Question 1

Any property other than an interest in real property is:
A) goods.
B) personal property.
C) tangible property.
D) intangible property.

Accepted Answer

Personal property refers to any property that is not real property, such as goods, chattels, and intangible assets. Tangible property refers to property that can be physically touched or seen, while intangible property refers to property that cannot be physically touched, such as patents or trademarks. Therefore, the best answer is B, as it encompasses all types of non-real property.

Question 2

A contract in which both parties exchange promises is a:
A) voidable contract.
B) bilateral contract.
C) unilateral contract.
D) quasi contract.

Accepted Answer

A bilateral contract is a type of contract in which both parties exchange promises. Each party is both a promisor (one who makes a promise) and a promisee (one to whom a promise is made). This is different from a unilateral contract, in which only one party makes a promise, while the other party has the option to accept or reject the offer.

Question 3

Common law relating to the formation of contracts has little relevance in the business world today.

Accepted Answer

Common law relating to the formation of contracts is still very much relevant in the business world today. It is important for businesses to understand the principles of offer and acceptance, consideration, and intention to create legal relations in order to form binding contracts. These principles are still applied and enforced by courts today.

Question 4

Contract law:
A) has seen little change during the nineteenth and twentieth centuries.
B) has experienced an expansion of the absolute freedom of contract during the twentieth century.
C) today usually recognizes contractual obligations whenever the parties manifest an intent to be bound.
D) requires privity between parties seeking to enforce contractual rights.

Accepted Answer

Contract law today typically recognizes contractual obligations when the parties clearly express an intent to be bound, regardless of the actual wording used in the contract. This has expanded the scope of enforceable contracts beyond traditional forms that required certain formalities or specific elements to be present.

Question 5

A contract to sell life insurance is covered by Article 2 of the Uniform Commercial Code.

Accepted Answer

Life insurance contracts are not covered by Article 2 of the Uniform Commercial Code, which specifically deals with the sale of goods. Rather, life insurance contracts fall under the realm of insurance law.

Question 6

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by:
A) Article 2 of the UCC.
B) state common law.
C) federal statute.
D) the law of quasi contract.

Accepted Answer

The contract between Caroline and Incellmed Corporation for work as a sales rep is an employment contract and is therefore governed by state common law.

Question 7

Larry says to Jeff, "If you will mow my lawn, I will give you fifteen dollars." Under these facts, no contract is formed until Jeff finishes mowing the lawn.

Accepted Answer

The answer of Larry says to Jeff, "If you will...

Question 8

Promissory estoppel is a contractual doctrine that includes the following considerations:
A) The courts use the doctrine of promissory estoppel to enforce unilateral promises.
B) Under this doctrine the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the nature of the promise to take action or refrain from taking action and the promisee does so.
C) The courts will not, under any circumstance, enforce promises that do not include all four of the elements of contract.
D) None of these apply to promissory estoppel.

Accepted Answer

Promissory estoppel is a doctrine that allows a party to enforce a promise even if it does not meet the traditional requirements of a contract. It requires that the promisor made a clear promise, the promisee relied on the promise, and the reliance was reasonable and foreseeable. Therefore, choice B is the correct answer as it correctly describes the considerations of promissory estoppel.

Question 9

Lee has been declared incompetent by the court and is under the care of his sister. Without his sister's knowledge, Lee rents the 30,000-seat civic center for his birthday party. Lee's contract to rent the civic center is best described as a:
A) valid contract.
B) voidable contract.
C) void contract.
D) quasi contract.

Accepted Answer

Lee has been declared incompetent by the court, meaning he lacks legal capacity to enter into a contract. Therefore, any contract he enters into is void, meaning it has no legal effect. His sister also has legal authority over him as his caretaker, so any contract he enters into without her knowledge or consent is unenforceable.

