Chapter 10 - Quiz Question Bank Flashcards
The Restatement of Contracts is an authoritative source that presents and summarizes the common law of contracts.
True
Freedom of contract means businesses may enter into any contracts they wish to.
False
The Uniform Commercial Code has significantly influenced the operation of commercial contract law.
True
Contract law enforces duties imposed on citizens by the government.
False
Express contracts must be in writing to be valid.
False
An implied contract is based on promises inferred from the behavior or circumstances of the parties involved.
True
The basic elements of a contract are: offer, acceptance, consideration, lawful subject matter, and genuine consent.
True
An effective offer requires a clear manifestation of intent, definite terms and conditions, and communication of the offer.
True
An offer is made by an offeror.
True
Preliminary negotiations are generally considered to create binding offers.
False
“I want $10,000 for my car,” says Sam. “I would love to have it,” says Jan. We have an offer that has been accepted to form a contract.
False
If a printed advertisement states the price of a good offered for sale, the seller must sell to any customer who wants the good at that price.
False
Termination of an offer can only occur through the operation of law.
False
If no time is specified in an offer, the law presumes the offer exists for one year before it is terminated by lapse of time.
False
“I will pay you $100 to not sell your $500,000 house to anyone else for the next month so I can see if I can get the money together to buy it,” you say. “Ok,” says the homeowner. The $100 payment is a valid contract.
True
Option contracts are binding promises to keep an offer to sell a good open to the public for a certain length of time.
False
Offers may be terminated by the destruction of the subject matter of the contract.
True
If the offeree accepts an offer through performance requested, a unilateral contract is formed.
True
Two promises or an exchange of promises are involved in bilateral contracts.
True
Most contracts are bilateral.
True
Acceptance of an offer must be unconditional, unequivocal, and legally communicated to be effective.
True
The general rule in contract law is that an acceptance of an offer must be its “mirror image.”
True
The acceptance of an offer to form a contract may be communicated in any “reasonable” way and be effective, in most instances.
True
Usually, acceptance of an offer is legally effective when the acceptance is received.
False
If an acceptance is mailed before a revocation of an offer is received, the acceptance is effective.
True
A legal detriment may be good consideration for a contract.
True
Consideration involves the right of individuals to be considered to be able to enter into contracts legally.
False
Promissory estoppel applies when, to avoid injustice, a court refuses to enforce a grossly unfair promise.
False
When the courts use the doctrine of promissory estoppel (detrimental reliance), it means that despite the lack of the elements of a contract, the court may require payment to be made as if a contract had existed.
True
Fraud occurs whenever there is any false information passed to the party being induced to enter into a contract.
False
An intoxicated person often has partial capacity to contract.
True
A voidable contract never was or will be a valid contract.
False
A contract formed under conditions of fraud is voidable.
True
Contracts created by intoxicated persons, or persons under the influence of drugs, are always voidable at their option.
False
A minor may ratify a contract, upon reaching the age of majority, that she had the right to disaffirm if she so desired.
True
If a minor buys a car and later wants his money back after the car burns in a fire, courts will typically hold the contract to be voidable and a full refund is required.
False
If a minor agrees to join the Army, the minor’s agreement to join is voidable.
False
Contracts in many low-income countries are more difficult and costly to enforce than they are in more developed countries.
True
A valid contract can become unenforceable because of a statute passed after the contract was formed.
True
When the U.S. government announced that no Americans could do business with Iraq, all existing contracts became unenforceable.
True
Joe contracts with Phil to set fire to Joe’s warehouse so he can collect the insurance money, but then Joe refuses to pay Phil for his work. This contract is unenforceable.
True
If you win a lot of money at a poker game, and the other players refuse to pay you, in many states you could not sue to collect your winnings.
True
Contracts that unreasonably restrict competition are unenforceable.
True
If a contract is made under duress or undue influence, it may be disaffirmed because there was no real consent.
True
The Federal Trade Commission cooling-off rule allows purchasers of door-to-door sales of more than $25 to rescind the contract within three days, even if there was no undue influence used in the sale.
True
If a contract is agreed to in the presence of any incorrect information, the contract may be voided.
False
