Ch 6 - Contract Law

Question 1

The exchange of the parties made at the same time

Answer 1

Present consideration

Question 2

To displace in favor of another

Answer 2

Supercede

Question 3

Oral declaration; word-of-mouth

Answer 3

Parol

Question 4

When a contract is required by law to be in writing, the authority of an agent to enter into such a contract on behalf of the principal must also be in writing

Answer 4

Equal dignities rule

Question 5

The legal means of canceling a contract and restoring the parties to the original positions

Answer 5

Rescind

Question 6

A legally enforceable agreement to do (or not to do) a specific thing

Answer 6

Contract

Question 7

An act intended to deceive for the purpose of inducing another to part with something of value

Answer 7

Fraud

Question 8

A body of law that codifies all law relating to commercial transactions to make states law uniform

Answer 8

Uniform commercial code (UCC)

Question 9

True or false:

The earnest money The buyer may put down is not the consideration necessary to make the contract valid

Answer 9

True

Question 10

True or False:

The tenant still has the right to rescind the contract due to innocent misrepresentation

Answer 10

True

Question 11

True or false:

A written contract is not supersede an oral contract

Answer 11

False - A written contract will always supersede an oral one

Question 12

True or false:

Love and affection do not count as present consideration

Answer 12

True

Question 13

True or false:

People of unsound mind who have been declared incompetent by a judge may not make a valid contract

Answer 13

True

Question 14

True or false:

The existence of mutual agreement is evidenced by the words and acts of the parties indicating that there is a valid offer and an unqualified acceptance

Answer 14

True

Question 15

True or false:

An individual can give another person the power to act on his behalf through power of attorney

Answer 15

True

Question 16

What are the three alternatives for discharge of contract that are open to parties of a contract?

Answer 16

• assignment
• novation
• supervening illegality

Question 17

What are four ways to describe the validity of a contract?

Answer 17

Valid
Void
Voidable
Vnenforceable

Question 18

What are three standards in deciding the competency of those entering a contract?

Answer 18

• minors
• intoxication
• unsound mind

Question 19

Under certain circumstances, the ______ Permits oral evidence to complete an otherwise incomplete or ambiguous written contract

Answer 19

Parole evidence rule

Question 20

Under the _________, if neither possession nor title has passed and there is material destruction to the property, the seller cannot enforce the contract and the purchaser is entitled to his money back

Answer 20

Uniform vendor and purchaser risk act

Question 21

When could any of these six alternatives be used by a wrong or innocent party:

• accept partial performance
• rescind the contract unilaterally
• sue for specific performance
• sue for money damages
• accept liquidated money damages
• mutually rescind the contract

Answer 21

In the event of breach of contract

Question 22

Upon receiving an offer, what three options does an offeree have?

Answer 22

• agree to it
• reject it
• make a counteroffer

Question 23

What are the five legal requirements to make a contract legally valid?

Answer 23

• legally competent parties
• mutual agreement
• lawful objective
• consideration or cause
• contract in writing when required by law