Learn: Contracts and Employment Law

Which of the following is an example of sufficient consideration?

A promise by a current employee not to solicit the employer's clients for a period if/when they terminate their employment in the future

Amy wants to sell her laptop for $400. Beth needs a laptop for school and asks Amy if the laptop is compatible with a certain school software. Amy replies that she believes so, but hasn't used that software personally, so can't be sure. Beth agrees to buy the laptop for $400 but only has $100 on her at the time. She tells Amy she will bring her the remaining $300 a few days later. The next day, Beth tries to use the laptop with the school's software and learns that it is not compatible. Beth tells Amy and says she wants to return laptop and get her $100 refunded. Amy says, "a deal's a deal" and demand that Beth pay the remaining $300. If one of the parties sues the other, the likely outcome would be:

Amy would win, unless she actually knew that the laptop was not compatible with the school software

Bob tells Tom he will agree to sell his guitar to him if Tom will agree to pay him $200. Tom accepts. This type of contract is:

Bilateral

Article 2 of the UCC requires that the terms of a contract's acceptance must mirror the terms of the offer.

False

Bill hates his roommate. He promised to pay John $5,000 if John agrees to murder Bill's roommate by or before March 3rd. John agrees to do so. However, on March 1st, John informs Bill that he has changed his mind and will not murder the roommate. Can Bill sue John for breach of contract?

No, because the arrangement was not a valid contract

A startup hires a marketing specialist but classifies them as an independent contractor. The worker must work from the company office, follow a fixed daily schedule, use company equipment, and report to a supervisor. If challenged, what is the most likely legal conclusion?

The worker is an employee because the company exercises significant control

In the context of contracts, legal capacity refers to:

the legal ability to make a contract

Which of the following is NOT an element of "mutual mistake" with respect to a contract

One of the parties did not have legal capacity to sign the contract

DevShop signed a contract via DocuSign in Austin; Acme signed via DocuSign in Dallas. The two PDFs were emailed back as separate digital counterparts; no single 'wet-ink' original exists. After a dispute arises, DevShop tries to escape the contract by arguing that, because there is no single signed original, no binding contract was formed.

Under the Counterparts clause and federal/state e-signature law (E-SIGN Act and UETA), the contract is fully enforceable; counterpart and digital signatures have the same legal effect as a single original.

Before the software development agreement (SDA) was signed, DevShop's CEO told Acme's CEO over coffee, 'Don't worry — we'll throw in mobile-app support for free.' That promise was never written into the SDA or SOW. Six months in, Acme demands the free mobile support; DevShop refuses, citing the SDA's Entire Agreement clause. Acme has no fraud claim, just the alleged oral side-deal.

The Entire Agreement clause eliminates and supersedes the prior oral representation.

Mid-project, DevShop is acquired by a direct competitor of Acme. The acquisition is structured as a sale of substantially all of DevShop's assets, including the SDA. Acme objects on learning of the deal, citing the SDA's No Assignment clause, which makes the contract 'personal in nature, not assignable or transferable by Contractor... absent prior written approval from Company.'

Without Acme's prior written consent, DevShop's purported assignment of the SDA is invalid; Acme may treat the assignment as a breach and terminate, and may also be entitled to enjoin further work by the acquirer.

A SaaS company posts 'Terms of Use' via a passive link at the bottom of its homepage; users never click 'I Agree.' The terms include a forum-selection clause requiring suit in Delaware. A user sues in Texas. What is the most accurate observation?

Browsewrap-style passive Terms can be challenging to enforce; courts often examine conspicuousness, notice, and assent. Click-through (clickwrap) Terms with affirmative assent are generally far more enforceable.

A Texas vendor sends a Plano-based merchant a written quote for 10,000 widgets at $4 each. Before the vendor revokes, the merchant accepts in writing but adds, 'shipping must be expedited.' Under UCC Article 2, which is most likely TRUE?

A contract is formed; the additional shipping term may or may not become part of the contract under UCC § 2-207, depending on materiality, merchant status, and timely objection.

