Business Law Assessment 3

D. Money

Which of the following is acceptable consideration for a contract?

A. a penalty

B. an arrest

C. a sentence

D. money

B. Void

Two brothers, Sam and Jim, were fighting over the division of their ancestral property. After 10 years of legal battle, a frustrated Sam contacted a powerful politician who subjected Jim to extreme duress, forcing him to sign a contract in favor of Sam. When Sam takes this contract to court, the contract will be declared ______________.

A. voidable

B. void

C. null

D. unenforceable

D. bilateral

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

A. voidable

B. executed

C. unilateral

D. bilateral

A. bilateral

Windsor, the owner of Windsor's Sandwiches, contacts Gary, a new supplier. He promises 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. bilateral

B. unilateral

C. executed

D. voidable

C. Unilateral

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

A. executed

B. executory

C. unilateral

D. bilateral

B. Unilateral

Yvonne finds a carpenter to do some repairs for her house and tells him that if he finishes the job by Saturday, she will pay him $1,000. Yvonne's offer creates a(n) ____________ contract.

A. executed

B. unilateral

C. executory

D. bilateral

C. Martha cannot sue the baker

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 is accurate?

A. Martha can sue the baker but cannot recover damages.

B. Martha can sue the baker and recover $150 in damages.

C. Martha cannot sue the baker.

D. The baker must pay Martha $150 plus the cot of a replacement cake, as he entered into a verbal contract with her and did not perform his legal obligation.

D. Cannot revoke the contract

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 an informal verbal agreement is not legally binding.

B. can revoke the contract, provided he does so before she completes the marathon.

C. can reduce the amount of money he offered her, provided he does so before she completes the marathon.

D. cannot revoke the contract

D. A check

Which of the following is an example of an informal contract?

A. a recognizance

B. a lease

C. a letter of credit

D. a check

B. a party's agreement to pay a sum of money if another person does not pay it

What is a recognizance?

A. a sealed document that contains a formal contract whose contents are known to both parties and the referee who supervised its signing

B. a party's agreement to pay a sum of money if another person does not pay it

C. a party's acknowledgement in court that he or she is not liable to pay money if a certain event occurs

D. a sealed document that contains an informal contents are known only to the parties

C. Only one party is mistaken about a material fact regarding the subject matter of a contract

Which of the following is true of a unilateral mistake?

A. Only one mistake or ambiguity is present in the subject matter of entire contract.

B. Out of several contracts drafted simultaneously between two parties, one has a mistake in its subject matter that does not concern the other contracts.

C. Only one party is mistaken about a material fact regarding the subject matter of a contract.

D. A single mistake about a material fact in the subject matter of a contract appears several times in the contract.

D. Unilateral mistake

Heather chooses to buy a scarf from Macy's and reads the price on the tag as $50. She uses her credit card to pay for the scarf, but only after the purchase does she notice that the price tag actually says $500. This is an instance of a(n) ____________________.

A. bilateral mistake

B. mutual mistake of value

C. innocent misrepresentation

D. unilateral mistake

C. enforceable

A contract involving mutual mistake of value is ___________.

A. rescindable

B. ambiguous

C. enforceable

D. void

A. Fraudulent misrepresentation

A(n) ________________ is an event that occurs when one person consciously decides to induce another person to rely and act on a misrepresentation.

A. fraudulent misrepresentation

B. unitlateral mistake

C. bilateral mistake

D. erroneous misrepresentation

D. The innocent party justifiable relied on the wrongdoer's misrepresentation

In order to prove fraud, which of these elements must be shown?

A. The innocent party knew the wrongdoer.

B. The innocent party detected the misrepresentation prior to the contract's formation.

C. The wrongdoer assumed a false identity.

D. The innocent party justifiably relied on the wrongdoer's misrepresentation

B. Duress

____________ is a situation in which one party threatens to do a wrongful act unless the other party enters into a contract.

A. Scienter

B. Duress

C. Battery

D. Assault

C. He takes advantage of his grandmother's illness and persuades her to sign a will, leaving all of her property to him.

Which of the following scenarios makes Tim liable for undue influence?

A. He uses a false identity, borrows $10,000 from Kelly, and disappears with the money.

B. He threatens to kill Carlos if Carlos does not sign a contract that transfers all his property to Tim.

C. He takes advantage of his grandmother's illness and persuades her to sign a will, leaving all of her property to him.

D. He threatens to bring a lawsuit agianst Carlos if Carlos does not make him a partner in his firm.

True

T/F: A unilateral mistake is a mistake in which only one party is mistaken about a material fact regarding the subject matter of a contract.

