Exam 3 Ostendorf Business law

True

A promisee has the right to expect

or demand that something will or

will not happen in the future.

True

By supplying a process to enforce

private agreements, contract law

provides an essential element for

our market economy.

False

Only one party to a contract

must possess characteristics that

qualify him/her as competent for

a valid contract to exist.

False

Any contract that is not in writing

is not enforceable.

True

Contests and lotteries are

unilateral contracts because they

can be accepted by performance.

False

If a voidable contract is ratified

by the parties, both parties are

released from it.

A breach of contract

Yancy agrees to zed.com's terms of service and

downloads the site's app. Yancy then reverse-

engineers the app to create a competing product.

This is:

The objective theory of contracts

Bob claims that he intended to enter into a contract

with Carla for tutoring, and she breached it. Carla

responds that she never intended to enter into a

contract with Bob. Their intent to enter into a

contract is determined with reference to:

consideration

Pavers Inc. contracts with a QuikStop store

to repave the store's parking lot for a

certain price. To be enforceable, this

contract must include an element of:

Nancy promised to pay for the watch

Mack offers to sell his smart watch for $50

to Nancy. Nancy promises to pay Mack

the price. Later, they exchange the watch

for the funds. A contract was created

when:

A unilateral contract

Randy offers to pay Sally to deliver certain

documents within 30 minutes. Sally can

accept the offer only by completing the

task within the deadline. If she does,

Randy and Sally will have:

Pay damages to Holly

Three Guys Moving promises to deliver a

certain table to Holly, who promises to pay

for the service. If Three Guys does not

perform, it may be required to:

An implied contract

Maggie asks William, a cobbler, to repair a pair

of boots. There is no discussion of price, and

Maggie and William do not sign any documents.

After the repair, William hands Maggie a bill.

With respect to Maggie's obligation to pay the

bill, this is:

Void

Ocean Inc., a seafood distributor, agrees

to buy from Lydia, a commercial fisher,

any "overstock" of fish that she catches in

excess of the legal limit. This agreement is

most likely:

True

All parties entering into a contract must possess characteristics that qualify each party as competent for a valid contract to exist.

False

A unilateral contract is defined as a promise given in exchange for a promise.

False

Once an offer is made, the offeror cannot revoke it.

pay damages to Nora

Movers, LLC promises to deliver a certain couch to Nora, who promises to pay for the service. If Movers does not perform, it may be required to:

Noreen promised to pay for the iPad

Mary offers to sell her iPad for $100 to Noreen. Noreen promises to pay Mary the price. Later, they exchange the iPad for the money. A contract was created when:

False

The offeror's intention to

become bound by the offer must

be subjectively clear.

False

A request to negotiate is an offer.

An invitation to submit bids is an

offer.

True

In effect, a counteroffer converts

the original offeror into an

offeree with the power of

acceptance.

True

Under the mirror image rule, the offeree must accept the

offer without adding or changing

any terms.

True

An exchange of emails can create

a complete and unambiguous

binding agreement.

Words and actions

Fresh Agro Inc. offers to deliver produce to

Growers' Market for a certain price.

Fresh's intent to extend an offer is

determined by reference to Fresh's:

Serious Intent

Peter tries to start his car with no success. He

yells that he will sell the car to anyone for $10.

Rita, a passerby, hears Peter's yell. This is not

an effective offer because it lacks:

A statement of future intent to do something is not an offer.

Kennedy says, "I plan to sell my Apple stock." This is

not an offer because:

An invitation to submit offers, not an offer itself

Oliver decides to sell his ranch, Pine Valley,

in a live auction. When the auctioneer

puts the property up for bids, it will be:

Reasonably definite

For a court to determine if a contract

has been breached and to give an

appropriate remedy, the offer must

include terms that are at least:

Exactly mirror those of the offer

Glenn offers to sell Helen his iPad for $200. Under

the mirror image rule, Helen's response will be

considered an acceptance if the terms of the

acceptance:

Rejected the offer and made a counteroffer

Frank offers to sell his Graphic Signs LLC

business to Hannah for $100,000. Hannah

replies, "The price is too high. I will buy it for

$75,000." Hannah has:

False

An expression of opinion can indicate an intent to enter into a binding agreement.