An entrepreneur clicks 'I Agree' on a SaaS provider's online terms before beginning a trial. She later disputes whether the limitation-of-liability clause is binding. Under the federal E-SIGN Act, which is correct?

The 'click' can constitute an enforceable e-signature provided the parties intended to use electronic signatures and the record can be retained and accurately reproduced.

Using a liquidated damages clause, parties can limit their liability to the other party for contract breach by including language to that effect in the contract, as long as the provision is not deemed to be punitive

True

Which if the following statements is true

all contracts are promises, but not all promises are contracts

Reformation of a contract would be an appropriate remedy in the event a Scrivener's error, rather than voiding the contract

True

A click-on agreement can indicate the acceptance of an online offer.

True

Courts can consider granting equitable remedies such as specific performance only if legal remedies are not adequate or would result in an unfair result

True

Force Majeure is a defense to breach of contract

True

If a party waives a breach of a specific contract provision by the other party, they will not be allowed to enforce any other provisions of the contract, either.

False

All of the following are potential remedies for breach of contract except:

assignment

The exchange of benefits or items of value, also known as "quid pro quo" in a contract is called:

consideration

An offer can typically be revoked at any time prior to acceptance

True

Advertisements are typically sufficient to constitute an "offer" under contract law

False

Transferring all rights and obligations of one contracting party to a third person is called:

assignment

All contracts must be in writing to be enforceable by law

False

US employers never have the right to access or store an employee's personal emails

False

Employers are prohibited from taking actions against employees or applicants based on their social network postings.

False

When a former employer is providing a potential new employer with information about a former employee and they make false statements about the former employee

they can escape liability for defamation under qualified immunity if the statements are made in good faith

ABC Tech, a Texas startup, hires an independent contractor to develop the source code for its flagship app. The engagement letter says only, "Contractor will be paid $50,000 for app development." After delivery, the contractor claims he owns the software copyright. Under U.S. copyright law, who likely owns the copyright?

The contractor, because absent a signed assignment and given that he is not an employee, he retains copyright ownership.

Which of the following is NOT a protected class of individuals under Title VII of the Civil Rights Act of 1964

disability

The federal agency in charge of overseeing laws regarding workplace safety is

Occupational Safety and Health Administration

A seemingly neutral employment policy that has disproportionate impact on protected group under Title VII is referred to as

Disparate impact

An employer is not legally allowed to ask whether an employee has a right to work in the United States, nor to investigate whether an employees identification documents are genuine

False

The doctrine that holds that the employer can be held liable for the acts of its employees is called

respondeat superior

Employment "at will" means that an employer can terminate an employee's employment at any time and without cause

True

A state cannot require companies to pay employees a minimum wage that is higher than the federal minimum wage rate

False

Employment relationships are governed by:

all of these

The most important factor in determining whether a worker will be considered an employee vs. an independent contractor is:

the degree of control the employer exercises over the worker

The following is a type of sexual harassment

Hostile work environment

Race can sometimes qualify as a bona fide occupational qualification (BFOQ)

False

An employee fired for filing an EEOC complaint may bring a claim for:

Retaliation

A tech company requires all applicants for warehouse positions to pass a physical strength test. The test disproportionately excludes female applicants, even though lifting heavy objects is rarely required for the job. If sued for its policy, the company would most likely:

be liable for Disparate impact discrimination

An employer can be liable for discrimination if a neutral practice disproportionately affects a protected class, even without intent to discriminate

True

Employees under the Fair Labor Standards Act are entitled to overtime pay if they work more than 10 hours a day, even if they work fewer than 40 hours in a week.

False

What act mandates overtime pay for non-exempt employees?

FLSA

Which of the following statements best describes an independent contractor?

Provides their own tools and decides work methods

If an employer terminates an employee for filing a discrimination claim, this would likely be:

illegal, as Retaliation

All Saints Catholic Church is in need of a new director of its youth ministry. If they only consider prospects who describe themselves as "Catholic", this would likely:

not be considered discrimination under the Title VII of the Civil Rights Act, since agreeing with the religious beliefs is a bona fide occupational qualification for the open position

Title VII of the Civil Rights Act specifically prohibits employment discrimination based on sexual orientation

False