53) Morgan entered into a long-term contract at age 17. In the state in which the contract was
executed, the majority age was 18. She is now 19 and would like to disaffirm the contract on the
grounds that she was a minor when she entered into the contract. Which of the following
statements is true?
A) Morgan can disaffirm the contract because she lacked competency at the time she entered into
the contract, thus rendering the contract voidable.
B) Morgan can disaffirm the contract because the contract is void.
C) Morgan cannot disaffirm the contract because there was ample consideration.
D) Morgan cannot disaffirm the contract because she ratified it by failing to disaffirm the
contract in a timely fashion.
54) The contractual process begins with a legal offer.
55) The death of the agent of a corporation will result in termination of an offer.
56) If the offeror withdraws the offer after the offeree accepts it, the offer is terminated.
57) Consideration is defined as a bargained-for exchange of promises in which a legal detriment
is suffered by the promisee.
58) The doctrine of promissory estoppel requires a promise justifiably relied on by the promisee.
59) A liquidated debt exists when there is a dispute about the amount or other terms of the debt.
60) Fraud is one of the factors that prevents genuine assent.
61) Fraud is defined as any wrongful act or threat that prevents a party from exercising free will
when executing a contract.
62) Courts apply an objective test when determining the existence of duress. The party’s state of
mind is irrelevant.
63) In the case of necessaries, the intoxicated individual is not allowed to disaffirm, but is held
liable for the reasonable value of such items.
64) State the six elements of a legal contract.
65) List the five methods of termination of an offer.
66) State the requirements for a legal acceptance to be valid.
67) Discuss the relationship between the doctrine of promissory estoppel and the consideration
requirement of contract formation.
68) An “interest in land” includes all but which of the following?
A) a mortgage
B) an easement
C) the buildings on the land
D) the automobiles on the land
69) Leases for longer than ________ usually have to be in writing.
A) six months
B) one year
C) eight months
D) two months
70) A notable exception to the requirement that contracts for sale of an interest in land must be
written is ________.
A) partial performance
B) garnishment
C) consideration
D) competency
71) Abigail agrees to clear Adam’s debt with the bank if he is unable to pay it. Which of the
following is true of this scenario?
A) This agreement is not within the statute of frauds.
B) Abigail has primary liability to the bank.
C) Under the statute of frauds, this contract must be in writing.
D) Adam is not liable to the bank in any way.
72) A contract must be in writing if it specifies that it will last longer than ________.
A) 30 days from the formation of the contract
B) 90 days from the beginning of performance
C) 180 days from the beginning of performance
D) one year from the formation of the contract
73) Which of the following contracts needs to be in writing?
A) a contract to provide medical help to a person till the person dies
B) a contract to play for a football team as long as the player’s health allows it
C) a contract to pay a person’s tuition for as long as they are on the honor list
D) a contract to provide services to a hospital for two years
74) Based on the statute of frauds, which of the following contracts is orally enforceable?
A) a contract by the administrator of Harold’s estate to personally pay Harold’s outstanding debt
if the estate cannot
B) a contract by an athlete to endorse a company’s products for three years
C) a contract between two parties to sell goods worth $5,000
D) a contract to provide medical help to a person till the person dies
75) Under UCC Section 2-201, contracts for the sale of goods of $500 or more fall within the
statute of frauds and must be in writing to be enforceable. Exceptions to this rule include all but
which of the following?
A) the agreement is between a merchant seller and a non-merchant buyer
B) one of the parties to a suit admits in writing or in court to the existence of an oral contract
C) a buyer accepts and uses the goods
D) the contract is between merchants, and the merchant who is sued received a written
confirmation of the oral agreement and did not object within 10 days.
76) A notable exception to the requirement that contracts for sale of an interest in land must be
written is partial performance.
77) Contracts in consideration of marriage are non-business-related contracts that must be in
writing to be enforceable.
78) Discuss the various contracts that must be in writing to be enforceable.
79) According to the ________ evidence rule, when parties have executed a written agreement
which is complete on its face, oral agreements made before or at the same time as the written
agreement that vary, alter, or contradict the written agreement are invalid.
