Question 1

Steel Mill Inc. makes an offer to Tag to enter into a contract to work as a mechanical engineer for a certain salary for one year subject to a five-year renewal based on his performance. Tag accepts the offer. This is a valid contract because it includes
A)a price and a subject.
B)a duration and a termination.
C)an offer and an acceptance.
D)specific quality standards.

Accepted Answer

An offer by Steel Mill Inc. and acceptance by Tag are present, which are fundamental elements for forming a valid contract. The presence of a specific job role and agreed salary further supports the validity of the contract.

Question 2

Demi buys a lottery ticket. The ticket has the winning numbers for a prize. She submits the ticket to claim the prize. Demi accepted an offer for
A)a bilateral contract.
B)a unilateral contract.
C)a quasi contract.
D)an unenforceable contract.

Accepted Answer

Demi's action of submitting the lottery ticket to claim the prize is an acceptance of a unilateral contract. In a unilateral contract, one party makes a promise in exchange for the performance of a specified act by the other party. Here, the lottery organizers promise a prize for whoever holds the winning ticket, and Demi's act of submitting the ticket is her performance of the specified act.

Question 3

Ota asserts that a deal entered into with Pai to sponsor and host a motivational conference for independent sales representatives was formed as the result of a mistake. Ota's best defense to the enforcement of this contract is
A)a desire not to perform.
B)insufficient capital.
C)preliminary indications of unsatisfactory results.
D)the lack of a party's voluntary consent.

Accepted Answer

The lack of a party's voluntary consent, including mistakes, can invalidate a contract, making it a viable defense against enforcement.

Question 4

Vicky asks Walt, a cobbler, to repair a pair of boots. There is no discussion of a price, and Vicky and Walt do not sign any documents. After the repair, Walt hands Vicky a bill. With respect to Vicky's obligation to pay the bill, this is
A)an express contract.
B)an implied contract.
C)a quasi contract.
D)no contract.

Accepted Answer

This is an example of an implied contract, where the agreement and terms are inferred from the actions of the parties involved, rather than being explicitly stated. Vicky's act of giving the boots to Walt for repair and Walt's acceptance to repair them implies a contract that Vicky will pay for the service.

Question 5

Boca claims that he intended to enter into a contract with Carla for tutoring, and she breached it. Carla responds that she never intended to enter into a contract with Boca. Their intent to enter into a contract is determined with reference to
A)the intentional theory of contracts.
B)the objective theory of contracts.
C)the personal theory of contracts.
D)the subjective theory of contracts.

Accepted Answer

The objective theory of contracts is used to determine the intent to enter into a contract. It considers how a reasonable person would interpret the actions and words of the parties involved, rather than their internal, subjective intentions.

Question 6

Flo tells Ginger during a phone call that she will buy her textbook from last semester for $65. Ginger agrees. These parties have
A)no contract.
B)an express contract.
C)an implied contract.
D)a quasi contract.

Accepted Answer

An express contract is formed when the parties explicitly state the terms of their agreement, either orally or in writing. In this case, Flo and Ginger have verbally agreed on the sale of the textbook for $65, which constitutes an express contract.

Question 7

On behalf of the jazz group Fusion, their manager Gabe agrees to a performance in Hilltop Amphitheatre on July 4. Gabe and Hilltop sign a written copy of the agreement. These parties have
A)an express contract.
B)an implied contract.
C)a quasi contract.
D)no contract.

Accepted Answer

An express contract is formed when the parties have explicitly stated the terms of their agreement, either orally or in writing. In this scenario, since Gabe and Hilltop signed a written agreement for the performance, they have an express contract.

Question 8

Red offers to pay Sari to deliver certain documents within thirty minutes. Sari can accept the offer only by completing the task within the deadline. If she does, Red and Sari will have
A)a bilateral contract.
B)a unilateral contract.
C)a void contract.
D)an executive contract.

Accepted Answer

A unilateral contract is formed when one party makes a promise that the other party can accept only through an action, such as completing a task. In this case, Sari can accept Red's offer only by delivering the documents within the specified time, making it a unilateral contract.

Question 9

Alyssa hires Bret to mow Alyssa's lawn every Friday. Although they do not discuss the terms of payment, after each of the first three Friday mows, Alyssa pays Bret on Saturday. The payment term is
A)express.
B)implied.
C)quasi.
D)non-existent.