False

T/F: A material fact is a fact that is irrelevant to the subject matter of a contract but pertains to the conduct of the parties.

True

T/F: An ambiguity in a contract may constitute a mutual mistake of a material fact.

D. Uniform Commercial Code

The _________ is a model act passed in 1949 that includes comprehensive laws that cover most aspects of commercial transactions.

A. Gramm-Leach Bliley Act

B. Sarbanes-Oxley Act

C. Uniform Sales Act

D. Uniform Commercial Code

A. Article 2

Which of the following articles in the UCC deal s with the sale of goods?

A. Article 2

B. Article 4

C. Article 5

D. Article 8

D. a contract for the sale of goods

Under which of the following transactions does title to goods pass from the seller to the buyer?

A. an option contract

B. a rental agreement

C. a lease agreement

D. a contract for the sale of goods

B. sale

A ___________ is defined as the passing of title goods from a seller to a buyer for a price.

A. lease

B. sale

C. loan

D. gift

B. the sale of tangible goods

Which of the following sales is covered by Article 2 of the UCC?

A. the sale of intangible goods

B. the sale of tangible goods

C. the sale of real estate

D. the sale of stocks

D. a sale that involves the provision of a service and a good in the same transaction.

Which of the following describes a mixed sale?

A. a sale that involves two or more intangible goods

B. a sale that involves the passing of title goods from a seller to a buyer for a price

C. a sale that involves the possession and use of named goods for a set price

D. a sale that involves the provision of a service and a good in the same transaction

True

T/F: Article 2 of the Uniform Commercial Code is also applied by federal courts to sales contracts governed by federal law.

False

T/F: Article 2 of the UCC applies to sales contracts for the sale of intangible goods.

True

T/F: If a person buys a computer, the sales contract for it would be subject to Article 2 of the UCC.

True

Only movable goods come under the scope of Article 2 of the UCC.

Gap-filling

The __________ rule permits certain open terms to be "read into" a sales or lease contract.

The seller's place of business

If the parties to a sales contract do not agree to the time, place, and manner of delivery of the goods, the place for delivery is the __________________.

Seller

In a destination contract, the __________ bears the risk of loss of the goods during their transportation.

Void title

The term _________ refers to a situation in which a thief acquires no title to goods he or she steals.

Voidable title/voidable leasehold interest to goods

A seller or lessor has __________________ if he obtained the goods through fraud, if he is check for the payment of the goods or lease is dishonored, or if he impersonated another person.

Liquidated damages

______________ are damages that will be paid upon a breach of contract that are established in advance. Pre-established damages.

After identification, title to the goods can be transferred from the seller to buyer.

What is the passage of title to goods?

Legal, tangible evidence of ownership of goods.

What is title?

As voidable title

How does the UCC treat goods that were fraudulently obtained?

Warranty

A ___________ is a seller's or lessor's express or implied assurance to a buyer or lessee that the goods sold or leased meet certain quality standards.

Express warranty

A warranty that is created when a seller or lessor makes an affirmation that the goods he or she is selling or leasing meet certain standards of quality, description, performance, or condition is known as a(n) ________________.

Shipment

The seller is obligated to get the items to a carrier, sometimes they don't get their money until it gets to the carrier.

Destination

The person is responsible from taking the goods all the way from them to final person (not delivered until the goods are in the carrier's hands).

Lease

Transfer of the right to possession and use of named goods for a set term in return for certain consideration

Lessor

A person who transfers the right of possession and use of goods under a lease (maintains title)

Lessee

A person who acquires the right to possession and use of goods under a lease (no title, just using the item)

Article 2A

Article of the UCC that governs leases of goods (have to be over $1,000).

Entrustment Rule

States that when an owner entrusts the possession of his or her goods to a merchant who deals in goods of that kind, the merchant has the power to transfer all rights in the goods to a buyer in the ordinary course of business. The real owner cannot reclaim the goods from this buyer.

Lindholm v. Brant

Red Elvis Andy Warhol case that was treated with the entrustment rule

Uniform Commercial Code (UCC)

Model act that includes comprehensive laws that cover most aspects of commercial transactions

Open Terms

Major term of a sales or lease contract left open (meaning its negotiable)