Question 1

Heavyweight boxers Mike Tyson and Evander Holyfield met in 1997 in Las Vegas for a championship match. During the third round of the fight, a desperate Tyson bit off a piece of Holyfield's ear. The fight continued until moments later when Tyson bit Holyfield's other ear. Tyson was disqualified. Some fans were so outraged that they sued Tyson and the fight promoters seeking a refund. They sued on the basis of, among other theories, a claim to being third-party beneficiaries to various contracts into which the defendants had entered. The fans:​
A)Can recover as third party done beneficiaries
B)Can recover as third party creditor beneficiaries
C)Can recover as third party intended beneficiaries
D)Cannot recover as they are merely incidental beneficiaries with no rights in the contracts to which Tyson was a party.

Accepted Answer

The fans cannot recover as they are considered incidental beneficiaries rather than intended beneficiaries of the contracts related to the boxing match. Intended beneficiaries have rights in a contract specifically intended for their benefit, while incidental beneficiaries benefit from a contract indirectly without any direct intention from the contracting parties to benefit them. In this case, the contracts for the boxing match were primarily between Tyson, Holyfield, and the promoters, not directly intended to benefit the fans.

Question 2

Vian, Mariah Carey's stepfather before she achieved stardom, was in the business of designing, producing, and marketing gift and novelty items. He claimed that Carey agreed orally to give him a license to produce "Mariah dolls," which would be statuettes of the singer that would play her most popular songs. Vian asserted that this right was given in exchange for his financial and emotional support of Carey, including picking her up from late-night recording sessions, providing her with the use of a car, paying for dental care, allowing her to use his boat for business meetings and rehearsals, and giving her various items to help furnish her apartment. Vian based his claims on three conversations, twice in the family car and once on Vian's boat. Vian said to Carey "Don't forget about the M riah dolls." According to Vian, on one occasion, Carey said, "Okay." On other occasions, she merely smiled and nodded. Carey said she thought it was a joke. Is there a contract?​
A)There is a no contract because there is no evidence that Carey intended by a nod of her head or the expression "okay" to enter into a complex commercial licensing agreement involving her likeness and playing her copyrighted songs.
B)There is no contract because there is no written agreement, and all contracts must be in writing to be enforced.
C)There is no contract if either party thought it was a joke.
D)All of the above
E)None of the above. There is a contract if she promised him the right in return for his past financial support.

Accepted Answer

The correct choice is A because the evidence provided (a nod of the head or saying "okay") does not clearly indicate that Carey intended to enter into a complex commercial licensing agreement. Contracts, especially those involving licensing and copyrights, require clear, mutual agreement and understanding of the terms, which is not evident in this scenario.

Question 3

In the historic case of Hamer v. Sidway , the nephew:​
A)lost, as there was no consideration.
B)lost, as the uncle was dead.
C)won, as there was consideration.
D)won, as there was a completed gift.

Accepted Answer

In Hamer v. Sidway, the court ruled in favor of the nephew, determining that the uncle's promise to pay him if he refrained from drinking, using tobacco, swearing, and playing cards or billiards for money until he was 21 constituted a valid consideration. The nephew's abstention from these activities was deemed a sufficient sacrifice or detriment to constitute consideration, making the uncle's promise enforceable.

Question 4

Baker, a minor, entered into a 3-year contract with Adidas to wear its footwear for $20,000 in the first year of the contract and $25,000/year for each of the final 2 years. The agreement provided that any claim of Baker's arising out of the agreement, would be governed by the law of the Netherlands and settled by Amsterdam courts. On April 10, 2004, Baker turned 18. On April 19, 2004, Adidas sent
Another payment to Baker for $12,500, and in May, the company flew Baker to Portland to try a redesigned shoe. In Oct. 2004, Adidas International wired $12,500 to Baker, thus completing its contractual obligation to pay Baker a $25,000 endorsement fee for 2004. Baker ended her athletic career because of a foot injury at about the same time Adidas completed its payment obligation. She then brought suit against Adidas in NC state court, alleging the shoes caused the injuries that ended her career. Adidas claims she must sue in the Netherlands under the contract.​
A)She need not sue in the Netherlands, because she entered into the contract when she was a minor and can disaffirm it.
B)Since minors can disaffirm parts of the contract and affirm parts of the contract, she can disaffirm the forum selection clause and sue in North Carolina.
C)She cannot disaffirm the contract, in whole or in part, because she ratified it by accepting the payments after she turned 18.
D)She can disaffirm because a contract for the endorsement of goods is governed by the UCC.