Accepted Answer

The payment term is implied because although Alyssa and Bret did not explicitly discuss payment terms, Alyssa's consistent behavior of paying Bret after each mow suggests an understanding or agreement that payment will be made for the service.

Question 10

Mel agrees to work as a freight broker for National Shipping Inc. In determining whether a contract has been formed, an element of prime importance is the parties'
A)intent.
B)objectives.
C)subjective beliefs.
D)motives.

Accepted Answer

The intent of the parties is a crucial element in determining whether a contract has been formed, as it indicates whether both parties agreed to the terms and intended to enter into a binding agreement.

Question 11

Bo signs a lease with Capri Properties to lease a studio apartment for the next year for $850 per month. Daisy signs on Capri's behalf. Bo and Capri have
A)no contract.
B)an express contract.
C)an implied contract.
D)a simple contract.

Accepted Answer

An express contract is formed when the parties have explicitly stated the terms of their agreement, either orally or in writing. In this scenario, Bo and Capri Properties have an express contract because the terms of the lease (the studio apartment for $850 per month for the next year) are explicitly stated, and Daisy signs on Capri's behalf, indicating agreement to these terms.

Question 12

Movers LLC promises to deliver a certain couch to Nora, who promises to pay for the service. If Movers does not perform, it may be required to
A)none of the choices.
B)make another promise.
C)pay damages.
D)perform a different service.

Accepted Answer

Movers LLC would be required to pay damages if they do not perform the agreed-upon service, as this is a common remedy for breach of contract.

Question 13

Macy offers to sell his fitness watch for $50 to Nona. Nona promises to pay Macy the price. Later, they exchange the watch for the funds. A contract was created when
A)Macy offered to sell the watch.
B)Macy delivered the watch.
C)Nona promised to pay for the watch.
D)Nona paid for the watch.

Accepted Answer

A contract was created when Nona promised to pay for the watch, as this constituted acceptance of Macy's offer, forming a binding agreement.

Question 14

When a storm erupts outside Reba's Diner, Reba and Shaw quickly enter into an implied contract to split the revenue from Shaw's sale of umbrellas to Reba's customers. The terms of this contract are defined by
A)the conduct of the parties.
B)the written words of the parties.
C)the unforeseeable storm that gave rise to the deal.
D)the fortuity of the deal's timing and the parties' proximity.

Accepted Answer

The terms of an implied contract are defined by the conduct of the parties, as their actions demonstrate their agreement to the terms of the contract without the need for written or spoken words.

Question 15

On Monday, Xi tells Yard Work Inc., that he will pay $500 if a variety of tasks are completed by Friday. On Wednesday, when Yard Work is more than half done with the work, Xi says that he has changed his mind. These parties had
A)an expired contract when Xi said that he had changed his mind.
B)a quasi contract when Xi said that he would pay for certain work.
C)a unilateral contract as soon as Yard Work began to perform.
D)no contract.

Accepted Answer

This situation describes a unilateral contract, which is formed when one party (Xi) promises to pay upon the completion of a specific task by another party (Yard Work Inc.). The contract becomes enforceable when Yard Work begins the performance of the task.

Question 16

Juno tells Liu she will give him her old car if he babysits her son Marc weekday evenings for six months. Liu agrees. Juno and Lee have formed
A)a bilateral contract.
B)a unilateral contract.
C)a void contract.
D)an unenforceable contract.

Accepted Answer

This is a bilateral contract because it involves a promise for a promise. Juno promises to give her old car to Liu if Liu promises to babysit her son Marc weekday evenings for six months. Both parties have made promises to each other, which is characteristic of a bilateral contract.

Question 17

Pavers Inc. contracts with a QuikStop store to repave the store's parking lot for a certain price. To be enforceable, this contract must include an element of
A)consideration.
B)acceptability.
C)achievability.
D)practicality.

Accepted Answer

Consideration is a fundamental element of a contract, referring to something of value that is exchanged between the parties involved. It is what each party gives up to gain the benefits of the contract. In this case, Pavers Inc. would provide the service of repaving the parking lot, and QuikStop would provide payment in return.

Question 18

Fay offers to pay Grey $50 for a tennis lesson for Hetty. They agree to meet the day after tomorrow to exchange the cash for the lesson. These parties have
A)a bilateral contract.
B)a third-party contract.
C)a unilateral contract.
D)no contract.