A) parol
B) statutory
C) fraudulent
D) promissory
80) Which of the following is true of the parol evidence rule?
A) It discourages parties from signing a no-competition clause.
B) It prevents a party from varying the terms of a written contract by claiming the existence of
contradictory oral terms.
C) It provides a set of exceptions to the statute of frauds.
D) It prevents the unjust enrichment of a party who has refused to perform pursuant to clear
contract terms.
81) Under Uniform Commercial Code Section 2-________, written memoranda that are intended
to be a final expression of the parties’ agreement cannot be contradicted by prior or
contemporaneous oral agreement.
A) 213
B) 207
C) 202
D) 201
82) Discuss the various exceptions to the parol evidence rule.
83) ________ beneficiary contracts involve two parties to a contract, either by words, writing, or
actions, intending to bring benefits to a third party by virtue of an enforceable contract.
A) Intended
B) Incidental
C) Donee
D) Creditor
84) Daniel works for Jake in exchange for Jake’s promise to pay Anne the money Daniel owes
her. This is an example of a ________ contract.
A) donee beneficiary
B) creditor beneficiary
C) quasi-
D) void
85) Jones buys a life insurance policy from Liberty Insurance Company. The policy is designed
to pay Smith the sum of $100,000 upon Jones’s death. The policy is an example of ________.
A) a no-competition clause
B) the parol evidence
C) a third-party beneficiary contract
D) an assignment of rights
86) Randall agrees to pay a yearly premium to an insurance company that promises to give his
daughter $150,000 upon his death. This is an example of a ________ contract.
A) void
B) creditor beneficiary
C) quasi-
D) donee beneficiary
87) In an ________ contract, two parties to a contract (the promisor and promisee), either by
words, writing, or actions, intend to bring benefits to a third party by virtue of an enforceable
contract.
A) incidental guarantor
B) intended guarantor
C) incidental beneficiary
D) intended beneficiary
88) In an ________ contract, there is no intent to bring benefits to the third party. The benefit is
unintentional and the third party cannot sue to enforce such a contract.
A) incidental beneficiary
B) incidental guarantor
C) intended guarantor
D) intended beneficiary
89) A ________ contract exists when the purpose of the promisee in requiring a promisor’s
performance to be made to a third person is to fulfill a legal obligation of the promisee to the
third person.
A) void
B) quasi-
C) creditor beneficiary
D) donee beneficiary
90) A(n) ________ is the present transfer of an existing right.
A) garnishment
B) assignment
C) attachment
D) consideration
91) Insurance contracts and all forms of creditor collection agreements are ________ contracts.
A) incidental beneficiary
B) third-party beneficiary
C) unilateral
D) quasi-
92) Which of the following assignments are recognized by law?
A) those that materially change the duty of the obligor
B) those that are forbidden by state statute
C) those that involve the present transfer of an existing right
D) personal services contracts
93) Generally, in an assignment, unless the obligor receives ________ of assignment by the
obligee-assignor, the obligor has no duty to the assignee.
A) notice
B) gift
C) delegation
D) abrogation
94) Which of the following is true about an assignment of rights after the obligor-promisor has
received notice of the assignment by the obligee to an assignee?
A) The offer is terminated.
B) The assignee stands in the shoes of the obligee.
C) The offer becomes firm and cannot be revoked.
D) Consideration is implied under the doctrine of promissory estoppel.
95) Sarah owes Jane $10,000 under a valid contract but has been unable to pay the debt. Becky
agrees to pay $10,000 to Jane in exchange for Jane’s contract claim against Sarah. This
arrangement is an example of a(n) ________.
A) garnishment
B) parol evidence
C) attachment
D) assignment of rights
96) In an assignment scenario, the obligee-promisee is also known as the ________.
A) assignor
B) assignee
C) obligor
D) promisor
97) In an intended beneficiary contract, there is no intent to bring benefits to the third party.
98) A donee beneficiary contract exists when the purpose of the promisee in obtaining a promise
from the promisor is to make a gift to a third person.
99) An assignment is the present transfer of an existing right.
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100) Explain the various types of third-party beneficiary contracts.