Question 1

Parol evidence refers to anything (other than the written contract itself)that was said,done,or written before or as the parties signed the contract.

Accepted Answer

Parol evidence is any evidence outside of the written contract itself, such as verbal agreements, emails, or other documents exchanged between the parties before the contract was signed. This evidence can be used to help interpret the terms of the contract or to show that there was a mistake or misrepresentation in the drafting of the contract.

Question 2

Contracts that cannot be performed within __________ are unenforceable unless they are in writing.
A)one month
B)six months
C)one year
D)two years

Accepted Answer

Contracts that cannot be performed within one year are unenforceable unless they are in writing. This is known as the statute of frauds, which requires certain types of contracts to be in writing to be legally binding.

Question 3

Which of the following oral contracts may be enforceable?
A)Nathan owes $1,000 in back rent to his landlord.Miranda tells Nathan not to worry about it,she'll pay his debt for him.
B)Kenny orally agrees to purchase 5,000 pencils that the ABC Pencil Company stamps with the words "Kenny is the Greatest!"
C)Mrs.Washington calls the corner grocery and places an order for a loaf of bread,a gallon of milk,and a pound of hamburger to be delivered to her.Ten minutes later,before the store has a chance to put together her items,she calls to cancel the order.
D)All of these are correct.

Accepted Answer

An oral contract for the sale of goods over $500 typically needs to be in writing to be enforceable under the Statute of Frauds, but there are exceptions, such as specially manufactured goods that cannot be easily resold. The pencils stamped with "Kenny is the Greatest!" are likely considered specially manufactured goods.

Question 4

E-signatures are valid in all 50 states.

Accepted Answer

The Electronic Signatures in Global and National Commerce Act (ESIGN) of 2000 and the Uniform Electronic Transactions Act (UETA) of 1999 have made e-signatures valid in all 50 states.

Question 5

Sweet Plantation,Inc.made a written contract with Candy,Inc.whereby Sweet Plantation agreed to supply all of Candy's sugar requirements for the next year at $.25 per pound.A dispute arose as to how much sugar Sweet is to supply.The parol evidence rule will bar Sweet's introduction of evidence concerning the intent of the requirements of Candy.

Accepted Answer

The parol evidence rule generally prohibits the introduction of evidence of prior or contemporaneous negotiations and agreements that contradict, modify, or vary contractual terms if the written contract is intended to be a complete and final expression of the parties' agreement. However, it does not bar evidence clarifying the intended meaning of ambiguous terms, such as "Candy's sugar requirements," which might be necessary to interpret the scope of the contract's obligations.

Question 6

The original Statute of Frauds is the English law that began the practice of requiring written evidence of certain kinds of contracts,but now the British government has repealed the writing requirement for most contracts.

Accepted Answer

The statement is correct, as the original Statute of Frauds did introduce the requirement of written evidence for certain contracts, but the British government has since repealed this requirement for most contracts.

Question 7

Rest Well Hotel orally ordered 1,000 blankets monogrammed with its initials,RWH,from TriColor Textiles.TriColor had just finished monogramming the blankets when Rest Well called and canceled the order.TriColor will be able to enforce the agreement even though there was no writing.

Accepted Answer

While the contract is for the sale of goods over $500 and would typically require a written agreement under the statute of frauds, the fact that TriColor has already completed its end of the deal by monogramming the blankets means that Rest Well is in breach of contract if it cancels the order. This means that TriColor can still enforce the agreement through legal action.

Question 8

Either party may demand rescission of a fully executed oral contract if it was required to have been in writing under the Statute of Frauds.

Accepted Answer

The answer of Either party may demand rescission of a...

Question 9

Patrick owned an acre of land which was being divided into building lots.Nancy was interested in purchasing the corner lot.In a signed writing,Patrick stated,"I will sell Nancy Grimes a lot on Route 70 for $5,500 cash,payable on April 30,2012." This writing is sufficient under the Statute of Frauds to make the contract enforceable.

Accepted Answer

The answer of Patrick owned an acre of land which...

Question 10

Bry,Inc.and Gangl Co.entered into an oral agreement for the sale of 3,000 sweaters.Both parties performed as required under the contract.Bry delivered the sweaters,and Gangl accepted and paid for them.Since the contract is fully executed,it makes no difference that it was an oral agreement.

Accepted Answer

Since both parties performed as required and the contract is fully executed, it does not matter if the agreement was oral or written. The contract has been completed successfully.

Question 11

Raymond agrees to transfer an easement right to Sandra for $1,000.This contract is within the Statute of Frauds and therefore needs to be in writing to be enforceable.

Accepted Answer

The transfer of an easement right for $1,000 falls under the Statute of Frauds, which requires a written agreement to be enforceable.