Question 10

Ron says to Matt, "If you design and landscape my front lawn by the time I return from Paris next month, I will pay you $5,000." Matt does not respond but has the landscaping done by the time Ron returns. This is an example of a unilateral contract.

Accepted Answer

This is an example of a unilateral contract because only one party (Ron) makes a promise and the other party (Matt) is not required to respond, but can accept the offer by performing the requested action (designing and landscaping the lawn). Since Matt performed the requested action, Ron is obligated to pay the agreed-upon amount.

Question 11

Contracts are governed primarily by:
A) state common law.
B) federal common law.
C) statutory law.
D) federal case law.

Accepted Answer

Contracts are primarily governed by state common law, which is based on court decisions and legal precedents set within each state's court system. While statutory law and federal case law can also play a role in contract law, they are typically secondary to state common law.

Question 12

The Uniform Commercial Code would be applied in which of the following situations?
A) A contract for landscape services
B) A contract for sale of patent rights
C) A contract for the purchase of farmland
D) A contract to buy living room furniture

Accepted Answer

The answer of The Uniform Commercial Code would be applied...

Question 13

If a contract is not clearly unilateral or bilateral, the courts presume that the parties intended a unilateral contract.

Accepted Answer

Courts typically presume that a contract is bilateral, not unilateral, unless there is clear evidence indicating that only one party was intended to make a promise.

Question 14

Mike, the owner of a yogurt shop, orders 500 quarts of yogurt from his supplier. Nothing, however, is said by either party about the price or method of payment. The supplier ships the yogurt as ordered. Since this is a contract implied in fact, Mike must pay his supplier for the yogurt.

Accepted Answer

A contract implied in fact is based on the behavior of the parties involved rather than explicitly stated terms. By ordering and accepting the shipment of yogurt, both parties have agreed to an implied contract in which Mike must pay the supplier for the yogurt.

Question 15

Amendments to Article 2 of the UCC were promulgated in 2003 to reflect developments in the law and business practices and to accommodate electronic commerce.

Accepted Answer

The statement is true. Amendments to Article 2 of the UCC were indeed promulgated in 2003 to reflect developments in the law and business practices and to accommodate electronic commerce.

Question 16

An implied contract is as enforceable as an express contract.

Accepted Answer

An implied contract is based on the conduct of the parties and their actions and is just as legally binding as an express contract, which is based on written or spoken words. Both types of contracts have the same legal validity and can be enforced in court if necessary.

Question 17

A noncontractual promise may be enforceable where there has been justifiable reliance on the promise.

Accepted Answer

This is known as the doctrine of promissory estoppel, where a promise that is not supported by consideration (i.e. a contract) can be enforced if the person who made the promise should have reasonably expected the other party to rely on it, and the other party did in fact rely on it to their detriment.

Question 18

Ann makes a material misrepresentation of fact to Brian, and based upon the misrepresentation, Brian enters into a contract. Ann now thinks that the contract is not fair to her. This contract is voidable at Ann's option.

Accepted Answer

The contract is voidable at Brian's option because he was the party misled by Ann's material misrepresentation of fact, not the other way around.

Question 19

An implied in fact contract is formed by conduct.

Accepted Answer

An implied in fact contract is formed by the conduct of the parties, rather than a written or spoken agreement.

Question 20

Alice makes a material misrepresentation of fact to Betty, and based upon the misrepresentation, Betty enters into a contract. Betty now realizes she was deceived and wants to get out of the contract. This contract is voidable at Betty's option.

Accepted Answer

A material misrepresentation of fact invalidates the formation of a contract, making it voidable at the innocent party's option. In this scenario, Betty was deceived by Alice's misrepresentation, and therefore has the option to void the contract.

Quiz 9: Introduction to Contracts

Any property other than an interest in real property is:

A contract in which both parties exchange promises is a:

Common law relating to the formation of contracts has little relevance in the business world today.

Contract law:

A contract to sell life insurance is covered by Article 2 of the Uniform Commercial Code.

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by: