Chp. 9 - nature and terminology of contracts quiz1. International Sales Corporation and National Distribution, Inc., enter into a contract without an agreement concerning payment. This is
Chp. 9 - nature and terminology of contracts quiz
1. International Sales Corporation and National Distribution,
Inc., enter into a contract without an agreement concerning payment.
This is
a. an express contract.
b. an implied-in-fact contract.
c. an implied-in-law contract.
d. not a contract.
answer: B PAGE: 201 TYPE: =
2. . Which of the following will a court enforce?
a. a contract between a mother and son
b. a promise between a mother and son
c. a promise between two companies
d. both A and B
> a
EXPLANATION: Courts will only enforce contracts. By definition,
a contract is a legally enforceable promise.
Clarks12 Ch 12 #1 (MC #1)
3. Alec mistakenly pays property taxes that should have been assessed against Bart, the adjacent landowner. Alec will be able to recover the amount from Bart
a. only if Bart knew of the error.
b. only if Bart tried to conceal the error.
c. even if Bart had no knowledge of the error.
d. under no circumstances.
answer: c PAGE: 202 TYPE: =
4. Alpha sells microchips for Beta to use in the manufacture of computers. The industry average cost of similar chips is $220. The preprinted terms of the contract between Alpha and Beta say the cost will be $200 per unit, but this figure has been crossed out and replaced with handwriting that says "$250/unit". How much will Beta have to pay for each chip?
a. $200
b. $220
c. $250
d. none of the above
> c
EXPLANATION: First, terms in a contract override what is customary
in the industry. Second, typewritten or handwritten terms override
preprinted terms.
Clarks12 Ch 12 #24 (MC #24)
5. The doctrine of quasi contract
a. can only be used if there is an actual contract covering
the area in controversy.
b. cannot be used if there is an actual contract covering the
area in controversy.
c. can be used whether or not there is an actual contract covering
the area in con­troversy.
d. none of the above.
answer: B PAGE: 202 TYPE: =
6. When ambiguities appear in a contract, they will be construed against
a. the party with the greater bargaining power.
b. the promisor.
c. the promisee.
d. the party who drafted the contract.
answer: d PAGE: 206 TYPE: =
7. Tom and Mike sign an agreement that says, "Mike will sell his 1977 Ford Mustang to Tom for $500." Tom, in court, insists that Tom also agreed to deliver the car, paint it, and repair the brakes for the $500. Which of these pieces of evidence will the court consider in interpreting this agreement?
a. the claim the car was to be delivered
b. the claim the car was to be painted
c. the claim the car was to be repaired
d. none of the above
> d
EXPLANATION: When a contract is clear and unequivocal, no outside
evidence is admitted. This is the plain meaning rule; for a clearly
written contract, what you see is what you get.
Clarks12 Ch 12 #22 (MC #22)
8. Jimmy, who is 14, orders 12 CDs from a mail order music club for a penny. He signs an agreement to buy 6 more over the next three years. What type of agreement has been formed?
a. valid
b. void
c. voidable
d. unenforceable
> c
EXPLANATION: Minors under 18 usually form voidable contracts,
which means that Jimmy can avoid his obligation to buy more CDs
if he wants to. Too bad you aren't still under 18, huh?
Clarks12 Ch 12 #21 (MC #21)
9. Farmer Tom grows vegetables and sells most of them to grocery stores in his area. If one of the stores breaks a contract with him and fails to pay for a shipment, what body of law will be used to determine the outcome of the case?
a. state common law
b. federal common law
c. the Uniform Commercial Code
d. both A and B
> c
EXPLANATION: The UCC governs all contracts for the sale of goods.
Goods are defined as moveable, tangible property, so Tom's vegetables
are goods.
Clarks12 Ch 12 #2 (MC #2)
10. Tom and Bill formed a contract six years ago, and Tom has still not fulfilled his part of the bargain. The statute of limitations in their state is four years. What kind of contract exists today?
a. valid
b. void
c. voidable
d. unenforceable
> d
EXPLANATION: An unenforceable contract is validly formed but cannot
be enforced because of a legal defense against it.
Clarks12 Ch 12 #20 (MC #20)
11. Which of the following statements is true?
a. Express terms are given less weight than the course of dealing
by the parties.
b. The course of dealing by the parties is given less weight than
the trade usage in that particular industry.
c. Express terms are given more weight than the course of perform­ance
by the parties.
d. The trade usage in that particular industry is given greater
weight than the course of dealing.
answer: c PAGE: 206 TYPE: =
12. Curt and Donna enter into a contract but later dispute its meaning. When a contract contains unclear terms, the primary purpose of the common law rules of contract interpretation is to give effect to
a. the parties’ intent as expressed in their contract.
b. what the parties now claim they intended.
c. what the defendant claims was the parties’ intent.
d. what the plaintiff claims was the parties’ intent.
ANSWER: A PAGE: 205 TYPE: N
13. Capone hires Smith to take a truck filled with marijuana to California for $10,000. What type of contract has been formed?
a. valid
b. void
c. voidable
d. unenforceable
> b
EXPLANATION: A void contract is not really a contract at all,
because it produces no legal obligations on the part of any party.
