CHAPTER 9 - INTRODUCTION TO

1. One purpose of contract law is to make business matters more predictable. TRUE

2. The elements of a contract are agreement, consideration, legality, and capacity. TRUE

3. Unilateral contracts are usually considered illegal. FALSE

4. Robert offers to buy a car from Jane for $400. Jane must accept this offer in order to form an enforceable contract. TRUE

5. Strawly Corp. wants to sell land which has toxic waste underground. It may shift all the responsibility for environmental cleanup to the buyer by including such a provision in the sales contract. FALSE

6. Contracts for the sale of patents, automobiles, cleaning services and paper clips would all be governed by Article 2 of the Uniform Commercial Code. FALSE

7. A valid contract can legally be voided by either party. FALSE

8. Dawn and Isaac sign a contract in which Dawn agrees to deliver 8 bags of flour in exchange for Isaac’s

promise to pay $25 per bag. Dawn delivers the flour. Isaac pays for the goods. This contract is fully executory. FALSE

9. A quasi-contract is the legal designation of an oral contract. FALSE

10. Erin goes into Great Buy Electronics store and purchases a TV. She agrees to pay for the TV in 30 days on the store's \"30 days same as cash\" plan. This is an executed contract. FALSE

11. Valerie promises Teresa that she will pay Teresa $75 if Teresa will clean Valerie's house by noon on Saturday. If Teresa cleans the house by noon on Saturday and Valerie pays the $75, then this is an implied, bilateral, executory contract. FALSE

12. Reliance on the promise made by the defendant doesn’t need to be evidenced in order for promissory estoppel to apply. FALSE

13. When promissory estoppel is used by the courts, it is because there is NOT an enforceable contract present. TRUE

14. Under a contract, Danielle is required to make a set of draperies out of fabric chosen by the homeowners, the Flynns. After Danielle makes the draperies according to the contract requirements, her duties under the contract are discharged. TRUE

15. Alex promises to pay $100 to anyone who finds his lost watch. Kate finds and returns the watch to Alex after hearing of the reward money. Alex and Kate have an enforceable unilateral contract. TRUE

16. Jerry offers to shovel the snow from Ben's driveway for $35. Ben grabs his shovel and begins to work. This is an example of:

A. an implied, unilateral contract. B. an express, unilateral contract. C. an implied, bilateral contract. D. an express, bilateral contract.

17. The common law governs contracts for: A. services. B. real estate. C. employment. D. All of the above.

18. When John comes home from work one evening, he finds that the leaves in his frontyard have been raked and put in bags. Later, a man comes to collect for the yard work done. John refuses to pay for the work since he has never seen the man before and did not hire him to do his yard work. Which of the following answers is most accurate?

A. This is an implied, unilateral contract and he must pay the price requested by the man. B. John has to pay as this is an implied, bilateral executed contract.

C. The court would order John to pay the reasonable value of the yard work because of the benefit conferred on him.

D. John would not have to pay for the yard work as he did not have the opportunity to reject the offer.

19. As English judges were developing the common law of contracts in the twelfth and thirteenth centuries: A. most promises were found to be enforceable.

B. promises were found not binding unless written and sealed. C. the term “contract” became common. D. changes in the law occurred rapidly.

20. Miles purchased a lawnmower with an attached warning that said, \"The manufacturer is not responsible in the case of an injury caused by the lawnmower.\" If Miles is injured because of a defect in the mower and sues the lawnmower manufacturer, he will most likely:

A. lose, as he agreed to not hold the lawnmower manufacturer liable. B. lose, as he assumed the risk.

C. win, as this warning would be unenforceable. D. win, as all lawnmower manufacturers are strictly liable.

21. Mike made the following offer to Mick: \"I will pay you $500 if you agree to paint my house.\" Mick replied that he would. At this point, the contract is an: A. executed, bilateral, express contract.

B. executory, bilateral, implied-in-law contract. C. executory, unilateral, express contract. D. executory, bilateral, express contract.

22. What is not required to establish promissory estoppel? A. A promise made by the defendant.

B. A promise made by the plaintiff in response to the defendant's promise. C. Reliance on the defendant's promise.

D. Enforcing the promise is the only way to avoid injustice.

23. One of the factors leading courts away from a laissez-faire approach to contract law was: A. the movement away from requiring a writing and a seal on contracts. B. a change in relative bargaining power between parties to contracts. C. the assumption that promises are not legally significant. D. the assumption that parties had freedom to contract and would have to live with the consequences.

24. In the case Norton v. Hoyt, the court held that Norton failed to establish promissory estoppel because: A. Norton never promised anything in return for Hoyt’s promise. B. Norton breached the contract.

