Question 1

Sales Corporation and Real Estate Inc. agree to the payment of a commission for the sale of certain property. If this deal has all of the elements necessary for one of the parties to enforce it in court, it is most likely
A) a valid contract.
B) a voidable contract.
C) a void contract.
D) none of the choices.

Accepted Answer

If the deal has all of the elements necessary for one of the parties to enforce it in court, then it is most likely a valid contract. A valid contract is a binding agreement that meets all of the legal requirements for enforceability.

Question 2

Rough Water LLC and Schafer enter into a contract for the delivery of a used fishing boat. Until the boat is delivered and paid for, these parties have
A) an executory contract.
B) no contract.
C) a quasi contract.
D) an executed contract.

Accepted Answer

An executory contract is a contract in which one or more parties have obligations that have not yet been fulfilled. In this case, Rough Water LLC and Schafer have agreed to deliver and pay for a used fishing boat, but until the boat is delivered and paid for, their contractual obligations remain executory.

Question 3

Oceans Inc., a seafood distributor, agrees to buy from Paul, a commercial fisherman, any "overstock" of fish that Paul catches in excess of his legal limit. This agreement is most likely
A) enforceable.
B) quasi.
C) void.
D) voidable.

Accepted Answer

This agreement is void because it is illegal. It encourages and facilitates the violation of legal fishing limits, which are set in place to protect marine habitats and ensure sustainable fishing practices.

Question 4

On May 1, Ramona and Santo orally agree that Santo will guide a party from the base of Mount McKinley to its summit and from the summit to a return to the base. Under the agreement, Ramona will pay for the service after the completion of the climb on June 1. On May 1, is this contract express or implied? On May 31, after the climb has been made but before payment is paid, is the contract executed or executory?

Accepted Answer

The answer of On May 1, Ramona and Santo orally...

Question 5

Susan enters into a contract with Trey to act as his personal sports trainer. If a dispute later arises, the court will interpret the contract according to
A) the parties' intent at the time they entered into the contract.
B) what the promisor claims was the parties' intent.
C) what the promisee claims was the parties' intent.
D) what the parties now agree they intended.

Accepted Answer

When interpreting a contract, the court will look to the parties' intent at the time they entered into the contract. This means that the court will try to determine what the parties intended the contract to mean when they initially agreed to it. The court will not simply accept what one party claims was the intent or what the parties agree to now if it contradicts the original intent.

Question 6

A letter-of-credit agreement between Rural Feed Corporation and Soy Farm Inc. requires Rural's bank to pay Soy on receipt of invoices. This is
A) a formal contract.
B) an informal contract.
C) an implied contract.
D) a quasi contract.

Accepted Answer

The letter-of-credit agreement is a formal contract that outlines the terms of payment between Rural Feed Corporation and Soy Farm Inc. The agreement specifies that Rural's bank will pay Soy upon receipt of invoices, creating a binding legal obligation.

Question 7

Darcy enters into a contract with Event Center Inc. to use its venue for a business meeting. If an ambiguity appears in the contract that outside evidence does not make clear, it will most likely be
A) interpreted against the party responsible for creating it.
B) struck from the deal.
C) construed according to the court's discretion.
D) applied in favor of the party who drafted the contract.

Accepted Answer

Ambiguities in contracts are typically interpreted against the party who created them. This is because the party responsible for drafting the contract is presumed to have had more control over the terms and therefore should have been clearer in their language. This principle is known as the "contra proferentem" rule.

Question 8

Ed, a businessperson, is a friend of Fran, the owner of Good Morning, a coffee pastries kiosk. Every day, Ed spends five minutes at the kiosk, looking at the goods and usually buying one or two cinnamon buns or bagels. One afternoon, Ed looks at the items, and picks up a $1 chocolate brownie. He waves the brownie at Fran without saying a word and walks on. Is there a contract? If so, how would it be classified in terms of formation, performance, and enforceability?

Accepted Answer

The answer of Ed, a businessperson, is a friend of...

Question 9

Saul claims that his contract with Teri for piano lessons is voidable. If their contract is avoided
A) both parties are released from it.
B) both parties must fully perform their obligations under it.
C) the parties' contractual obligations are postponed.
D) the parties are proscribed from another contract on the same subject.

Accepted Answer

If a contract is voidable, it means that one or both parties have the right to avoid or cancel the contract. If the contract is avoided, both parties are released from their obligations under it. Therefore, option A is the correct choice.

Question 10

Jana, a nurse practitioner, renders aid to Kurtz, who is injured and unconscious. Jana can recover the cost of the aid from Kurtz
A) on a quasi contract theory.
B) only if Kurtz recovers because of the aid.
C) only if Kurtz was aware of the aid.
D) under no circumstances.

Accepted Answer

A quasi contract theory allows a person to recover costs for aid rendered to another in certain circumstances, such as the injured party being unconscious and unable to consent.

Question 11

Sal enters into a contract with Trucking Company to work as a driver. Under the plain meaning rule, the court cannot consider any evidence not contained in the document if
A) the parties' intent cannot be determined from the contract's language.
B) the contract lacks a provision on a disputed issue.
C) the words in the contract appear clear.
D) a contract term can be interpreted in more than one way.

Accepted Answer

The plain meaning rule states that if the words in the contract appear clear, the court cannot consider any evidence not contained in the document. Therefore, option C is the correct answer. Options A, B, and D suggest situations where the court may need to look beyond the plain language of the contract to determine the parties' intentions or the meaning of a disputed term.

Question 12

Cheri drives into Domestic Auto Service and asks to have a tire replaced on her car. After Domestic replaces the tire, but before Cheri pays for it, any contract between them is
A) executed.
B) executory.
C) void.
D) unenforceable.

Accepted Answer

The contract between Cheri and Domestic Auto Service is executory because the performance by one party (paying for the tire) has not yet occurred. Once Cheri pays for the tire, the contract will be fully executed.

Quiz 10: Nature and Classification

Sales Corporation and Real Estate Inc. agree to the payment of a commission for the sale of certain property. If this deal has all of the elements necessary for one of the parties to enforce it in court, it is most likely

Rough Water LLC and Schafer enter into a contract for the delivery of a used fishing boat. Until the boat is delivered and paid for, these parties have

Oceans Inc., a seafood distributor, agrees to buy from Paul, a commercial fisherman, any "overstock" of fish that Paul catches in excess of his legal limit. This agreement is most likely

Susan enters into a contract with Trey to act as his personal sports trainer. If a dispute later arises, the court will interpret the contract according to

A letter-of-credit agreement between Rural Feed Corporation and Soy Farm Inc. requires Rural's bank to pay Soy on receipt of invoices. This is

Darcy enters into a contract with Event Center Inc. to use its venue for a business meeting. If an ambiguity appears in the contract that outside evidence does not make clear, it will most likely be

Saul claims that his contract with Teri for piano lessons is voidable. If their contract is avoided

Jana, a nurse practitioner, renders aid to Kurtz, who is injured and unconscious. Jana can recover the cost of the aid from Kurtz

Sal enters into a contract with Trucking Company to work as a driver. Under the plain meaning rule, the court cannot consider any evidence not contained in the document if

Cheri drives into Domestic Auto Service and asks to have a tire replaced on her car. After Domestic replaces the tire, but before Cheri pays for it, any contract between them is