True

In effect, a counteroffer converts the original offeror into an offeree with the power of acceptance.

manifest their voluntary consent to the same bargain.

For a contract to be considered valid and enforceable, the parties to a deal must:

an invitation to negotiate, not an offer.

Lonnie says to Mary, "I think I would like to sell you my sofa." This statement is:

reasonably definite

For a court to determine if a contract has been breached and to give an appropriate remedy, the offer must include terms that are at least:

True

Under the mirror image rule, the offeree must accept the

offer without adding or changing

any terms.

True

Acceptance is generally timely if

it is effective before the offer is

terminated.

False

If the offeror does not expressly

specify a certain mode of

acceptance, then acceptance can

be made by any means, whether or

not it is "reasonable."

True

A click-on agreement can

indicate the acceptance of an

online offer.

True

Acceptance of an e-contract

must show that the offeree

voluntarily assented to the

offer's terms.

Only after he hauls away the debris

Ginny tells Frank that she will pay him $50

to haul lawn debris from her property.

Because this is a unilateral contract,

Frank's acceptance is complete:

sent

Via US mail, Shep offers to make digital copies of

Reliable Company's business conference VHS tapes,

CDs, and DVDs for $500. Under the mailbox rule,

Reliable's acceptance by US mail will be considered

effective when:

sent

Domestic Gas Company offers to sell Energy Ltd.

a certain quantity of natural gas. If Energy

sends an acceptance via Domestic's authorized

mode of communication, it will be effective

when it is:

A provision relating to the resolution of any dispute

To control specific offers for goods online and

thus the resulting contracts, an important term

to include is:

only after he paints her house

Tara tells Brian that she will pay him $100 if he paints the outside of her house. Because this is a unilateral contract, Brian's acceptance is complete:

True

An offer terminates automatically when the period of time specified in the offer has passed.

False

Merely inquiring about an offer constitutes rejection.

false

Acceptance of an offer by a method not authorized by the offeror always renders the offer invalid.

a contract that includes the terms she viewed

Violet, a user of Phone-App.com's website, can download apps for free by first clicking on "I accept" after viewing certain terms. This is:

True

To enforce a contractual promise,

there must be an exchange of

consideration underlying the

bargain.

True

Consideration is the value given

in return for a promise or in

return for performance.

Is the consideration that creates Kim's obligation to pay Leo

Kim promises to pay Leo $500 to install a sump

pump in Kim's warehouse. Leo completes the

installation. The act of installing the pump:

Not enforceable because Kay has not given consideration in return

Jen promises to pay Kay $500 because "she does not

have as much money as other people." Jen's

promise is:

True

Promising to pay on receipt of goods is

"something of legally sufficient value."

True

Providing accounting services is

"something of legally sufficient value."

Because it is a promise of something of the value

Sports Bar and Tasty Tacos are adjacent businesses

with adjoining parking lots. Sports Bar offers Tasty a

discount on purchases if the restaurant will not tow

the cars of Sports Bar's patrons who park in the

restaurant's lot. The discount is legally sufficient

consideration:

A bargained-for exchange

To constitute consideration, there must

be:

False

In general, courts question the

adequacy of consideration.

not question the adequacy of consideration

EcoEnergy LLC files suit against Fiber Optics Inc.,

claiming that the consideration for their contract is

inadequate - that the plaintiff will not realize

sufficient financial benefit from the deal to make it

worthwhile. Most likely, the court will:

Consideration

Fritz offers to buy a guitar owned by Holly for twice

what she paid for it. She accepts and hands the

guitar to Fritz. Holly's delivery of the guitar is:

True

A promise to do something that one has

no prior legal duty to do is legally

sufficient consideration.

False

The performance of an action that one is

not otherwise obligated to undertake is

not legally sufficient consideration.

False

If a party is already bound by contract

to perform a certain duty, that duty

can also serve as consideration for a

second contract.

