Question 1

What is recognizance?
A)a party's acknowledgement in court that he or she will pay a specified sum of money if a certain event occurs
B)a sealed document that contains a formal contract whose contents are known to both parties and the referee who supervised its signing
C)a sealed document that contains an informal contract whose contents are known only to the parties
D)a party's acknowledgement in court that he or she is not liable to pay any money if a certain event occurs

Accepted Answer

Recognizance is a legal term that refers to a party's acknowledgement in court that he or she will pay a specified sum of money if a certain event occurs, such as failing to appear in court or failing to comply with other conditions of a court order.

Question 2

Alan tells Sherry that he will pay her $5, 000 if she runs the Boston Marathon.Once Sherry starts running the marathon, Alan ________.
A)can revoke the contract as informal verbal agreements are not binding
B)cannot revoke the contract
C)can reduce the money on offer
D)can only increase the money on offer

Accepted Answer

Once Alan makes an offer to pay Sherry $5,000 to run the Boston Marathon and Sherry accepts the offer, a binding contract is formed. Once a contract is formed, neither party can unilaterally change its terms. Therefore, Alan cannot revoke the contract or reduce the money on offer. He can only fulfill his promise to pay the $5,000 or potentially increase the amount offered.

Question 3

Michael Harrison opens an online store where people from all over the world can purchase and download iPhone apps.Which of these should Michael consult to know the rules of trading through his online store?
A)common law of contracts
B)objective law of contracts
C)UCITA
D)UCC

Accepted Answer

UCITA (Uniform Computer Information Transactions Act) specifically deals with the licensing and transferring of computer information, including software and online content. As Michael's online store sells iPhone apps, which are considered computer information, he should consult UCITA to know the rules of trading through his online store.

Question 4

Which of the following is an informal contract?
A)check
B)bank draft
C)lease
D)recognizance

Accepted Answer

A lease is an informal contract because it is typically not executed with the same formalities as a written contract. It can still be legally binding, but it may not have all of the same protections and requirements as a more formal agreement like a bank draft or recognizance. A check is also not considered an informal contract, as it is simply a payment instrument.

Question 5

Which of the following is true of UCITA?
A)It establishes the rules for operation of franchises in the U.S.A.
B)It does not become law until a state adopts it as a statute.
C)It solely deals with the formation of electronic contracts, not licenses.
D)It addresses most of the legal issues that are encountered while starting an entrepreneurial venture.

Accepted Answer

UCITA (Uniform Computer Information Transactions Act) is a model law that does not become law until a state adopts it as a statute. It governs the formation and enforcement of contracts related to computer software, digital content, and other intellectual property. It does not deal with franchise operations or address all the legal issues related to starting an entrepreneurial venture.

Question 6

If a contract is required to be in writing under the Statute of Frauds but is not, the contract is ________.
A)valid
B)void
C)voidable
D)unenforceable

Accepted Answer

If a contract is required to be in writing under the Statute of Frauds but is not, the contract is unenforceable. This means that a court will not enforce the agreement, but it does not mean that the contract is entirely void or invalid.

Question 7

Ben was talking to Harry who was drunk.Harry agreed to give his car to Ben as a token of friendship.Once sober, Harry asks Ben to return his car.This contract is considered ________.
A)valid
B)void
C)voidable
D)unenforceable

Accepted Answer

The contract is considered voidable because Harry was under the influence of alcohol and did not have the mental capacity to enter into a binding agreement. When he became sober, he realized the mistake and asked for his car back. Therefore, Harry has the right to void the contract.

Question 8

An offeror uses blackmail to make an offeree sign a contract that involves the sale of the offeree's house.The contract is ________.
A)valid
B)void
C)voidable
D)unenforceable

Accepted Answer

Contracts formed under duress, including blackmail, are considered voidable at the option of the coerced party. This means the offeree can choose to either affirm or void the contract.

Question 9

Which of the following statements is true about contracts?
A)Parties to an informal contract can use any words they choose to express their contract.
B)A contract under seal is disclosed only to the offeror of the contract.
C)A letter of credit is an informal contract.
D)A void contract is the same as a voidable contract.