Accepted Answer

Baker ratified the contract by accepting payments after turning 18, which means she affirmed the contract's terms, including the forum selection clause. Therefore, she cannot disaffirm the contract to avoid the agreed-upon jurisdiction.

Question 5

Ruby's laundry room needed cleaning. She promised her seventeen year-old daughter Pearl that if she cleaned the laundry room, she would pay her $50. Which statement is TRUE?​
A)Pearl is obligated to perform under an express bilateral agreement and Ruby is obligated to pay.
B)This is an example of a unilateral contract and Pearl is under no obligation to perform, but if she does, she is entitled to $50.
C)This is an example of a quasi contract, and if Pearl cleans, she would be entitled to the value of her services, which may or may not be $50.
D)There is no consideration so no contract.

Accepted Answer

This scenario describes a unilateral contract where Ruby promises to pay Pearl $50 if Pearl cleans the laundry room. Pearl is not obligated to clean the room, but if she chooses to do so, Ruby is obligated to pay her the promised amount.

Question 6

Assume that there is a contract for the sale of the hat for $10. DB refuses to perform the agreement and deliver the hat. If similar hats are selling on eBay for $100, what would be Dan's remedy?​
A)Specific performance, a court order to make DB give Dan the hat
B)Injunctive relief, a court order to stop DB from selling the hat to anyone else.
C)Compensatory damages of $90
D)Nominal damages of $1
E)Punitive damages of $100

Accepted Answer

Compensatory damages of $90 would be Dan's remedy to cover the difference between the contract price ($10) and the market price ($100) of the hat, thus compensating him for his loss due to DB's refusal to perform the agreement.

Question 7

Adrian sent an offer to Sehar by mail to sell him a used computer monitor for $125. An appropriate response accepting this offer is first effective to form a contract when​
A)Sehar's acceptance arrives at the Adrian's.
B)Sehar decides to accept.
C)Sehar's acceptance is put in an envelope to mail.
D)Sehar mails his letter of acceptance.

Accepted Answer

Under the mailbox rule, an acceptance is generally considered effective once it is dispatched, as long as the acceptance is properly addressed and stamped. Therefore, when Sehar mails his letter of acceptance, the contract is formed at that moment.

Question 8

Morse, age 35, is a bartender for the Nordic Restaurant in Nevada. Craig brought twenty of his friends to the restaurant to celebrate a rare soccer victory and he ordered four rounds of drinks. The bill totaled $250. Craig later learned that Morse failed to renew her bartender's license, and Nevada requires a license to be a bartender. Craig refuses to pay, claiming the contract is unenforceable because Morse lacks a license. Requirements for such a license in Nevada include that the applicant be 21 years old, a non-felon, and pay a $100 fee.​
A)The contract is voidable at Craig's option.
B)This contract must be in writing to be enforceable.
C)The contract is valid and Craig must pay the bill.
D)The contract is void because Morse lacks the appropriate state license.

Accepted Answer

The contract between Craig and the restaurant is valid despite Morse's lack of a license because the contract is for the purchase of goods (drinks) and services, and Craig received the goods and services as agreed. The issue of Morse's license does not invalidate the contract between Craig and the restaurant.

Question 9

DB offered to sell a cap for $10. Nate said, "I'll pay you $1." DB said OK.​
A)There is a contract for the sale of the hat for $1.00.
B)There is no contract for the sale of the hat because nothing is in writing.
C)There is no contract because there was only an offer and acceptance
D)There is no contract because there is no consideration.

