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1. Which of the following is not a contract?
a.
A restaurant purchases a month’s supply of condiments from a supplier and pays the
agreed price.
b.
A hotel delivers newspapers to its guests’ rooms at no charge.
c.
A snowplower agrees to plow a restaurant’s parking lot in exchange for free meals.
d.
A hotel hires a banquet manager at an agreed salary.
2. Which of the following is not an essential element of a contract?
a.
Contractual capacity
c.
A writing
b.
Consideration
d.
Legality
3. Which of the following has contractual capacity?
a.
A person age 17
c.
A very intoxicated person
b.
A mentally incompetent person
d.
A person ill with flu
4. What is the effect of a counteroffer?
a.
No contract results unless the counteroffer is accepted.
b.
The counteroffer creates a contract.
c.
A contract results, but it is voidable at the option of the offeror.
d.
A contract results, but it is voidable at the option of the offeree.
5. Which of the following is not covered by the statute of frauds?
a.
A hotel hires the services of a gardener.
b.
A restaurant hires a banquet manager on a three-year contract.
c.
A hotel contracts for the purchase of a two-acre parcel of property on which the hotel
plans to expand.
d.
The parents of a bride promise a hotel they will pay for the bridal suite if the bride and the
groom fail to pay.
6. Which of the following is not true about the statute of frauds?
a.
Initials on a writing are sufficient in lieu of a signature.
b.
Two pieces of paper can be used together to make up the necessary writing.
c.
The required signature is that of the plaintiff in a lawsuit.
d.
A note or memorandum may be sufficient to satisfy the writing requirement.
7. Which of the following involves an intention to mislead?
a.
Fraud
c.
Mistake
b.
Innocent misrepresentation
d.
Breach of contract
8. Andrea had reservations at a hotel but, because it overbooked, she was forced to stay elsewhere. The
only hotel in town with vacancies was more expensive. Rather than return home, Andrea took a room
in that hotel. For which of the following is the first hotel liable to reimburse Andrea?
a.
Mental anguish suffered by Andrea.
b.
The amount Andrea had to pay at the second hotel in excess of the cost of the room at the
first hotel.
c.
The full hotel bill paid by Andrea at the second hotel.
d.
None of the above; the hotel does not have any liability in this situation.
9. A guest with a one-night guaranteed reservation at a hotel did not show. The hotel was not able to rent
the room to someone else. For which of the following is the guest liable to the hotel?
a.
Loss of goodwill
c.
Punitive damages
b.
The full hotel bill
d.
None of the above
10. Matt contracted to purchase a computer at age 16. Until when can he disaffirm the contract?
a.
He cannot cancel it at any time.
b.
He can disaffirm the contract until his eighteenth birthday.
c.
He can avoid the contract while he is under 18 and for a reasonable period of time after he
reaches age 18.
d.
He can avoid the contract anytime until he reaches age 21.
1. A contract made by a person who lacks contractual capacity is void.
2. After an offer is made, a contract results whether the offeree accepts or rejects.
3. A void contract is unenforceable in court.
4. A hotel is remodeling its lobby. The manager negotiated a contract for the work with a construction
company and was about to sign it. The hotel manager then decided that installation of four additional
wall plugs not referenced in the contract were needed. The owner of the construction company only
orally agreed to add the four plugs. The hotel manager thereafter signed the contract, which did not
make reference to the additional plugs. True or false: The hotel manager can enforce the company’s
promise to install the four extra plugs.
5. A breach of contract is a crime.
6. Pain and suffering is recoverable in a breach of contract lawsuit.
7. For a plaintiff to collect money in a breach of contract case, the plaintiff must prove that it attempted
to mitigate the loss.
8. Jan made reservations at a hotel for three nights and paid a deposit of one night’s charge. Due to
family illness, she was forced to cancel the reservations. The hotel was able to rent the room to
someone else. True or false: The hotel is entitled to retain Jan’s deposit due to breach of her contract.
9. The Namberry Hotel had a minimum two-nights stay during the summer weekends. This arrangement
was announced in all its advertisements and explained to all who inquired about reservations. Sam
made a two-night reservation and paid in advance. After spending one night at the hotel, he decided to
leave. True or false: Sam is entitled to a return of his advance payment for the second night.
10. The following is an offer: “We have the following rooms available at the following prices: those with
ocean views are $135 per night; those without an ocean view are $112; those in the adjoining building
are $98.”
11. An oral contract made by a restaurant for the purchase of a freezer for $1,100 is enforceable in court.
12. The following is an offer: “We have chicken, fish, and meat entrees.”
13. Grilled black bass is a very popular selection at the Colligan Restaurant. Due to toxic levels in the
local river, the health department has prohibited eating bass caught there. Due to the popularity,
however, the restaurant continues to serve the river bass. True or false: Diners who are served the bass
from the river are legally obligated to pay for their own dinners.
14. A representative from the National Association of Freelance Writers (NAFW) contracted with a hotel
for convention services. After the contract was signed, the hotel orally agreed to include light hors
d’oeuvres for a cocktail party without additional charge. True or false: The agreement for hors
d’oeuvres is enforceable by the NAFW.
15. If one party to a contract made a unilateral mistake, the contract is voidable.
1. Mutuality is established by an offer and an ____________________.
2. _________________________ refers to practices generally adhered to in a particular industry and are
used to clarify an ambiguity in a contract.
3. ____________________ is a favorable reputation producing an expectation of future business.
4. An important reason for putting all contracts in writing is to avoid the _________________________
associated with oral contracts.
5. A 14-year-old who lives in the north purchases a winter coat and wears it for a few weeks. Thereafter
he seeks to return the coat. He will not be successful because a winter coat is a
____________________ in the north.
6. The purpose of the ______________________________ is to protect written contracts from
modifications by alleged oral agreements made prior to signing.
7. _________________________, one of the essential elements for a contract, means that the parties
have truly agreed to the terms.
1. In contract terms, how would you describe the following: “If the price is right, I will consider selling
the chandelier in the lobby”?
2. A primary reason that a contract for a catered event should be in writing is
____________________________________________________________________.
3. A 600-room hotel is sold out for the weekend. To accommodate the anticipated diners in the
restaurant, the restaurant manager ordered a larger quantity of fresh fish to be delivered by noon on
Friday. The supplier failed to provide the fish. As a result, the hotel was unable to serve many items on
the menu and lost business. To mitigate the loss, the restaurant should have
____________________________________________________________.
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