Accepted Answer

A bilateral contract is formed when both parties exchange promises, as Fay promises to pay $50 and Grey promises to provide a tennis lesson.

Question 19

Field Construction Inc. contracts with Mesa Ranch to build a new barn on Mesa's property for which Mesa agrees to pay. If this is a valid contract, it will be partly because it includes the element of
A)capability.
B)legality.
C)necessity.
D)marketability.

Accepted Answer

Legality is a crucial element of a valid contract, ensuring that the agreement is lawful and not for any illegal purpose.

Question 20

Marketing Inc. offers to create a campaign to increase N'Ice Cream Inc.'s online business. N'Ice agrees to pay for the service. These parties have
A)no contract.
B)an express contract.
C)an implied contract.
D)a quasi contract.

Accepted Answer

An express contract is formed when the parties have explicitly agreed on the terms of the contract, either orally or in writing. In this scenario, Marketing Inc. and N'Ice Cream Inc. have clearly agreed on the service and payment, forming an express contract.

Quiz 11: Nature and Terminology

Steel Mill Inc. makes an offer to Tag to enter into a contract to work as a mechanical engineer for a certain salary for one year subject to a five-year renewal based on his performance. Tag accepts the offer. This is a valid contract because it includes

Demi buys a lottery ticket. The ticket has the winning numbers for a prize. She submits the ticket to claim the prize. Demi accepted an offer for

Ota asserts that a deal entered into with Pai to sponsor and host a motivational conference for independent sales representatives was formed as the result of a mistake. Ota's best defense to the enforcement of this contract is

Vicky asks Walt, a cobbler, to repair a pair of boots. There is no discussion of a price, and Vicky and Walt do not sign any documents. After the repair, Walt hands Vicky a bill. With respect to Vicky's obligation to pay the bill, this is

Boca claims that he intended to enter into a contract with Carla for tutoring, and she breached it. Carla responds that she never intended to enter into a contract with Boca. Their intent to enter into a contract is determined with reference to

Flo tells Ginger during a phone call that she will buy her textbook from last semester for $65. Ginger agrees. These parties have

On behalf of the jazz group Fusion, their manager Gabe agrees to a performance in Hilltop Amphitheatre on July 4. Gabe and Hilltop sign a written copy of the agreement. These parties have

Red offers to pay Sari to deliver certain documents within thirty minutes. Sari can accept the offer only by completing the task within the deadline. If she does, Red and Sari will have

Alyssa hires Bret to mow Alyssa's lawn every Friday. Although they do not discuss the terms of payment, after each of the first three Friday mows, Alyssa pays Bret on Saturday. The payment term is

Mel agrees to work as a freight broker for National Shipping Inc. In determining whether a contract has been formed, an element of prime importance is the parties'

Bo signs a lease with Capri Properties to lease a studio apartment for the next year for $850 per month. Daisy signs on Capri's behalf. Bo and Capri have

Movers LLC promises to deliver a certain couch to Nora, who promises to pay for the service. If Movers does not perform, it may be required to

Macy offers to sell his fitness watch for $50 to Nona. Nona promises to pay Macy the price. Later, they exchange the watch for the funds. A contract was created when

When a storm erupts outside Reba's Diner, Reba and Shaw quickly enter into an implied contract to split the revenue from Shaw's sale of umbrellas to Reba's customers. The terms of this contract are defined by

On Monday, Xi tells Yard Work Inc., that he will pay $500 if a variety of tasks are completed by Friday. On Wednesday, when Yard Work is more than half done with the work, Xi says that he has changed his mind. These parties had

Juno tells Liu she will give him her old car if he babysits her son Marc weekday evenings for six months. Liu agrees. Juno and Lee have formed

Pavers Inc. contracts with a QuikStop store to repave the store's parking lot for a certain price. To be enforceable, this contract must include an element of

Fay offers to pay Grey $50 for a tennis lesson for Hetty. They agree to meet the day after tomorrow to exchange the cash for the lesson. These parties have

Field Construction Inc. contracts with Mesa Ranch to build a new barn on Mesa's property for which Mesa agrees to pay. If this is a valid contract, it will be partly because it includes the element of

Marketing Inc. offers to create a campaign to increase N'Ice Cream Inc.'s online business. N'Ice agrees to pay for the service. These parties have