Not collect it because she had a preexisting duty to capture Oscar

Maria is the sheriff of Narez, Texas. Oscar robs a

Narez gas station and a $500 reward is offered for

his capture. When, later, Maria finds and arrests

him, with respect to the reward, she can:

Unenforceable because Terry's performance was a preexisting duty

Under a contract with Soy Farms, Terry begins grading a

terraced hillside for planting. Halfway through the project,

Terry asks for $5,000 over the agreed upon contract price,

claiming an increase in the "cost of doing business." The

farm agrees but later refuses to pay. The agreement to pay

more is:

Enforceable due to unforeseen difficulties

Holes Inc. begins digging a foundation at a

construction site for Investment Company under a

contract for a certain price. After 6 months, Holes

demands a higher price because of extraordinary

difficulties that were totally unforeseen at the time

the contract was formed. An agreement to pay the

higher price is:

False

A promise made in return for an

act or event that has already

taken place is fully enforceable.

Not enforceable because the consideration is in the past

Sam promises to pay his personal assistant Tina

$50,000 in consideration of the services she has

performed over the years. Sam never makes the

payment. Sam's promise is:

True

A promise is illusory when its

performance depends solely on

the discretion of the promisor.

False

An option to cancel a contract

before performance begins does

not make the promise illusory.

Illusory

Dana's Aunt Emily tells her, "If I feel you

deserve it at the time, I will give you a new

car when you graduate from college."

Emily's promise is:

true

If a debt is liquidated, an accord

and satisfaction cannot take

place.

True

Forfeiting a right to sue to

recover further damages can

constitute consideration.

Liable to Nikki under the doctrine of

promissory estoppel.

Marketing Solutions Inc. promises to employ Nikki

as a software engineer. In reliance on that promise,

Nikki quits her job with Online Ad Agency, but

Marketing Solutions doesn't hire her. Most likely,

Marketing Solutions is:

False

Consideration refers to the objective determination of how much a bargain is worth.

False

Normally, a court will evaluate the adequacy of consideration based solely on the comparative value of the things exchanged as part of the agreement.

False

A promise made in return for an act or event that has already taken place is fully enforceable.

a bargained-for exchange

To constitute consideration, there must be:

an illusionary promise

Cloud Storage Inc. promises to pay its employees a year-end bonus "if profits continue to be high and management agrees at the time." This is:

bilateral contract

A type of contract that arises when a promise is given in exchange for a promise.

contract

An agreement that can be enforced in court; formed by two or more parties, each of whom agrees to perform or to refrain from performing some act now or in the future.

executed contract

A contract that has been completely performed by both parties.

executory contract

A contract that has not yet been fully performed.

express contract

A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.

extrinsic evidence

Evidence that relates to a contract but is not contained within the document itself, including the testimony of the parties, the testimony of witnesses, and additional agreements and communications. A court may consider extrinsic evidence only when a contract term is ambiguous and the evidence does not contradict the express terms of the contract.

formal contracts

A contract that by law requires a specific form, such as being executed under seal, to be valid.

implied contract

A contract formed in whole or in part from the conduct of the parties (as opposed to an express contract).

informal contracts

A contract that does not require a specified form or formality in order to be valid.

objective theory of contracts

A theory under which the intent to form a contract will be judged by outward, objective facts as interpreted by a reasonable person, rather than by the party's own secret, subjective intentions. Objective facts might include what a party said when entering into the contract, how a party acted or appeared, and the circumstances surrounding the transaction.

offerree

A person to whom an offer is made.

Offerror

A person who makes an offer.

promise

A person's assurance that he or she will or will not do something.

promisee

A person to whom a promise is made.

promisor

A person who makes a promise.

quasi

contracts

unenforceable contract

A valid contract rendered unenforceable by some statute or law.

unilateral contract

A contract that results when an offer can be accepted only by the offeree's performance.

valid contract

A contract that results when the elements necessary for contract formation (agreement, consideration, contractual capacity, and legality) are present.

void contract

A contract having no legal force or binding effect.