Accepted Answer

There is a contract for the sale of the hat for $1.00 because DB offered to sell the hat for $10, Nate counter-offered with $1, and DB accepted Nate's offer, fulfilling the requirements for a valid contract: offer, acceptance, and consideration (the $1). Contracts for the sale of goods under a certain amount (typically under $500, but this can vary by jurisdiction) do not need to be in writing to be enforceable.

Question 10

Dr. Aurigemma sued his employer, a rehabilitation center, for violation of an alleged oral agreement pursuant to which the doctor alleged he was to serve as medical director. The doctor alleged that he entered into an oral agreement on September 4, 2003, whereby he agreed to serve as medical director for one year beginning October 1, 2003 for a salary of $120,000. The employer denied any such agreement and contended that the contract was not enforceable. Does the Statute of Frauds require that the agreement be in writing?​
A)Yes, it was for more than $500.
B)Yes, it was not capable of being performed within a year.
C)Both of the above.
D)Neither of the above. It was for one year so an oral agreement can be enforced.

Accepted Answer

The Statute of Frauds requires certain types of contracts to be in writing to be enforceable. One of the criteria is that the contract cannot be performed within one year from the date of its making. Since the agreement in question spans over a year from the date it was allegedly made (September 4, 2003) to its completion (beyond October 1, 2004), it falls under this requirement. The fact that it was for more than $500 is relevant under the Statute of Frauds but for a different reason than the one-year rule.

Question 11

Tony entered into a complete and final written lease agreement for an apartment. The lease specified in bold, "NO PETS." At the time the parties signed the agreement, Tony pleaded with the landlord to  allow him to keep Fluffy his cat. The landlord promised orally that keeping the cat would not be a problem. Tony's friends can attest to the fact that the landlord made this oral promise, but now the landlord wants to terminate the lease agreement. The lease provides for early termination with a penalty provision if pets are found on the premises. Which of the following statements is TRUE?
A)Evidence cannot be admitted to show that there was an oral agreement that was inconsistent with the terms of the written contract, so the written agreement stands, and Fluffy must go.
B)The written contract was modified orally when it was executed so the oral agreement is binding. Fluffy stays.
C)The oral agreement can be proved so it can be enforced. Fluffy stays.
D)The Statute of Frauds does not require leases to be on writing, so the oral agreement is not in violation of either the Statute of Frauds or the Parole Evidence Rule. Since the oral agreement is valid, Fluffy stays.

Accepted Answer

The Parol Evidence Rule generally prohibits the admission of evidence of prior or contemporaneous oral agreements that would contradict the terms of a written contract, meaning the "NO PETS" clause in the written lease agreement would stand, and any oral agreement to the contrary would not be enforceable.

Question 12

DB offered to sell a cap in her possession for $10. Dan said he would pay $5.
A)There is a contract for the sale of the hat for $10.
B)There is a contract for the sale of the hat for $5
C)There is no contract because Dan's counter-offer terminated his power of acceptance.
D)There is a contract if DB says nothing to Dan's proposal, because then her silence would be an acceptance.

Accepted Answer

Dan's counter-offer of $5 in response to DB's original offer of selling the cap for $10 effectively rejects DB's original offer and presents a new offer. Since an original offer is terminated by a counter-offer, there is no contract based on the original terms, and DB's power to accept the original terms is terminated.

Question 13

Students canceling their housing contract after occupying their room shall pay damages in of $5.00 per day for the remainder or unexpired portion of the term of the academic agreement, not to exceed $400." This clause in the contract for student housing is a(n):​
A)Liquidated Damages Clause
B)Exculpatory Clause
C)Novation
D)Option Contract

Accepted Answer

This clause is a Liquidated Damages Clause because it specifies a predetermined amount of damages ($5.00 per day, up to $400) that a student must pay if they cancel their housing contract after occupying their room, which is a common feature of liquidated damages clauses to provide a clear, agreed-upon penalty for breach of contract.

Question 14

Promising to do something that one does not have an obligation to do in reply to a request from another usually constitutes:​
A)consideration
B)promissory estoppel
C)capacity
D)detrimental reliance

Accepted Answer

Consideration in a contract involves a promise to do something that one is not legally required to do or a promise not to do something that one has the right to do. When someone promises to do something in response to a request, even if they were not initially obligated, this promise can serve as consideration, making the agreement potentially enforceable.

