Question 1

To have an agreement,a contract must have:

Accepted Answer

An agreement or contract must have both an offer and an acceptance for it to be considered binding. Choices A, B, and C are important factors in forming a valid contract, but they are not sufficient on their own.

Question 2

The ________ rule says that an offeree's acceptance must be the mirror image of the offeror's offer.

Accepted Answer

The mirror image rule states that the acceptance must be an exact acceptance of the terms of the offer, without any modifications or conditions. Any changes to the offer in the acceptance would be considered a rejection and counteroffer.

Question 3

Something of legal value that the parties exchange as part of a bargain.

Accepted Answer

Consideration refers to something of legal value that is exchanged between parties as part of a contract or agreement. The other choices (A, B, and C) are related to the concept of a contract, but do not specifically refer to the exchange of something valuable (i.e. consideration) between the parties.

Question 4

The owner of a small auto repair shop knowingly installs a used water pump in your car and tells you it is "brand new." This is:

Accepted Answer

The owner of the auto repair shop deliberately misrepresents the condition of the water pump to the customer, which constitutes fraud. It is unethical and unlawful to deceive customers about the quality of products or services, and the owner can be held legally liable for such actions.

Question 5

On October 1,Althea writes Katherine a letter offering her a job at her travel agency.Katherine mails Althea a letter on October 2 accepting the offer.On October 3,before she receives Katherine's acceptance,Althea calls Katherine to rescind the offer.In terms of contract law:

Accepted Answer

A contract is formed on October 2 when Katherine mails the letter of acceptance to Althea. The acceptance is valid even if Althea has not yet received it. Therefore, Althea cannot rescind the offer before the contract is formed.

Question 6

Maria writes a letter offering to sell some office furniture to Lee.Lee,in a distant city,sends a telegram to Maria accepting the offer.Because of an error in the Western Union Office,the telegram never reaches Maria.What is the result?

Accepted Answer

A contract is formed when the acceptance is dispatched, as per the "mailbox rule," which applies to telegrams as well.

Question 7

Which of the following statements is correct?

Accepted Answer

Option A defines a service mark and option B defines a trademark. Option C clarifies that a service mark identifies and distinguishes the source of a service. Both options B and C are correct, making option D the best choice.

Question 8

Al voluntarily becomes intoxicated at a local bar.He sells his car for half of its value simply to irritate his wife.Later when sober,Al and his wife want the car back.This contract:

Accepted Answer

The contract is voidable because Al was voluntarily intoxicated at the time of the transaction, which impaired his ability to understand the nature of the transaction and its consequences. Upon sobering up, he and his wife can choose to void the contract and try to regain possession of the car. However, if the buyer of the car was unaware of Al's intoxication and acted in good faith, they may have a claim to keep the car, and Al and his wife would need to seek legal remedies to recover it.

Question 9

________ law governs the rights and the obligations between people and the parties they made promises to or agreements with.

Accepted Answer

Contract law governs the rights and obligations between parties who have entered into an agreement or made promises to one another. This may include aspects such as offer and acceptance, consideration, and the terms of the agreement. Agency law deals with the relationship between principal and agent, while freedom of contract is a principle guiding the parties' ability to enter into contracts. The UCC (Uniform Commercial Code) governs commercial transactions, specifically the sale of goods.

Question 10

The courts use the presence or absence of a(n)________ to distinguish between serious promises and those that are not serious.

Accepted Answer

The presence or absence of consideration is a key factor in determining if a promise is enforceable as a contract. Consideration refers to the benefit each party receives or the loss each party suffers as a result of entering into the agreement. Without consideration, a promise may be considered a mere gift or moral obligation rather than a binding contract.

Question 11

In terms of contractual capacity:

Accepted Answer

The answer of In terms of contractual capacity:
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Question 12

Rupert,a very old man,suffers from bouts of senility.During a lucid moment,he contracts to buy a new freezer from a local appliance dealer.This contract is:

Accepted Answer

Contracts entered into during a lucid interval by someone who suffers from bouts of senility are generally considered enforceable, as the individual is deemed to have the necessary mental capacity at the time of entering the contract.

Question 13

Toni wants to buy software from Bill that she can modify in order to hack into her boyfriend's e-mail account to see if he's writing to another woman.When Bill discovers why Toni wants the software,he refuses to sell it to her.Toni sues Bill in small claims court.Is the contract valid?

Accepted Answer

The principle of legality states that a contract is only valid if its purpose is legal. In this case, the purpose of the contract is illegal, as Toni intends to use the software to commit a crime (hacking into her boyfriend's e-mail). Therefore, the contract between Toni and Bill is not valid.

Question 14

A contract entered into by a(n)________ person can be void,voidable,or valid,depending on the mental state of the person.

Accepted Answer

A contract entered into by an insane person can be void, voidable, or valid depending on their mental state at the time of the contract. If they were unable to understand the nature and consequences of the transaction, the contract may be voidable. If they were adjudged insane, it may be void. If they were lucid, it may be valid.

Question 15

To have a valid offer,there must be:

Accepted Answer

The intention to be bound by the offer is a crucial element in making an offer valid. The offeror should manifest an intention to be legally bound by the offer. If there is no intent to be bound by the offer, the offer will not be valid.

Question 16

A(n)________ is a promise or a set of promises for the breach of which the law gives a remedy,or the performance of which the law recognizes as a duty.

Accepted Answer

A contract is a legally binding agreement between two or more parties that imposes obligations on the parties involved. The law provides a remedy if one of the parties breaches the contract or fails to perform their duty. Therefore, a contract is a promise or set of promises that must be fulfilled by the parties involved. The UCC (Uniform Commercial Code) is a set of laws governing commercial transactions, and a warranty is a guarantee or assurance regarding the quality or performance of a product. While both the UCC and warranties may be involved in contracts, they are not synonymous with a contract itself.

Question 17

________ serves as a check on the parties' agreement,verifying that it is genuine and not subject to mistakes,misrepresentation,fraud,duress,or undue influence.

Accepted Answer

Genuineness of assent serves as a check on the parties' agreement, ensuring it is genuine and not affected by mistakes, misrepresentation, fraud, duress, or undue influence.

Question 18

In most cases dealing with the issue of consideration,courts:

Accepted Answer

In most cases, courts do not evaluate the adequacy of the consideration. As long as there is something of value being exchanged between the parties, the consideration requirement is met. However, there are some exceptions where courts may weigh the value of the consideration, such as in cases of unconscionable contracts or contracts involving fraud. But these are not the norm. Offers of "love and affection" are generally not considered valuable consideration.

Question 19

The terms of the ________ must be defined and reasonably certain.

Accepted Answer

The terms of the offer must be clearly defined and specific. This includes the price, quantity, quality, and any other important details. Without clear and definite terms, there cannot be a valid offer.

Question 20

What are,if any,the possible defenses against a valid contract which may cause it to be unenforceable?

Accepted Answer

The genuineness of assent and form of the contract can render it unenforceable if there was misrepresentation, mistake, undue influence, or duress involved in the formation of the agreement. Additionally, if the contract lacks proper form, such as not being in writing or lacking formalities required by law, it may also be unenforceable.

B, C, and D are all necessary elements for a valid contract and are not defenses against enforceability.

Quiz 23: The Legal Environment: Business Law and Government Regulation