exam 3 multiple choice Flashcards
Noncompetition agreements are:
more common today than they were in the past, although policy issues they raised in the 1700s have never gone away.
In January, Alex promised to pay Y-K Inc. $5,000 if it would refrain from filing suit against him on a breach of contract action. Y-K agreed and accepted a $5,000 check from Alex. Which of the following statements is correct?
Y-K’s promise to refrain from suing Alex was supported by legal consideration and is enforceable.
The intent of the offeror to extend an offer to the offeree is generally determined by reference to:
the words and conduct of the offeror.
If Rudy offers Oscar $200 for his laptop valued at $600 and Oscar agrees, a court will probably:
not set aside the agreement based on the adequacy of the consideration.
Zero, Inc. agreed to build Millie a storage building for $8,000. After beginning the project, Zero realized that it could not complete the job and make a profit. Zero demanded $9,500 to complete the building. Millie agreed to pay the $9,500. When the project was complete, Millie tendered $8,000 to Zero for the job. If Zero sues Millie for the remaining $1,500:
Zero will lose because there was no legal consideration to support the additional $1,500.
Barb has been a children’s day care provider for several years in the small town of Sallton. She has decided to give it all up and move to the big city for excitement and adventure. She sells her business to Ken, agreeing not to open a competing business within five miles of Sallton for a period of nine months. After five months of the big city life, Barb is broke and moves back to Sallton. She opens a small day care business. Ken sues on the noncompete clause. What is the most likely result?
Ken wins. The agreement is enforceable.
Which of the following is an example of an exculpatory clause?
Seller is not responsible for property damage regardless of the cause of the injury.
When Mohammed was hired by Pomico, Inc., he signed the following agreement, “Upon termination of my employment with Pomico, I agree not to work for a competing company within 30 miles of Pomico’s headquarters for one year.” This agreement, important to protecting secret information developed in the employer’s business, is:
an enforceable agreement not to compete.
Marty, a 16-year-old, contracts with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle. Marty agrees to make monthly payments until the purchase price plus interest are paid in full. Which of the following is correct?
The contract is voidable by Marty.
Marty, a 16-year-old, contracted with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle. He agreed to make monthly payments until the purchase price plus interest were paid in full. It is three years later and Marty has not disaffirmed the contract and has made regular payments on the cycle since turning 18. Which of the following is correct?
Marty has ratified the contract and is now bound by its terms.
Deborah purchased a boat from Sun ‘N Surf Marine. She later learned that the salesman had made misrepresentations to induce her to make the purchase. Under UCC Section 2-721, Deborah can rescind the contract:
and sue for damages whether the misrepresentation was fraudulent or innocent
Ryan, a minor, contracted to sell his auto to Ed, a 28-year-old. Ryan later refused to complete the sale. If Ed sues to enforce the contract, Ed will:
lose, because the contract is voidable by Ryan.
Mentally infirmed Sasha contracts to purchase a piano for $2,500 in 60 monthly installment payments. Six months later she tries to void the contract on grounds of mental impairment. A court will:
normally void the contract but will require Sasha to return the piano.
If Becky promises not to drink alcohol until she becomes a legal adult in exchange for Ben’s promise of $1,000, the agreement is:
not enforceable because Becky does not have a legal right to drink alcohol.
Claude agrees to lease his house to Irvin for nine months, the lease to begin six months from the signing of the contract. Under the statute of frauds:
the lease is required to be in writing because of the one-year rule.
Under a contract for the sale of land, the statute of frauds:
requires the defendant to sign the agreement.
Which of the following promises ordinarily must be in writing to be enforceable?
- Promises made as a part of a prenuptial agreement.
- The agreement to sell a car for $1500.
- The promise by an executor of an estate to pay a debt of the decedent.
Wally owns 200 acres of land. Wally offers to sell the land to Robert for $1,500 per acre. Robert replies that he does not need 200 acres of land but would like to buy 40 acres at $1,500 per acre. Wally agrees to sell but does not identify which 40 acres. Later, Wally refuses to sell any land to Robert. What is the result?
Wally wins; this agreement is too indefinite since it does not identify which 40 acres are to be sold.
Willis and Leslie orally agree to the sale of a parcel of land for $50,000: one-half payable now as a down payment; one-half payable in 30 days at the time of closing when the title will be transferred. The buyer, Willis, is to have possession immediately. Willis pays Leslie $25,000, takes possession of the land, and starts building a house. At the time of closing, Willis has made a substantial beginning on the house. However, Leslie refuses to transfer the title, claiming the oral contract is not enforceable. This contract is:
enforceable, because Willis has partially performed the oral contract and made improvements on the land.
In order to satisfy the statute of frauds, a writing must:
be signed by the defendant and contain the name of each party, the subject matter of the agreement, and the essential terms and promises.
Which of the following is most likely to constitute fraud?
Silence as to a toxic waste problem on real property that the buyer would not reasonably find.
When a party to a contract makes a unilateral mistake, the contract:
generally cannot be rescinded by the mistaken party unless the contract is unconscionable or it is proven that the nonmistaken party knew of the error.
For the purposes of the statute of frauds, an interest in land includes:
- a house.
- a real estate mortgage.
- an easement.
Which of the following promises ordinarily must be in writing to be enforceable?
- Promises made as a part of a prenuptial agreement.
- The agreement to sell a car for $1500.
- The promise by an executor of an estate to pay a debt of the decedent.
Brandon orally assigned his right to $100 to Will as a gift. This assignment is:
valid even though it was oral and there was no consideration from Will.
A third party beneficiary’s status occurs:
when the contract is created.
The beneficiary of a life insurance policy paid for by the insured would ordinarily be:
a donee beneficiary.
The status of a third party is determined by:
the intent of the contracting parties.
A nonparty to a contract may enforce the contract if the person is:
- a donee beneficiary.
- a creditor beneficiary.
Johann, a well-known musician, agrees to give ten guitar lessons to Elton for $2,000. Nothing in the contract itself prohibits a delegation. If Johann delegates his obligation to Eugene, a second-year musical student and enthusiastic guitar player, then the delegation will probably be:
prohibited because Johann and Eugene have very different skill levels.
Linda assigns to Ben a right to receive rent payments. The law implies the following warranty on Linda’s part:
Linda actually has a right to the rental payments.
Molly and Craig are the original parties to a contract. Craig is obligated to design a Website for Molly. They subsequently make an agreement with Eric that Eric should take the place of Craig and assume all of Craig’s rights and duties under the contract. The agreement releases Craig from his obligations under the contract. This agreement is:
an accord and satisfaction.
A donee beneficiary:
usually does not give consideration in return for the gift.
Which statement most accurately describes third party beneficiary rights?
A beneficiary may enforce a contract if the parties intended to benefit him and if enforcing the promise will satisfy a duty of the promisee to the beneficiary.
Wright Company contracted with the city of St. Louis to train and employ disadvantaged youths. If Wright fails to fulfill the contract and is sued by one of the disadvantaged youths, the youth would:
lose, as he is an incidental beneficiary.
Tyron purchased a vacant lot and entered into a contract with BZ Inc. to construct a shopping center on the site. Douglas heard about this contract and built a restaurant on an adjoining piece of property because of the planned shopping center. Tyron was unable to raise the necessary capital and was unable to perform the contract with BZ, Inc. Douglas sued Tyron for breach of contract as a third party beneficiary. Douglas will probably:
lose as a third party incidental beneficiary.
Which of the following duties can probably be delegated?
An agreement to paint a house.
An assignment:
for consideration is irrevocable.
An assignment is valid and enforceable against all parties:
from the moment the obligor is notified from any source.