Question 15

DB offered to sell a cap for $10. Dan asked if she would give him 2 hours to think about it. She said, "Sure." Dan checked eBay, learned the hat was worth $100, but before he could call to accept the offer, she revoked it.​
A)There is a contract for the sale of the hat if the 2-hour period had not expired, because she promised to keep the offer open.
B)There is a contract for the sale of the hat, but only if the offer was in writing.
C)There is a contract because of the option.
D)There is no contract because DB revoked the offer prior to acceptance and there was no consideration for her promise to keep it open.

Accepted Answer

In contract law, an offer can be revoked at any time before it is accepted, unless the offeree has given consideration for a promise to keep the offer open, which creates an option contract. In this scenario, Dan did not provide any consideration to DB for her promise to hold the offer open for two hours, allowing DB to legally revoke the offer before Dan accepted it.

Question 16

Sara and Rizwan enter into a contract by which Rizwan agrees to pay Sara $200 for a new digital player, Sara's subsequent transfer of her right to receive payment for the new digital player is known as:​
A)a delegation.
B)an assignment.
C)a novation.
D)a quasi-contract.

Accepted Answer

Sara's transfer of her right to receive payment to someone else is known as an assignment. An assignment involves transferring benefits or rights from one party to another, while obligations or duties are transferred in a delegation.

Question 17

DB offered to sell a cap for $10. Dan said no to the offer. After checking on eBay, and learning that the hat was worth $100, he called DB, said he changed his mind and he would buy the hat for $10.​
A)There is a contract for the sale of the hat for $10.
B)There is only an offer by Dan for the purchase of the hat for $10.
C)There is no contract because Dan revoked the offer.
D)There is no contract because DB revoked the offer.

Accepted Answer

Initially, DB offered to sell the hat for $10, which Dan declined. When Dan later decided he wanted to buy the hat for $10 after discovering its value, his action constituted a new offer to DB rather than forming a contract. DB's original offer was terminated when Dan initially declined it, so any subsequent agreement would require acceptance by DB of Dan's new offer.

Question 18

Plotty's Discount Motors sold a Pontiac Grand Am to Charles. The car's odometer said it had less than 130,000 miles on it, but a history report says the actual mileage is about 230,000. Plotty's Motors was manipulating the odometer dial on vehicles and turning the mileage listed backwards in order to make the vehicles more appealing to prospective buyers. If Charles chose to keep the car and sue for
Damages, which statement is TRUE?​
A)Charles would be entitled to punitive damages for the fraud.
B)Charles would be entitled to compensatory damages equal to the difference in the value of a car with 230,000 miles and one with 130,000.
C)Both of the above.
D)Neither of the above. He would only be entitled to nominal damages.

Accepted Answer

Charles would likely be entitled to both punitive damages for the fraud committed by Plotty's Motors through the deliberate act of manipulating the odometer, and compensatory damages to cover the difference in value between a car with the misrepresented mileage and its true mileage.

Question 19

The Carolina Panthers signed a 4-year $22 million contract with Cam Newton. Which of the following statements is TRUE?​
A)Cam could assign his right to payment from the Panthers to the Special Olympics.
B)Cam could not delegate his duty to play to a comparable athlete.
C)The Panthers organization could delegate their duty to pay Cam to a subsequent owner of the team.
D)All of the above
E)None of the above

Accepted Answer

All of the options are true. A) Cam could assign his right to payment to another party, such as the Special Olympics. B) Cam cannot delegate his personal service obligation to play football to another athlete, as this is a duty based on his unique skills and abilities. C) The Panthers could delegate their duty to pay Cam to a new owner if the team is sold, as this is a financial obligation rather than a personal service obligation.

