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177. If the values of the items exchanged in a contract are unequal courts generally:
a. hold that the contract is not binding
b. require the parties to rewrite the contract
c. require the offeree to add something to the contract
d. require the offeror to add something to the contract
e. none of the other choices are correct
178. In Caley v. Gulfstream Aerospace, the employer told the employees that as a condition of continued employment
they had to agree to a new dispute resolution policy that would take effect in two weeks. Caley sued, contending
the new policy was not backed by consideration, so there was no enforceable contract. The appeals court held that:
a. the employees would have to be given something extra beyond the same employment conditions for there to
be consideration for a contract
b. continued employment was consideration; there was a contract
c. there was no contract because the parties never bargained
d. in employment relationships there are no contracts, so consideration is irrelevant
e. none of the other choices
179. In Caley v. Gulfstream Aerospace, the employer told the employees that as a condition of continued employment
they had to agree to a new dispute resolution policy that would take effect in two weeks. Caley sued, contending
the new policy was not backed by consideration, so there was no enforceable contract. The appeals court held that:
a. the employees would have to be given something extra beyond the same employment conditions for there to
be consideration for a contract
b. once the new policy was announced, the employees had to be given a chance to make counter-offers or
there would be no contract
c. there was no contract because the parties never bargained
d. in employment relationships there are no contracts, so consideration is irrelevant
e. none of the other choices
180. In Caley v. Gulfstream Aerospace, the employer told the employees that as a condition of continued employment
they had to agree to a new dispute resolution policy that would take effect in two weeks. Caley sued, contending
the new policy was not backed by consideration, so there was no enforceable contract. The appeals court held that:
a. there was an offer, acceptance and consideration so there was a contract
b. there was an offer and acceptance, but no consideration so there was no contract
c. there was an offer and consideration, but continued employment was not a sufficient method of acceptance
so there was no contract
d. none of the conditions necessary for a contract were present so there was no contract
e. companies cannot offer employees contracts, so whether or not there was consideration is irrelevant
181. In Caley v. Gulfstream Aerospace, the employer told the employees that as a condition of continued employment
they had to agree to a new dispute resolution policy that would take effect in two weeks. Caley sued, contending
the new policy was not backed by consideration, so there was no enforceable contract. The appeals court held that:
a. companies cannot offer employees contracts, so whether or not there was consideration is irrelevant
b. there was an offer and acceptance, but no consideration so there was no contract
c. there was an offer and consideration, but continued employment was not a sufficient method of acceptance
so there was no contract
d. none of the conditions necessary for a contract were present so there was no contract
e. none of the other choices are correct
182. Which of the following is usually not a requirement for a contract to be valid?
a. offer and acceptance
b. equal value in exchange
c. contractual capacity
d. purpose of contract must be legal
e. all of the other choices are required
183. Which of the following is usually not a requirement for a contract to be valid?
a. offer and acceptance
b. purpose of contract must be legal
c. contractual capacity
d. all of the other choices are required
e. none of the other choices are required
184. A doctrine to avoid injustice that is used by the courts to bind a promisor to promises that a reasonable person
would rely upon without consideration, is called:
a. settlement agreement
b. accord and satisfaction
c. unliquidated debt
d. performance contract
e. promissory estoppel
185. A doctrine to avoid injustice that is used by the courts to bind a promisor to promises that a reasonable person
would rely upon without consideration, is called:
a. settlement agreement
b. accord and satisfaction
c. unliquidated debt
d. performance contract
e. none of the other choices
186. Under some circumstances, courts do not require consideration for a promise to be enforced. The doctrine used by
the courts to bind a promisor is called detrimental reliance or:
a. restitution
b. promissory estoppel
c. revocation
d. all of the other choices
e. none of the other choices
187. The doctrine that prevents an injustice due to the promisee's reasonable reliance on the promisor's promise is:
a. promissory estoppel
b. promissory reliance
c. forced fulfillment
d. promissory binding
e. promissory reasonableness
188. The doctrine that prevents an injustice due to the promisee's reasonable reliance on the promisor's promise is:
a. promissory reasonableness
b. promissory reliance
c. forced fulfillment
d. promissory binding
e. none of the other choices are correct
189. The doctrine that prevents an injustice due to the promisee's reasonable reliance on the promisor's promise is:
a. detrimental reliance
b. promissory reliance
c. forced fulfillment
d. promissory binding
e. promissory reasonableness
190. Uncle Jim tells his niece as she goes off to Creepy U. that if she maintains a 3.5 average that he will buy her a
BMW convertible when she graduates. At graduation she has a 3.7 GPA and so she wants the BMW convertible.
Uncle Jim says that he doesn't have to give her the BMW convertible because what she did was for her own good.
Niece wants to sue Uncle Jim to get the BMW convertible. There probably is:
a. no breach of contract because the benefit to Uncle Jim is trivial compared to the BMW convertible
b. no breach of contract because what the niece did was a benefit for herself only
c. no breach of contract because it would violate public policy
d. no breach of contract; there was only a moral obligation
e. a breach of a valid contract
191. Uncle Jim tells his niece as she goes off to Creepy U. that if she maintains a 3.5 average that he will buy her a
BMW convertible when she graduates. At graduation she has a 3.7 GPA and so she wants the BMW convertible.
Uncle Jim says that he doesn't have to give her the BMW convertible because what she did was for her own good.
Niece wants to sue Uncle Jim to get the BMW convertible. There probably is:
a. no breach of contract because the benefit to Uncle Jim is trivial compared to the BMW convertible
b. no breach of contract because what the niece did was a benefit for herself only
c. no breach of contract because it would violate public policy
d. no breach of contract; there was only a moral obligation
e. none of the other choices
192. A offers B $100,000 for his farm, and they sign an agreement for the sale. Before the money is paid, A finds out
that the market value of the farm is only $55,000. A:
a. must pay $100,000; the contract is valid
b. does not have to go through with the contract because there is not adequate consideration
c. does not have to go through with the contract because there was a mistake of fact
d. must buy the farm, but the price will be lowered when the court reforms the contract
e. must buy the farm, but the price will be lowered to create consideration of proper value
193. A offers B $100,000 for his farm, and they sign an agreement for the sale. Before the money is paid, A finds out
that the market value of the farm is only $55,000. A:
a. must buy the farm, but the price will be lowered to create consideration of proper value
b. does not have to go through with the contract because there is not adequate consideration
c. does not have to go through with the contract because there was a mistake of fact
d. must buy the farm, but the price will be lowered when the court reforms the contract
e. none of the other choices
194. Twenty years after you leave college you are rich and famous. Your college calls on you for a $10 million gift to
renovate a classroom building and name the building in your honor. You tell them you will be glad to give the gift
because you learned so much and that is why you are successful. A year later the building is renovated and the
college asks for the money. You decide to spend it on a new jet and tell the college to get stuffed. You:
a. do not have to pay the money, promises of gifts do not create contracts
b. do not have to pay the money unless your promise was in writing and for a specific date
c. have to pay an amount equal to how much has been spent on the renovation work to date, not the full amount
d. have to pay the money under the rule of promissory estoppel
e. have to pay the money under the rule of unliquidated debt
195. Twenty years after you leave college you are rich and famous. Your college calls on you for a $5 million gift to
renovate a classroom building and name the building in your honor. You tell them you will be glad to give the gift
because you learned so much and that is why you are successful. A year later the building is renovated and the
college asks for the money. You decide to spend it on a new jet and tell the college to get stuffed. You:
a. do not have to pay the money, promises of gifts do not create contracts
b. do not have to pay the money unless your promise was in writing and for a specific date
c. have to pay an amount equal to how much has been spent on the renovation work to date, not the full amount
d. have to pay the money under the rule of unliquidated debt
e. probably none of the other choices
196. In Hinson v. N&W Construction, where Hinson submitted the low bid to N&W for plumbing work to be part of a
larger construction project by N&W, but then refused to do the work when construction was started by N&W, the
court held that Hinson's bid:
a. could not be relied upon by N&W because he was not licensed for such work
b. was unrealistically low, which N&W recognized, so it could not rely on the bid
c. was valid, so there was a breach of contract; Hinson was liable for the full value of the contract
d. created liability based on promissory estoppel, so he was liable for the extra costs incurred by N&W
e. created liability based on promissory estoppel, so he was liable for the full value of the contract
197. In Hinson v. N&W Construction, where Hinson submitted the low bid to N&W for plumbing work to be part of a
larger construction project by N&W, but then refused to do the work when construction was started by N&W, the
court held that Hinson's bid:
a. could not be relied upon by N&W because he was not licensed for such work
b. was unrealistically low, which N&W recognized, so it could not rely on the bid
c. was valid, so there was a breach of contract; Hinson was liable for the full value of the contract
d. was valid, so there was a breach of contract, so he was liable for the extra costs incurred by N&W
e. none of the other choices
198. In Hinson v. N&W Construction, where Hinson submitted the low bid to N&W for plumbing work to be part of a
larger construction project by N&W, but then refused to do the work when construction was started by N&W, the
court held that Hinson:
a. could not be relied upon by N&W because he was not licensed for such work
b. was not liable because there was no consideration paid by N&W to create a contract
c. was liable for damages based on a theory of promissory estoppel, not breach of contract
d. was not liable because there was not a contract due to lack of proper acceptance by N&W
e. none of the other choices
199. In Hinson v. N&W Construction, where Hinson submitted the low bid to N&W for plumbing work to be part of a
larger construction project by N&W, but then refused to do the work when construction was started by N&W, the
court held that Hinson:
a. could not be relied upon by N&W because he was not licensed for such work
b. was not liable because there was no consideration paid by N&W to create a contract
c. was liable to N&W for the value of the contract based on a breach of contract
d. was not liable because there was not a contract due to lack of proper acceptance by N&W
e. none of the other choices
200. In Hinson v. N&W Construction, where Hinson submitted the low bid to N&W for plumbing work to be part of a
larger construction project by N&W, but then refused to do the work when construction was started by N&W, the
court held that:
a. Hinson was liable for the value of the contract because N&W relied on his verbal quote of $92,000
b. Hinson was not liable for the value of the contract because N&W should not have relied on his verbal quote
c. a verbal quote cannot be a promise
d. Hinson was not liable because there was not a contract due to lack of proper acceptance by N&W
e. none of the other choices
201. is the legal ability to create a contract.
a. contractual capacity
b. understanding capacity
c. real capacity
d. final capacity
e. coherent capacity
202. is the legal ability to create a contract.
a. coherent capacity
b. understanding capacity
c. real capacity
d. final capacity
e. none of the other choices are correct
203. The party claiming incapacity, or the lack of legal ability to create a contract:
a. does not have the burden of proving it
b. has the burden of proving it
c. must have at least 3 witnesses who can testify on his behalf
d. must claim incapacity before acceptance
e. must claim incapacity before the discovery stage of a trial
204. The party claiming incapacity, or the lack of legal ability to create a contract:
a. does not have the burden of proving it
b. must claim incapacity before the discovery stage of a trial
c. must have at least 3 witnesses who can testify on his behalf
d. must claim incapacity before acceptance
e. none of the other choices are correct
205. Which of the following categories of people have the right to walk away from a contract they made to buy a new
house?
a. an insane person
b. a minor
c. a heavily intoxicated person
d. none of these conditions are relevant
e. all of those conditions can be relevant to contractual capacity
206. A contract made by a person with partial capacity is:
a. not enforceable
b. enforceable unless the person with partial capacity exercises the right to disaffirm the contract
c. enforceable in some states, but not others
d. enforceable only if the other party has complete capacity to contract with persons of partial capacity
e. not enforceable unless it deals with property worth less than $100 and there is a written agreement
207. A contract made by a person with partial capacity is:
a. not enforceable
b. enforceable unless the person with partial capacity exercises the right to disaffirm the contract
c. enforceable in some states, but not others
d. enforceable only if the other party has complete capacity to contract
e. none of the other choices are correct
208. Contracts created by those with partial capacity are:
a. not voidable
b. voidable
c. executory
d. exemplary
e. illegal
209. Contracts created by those with partial capacity are:
a. not voidable
b. illegal
c. executory
d. exemplary
e. none of the other choices are correct
210. A "contract" that does not exist at law, such as a contract to commit a crime, is what kind of contract?
a. executed
b. voidable
c. executory
d. void
e. unenforceable
211. A "contract" that does not exist at law, such as a contract to commit a crime, is what kind of contract?
a. executed
b. voidable
c. executory
d. unenforceable
e. none of the other choices
212. A legally binding contract that can be terminated at the option of one of the parties is called:
a. an executed contract
b. a formal contract with an escape clause
c. a voidable contract
d. a void contract
e. a parol evidence contract
213. A legally binding contract that can be terminated at the option of one of the parties is called:
a. an executed contract
b. a formal contract with an escape clause
c. a void contract
d. a parol evidence contract
e. none of the other choices
214. A(n) is when one party to the contract has the right to avoid a legal obligation.
a. executed contract
b. formal contract with an escape clause
c. voidable contract
d. real contract
e. parol evidence contract
215. A(n) is when one party to the contract has the right to avoid a legal obligation.
a. executed contract
b. formal contract with an escape clause
c. parol evidence contract
d. ephemeral contract
e. none of the other choices are correct
216. Tracy drinks beer at a bar, then goes to a car dealer and orders a new car. Tracy later claims he was drunk and
should not have to buy the car. This:
a. is correct⎯people who have been drinking are not responsible for contracts they sign
b. is not correct⎯people who were drunk are responsible for their contracts, the law does not allow this excuse
c. is not correct⎯after drinking a few beers you are responsible for your contracts
d. depends if Tracy could show he was mentally incapacitated after a few beers, in which case he would not
be held to the contract
e. none of the other choices
217. For Amy's sixteenth birthday her parents give her money so she can make a down payment on a car she wants.
She enters into a contract with a car dealer to make payments. This is a:
a. valid contract
b. void contract
c. voidable contract
d. unenforceable contract
e. none of the other choices
218. For Amy's sixteenth birthday her parents give her money so she can make a down payment on a car she wants.
She enters into a contract with a car dealer to make payments. This is a(n):
a. valid contract
b. void contract
c. contract by promissory estoppel
d. unenforceable contract
e. none of the other choices
219. A 16-year-old goes to a used car dealership and pays $2,000 cash to buy a car off the lot.
a. assuming no fraud by the dealer, and that the car is really worth about $2,000, the contract is valid
b. the dealer realizes that the car is worth more than $2,000, so he can void the contract and insist on the car
back
c. the 16-year-old can bring the car back the next day and demand his money back (less damages) because the
contract is voidable
d. the parents of the 16-year-old cannot try to get the money back for the car because parents are responsible
for providing their children with necessities
e. none of the other choices
220. 16-year-old Green bought a car that he later wanted to return for a full refund. If the dealer refuses a court is likely
to hold that:
a. contracts do not permit refunds, so the sale was final
b. as a minor Green can disaffirm the contract and be given a refund, less the value of the benefits received
from the use of the car
c. as a minor Green cannot disaffirm the contract
d. as a minor he could disaffirm the contract; his parents would have to take responsibility for the contract
e. as a minor Green could disaffirm the contract, receive a refund and receive damages for fraud against a
minor
221. 16-year-old Green bought a car that he later wanted to return for a full refund. If the dealer refuses a court is likely
to hold that:
a. contracts do not permit refunds, so the sale was final
b. as a minor Green could disaffirm the contract, receive a refund and receive damages for fraud against a
minor
c. as a minor Green cannot disaffirm the contract
d. as a minor he could disaffirm the contract; his parents would have to take responsibility for the contract
e. none of the other choices
222. 17-year-old Robert purchased a car from King that was then destroyed by fire. Robert sued to recover the price of
the car. The court would hold that:
a. no contract existed; Robert relied on King to his detriment
b. no contract existed because Robert is too young to enter into a contract; his parents are parties to the
contract
c. a contract existed, but Robert was a minor and so could disaffirm the contract and get a full refund
d. a contract existed, but the uneven bargaining positions of the parties allowed the court to render the contract
void as in violation of public policy
e. a contract existed that Robert could disaffirm, but he could only collect a refund equal to the value of the car
after the fire
223. 17-year-old Robert purchased a car from King that was later destroyed by fire. Robert sued to recover the price of
the car. The court would hold that:
a. no contract existed; Robert relied on King to his detriment
b. no contract existed because Robert is too young to enter into a contract; his parents are parties to the
contract
c. a contract existed, but Robert was a minor and so could disaffirm the contract and get a full refund
d. a contract existed, but the uneven bargaining positions of the parties allowed the court to render the contract
void as in violation of public policy
e. none of the other choices
