Question 1

If ambiguity is detected while determining the type of a contract, it is presumed to be a bilateral contract.

Accepted Answer

This is because in a bilateral contract, both parties make promises to each other, while in a unilateral contract, only one party makes a promise and the other party must perform an action in order to accept the offer. Therefore, if it is unclear whether both parties are making promises, it is safer to assume that it is a bilateral contract.

Question 2

A contract is ________ if the offeror's offer can be accepted only by the performance of an act by the offeree.
A) unilateral
B) bilateral
C) implied-in-law
D) executory

Accepted Answer

A unilateral contract is one in which the offeror's offer can only be accepted by the performance of an act by the offeree. This means that the offeree must do something in order to accept the offer, such as completing a task, making a delivery, or providing a service. In a unilateral contract, the offeror is bound to the contract once the offeree has completed the specified act.

Question 3

A contract that has been fully performed on both sides is called an ________ contract.
A) executory
B) executed
C) option
D) executive

Accepted Answer

An executed contract is one where all terms have been fulfilled by both parties. Executory contracts are those that have not been fulfilled by one or both parties. Option and executive do not accurately describe a contract that has been fully performed.

Question 4

A contract is a(n) ________ if the offeror's promise is answered with the offeree's promise of acceptance.
A) unilateral contract
B) bilateral contract
C) executed contract
D) executory contract

Accepted Answer

In a bilateral contract, both parties make a promise to each other. The offeror makes a promise in the offer, and the offeree accepts that promise by making a promise to perform. This distinguishes it from a unilateral contract, where the offeror's promise is answered with the offeree's performance. Executed contracts have already been performed, while executory contracts have yet to be performed.

Question 5

Martha contacts a bakery to get a cake for her son's birthday party. She tells the baker that she will pay him $150 for the cake if he delivers the cake on Friday evening. If the baker does not deliver the cake on Friday evening, which of the following will hold true?
A) Martha can sue the baker to recover $150 in damages.
B) Martha can sue the baker but cannot recover damages.
C) The baker has to give $150 plus cost of the replacement cake to Martha as he entered into a verbal contract with her.
D) Martha cannot sue the baker.

Accepted Answer

The baker has not breached the contract yet, so Martha cannot sue him.

Question 6

Which of the following is a necessary condition for a contract to be considered valid?
A) It cannot be enforced by just one of the parties involved.
B) It is enforceable by at least one of the parties.
C) It can be voided by one of the parties.
D) It can be voided by both parties.

Accepted Answer

For a contract to be considered valid, it must be enforceable by at least one of the parties involved. A contract that cannot be enforced by any of the parties would not be considered valid. The other choices are not necessary conditions for a contract to be considered valid.

Question 7

Contracts that have been fully performed by one side but not by the other are classified as ________ contracts.
A) executory
B) executed
C) void
D) voidable

Accepted Answer

Executory contracts are those that have not yet been fully performed by both parties. On the other hand, executed contracts are those that have been fully performed by both parties. Void contracts are those that are not legally enforceable from the beginning, and voidable contracts are those that may be legally avoided by one or both parties. Therefore, the correct answer is A) executory.

Question 8

If a contract is required to be in writing under the Statute of Frauds but is not, then the contract is ________.
A) valid
B) void
C) voidable
D) unenforceable

Accepted Answer

If a contract is required to be in writing under the Statute of Frauds but is not, then the contract is unenforceable. This means that although the parties may have agreed to the terms, the court will not enforce the contract if one party breaches it. The purpose of the Statute of Frauds is to prevent fraudulent claims of oral contracts and to ensure that important contracts are in writing and signed by the parties.

Question 9

What is recognizance?
A) a party's acknowledgement in court that he or she will pay a specified sum of money if a certain event occurs
B) a sealed document that contains a formal contract whose contents are known to both parties and the referee who supervised its signing
C) a sealed document that contains an informal contract whose contents are known only to the parties
D) a party's acknowledgement in court that he or she is not liable to pay any money if a certain event occurs

Accepted Answer

Recognizance is a legal concept in which a party acknowledges in court that they will pay a specified amount of money if a certain event occurs. It is often used as a way for defendants to secure their release from jail before trial. This option represents the definition of recognizance.

Question 10

Yvonne finds a carpenter to do some repairs for her house and tells him that if he finishes the job within Saturday, she would pay him $1,000. This offer creates a(n) ________ contract.
A) executed
B) executory
C) unilateral
D) bilateral

Accepted Answer

This is a unilateral contract because only Yvonne is making a promise (to pay $1,000 if the work is finished by Saturday) and the carpenter is not making any promises in return.

Question 11

Elizabeth signs a contract to purchase a new car from Spadace Motors. She is yet to pay for the car and thus Spadace Motors has not delivered the car to Elizabeth. This is an example of a(n) ________ contract.
A) void
B) unenforceable
C) executed
D) executory

Accepted Answer

An executory contract is a contract where one or more parties have not yet fulfilled their obligations. In this case, Elizabeth has not yet paid for the car and Spadace Motors has not yet delivered the car, making it an executory contract. A void contract is a contract that is not legally binding from the beginning, an unenforceable contract is a contract that cannot be enforced due to legal reasons, and an executed contract is a contract that has been fully performed by both parties.

Question 12

Harry in a drunken state agrees to give his car to Ben as a token of friendship. Once sober, Harry asks Ben to return his car. This contract is considered ________.
A) valid
B) void
C) voidable
D) unenforceable

Accepted Answer

This contract is considered voidable because Harry was in a state of drunkenness which impaired his judgment and ability to make a rational decision when he gave his car to Ben. Harry can later disaffirm the contract once he is sober, thus making it voidable.

