Question 10

A unilateral is a promise for an act.

Question 11

Under the mailbox rule,an acceptance takes effect at the time it is sent.

Question 12

As a general rule,contract duties can be delegated.

Question 13

Forcing someone to enter into a contract through fear created by threats is duress.

Question 14

In contract law,"consideration" refers to the courtesy that one party shows another in negotiating a deal.

Question 15

Misrepresentation of a material fact can occur through conduct alone.

Question 16

No offer may be revoked before it is accepted.

Question 17

An acceptance subject to new conditions implicitly rejects the offer.

Question 18

A contract involving property of any kind must be in writing to be enforceable.

Question 19

A contract is always enforceable even if one party is aware that the other party made a mistake of fact.

Question 20

An incidental third party beneficiary can sue to enforce the contract.

Question 21

Jolie signs a contract with Keaton,an unlicensed physician,to perform plastic surgery-a medical procedure.This contract is enforceable by

A)Jolie.
B)Jolie's medical insurance company.
C)Keaton.
D)no one.

Question 22

Maya is a stockbroker.Nora believes that the price of OK Goods,Inc.(OKGI),a widely traded stock,is going to in?crease sub?stantially.Through Maya,Nora buys 500 shares of OKGI at $10 per share,but the price soon drops to $2.Nora can successfully recover from Maya

A)nothing.
B)the amount of the purchase price.
C)the amount of the purchase price plus the expected increase.
D)the amount of the purchase price plus the unexpected decrease.

Question 23

Tomato Farms (TF)offers to sell Unified Grocers,Inc. ,a boxcar load of tomatoes.The offer is sent via overnight delivery because an acceptance is re?quired urgently.It would be most reasonable for Unified to accept via

A)a fax,a letter,or a phone call to TF within two weeks.
B)a fax sent to TF as soon as the offer is received.
C)a letter mailed to TF within two days.
D)a phone call to TF within five business days.

Question 24

Panini Vittles,Inc. ,contracts with Qino to deliver its sandwiches.Later,the parties decide to cancel their contract.They can

A)rescind their entire contract.
B)rescind their contract to the extent that it is executory.
C)rescind their contract if they make a new contract at the same time.
D)not rescind their contract.

Question 25

Vicky contracts with Rashad for the delivery of hospice services to benefit Sigmund.This is

A)a delegation.
B)an assignment.
C)a third party beneficiary contract.
D)not an enforceable contract.

Question 26

Yvon asks Zach,"Do you want to buy one of my fishing rods?" This is

A)a valid offer.
B)not a valid offer because the terms are not definite.
C)not a valid offer because Yvon did not state an intent.
D)not a valid offer because Zach did not respond.

Question 27

Grande Properties,Inc. ,and Investment Capital Corporation enter into a con?tract for a sale of land.To be enforceable,the contract must be in writing if the land is valued at

A)more than $500.
B)more than $5,000.
C)more than $50,000.
D)any price.

Question 28

Phil agrees to work for Vacation Resorts,Inc. ,as a chef.In determining whether a contract has been formed,an element of prime importance is

A)the parties' intent.
B)Phil's rate of pay.
C)the duration of the work.
D)Vacation Resorts's facilities.

Question 29

Loren and Kendra enter into a contract for the distribution of Loren's produce to local restaurants for which he agrees to pay Kendra.Kendra transfers her right to payment under the contract to County Bank.This transfer is

A)a delegation.
B)an assignment.
C)a third party beneficiary contract.
D)prohibited.

Question 30

Deepwater Mining Corporation offers to sell East China Refining,Inc. ,a certain quantity of unrefined oil.If East China sends an acceptance via Deepwater's authorized mode of communication,it will be effective when it is

A)in transit.
B)received.
C)sent.
D)written.

Question 31

Jenna,a minor acting on her own,signs a contract to buy a horse and its tack from Field Equine Ranch.Later,after taking possession of the horse and tack,Jenna disaffirms the deal.She

A)can keep the horse and the tack.
B)can keep the horse but not the tack.
C)can keep the tack but not the horse.
D)must return both the horse and the tack.

Question 32

Sylvia creates a profile for Today's Date,Inc. ,an online dating service.She exaggerates her appealing features and posts a photo of her friend Uva,whom Sylvia thinks is prettier.Enticed by the profile,Van subscribes to the service so that he can contact Sylvia.Van is most likely a victim of

A)undue influence.
B)fraud.
C)mistake.
D)nothing.

Question 33

Under a contract with Bucolic Farms,Agro Excavation,Inc. ,begins digging an agricultural pond.In mid-project,Agro asks for $15,000 over the contract price,claiming an increase in the "cost of doing business." Bucolic agrees but later refuses to pay.Their agreement is

A)unenforceable because Agro's performance was a preexisting duty.
B)unenforceable because Bucolic's promise was illusory.
C)enforceable.
D)unenforceable because its performance is unforeseeably difficult.

Question 34

When Jeff's car breaks down,he asks Kwik Tow,Inc. ,to tow it from its location to Lou's Repair Shop.There is no discussion of a price,and Jeff and Kwik do not sign any documents.After the tow,Kwik sends Jeff a bill.With respect to Jeff's obligation to pay the bill,this is

A)an express contract.
B)an implied contract.
C)a voidable contract.
D)no contract.

Question 35

Kelsey promises to pay Jon,her son,$5,000 if he obtains his degree at Ivy University,where he is currently in his second year.Jon graduates.Kelsey is

A)not required to pay,because Jon was already at Ivy.
B)not required to pay,because obtaining a degree benefits Jon.
C)required to pay,because a job can be hard to find after college.
D)required to pay,because Jon obtained a degree at Ivy.

Question 36

Grant offers to sell his Honda Civic for $10,000 to Ivy.Referring to the prices for similar Hondas,Ivy says,"I'll pay no more than $5,000." Grant says,"Forget it." Grant's offer was terminated by

A)Grant.
B)Honda.
C)Ivy.
D)no one-Grant's offer is still open.

Question 37

On behalf of the jazz group Synco-Passion,their manager Raul agrees to a performance in the Quay Club on May 1.Portia,acting for Quay Club,sends a written copy of the agreement to Raul to be signed.Typically,businesspersons put their contracts in writing to

A)ensure proof of the contracts' existence.
B)create substance from form.
C)obtain a check or other negotiable instrument.
D)practice their "letters of credit."

Question 38

Danton,a popular performer,dies.His spouse Caitlin sells their house to Buck.Un?known to Caitlin or Buck,in one of the closets is the mas?ter recording of an unreleased album.With respect to this recording,Buck can

A)keep it because Caitlin should have known about it.
B)keep it because the sale of a house includes everything in it.
C)not keep it because there was no voluntary consent to its sale.
D)not keep it because the sale of a house includes nothing in it.

Question 39

Lyra induces Moe to enter into a contract for the sale of an apartment about which Lyra fraudulently misrepresents a number of material facts.Lyra tells Moe that her commission is 6 percent,but their signed,written contract states "12 percent." The Statute of Frauds governs

A)contracts that are induced by fraud.
B)contracts that must be in writing to be enforceable.
C)the admissibility in court of oral evidence.
D)the reformation of oral and written statements into one contract.

Question 40

Scot enters into a contract with Tiffany that later proves voidable at Tiffany's option.If she elects to avoid the contract

A)both parties are released from it.
B)neither party is released from it.
C)only Scot is released from it.
D)only Tiffany is released from it.

Question 41

Ed,a businessperson,is a friend of Fran,the owner of a candy store.Every day,Ed spends five minutes in Fran's candy store,looking at the candy and usually buying one or two candy bars.One afternoon,Ed goes into the store,looks at the candy,and picks up a $1 candy bar.Ed waves the candy at Fran without saying a word and walks out.Is there a con?tract? If so,how would it be classified in terms of formation,perform?ance,and enforceability?

Question 42

On May 1,Brand Name Industries,Inc.(BNI),sent Carol a letter,via overnight delivery,offering to employ her to audit BNI's financial state?ments for the current year for $1,000.In the letter,BNI stated that Carol had ten days to accept.On May 5,Carol sent BNI a fax that stated,"The price for the audit seems too low.Would you consider paying $1,200?" BNI received the fax.The next day,Dan offered to conduct the audit for $800.On learning of Dan's offer,Carol immediately e-mailed BNI,agree?ing to do the work for $1,000.BNI received this e-mail on May 7.Explain why BNI and Carol do,or do not,have a contract.