Question 20

"Dear Lawyer, Before we married my husband and I had an agreement that, if I married him, he would give me certain things. We texted about things he promised me, like jewelry and a car, and an email states he was to have his attorney draw up a prenup prior to our marriage. He lives in Ohio and I live in Colorado. He arrived in Colorado one day before our wedding without the prenup. While here he spoke with two of my children and two of my friends about the terms of our prenup and what he would be giving me after we wed. After being together for 3 1/2 months, he threw me out for no reason other than 'Sometimes I want to be married and sometimes I don't.' Am I entitled to the stuff he promised me?"​
A)No, the contract is not capable of being performed in a year because marriage is a longer commitment.
B)No, prenuptial agreements must be in writing and signed by the party to be charged, in this case her husband.
C)No, prenuptial agreements must be in writing and signed by both parties.
D)Yes, there are witnesses to the oral promise, her children and friends.

Accepted Answer

Prenuptial agreements must be in writing and signed by both parties to be enforceable.

Quiz 8: Contracts: Enforceable Agreements

In the historic case of Hamer v. Sidway , the nephew:

Ruby's laundry room needed cleaning. She promised her seventeen year-old daughter Pearl that if she cleaned the laundry room, she would pay her $50. Which statement is TRUE?

Assume that there is a contract for the sale of the hat for $10. DB refuses to perform the agreement and deliver the hat. If similar hats are selling on eBay for $100, what would be Dan's remedy?

Adrian sent an offer to Sehar by mail to sell him a used computer monitor for $125. An appropriate response accepting this offer is first effective to form a contract when

DB offered to sell a cap for $10. Nate said, "I'll pay you $1." DB said OK.

DB offered to sell a cap in her possession for $10. Dan said he would pay $5.

Students canceling their housing contract after occupying their room shall pay damages in of $5.00 per day for the remainder or unexpired portion of the term of the academic agreement, not to exceed $400." This clause in the contract for student housing is a(n) :

Promising to do something that one does not have an obligation to do in reply to a request from another usually constitutes:

DB offered to sell a cap for $10. Dan asked if she would give him 2 hours to think about it. She said, "Sure." Dan checked eBay, learned the hat was worth $100, but before he could call to accept the offer, she revoked it.

Sara and Rizwan enter into a contract by which Rizwan agrees to pay Sara $200 for a new digital player, Sara's subsequent transfer of her right to receive payment for the new digital player is known as:

DB offered to sell a cap for $10. Dan said no to the offer. After checking on eBay, and learning that the hat was worth $100, he called DB, said he changed his mind and he would buy the hat for $10.

The Carolina Panthers signed a 4-year $22 million contract with Cam Newton. Which of the following statements is TRUE?

Quiz 8: Contracts: Enforceable Agreements

In the historic case of Hamer v. Sidway , the nephew:​

Ruby's laundry room needed cleaning. She promised her seventeen year-old daughter Pearl that if she cleaned the laundry room, she would pay her $50. Which statement is TRUE?​

Assume that there is a contract for the sale of the hat for $10. DB refuses to perform the agreement and deliver the hat. If similar hats are selling on eBay for $100, what would be Dan's remedy?​

Adrian sent an offer to Sehar by mail to sell him a used computer monitor for $125. An appropriate response accepting this offer is first effective to form a contract when​

DB offered to sell a cap for $10. Nate said, "I'll pay you $1." DB said OK.​

DB offered to sell a cap in her possession for $10. Dan said he would pay $5.

Students canceling their housing contract after occupying their room shall pay damages in of $5.00 per day for the remainder or unexpired portion of the term of the academic agreement, not to exceed $400." This clause in the contract for student housing is a(n) :​

Promising to do something that one does not have an obligation to do in reply to a request from another usually constitutes:​

DB offered to sell a cap for $10. Dan asked if she would give him 2 hours to think about it. She said, "Sure." Dan checked eBay, learned the hat was worth $100, but before he could call to accept the offer, she revoked it.​

Sara and Rizwan enter into a contract by which Rizwan agrees to pay Sara $200 for a new digital player, Sara's subsequent transfer of her right to receive payment for the new digital player is known as:​

DB offered to sell a cap for $10. Dan said no to the offer. After checking on eBay, and learning that the hat was worth $100, he called DB, said he changed his mind and he would buy the hat for $10.​

The Carolina Panthers signed a 4-year $22 million contract with Cam Newton. Which of the following statements is TRUE?​