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BUS-L201 Module 3 Exam - Contract Law
Exam Questions With Correct Answers
Consideration - answer✔✔Which of the following terms refers to legal value that is bargained
for and given in exchange for an act or promise?
offer - answer✔✔A(n) __________ is a proposal by one person to another that is intended to
create legal relations on acceptance by the person to whom it is made.
c) Sale of cocaine where buyer does not pay and retains the goods - answer✔✔What type of
contract is not legally enforceable?
a) Sale of home with all the fixtures inside the home
b) Supported by adequate consideration that is not money
c) Sale of cocaine where buyer does not pay and retains the goods
d) All of the choices are correct.
There was a contract implied in fact because the circumstances and behaviors of the parties
demonstrated a general course of dealing and a mutual intent to contract. - answer✔✔In the case
in the text, Trapani Construction Company v. Elliot Group, Incorporated, the court held that:
No, because it was a friendly advice and not an actual contract. - answer✔✔Jimmy and Pat had a
long-standing professional relationship. In 2008, Jimmy's business began experiencing financial
strain. The two friends discussed Jimmy's personal problems and financial difficulties, and Pat
was concerned about his friend's depressed mental state. In 2013, Pat flew from Atlanta to New
York to meet with Jimmy. Prior to Pat's flight, Jimmy's employee faxed copies of various
construction contracts and correspondence relating to Jimmy's controversial projects for Pat to
review. In late 2018, Pat billed Jimmy for a $40,000 balance that Jimmy owed on the alleged oral
contract for consulting services. In a letter to Pat, Jimmy stated: "I have paid you plenty and will
not pay you any more. I have not called for any professional advice since then." Pat filed suit
against Jimmy for breach of contract. Will Pat succeed?
An offer and acceptance - answer✔✔What must a contract contain to be enforceable?
2 or more parties, landlord ad tenant, business entities - answer✔✔Contracts are typically
between:
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voidable contract - answer✔✔A(n) __________ contract creates no obligation and is not
enforceable by any party.
voidable. - answer✔✔A contract where formation was induced by duress is an example of a
contract that is:
A bilateral contract - answer✔✔Aaron promises to sell his boat to Matt, and Matt promises to
buy it from Aaron. What type of contract is this?
express contract - answer✔✔The mutual agreement necessary to create a(n) __________
contract must be evidenced by a writing.
unenforceable contract - answer✔✔An otherwise valid contract whose enforcement is barred by
the applicable statute of limitations is an example of a(n):
real estate - answer✔✔Article 2 of the UCC never applies to __________ contracts.
The contract rules of the UCC apply, because the predominant purpose of the contract was for
the sale of goods. - answer✔✔Linda wanted to replace the old carpet in her home. She entered
into a contract with Carpet Company for the purchase and installation of a new carpet. The price
of the carpet was $3,000 and the cost of the labor to install the carpet was $150. Later, Linda
became dissatisfied with this transaction and now wants to sue Carpet Company. Linda wants to
apply the contract rules of the UCC, but Carpet Company, wants to apply the contract rules of
the common law. Which source of law should govern this case?
Restatement (Second) of Contracts - answer✔✔The rules promulgated by the __________ often
resemble the rules created by Article 2 of the UCC.
Contract rules of the Uniform Commercial Code - answer✔✔Dawson entered into a contract
with Jensen for the sale of Dawson's boat. Which set of legal rules governs this transaction?
Because buyers tend to place more reliance on merchants - answer✔✔Why does Article 2 hold
merchants to a higher standard than nonmerchants?
A bulk sale of inventory - answer✔✔Which of the following would be covered by the UCC?
1/3 - answer✔✔As leasing became a more common way of executing and financing transactions
in goods, a separate UCC article, Article 2A, was developed to govern the lease of goods.
Roughly __________ of the states have adopted Article 2A.
Quasi-contract - answer✔✔Which of the following is a doctrine by which courts imply, as a
matter of law, a promise to pay the reasonable value of goods or services when the party
receiving such goods or services has knowingly done so under circumstances that make it unfair
to retain them without paying for them?
No, because the rules of the contract prescribed that the ticket must be shown to claim the
money. Amy accepted that rule when she entered into the contract and thus she is now precluded
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from claiming the prize money. - answer✔✔Amy bought Mississippi State Lottery tickets.
Several days later, she learned that someone won the lottery but that the winner had not yet come
forward. She searched for her ticket to see if she had selected the winning numbers, but was
unable to find it. Although the lottery ticket was gone, Amy still possessed the play slip she had
used when she purchased the ticket. She checked the numbers on the play slip and discovered
that she had the winning numbers for the lottery. Reasoning that the play slip would satisfy the
Lottery Office, Amy presented her claim. The Lottery Office took the position that Amy needed
to produce the actual winning ticket as per the rules, and hence denied her claim. Amy sued the
Lottery Office for breach of contract and unjust enrichment. Will she succeed?
Enforce promise - answer✔✔Which of the following is not a theory of recovery in contract law?
Promissory estoppel - answer✔✔__________ protects reliance on a promise from one party to
another.
An offer in definite terms - answer✔✔Which of the following is the first critically important step
in the contract formation process?
present - answer✔✔To meet the requirements to form a contract, the parties must have
__________ intent to agree and form a contract.
An enforceable contract - answer✔✔Mr. Blue and Mr. Green are in negotiations for a regular
delivery of newspapers to Mr. Blue's business. Mr. Blue did not formally announce his
acceptance to the offer. But when Mr. Green sent a shipment of newspapers as they agreed, Mr.
Blue accepted the shipment and paid for them. According to the UCC, what do Mr. Blue and Mr.
Green have?
important terms of a contract can be implied under certain circumstances. - answer✔✔The case
in the text, Domingo v. Mitchell, 257 S.W.3d 34 (Ct. App. Tx. 2008), demonstrates that:
No, because the offeror did not communicate the terms of the offer to the offeree. -
answer✔✔Sue offers to buy a house from John, and they were negotiating the price of the house.
In the meantime, Sue confides in John's sister that she is willing to pay an amount of $50,000 for
the house. Delighted to hear this, John's sister tells John the good news. John immediately calls
Sue and accepts her offer. Is there a binding contract?
The proposal clearly explains the obligations of the parties. - answer✔✔Under the United
Nations Convention on Contracts for the International Sale of Goods (CISG), a proposal will be
considered an offer if it meets three requirements. Which of the following is not one of those
requirements?
consideration - answer✔✔If it is supported by some form of __________, a contract to give an
offeree the exclusive power of acceptance for a period of time is enforceable as an independent,
complete option contract.