C. Norton did not establish a clear, unambiguous promise. D. Hoyt had made an illusory promise.

25. Larry goes to his barber who has cut his hair for the past several years. The barber proceeds to cut his hair as they talk about the most recent snow storm to hit the area. This is an example of a: A. unilateral, implied contract. B. bilateral, implied contract. C. unilateral, express contract. D. bilateral, express contract.

26. Which of the following statements about quasi-contracts is true? A. The plaintiff gave some benefit to the defendant.

B. The plaintiff reasonably expected to be paid for the benefit and the defendant knew this.

C. The defendant would be unjustly enriched if he did not pay. D. All of the above.

27. Patty is a poor college student struggling to work and keep up with her studies. Fred, her uncle, promises to pay Patty support of $200 per month for the next six months. Although Fred didn't ask her to, she quits her current job in order to devote full time to her studies for the next six months. Fred makes one payment and then stops with no explanation. If Patty sues, what is the likely result? A. Fred would win, as he did not ask Patty to quit her job.

B. Patty would win, as a contract was formed when Fred promised to pay her the support. C. Fred would win, as family members cannot sue each other for breach of an oral promise. D. Patty may win under the doctrine of promissory estoppel.

28. Noncompetition agreements are:

A. more common today than they were in the past, although policy issues they raised in the 1700s have never gone away.

B. now illegal, as they violate antitrust laws. C. infrequently litigated.

D. relatively recent developments, first used following the Great Depression in the United States.

29. The basic distinction between a bilateral contract and a unilateral contract is that: A. only one promise is involved in a bilateral contract. B. only one promise is involved in a unilateral contract. C. the Statute of Frauds applies to one and not the other. D. one is enforceable, the other is not.

30. The courts will find an implied contract when: A. there is no written agreement.

B. conduct of the parties indicates they intended an agreement. C. there is promissory estoppel.

D. the contract is executory but not executed.

31. Courts may award damages called “quantum meruit”: A. which means “as much as he deserved.”

B. which is money the court believes the plaintiff morally ought to have. C. even though there was no valid contract entitling the plaintiff to it. D. All of the above.

32. On January 16, Deb offers to sell her waterbed to Colleen for $600. Colleen accepts and agrees to pay Deb $600 on January 27. Which of the following is correct? A. On January 16, the contract was executory. B. On January 16, the contract was executed. C. This contract is a unilateral contract.

D. There is no contract until one party performs.

33. Which of the following statements about an express contract is true?: A. It must be in writing.

B. It may be inferred by the conduct of the parties involved.

C. The two parties explicitly state all important terms of their agreement. D. None of the above.

34. Which of the following represents a unilateral offer? A. \"I will pay you $50 if you mow my lawn.\" B. \"I am willing to shovel your driveway if you accept to pay me $50.\" C. \"I will pay you $50 for your CD player.\" D. \"Your backpack is probably worth $50.\"

35. Walter enters a dentist office and points to a damaged tooth. The dentist, Matt, treats the tooth. If Walter refused to pay and Matt sued:

A. Walter would win as there was no contract. B. Walter would win because of the UCC. C. Matt would win; this is an implied contract. D. Matt would win in quantum meruit.

36. Jennifer has offered to sell her computer for $1750 to Jack. She tells Jack that the computer is only six months old but, in fact, the computer is three years old, and Jennifer wants to unload the lemon. Jack agrees to buy the computer based on Jennifer's representations. This contract is: A. a void agreement because of the fraud involved. B. a voidable contract, one that Jack can void. C. a voidable contract, one that Jennifer can void. D. void according to the UCC.

37. Which of the following types of property would be goods under the Uniform Commercial Code? A. A promissory note. B. A stock. C. A patent. D. A computer.

38. Ron enters into a contract to paint Paul’s house. When Paul decides on a color, Ron will buy the paint and paint the house for the price of $2,500. This contract is governed by:

A. the common law of contracts because this is a mixed contract (one for services and goods).

B. the common law of contracts because the predominant factor of the contract is for the sale of services and not goods.

C. the Uniform Commercial Code because a sale of goods is involved. D. both the common law and the Uniform Commercial Code.

39. Zena enters into a contract with Steeley Company to purchase a washer and dryer. She doesn’t understand the financing terms, but signs the agreement anyway because she needs the appliances. The financing terms are very unfavorable to Zena, and she is unable to make all of her payments when they are due. Steeley sues. The court would:

A. be exercising judicial restraint if it requires Zena to pay as she promised, even if the agreement was unfair and unwise.

B. have to rewrite the contract to be fair to both parties.

C. have to declare the contract void since it contained terms unfavorable to the weaker party to the transaction. D. use the theory of promissory estoppel to remedy any unfavorable terms in the contract.

40. Contracts that do not arise from mutual agreement but are created by courts to avoid unjust enrichment are: A. express contracts. B. implied contracts. C. quasi-contracts. D. unilateral contracts.