Question 1

Unjust enrichment is a theory used to impose an obligation in the absence of an actual agreement.

Accepted Answer

Unjust enrichment is a quasi-contract theory of recovery designed to prevent injustice when there is no enforceable agreement between the parties.

Question 2

The terms agreement and contract have the same meaning.

Accepted Answer

A contract is more than an agreement between two or more parties. Contracts are enforceable agreements between the parties.

Question 3

Sophia stops at a coffee shop after class and orders a latte. This is an example of an implied contract.

Accepted Answer

The order is an implied contract because the server does not ask if Sophia promises to pay for the coffee. Her act of ordering the drink creates an obligation to pay.

Question 4

A negotiation to buy a car is an example of entering into an implied contract.

Accepted Answer

Buying a car is an example of an express contract because both parties knowingly and intentionally agree on the promises and performances.

Question 5

Jason writes a check to the university bookstore to pay for textbooks and supplies. This is an example of an informal contract.

Accepted Answer

This is an example of a formal contract, because a check is a negotiable instrument. Checks that businesses and individuals write when transacting business have to meet specific written content requirements to be valid.

Question 6

Any meeting of the minds resulting in mutual assent to do or refrain from doing something is called a contract.

Accepted Answer

An agreement is any meeting of the minds resulting in mutual assent to do or refrain from doing something.

Question 7

The Uniform Commercial Code (UCC) is law that governs contracts for the sale of goods.

Accepted Answer

State statutory law that is based on the UCC is law that governs contracts for the sale of goods. The UCC is not law, but rather a model statute that states can follow when enacting law.

Question 8

A contract for installing a new furnace is an example of a hybrid contract.

Accepted Answer

This is a hybrid contract because it involves both goods and services.

Question 9

Elise hires an artist to paint a portrait of her family. This contract is governed by common law.

Accepted Answer

Common law governs this contract because the price of materials (canvas, paint, etc.) is incidental to the contract and the services to be provided are unique.

Question 10

A building manager hires a painting company to paint the common areas in the building. The manager will supply all of the paint. This contract is a hybrid contract.

Accepted Answer

This contract is a contract for services only. Contracts for goods and services are hybrid contracts.

Question 11

A valid contract is one that has all the necessary elements and, thus, can be enforced.

Accepted Answer

A contract is valid when it has all the necessary elements and is not subject to a legal defense.

Question 12

A contract that is not yet complete is called an executed contract.

Accepted Answer

An executory contract is a contract that is not yet complete.

Question 13

A legal defense renders a contract unenforceable, even though it has the necessary elements of a valid contract.

Accepted Answer

An unenforceable contract is a contract that meets the elements required by law for an otherwise binding agreement but is subject to a legal defense.

Question 14

Under a bilateral contract, there is no contract until the offeree performs the requested act.

Accepted Answer

A bilateral contract is formed when the enforceable promises are exchanged.

Question 15

Common law governs a contract that involves installation of computer equipment when materials are valued at $75,000 and labor is $10,000.

Accepted Answer

Statutory law governs this contract because, based on price allocation, the predominant feature of the contract is goods.

Question 16

Divisible contracts are often referred to as severable contracts in many states.

Accepted Answer

In many states, severable contracts have the same meaning as divisible contracts.

Question 17

An enforceable contract has four necessary elements: mutual assent, capacity to contract, consideration, and legal purpose.

Accepted Answer

To be valid, contracts must have mutual assent, capacity to contract, consideration, and legal purpose.

Question 18

A handyman goes to the wrong house by mistake and cleans the gutters while the homeowners are at work. The homeowners will have to pay for the service under the quasi-contract theory of unjust enrichment.

Accepted Answer

The homeowners were not home and did not have the opportunity to mitigate damages.

Question 19

Most contracts require a specific format or ceremony.

Accepted Answer

Most contracts, while they require evidence that the elements are met, do not require a specific format or ceremony.

Question 20

Legal purpose means the contract itself does not violate the law.

Accepted Answer

The reason and outcome of the contract must be legal.

Quiz 6: Overview and Language of Contracts