Question 13

Windsor, the owner of Windsor's Sandwiches, contacts a new supplier, Gary. He tells Gary that he will pay him $375 if Gary delivers 20 pounds of cheese the following morning. Gary promises to make the delivery as requested by Windsor. This creates a(n) ________ contract between them.
A) unilateral
B) bilateral
C) implied-in-law
D) executory

Accepted Answer

This is a bilateral contract because both parties have made promises to each other, with Windsor promising to pay and Gary promising to deliver the cheese.

Question 14

Which of the following is an informal contract?
A) check
B) bank draft
C) lease
D) recognizance

Accepted Answer

A lease is a type of informal contract, as it is typically not written and does not require formal legal processes. Choices A and B are types of payment instruments, and choice D refers to a formal legal agreement.

Question 15

An act of performance is necessary to create a bilateral contract.

Accepted Answer

A bilateral contract is created by the exchange of promises between two parties, not by an act of performance.

Question 16

A contract is bilateral contract if the offeror's promise is answered with the offeree's promise of acceptance.

Accepted Answer

A bilateral contract is a type of contract where both parties exchange mutual promises to perform an act. This means that both the offeror (person making the offer) and the offeree (person receiving the offer) make promises to each other in the contract.

Question 17

An offeror uses blackmail to make an offeree sign a contract that involves the sale of the offeree's house. The contract is ________.
A) valid
B) void
C) voidable
D) unenforceable

Accepted Answer

Contracts formed under duress, including blackmail, are considered voidable at the option of the coerced party. This means the offeree can choose to either affirm or void the contract.

Question 18

Which of the following statements is true of contracts?
A) Parties to an informal contract can use any words they choose to express their contract.
B) A contract under seal is disclosed only to the offeror of the contract.
C) A letter of credit is an informal contract.
D) A void contract is the same as a voidable contract.

Accepted Answer

Parties to an informal contract can use any words they choose to express their contract. Informal contracts, such as verbal agreements, are not legally required to be in writing and can be expressed using any language that both parties agree upon. However, it is always recommended to have a written contract to avoid any misunderstandings or disputes in the future.

B is incorrect as a contract under seal is usually disclosed to both parties, and not just the offeror.

C is incorrect as a letter of credit is a formal contract used in international trade.

D is incorrect as a void contract is different from a voidable contract. A void contract is one that is not enforceable by law, while a voidable contract is one that can be legally avoided or canceled by one or both parties.

Question 19

Alan tells Sherry that he will pay her $5,000 if she runs the Boston Marathon. Once Sherry starts running the marathon, Alan ________.
A) can revoke the contract as informal verbal agreements are not binding
B) cannot revoke the contract
C) can reduce the money on offer
D) can only increase the money on offer

Accepted Answer

Once a contract has been formed, it is binding and cannot be unilaterally revoked by one party without the consent of the other party. In this scenario, Alan made a promise to pay Sherry $5,000 if she runs the Boston Marathon. Sherry then started running the marathon, which means she has begun to perform her part of the agreement. Therefore, Alan cannot revoke the contract.

Question 20

Which of the following is true of enforcing a contract?
A) A contract is only considered valid if it is enforceable by both parties.
B) In an unenforceable contract, at least one party has the option to void his or her contractual obligations.
C) Void contracts are enforceable in cases involving mutual mistakes.
D) Parties may voluntarily perform a contract that is unenforceable.

Accepted Answer

Parties may choose to voluntarily perform an unenforceable contract, even though it cannot be legally enforced.

Quiz 9: Nature of Traditional and E-Contracts

If ambiguity is detected while determining the type of a contract, it is presumed to be a bilateral contract.

A contract is ________ if the offeror's offer can be accepted only by the performance of an act by the offeree.

A contract that has been fully performed on both sides is called an ________ contract.

A contract is a(n) ________ if the offeror's promise is answered with the offeree's promise of acceptance.

Martha contacts a bakery to get a cake for her son's birthday party. She tells the baker that she will pay him $150 for the cake if he delivers the cake on Friday evening. If the baker does not deliver the cake on Friday evening, which of the following will hold true?

Which of the following is a necessary condition for a contract to be considered valid?

Contracts that have been fully performed by one side but not by the other are classified as ________ contracts.

If a contract is required to be in writing under the Statute of Frauds but is not, then the contract is ________.

What is recognizance?

Yvonne finds a carpenter to do some repairs for her house and tells him that if he finishes the job within Saturday, she would pay him $1,000. This offer creates a(n) ________ contract.

Elizabeth signs a contract to purchase a new car from Spadace Motors. She is yet to pay for the car and thus Spadace Motors has not delivered the car to Elizabeth. This is an example of a(n) ________ contract.

Harry in a drunken state agrees to give his car to Ben as a token of friendship. Once sober, Harry asks Ben to return his car. This contract is considered ________.

Windsor, the owner of Windsor's Sandwiches, contacts a new supplier, Gary. He tells Gary that he will pay him $375 if Gary delivers 20 pounds of cheese the following morning. Gary promises to make the delivery as requested by Windsor. This creates a(n) ________ contract between them.

Which of the following is an informal contract?

An act of performance is necessary to create a bilateral contract.

A contract is bilateral contract if the offeror's promise is answered with the offeree's promise of acceptance.

An offeror uses blackmail to make an offeree sign a contract that involves the sale of the offeree's house. The contract is ________.

Which of the following statements is true of contracts?

Alan tells Sherry that he will pay her $5,000 if she runs the Boston Marathon. Once Sherry starts running the marathon, Alan ________.

Which of the following is true of enforcing a contract?