Accepted Answer

Parties to an informal contract are free to use any words or language they choose to express their agreement. Formal contracts, on the other hand, often require specific language and formalities to be enforceable.

B) This statement is false. A contract under seal is a formal contract that must be signed and sealed in front of a witness, and it is typically enforceable against both parties.

C) This statement is false. A letter of credit is a type of formal contract used in international trade and financing.

D) This statement is false. A void contract is one that is completely unenforceable and has no legal effect, while a voidable contract can be legally voided by one or both parties.

Question 10

Which of the following is a necessary condition for a contract to be considered valid?
A)It is enforceable by both the parties.
B)It is enforceable by at least one of the parties.
C)It can be voided by one of the parties.
D)It can be voided by both parties.

Accepted Answer

For a contract to be considered valid, it must be enforceable by at least one of the parties. This means that there must be mutual agreement between the parties, consideration or something of value exchanged, and the contract must not violate any laws or public policy. However, it is not necessary for the contract to be enforceable by both parties or able to be voided by either party.

Question 11

A contract is ________ if the offeror's promise is answered with the offeree's promise of acceptance.
A)unilateral contract
B)bilateral contract
C)executed contract
D)executory contract

Accepted Answer

A bilateral contract is a type of contract where both parties exchange promises to perform some act. This is different from a unilateral contract where only one party makes a promise in exchange for some act or performance. An executed contract refers to a contract that has been fully performed by both parties, while an executory contract is a contract where one or more parties have not yet fully performed their obligations under the contract.

Question 12

The ________ establishes uniform legal rules for the formation and enforcement of electronic contracts and licenses.
A)common law of contracts
B)Restatement of the Law of Contracts
C)UCITA
D)UCC

Accepted Answer

UCITA, or the Uniform Computer Information Transactions Act, specifically focuses on the formation and enforcement of electronic contracts and licenses, while the common law of contracts and Restatement of the Law of Contracts are broader legal concepts that apply to contracts in general. The UCC, or Uniform Commercial Code, applies to the sale of goods but does not address electronic contracts and licenses specifically.

Question 13

A contract is ________ if the offeror's offer can be accepted only by the performance of an act by the offeree.
A)unilateral
B)bilateral
C)implied-in-law
D)executory

Accepted Answer

A unilateral contract is one in which the offeror's offer can be accepted only by the performance of an act by the offeree. In a bilateral contract, both parties make promises to each other, while an implied-in-law contract arises from the conduct of the parties rather than an explicit agreement. An executory contract is one that has not yet been fully performed by either party.

Question 14

Windsor, the owner of Windsor's Sandwiches contacts a new supplier Gary.He tells Gary that he will pay him $375 if Gary delivers 20 pounds of cheese the following morning.Gary promises to make the delivery as requested by Windsor.This creates a ________ contract between them.
A)unilateral
B)bilateral
C)implied-in-law
D)executory

Accepted Answer

A bilateral contract is created when both parties exchange promises. In this case, Windsor promises to pay Gary and Gary promises to deliver the cheese. Therefore, a bilateral contract exists between them. Option A is incorrect because, in a unilateral contract, only one party makes a promise, and the other party can accept by performing the requested act. Option C, implied-in-law contract, also known as quasi-contract, is created by the law to prevent unjust enrichment and is not formed by mutual agreement. Lastly, option D, executory contract, is a contract where one or both parties still have obligations to fulfill. This option does not apply here because the contract has not been completed yet.

Question 15

A contract that has been fully performed on both sides is called an ________ contract.
A)executory
B)executed
C)option
D)executive

Accepted Answer

An executed contract is a contract that has been fully performed on both sides. Option contracts give one party the right to buy or sell something at a future time, but they are not fully executed until that option is exercised. Executory contracts are contracts where one or both parties still have obligations to fulfill. Executive is not a relevant term for describing a contract.

Question 16

According to the objective theory of contracts, the intent to enter into an express or implied-in-fact contract is judged by the ________.
A)reasonable person standard
B)legality of the contract
C)doctrine of equity
D)common law of contracts

Accepted Answer

The objective theory of contracts states that the intent to enter into a contract should be judged by how a reasonable person would interpret the actions and words of the parties involved. The other choices may be relevant in contract law, but they do not specifically pertain to how intent is judged.

