Question 1

George has been declared incompetent by the court and is under the care of his sister. Unknown to his sister, George rents the 10,000-seat civic center for his birthday party. George's contract to rent the civic center is best described as:
A) a void contract.
B) a quasi contract.
C) a voidable contract.
D) an enforceable contract.

Accepted Answer

A contract made by a person declared incompetent by the court is considered void, meaning it has no legal effect from the beginning.

Question 2

A contract is a binding agreement that the courts will enforce.

Accepted Answer

A contract is a legally binding agreement between two or more parties that is enforceable by law, where the courts can require parties to perform their obligations or compensate for failure to do so.

Question 3

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 to do something in the future. This is in contrast to a unilateral contract, where only one party makes a promise, and a quasi-contract, which is not a true contract but rather a legal fiction used to prevent one party from being unjustly enriched by another. A voidable contract is a contract that can be legally avoided or cancelled by one of the parties, typically due to some sort of defect or problem with the formation of the contract.

Question 4

Charles says to Wes, "If you will mow my lawn, I will give you $15." Wes says nothing, but he mows the lawn. No contract exists under this fact situation, because Wes did not accept Charles's offer.

Accepted Answer

Wes's action of mowing the lawn constitutes acceptance of Charles's offer through performance, thus forming a contract.

Question 5

A promisee is the person making a promise.

Accepted Answer

A promisee is the person to whom a promise is made, not the one making the promise.

Question 6

Matt says to Lynn, "If you will mow my lawn, I will give you $20." Lynn replies, "O.K." Under these facts, each party is a promisor and each party is a promisee.

Accepted Answer

Matt is the promisor for the $20 and the promisee for the lawn mowing service, while Lynn is the promisor for the lawn mowing service and the promisee for the $20, making each party both a promisor and a promisee.

Question 7

Atsuko 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

Employment contracts, like the one Atsuko signed with Incellmed Corporation, are governed by state common law rather than the Uniform Commercial Code (UCC), federal statutes, or the law of quasi contract. The UCC primarily deals with transactions involving goods, not employment contracts.

Question 8

Contracts are governed primarily by statute, including the UCC.

Accepted Answer

The answer of Contracts are governed primarily by statute, including...

Question 9

A valid contract is one that meets all of the requirements of a binding contract.

Accepted Answer

A valid contract must have offer, acceptance, consideration, mutual assent, capacity, and legality of the purpose. Therefore, it should meet all the requirements to be considered a binding contract.

Question 10

The requirement that each party to a contract must intentionally exchange something of value as an inducement to the other party to make a return exchange is known as:
A) mutual assent.
B) consideration.
C) legality of object.
D) contractual capacity.

Accepted Answer

Consideration is the legal concept that requires each party in a contract to exchange something of value as an incentive for the other party to enter into the agreement. It is a fundamental element that must be present for a contract to be legally enforceable.

Question 11

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, which allows a promise to be enforced in certain circumstances even if there was no formal contract. Justifiable reliance on the promise is a key factor in determining if promissory estoppel applies.

Question 12

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

Accepted Answer

The contract is voidable at Betty's option because she was the party misled by Alfred's material misrepresentation, not the other way around.

Question 13

An implied in fact contract is formed by conduct.

Accepted Answer

An implied in fact contract is formed by the conduct and actions of the parties involved, rather than through explicit written or verbal agreements.

Question 14

In addition to the four basic requirements of a contract, which of the following must also occur in order to have a valid contract?
A) The agreement must always be in writing.
B) All terms of the agreement must be clearly indicated.
C) There must be an absence of invalidating conduct.
D) A legal remedy must be available for there to be a breach.

Accepted Answer

C) There must be an absence of invalidating conduct, such as fraud, duress, undue influence, or misrepresentation, for a contract to be considered valid. This ensures that all parties enter into the agreement freely and with full knowledge of the terms.

Question 15

Mike, a plumbing contractor, was hired to correct a stoppage in the sewer line at Sarah's house. During his work, he discovered numerous leaks in a rusty, defective water pipe that ran parallel with the sewer line. To meet public regulations, the water pipe had to be replaced either then or later, when the yard would have to be redug. Mike replaced the water pipe and Sarah inspected the work daily and did not object to the extra work. When Mike finished, Sarah refused to pay for the water pipe replacement since that was not what she originally hired Mike to do and she had never specifically agreed to that work. Sarah must pay Mike for his labor and materials costs for both the sewer and water line repair.

Accepted Answer

Under the legal principle of quasi-contract or the doctrine of unjust enrichment, Sarah would likely be required to pay Mike for the additional work on the water pipe. Since she benefited from the work and did not object to it while it was being performed, a court could find that it would be unjust for her to retain the benefit without paying for it.

Question 16

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

Accepted Answer

Article 2 of the Uniform Commercial Code governs the sale of goods, not the sale of services such as life insurance. Instead, life insurance contracts are typically regulated by state insurance laws.

Question 17

The United Nations Convention on Contracts for the International Sales of Goods (CISG) governs all contracts for the international sales of goods between parties located in different nations that have ratified the CISG.

Accepted Answer

The CISG is specifically designed to apply to contracts for the international sale of goods between parties whose places of business are in different countries, particularly those countries that have ratified the Convention.

Question 18

Thomas contacted Welsh, a realtor, and asked him to be looking for property that is at least 20 acres, zoned commercial, within the city limits.  Welsh responded that he would look for such a property and reminded Thomas that the typical finders fee in such a situation is 10% of the property asking price.  If Thomas responds with "I know," the parties have formed an express contract by mutually manifesting assent to the essential terms.

Accepted Answer

By Thomas acknowledging the finder's fee and not objecting to it, both parties have shown mutual assent to the terms, forming an express contract through their clear and explicit agreement on the essential terms, including the service to be performed and the compensation.

Question 19

Ronald says to Evan, "If you design and build my back deck according to these specifications by the time I return from California in 6 weeks, I will pay you $5,000." Evan does not respond but has the landscaping done by the time Ronald returns. This is an example of a unilateral contract.

Accepted Answer

A unilateral contract is formed when one party makes a promise in exchange for the performance of a specified act by another party. In this case, Ronald's offer to pay Evan $5,000 if he designs and builds the back deck according to specifications is a promise for an act, and Evan's completion of the deck constitutes acceptance of that offer through performance, thus forming a unilateral contract.

Question 20

Alfred 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

Betty has the right to void the contract because it was entered into based on Alfred's material misrepresentation of fact, which is a valid ground for voiding a contract.

Quiz 9: Introduction to Contracts

George has been declared incompetent by the court and is under the care of his sister. Unknown to his sister, George rents the 10,000-seat civic center for his birthday party. George's contract to rent the civic center is best described as: