True / False
1. The Restatement of Contracts is an authoritative source that presents and summarizes the common law of
contracts.
a. True
b. False
2. Contract law is primarily state common law.
a. True
b. False
3. Freedom of contract means businesses may enter into any contracts they wish to.
a. True
b. False
4. A contract may be based on a promise not to do something.
a. True
b. False
5. The Uniform Commercial Code has significantly influenced the operation of commercial contract law.
a. True
b. False
6. Not all promises are enforceable contracts.
a. True
b. False
7. Contract law enforces duties imposed on citizens by the government.
a. True
b. False
8. If a party fails to perform a nonbinding promise the law will provide a remedy.
a. True
b. False
9. Express contracts must be in writing to be valid.
a. True
b. False
10. In an express contract, promises are inferred from the behavior of the parties in relation to one another.
a. True
b. False
11. An implied contract is based on promises inferred from the behavior or circumstances of the parties involved.
a. True
b. False
12. The basic elements of a contract are: offer, acceptance, fair value, lawful subject matter, and genuine consent.
a. True
b. False
13. The basic elements of a contract are: offer, acceptance, consideration, lawful subject matter, and genuine consent.
a. True
b. False
14. The basic elements of a contract are: offer, acceptance, consideration, genuine consent and court approval.
a. True
b. False
15. An effective offer requires a clear manifestation of intent, definite terms and conditions, and communication of the
offer.
a. True
b. False
16. An offer is made to the offeree.
a. True
b. False
17. An offer is made by an offeror.
a. True
b. False
18. An offer is made by an offeree.
a. True
b. False
19. Preliminary negotiations are generally considered to create as binding offers.
a. True
b. False
20. Advertisements that state prices are usually not considered binding offers.
a. True
b. False
21. “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.
a. True
b. False
22. An offer that is missing only one key element will be accepted as the basis of a contract; the court will clarify the
offer.
a. True
b. False
23. 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.
a. True
b. False
24. You return a lost dog to its owner. You did not know a reward was being offered for the dog. You do not have a
legal right to the reward.
a. True
b. False
25. Termination of an offer can only occur through the operation of law.
a. True
b. False
26. An offer may be revoked before the offeree has a chance to respond to it.
a. True
b. False
27. 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.
a. True
b. False
28. “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 home owner. The $100 payment is an option contract.
a. True
b. False
29. “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 home owner. The $100 payment is a valid contract.
a. True
b. False
30. Option contracts are binding promises to keep a specific offer open to a specific party for, say, one month.
a. True
b. False
31. Option contracts are binding promises to keep an offer to sell a good open to the public for a certain length of time.
a. True
b. False
32. A counteroffer terminates the original offer.
a. True
b. False
33. Offers may be terminated by the destruction of the subject matter of the contract.
a. True
b. False
34. “I will sell you my car for $5,000,” says A. “How about $4,000 instead?” says B. The offer to sell for $5,000 has
been terminated.
a. True
b. False
35. If the offeree accepts an offer through performance requested, unilateral contract is formed.
a. True
b. False
36. Most contracts are unilateral.
a. True
b. False
37. Two promises or an exchange of promises are involved in bilateral contracts.
a. True
b. False
38. If an offeree accepts an offer through an exchange of mutual promises, a unilateral contract is formed.
a. True
b. False
39. Most contracts are bilateral.
a. True
b. False
40. In unilateral contracts, performance is acceptance of an offer.
a. True
b. False
41. Acceptance of an offer must be unconditional, unequivocal, and legally communicated to be effective.
a. True
b. False
42. Acceptance of an offer must be conditional, unequivocal, and legally communicated to be effective.
a. True
b. False
43. The general rule in contract law is that an acceptance of an offer must be its “mirror image.”
a. True
b. False
44. In Certified Fire Protection v. Precision Construction, Precision accepted a winning bid from Certified for it
to install a fire suppression sprinkler system. Later the two parties got into a fight over some details in the
contract, which was never signed. The courts held that the contract was enforceable as all major terms were
clear.
a. True
b. False
45. In Certified Fire Protection v. Precision Construction, Precision accepted a winning bid from Certified for it
to install a fire suppression sprinkler system. Later the two parties got into a fight over some details in the
contract, which was never signed. The courts held that the contract was existed
a. True
b. False
46. In Certified Fire Protection v. Precision Construction, Precision accepted a winning bid from Certified for it
to install a fire suppression sprinkler system. Later the two parties got into a fight over some details in the
contract, which was never signed. The courts held that there was an implied, not an express, contract..
a. True
b. False
47. In Certified Fire Protection v. Precision Construction, Precision accepted a winning bid from Certified for it
to install a fire suppression sprinkler system. Later the two parties got into a fight over some details in the
contract, which was never signed. The courts held that the contract failed as the price and work terms of the
agreement were never settled.
a. True
b. False
48. “Unless you say no, then you must buy my car for $5,000,” says A. B says nothing. B must buy the car.
a. True
b. False
49. The acceptance of an offer to form a contract may be communicated in any “reasonable” way and be effective, in
most instances.
a. True
b. False
50. Usually, the acceptance of an offer is legally effective when the acceptance is sent.
a. True
b. False
51. Usually, acceptance of an offer is legally effective when the acceptance is received.
a. True
b. False
52. The party who makes an offer can require the acceptance to be communicated in a very specific way or the
acceptance is not good.
a. True
b. False
53. If an acceptance is mailed before a revocation of an offer is received, the acceptance is effective.
a. True
b. False
54. Consideration is something of value in exchange for a promise.
a. True
b. False
55. A legal detriment may be good consideration for a contract.
a. True
b. False
56. A promise not to do something may not be consideration for a valid contract.
a. True
b. False
57. Consideration involves the right of individuals to be considered to be able to enter into contracts legally.
a. True
b. False
58. Courts will not enforce contracts if the consideration is not “reasonably consistent” with what is received in
exchange.
a. True
b. False
59. In Caley v. Gulfstream Aerospace the court held that when employees were told a new dispute resolution policy
would be imposed on them if they kept working that there was no consideration, so no contract.
a. True
b. False
60. In Caley v. Gulfstream Aerospace the court held that when employees were told a new dispute resolution policy
would be imposed on them if they kept working that getting to keep working was adequate consideration, so there
was a contract.
a. True
b. False
61. In Caley v. Gulfstream Aerospace the court held that when employees were told a new dispute resolution policy
would be imposed on them if they kept working that there was no acceptance of an offer, so no contract.
a. True
b. False
62. A signs a contract to buy B’s ranch for $900,000 then learns that the true market value is $500,000. There is not
adequate consideration, so the contract will not be enforced.
a. True
b. False
63. Promissory estoppel applies when, to avoid injustice, a court refuses to enforce a grossly unfair promise.
a. True
b. False
64. Promissory estoppel is also known as detrimental reliance.
a. True
b. False
65. 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.
a. True
b. False