Question 12

Tuan is president and sole shareholder of Entertainment,Inc.Entertainment,Inc.wishes to borrow money,but to do so,the bank requires Tuan to orally agree to personally pay the debt of the corporation if Entertainment,Inc.cannot.Tuan's guarantee to repay is
A)enforceable under the parol evidence rule.
B)unenforceable because there is no insurable interest.
C)enforceable because of the leading object rule.
D)unenforceable because it is a collateral promise.

Accepted Answer

The guarantee made by Tuan to personally pay the debt of Entertainment, Inc. can be enforced because of the leading object rule. This rule states that if the main purpose of a transaction is to benefit the guarantor (in this case, Tuan), then the guarantee is valid even if there is no insurable interest. In this case, Tuan's personal guarantee allows Entertainment, Inc. to obtain financing that it may not have been able to secure otherwise, and therefore benefits Tuan as the sole shareholder and president of the corporation.

Question 13

Amanda,a recent university graduate,needed a car to get to her new job.To help Amanda secure a loan for the car,Ted,a friend,agreed to pay the loan should Amanda default.Ted's promise to pay the loan is a collateral promise.His promise must be in writing to be enforceable.

Accepted Answer

According to the statute of frauds, a collateral promise, such as Ted's promise to pay the loan if Amanda defaults, must be in writing to be enforceable.

Question 14

The Uniform Commercial Code provides that,under certain circumstances,a merchant may be liable on a written contract,even though that merchant has NOT signed it.

Accepted Answer

According to UCC § 2-201(2), a merchant may be bound by a written contract even if they did not sign it if the contract satisfies certain requirements, including that the contract was sent to the merchant and they did not object to its contents within a reasonable time. This is known as the "merchant's confirmation" exception to the Statute of Frauds.

Question 15

Hannah orally agrees to sell her house to Brett for $175,000.If she delivers the deed to Brett with the expectation of payment in two weeks and he fails to pay,most courts will not enforce the contract since it was not in writing.

Accepted Answer

While a contract for the sale of real estate is generally required to be in writing to be enforceable under the Statute of Frauds, the scenario described in the statement does not satisfy all the elements necessary for a valid contract. For a contract to be enforceable, there must be consideration (something of value exchanged between the parties), mutual assent (agreement on the essential terms), and capacity (the legal ability to enter into a contract). In this case, while there was mutual assent between Hannah and Brett on the price and the property, there was no consideration given by Brett in exchange for Hannah's promise to sell the house. Therefore, the contract is not valid regardless of whether it is in writing.

Question 16

Willis and Leslie orally agree to the sale of a parcel of land for $50,000: one-half payable now as a down payment;one-half payable in 30 days at the time of closing when the title will be transferred.The buyer,Willis,is to have possession immediately.Willis pays Leslie $25,000,takes possession of the land,and starts building a house.At the time of closing,Willis has made a substantial beginning on the house.However,Leslie refuses to transfer the title,claiming the oral contract is not enforceable.This contract is
A)enforceable,because the Statute of Frauds does not apply to this interest in land.
B)unenforceable,because there is no writing signed by Leslie.
C)enforceable,because Willis has partially performed the oral contract and made improvements on the land.
D)unenforceable,because the parol evidence rule applies.

Accepted Answer

Willis has partially performed the oral contract by paying half of the sale price, taking possession of the land, and starting construction on a house. This partial performance makes the contract enforceable even though it is not in writing. Leslie cannot now refuse to transfer the title since Willis has relied on the oral contract and has made improvements on the land.

Question 17

Under the Statute of Frauds,the writing must: be signed by the defendant;and must state with reasonable certainty the name of each party,the subject matter of the agreement,and all of the essential terms and promises.

Accepted Answer

The statement accurately describes the requirements under the Statute of Frauds.

Question 18

Under the merchants' exception rule of the UCC,within a reasonable time of making an oral contract,if a merchant sends a written confirmation to another,and if the confirmation is definite enough to bind the sender herself,then the merchant who receives the confirmation will also be bound by it unless he objects in writing within
A)3 days.
B)5 days.
C)10 days.
D)30 days.

Accepted Answer

According to the merchants' exception rule of the UCC, the merchant who receives a written confirmation from the other merchant must object in writing within 10 days; otherwise, they will be bound by it. Therefore, the correct choice is option C.

Question 19

Any contract involving a sale of goods of $100 or more must be in writing.

Accepted Answer

The Uniform Commercial Code (UCC) requires a contract for the sale of goods priced at $500 or more to be in writing to be enforceable, not $100. This threshold has been updated to $5,000 in the amendments to the UCC Article 2, but the original statement is incorrect based on the traditional $500 rule.

Question 20

Ramona,age 42,orally agreed to work for Brahma,Inc.for the rest of her life for $50,000 per year.This agreement would not be enforceable since it violates the one-year rule of the Statute of Frauds.

Accepted Answer

The agreement could be enforceable because it is possible for Ramona to complete her lifetime employment within one year if she were to pass away within that time, thus not violating the one-year rule of the Statute of Frauds.

Quiz 16: Written Contracts