Question 17

The ________ states that the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties.
A)Restatement of the Law of Contracts
B)Restatement (Second)of Contracts
C)objective theory of contracts
D)common law of contracts

Accepted Answer

The objective theory of contracts is the principle that the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties. The Restatement of the Law of Contracts and Restatement (Second) of Contracts are both sources of contract law, but do not specifically pertain to the intent to contract being judged objectively. The common law of contracts is a general term for the body of contract law developed through court decisions over time.

Question 18

Yvonne finds a carpenter to do some repairs for her house and tells him that if he finishes the job within Saturday, she would pay him $1, 000.This offer creates a(n)________ contract.
A)executed
B)executory
C)unilateral
D)bilateral

Accepted Answer

This is a unilateral contract because Yvonne is making a promise to pay the carpenter if he completes the job within Saturday. The carpenter is not obligated to complete the job, but if he does, Yvonne is obligated to pay him.

Question 19

Contracts that have been fully performed by one side but not by the other are classified as ________ contracts.
A)executory
B)executed
C)void
D)voidable

Accepted Answer

An executory contract is one where one or both parties have not yet fulfilled their obligations. If one side has fully performed but the other side has not, then it is an executory contract. A fully performed contract by both sides is classified as an executed contract. Void contracts are those that are not legally enforceable from the beginning, and voidable contracts are those where one party has the option to rescind or enforce the contract.

Question 20

Martha contacts a bakery to get a cake for her son's birthday party.She tells the baker that she will pay him $150 for the cake if he delivers the cake on Friday evening.If the baker does not deliver the cake on Friday evening, which of the following will hold true?
A)Martha can sue the baker to recover $150 in damages.
B)Martha can sue the baker but cannot recover damages.
C)The baker has to give $150 plus cost of the replacement cake to Martha as he entered into a verbal contract with her.
D)Martha cannot sue the baker.

Accepted Answer

The answer of Martha contacts a bakery to get a...

Quiz 9: Nature of Traditional and E-Contracts

What is recognizance?

Alan tells Sherry that he will pay her $5, 000 if she runs the Boston Marathon.Once Sherry starts running the marathon, Alan ________.

Michael Harrison opens an online store where people from all over the world can purchase and download iPhone apps.Which of these should Michael consult to know the rules of trading through his online store?

Which of the following is an informal contract?

Which of the following is true of UCITA?

If a contract is required to be in writing under the Statute of Frauds but is not, the contract is ________.

Ben was talking to Harry who was drunk.Harry agreed to give his car to Ben as a token of friendship.Once sober, Harry asks Ben to return his car.This contract is considered ________.

An offeror uses blackmail to make an offeree sign a contract that involves the sale of the offeree's house.The contract is ________.

Which of the following statements is true about contracts?

Which of the following is a necessary condition for a contract to be considered valid?

A contract is ________ if the offeror's promise is answered with the offeree's promise of acceptance.

The ________ establishes uniform legal rules for the formation and enforcement of electronic contracts and licenses.

A contract is ________ if the offeror's offer can be accepted only by the performance of an act by the offeree.

Windsor, the owner of Windsor's Sandwiches contacts a new supplier Gary.He tells Gary that he will pay him $375 if Gary delivers 20 pounds of cheese the following morning.Gary promises to make the delivery as requested by Windsor.This creates a ________ contract between them.

A contract that has been fully performed on both sides is called an ________ contract.

According to the objective theory of contracts, the intent to enter into an express or implied-in-fact contract is judged by the ________.

The ________ states that the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties.

Yvonne finds a carpenter to do some repairs for her house and tells him that if he finishes the job within Saturday, she would pay him $1, 000.This offer creates a(n) ________ contract.

Contracts that have been fully performed by one side but not by the other are classified as ________ contracts.

Martha contacts a bakery to get a cake for her son's birthday party.She tells the baker that she will pay him $150 for the cake if he delivers the cake on Friday evening.If the baker does not deliver the cake on Friday evening, which of the following will hold true?