An illegal agreement is, in the eyes of the law, no agreement
at all.
Clarks12 Ch 12 #19 (MC #19)
14. Al makes a contract in which he will sell his car to Bill for $5,000. Al has delivered the car, but Bill has not yet paid the $5,000. What type of contract is it at this moment?
a. executed
b. executory
c. void
d. none of the above
> b
EXPLANATION: A contract has not been executed until ALL parties
have fully performed their contractual obligations.
Clarks12 Ch 12 #18 (MC #18)
15. Lauren, who is on the telephone, offers to sell Tina her bicycle for $400, and Tina accepts. Tina is over 18. Is this agreement a contract?
a. yes, because a contract automatically is formed when an
offer is accepted
b. yes, because all contractual requirements are met
c. no, because the agreement is not in writing
d. no, because no consideration is given
> b
EXPLANATION: A contract does not always arise upon offer and acceptance,
but there is no information here that indicates a problem with
formation. The bicycle is consideration, and most agreements,
this one included, do not need to be in writing.
Clarks12 Ch 12 #3 (MC #3)
16. Bill orders a stove from Best Buy for $1,000. They deliver the stove, and Bill refuses to pay them. What kind of contract has been formed?
a. express
b. implied
c. quasi
d. both A and C
> a
EXPLANATION: Don't get carried away with quasi-contracts. If an
express agreement exists, that is all that exists. To spot a quasi-contract,
look for both unjust enrichment AND a lack of any agreement between
the parties.
Clarks12 Ch 12 #14 (MC #14)
17.Doctor Detroit sees Val Victim unconscious on the side of the road. He stops and renders aid that saves Val's life. What kind of contract has been formed?
a. express
b. implied
c. quasi
d. none of the above
> c
EXPLANATION: This is slightly different than an implied contract,
because one of the parties did not solicit or expect anything.
However, when one party has given something of value to another,
a court will often find that a quasi-contract has been formed.
Clarks12 Ch 12 #13 (MC #13)
18. Tom enters a coffee shop in which he has an open account, fills a cup of coffee, holds it so the cashier can see it, acknowledges the cashier’s nod, and walks out with the coffee, knowing that he will be billed for it at the end of the month. Tom has formed
a. an express contract.
b. an implied-in-fact contract.
c. an implied-in-law contract.
d. a quasi contract.
answer: B PAGE: 201 TYPE: N
19. George agrees to deliver fifty MP3 players to Holly’s
E-Store. George de­livers but Holly does not pay. To recover
the price, George can collect from Holly on the basis of their
a. express contract.
b. implied-in-fact contract.
c. implied-in-law contract.
d. quasi contract.
answer: A PAGE: 201 TYPE: N
20. Which of the following people have the right to enter into contracts?
a. children
b. convicted felons
c. both A and B
d. none of the above
> c
EXPLANATION: Article I, Section 10 of the Constitution gives everyone
freedom of contract. The freedom from contract that children enjoy
is another issue.
Clarks12 Ch 12 #4 (MC #4)
21. Jeff jokingly offers to sell his farm to Al for $100. Al accepts, and demands the farm after giving Jeff his $100. What is Jeff's best argument that a contract was not formed?
a. He did not mean to make an offer; he was joking.
b. There is no consideration.
c. A reasonable person would not think an offer to sell a farm
for only $100 was a serious one.
d. none of the above
> c
EXPLANATION: Under the objective theory of contracts, only outward,
objective facts as judged by a reasonable person are used to determine
whether an offer is made.
Clarks12 Ch 12 #6 (MC #6)
22. A contest offers $100 to the best two essays handed in by Saturday. Al and Bill are selected as the winners. What type of contract exists between Al, Bill, and the operators of the essay contest?
a. unilateral
b. bilateral
c. trilateral
d. none of the above
> a
EXPLANATION: A unilateral offer is one that can only be accepted
by doing something affirmative, such as turning in an essay. The
classification has nothing to do with the number of people involved.
Clarks12 Ch 12 #8 (MC #8)
23. Raymond comes up to Tim's car when it is stopped at a red light and washes the windshield. What kind of contract has been formed?
a. express
b. implied
c. quasi
d. none of the above
> d
EXPLANATION: No quasi contract is formed if a benefit is conferred
on another unnecessarily or through misconduct.
Clarks12 Ch 12 #11 (MC #11)
24. Tom drops off his shirts at the cleaners. The clerk writes down his name, and nothing else is said. What kind of contract has been formed?
a. express
b. implied
c. quasi
d. none of the above
> b
EXPLANATION: One does not have to state the terms of an agreement
if it is clear that one party expects a service to be done and
the other party expects to be paid for it.
Clarks12 Ch 12 #12 (MC #12)
25. Fran and Greg enter into a bilateral contract, which is created when
a. Fran gives a promise in exchange for Greg’s performance
of a par­ticular act.
b. Fran gives a promise in exchange for Greg’s promise.
c. either a or b.
d. none of the above.
ANSWER: B PAGE: 200 TYPE: +