Chapter 9. Introduction to Contracts
1. Contracts are primarily governed by the Uniform Commercial Code.
a. True
b. False
2. The difference between an express contract and an implied in fact contract is the manner in which assent is
manifested.
a. True
b. False
3. A negotiable instrument, such as a check, is not a formal contract.
a. True
b. False
4. A quasi contract is another name for an oral contract.
a. True
b. False
5. During the twentieth century it became harder to enter into a contract as well as to get out of one.
a. True
b. False
6. “I promise to pay you $100 if you will promise to fix my car next month.” This is an offer for a unilateral contract.
a. True
b. False
7. A contract for the sale of a copyright is governed by Article 2 of the Uniform Commercial Code.
a. True
b. False
8. Maria posted several signs in the neighborhood offering $50 for the return of her lost cat. Dave calls to get a
description of the cat and tells Maria, “I’ll look for your cat.” A contract is formed by Dave’s call to Maria.
a. True
b. False
9. Marcus has a contract to purchase a new MP3 player. The law governing this contract is Article 2 of the UCC.
a. True
b. False
10. All written contracts are considered to be formal contracts.
a. True
b. False
11. If a person who has been declared incompetent by the courts enters into an agreement, that agreement is void,
because it does not meet all the requirements of a binding contract.
a. True
b. False
12. A contract to sell five acres of land is governed by Article 2 of the UCC.
a. True
b. False
13. The Restatement and the UCC are both currently authoritative sources of contract law.
a. True
b. False
14. Each party to a contract must intentionally exchange a legal benefit or incur a legal detriment as an inducement to
the other party to make a return exchange.
a. True
b. False
15. At common law a promise under a seal to authenticate it was effective without anything more.
a. True
b. False
16. Albert breaches a contract with Bill in a state where the statute of limitations is six years. Seven years later Bill
wants to sue. The contract is unenforceable, rather than void or voidable.
a. True
b. False
17. Quasi contract is another name for a contract that is implied in fact.
a. True
b. False
18. Article 2 of the Uniform Commercial Code does not apply to the sale of services.
a. True
b. False
19. The usual method of showing the mutual assent necessary to create a contract is by offer and acceptance.
a. True
b. False
20. A valid contract is one that meets all of the requirements of a binding contract.
a. True
b. False
21. An implied contract is as enforceable as an express contract.
a. True
b. False
22. A noncontractual promise may be enforceable where there has been justifiable reliance on the promise.
a. True
b. False
23. Larry says to Jeff, “If you will mow my lawn, I will give you fifteen dollars.“ Under these facts, no contract is
formed until Jeff finishes mowing the lawn.
a. True
b. False
24. A contract to sell life insurance is covered by Article 2 of the Uniform Commercial Code.
a. True
b. False
25. Alice makes a material misrepresentation of fact to Betty, and based upon the misrepresentation, Betty enters into a
contract. Betty now realizes she was deceived and wants to get out of the contract. This contract is voidable at
Betty’s option.
a. True
b. False
26. Ann makes a material misrepresentation of fact to Brian, and based upon the misrepresentation, Brian enters into a
contract. Ann now thinks that the contract is not fair to her. This contract is voidable at Ann’s option.
a. True
b. False
27. Mike, the owner of a yogurt shop, orders 500 quarts of yogurt from his supplier. Nothing, however, is said by either
party about the price or method of payment. The supplier ships the yogurt as ordered. Since this is a contract implied
in fact, Mike must pay his supplier for the yogurt.
a. True
b. False
28. Amendments to Article 2 of the UCC were promulgated in 2003 to reflect developments in the law and business
practices and to accommodate electronic commerce.
a. True
b. False
29. Common law relating to the formation of contracts has little relevance in the business world today.
a. True
b. False
30. An implied in fact contract is formed by conduct.
a. True
b. False
31. Ron says to Matt, “If you design and landscape my front lawn by the time I return from Paris next month, I will pay
you $5,000.” Matt does not respond but has the landscaping done by the time Ron returns. This is an example of a
unilateral contract.
a. True
b. False
32. If a contract is not clearly unilateral or bilateral, the courts presume that the parties intended a unilateral contract.
a. True
b. False
33. The Uniform Commercial Code would be applied in which of the following situations?
a. A contract for landscape services
b. A contract for sale of patent rights
c. A contract for the purchase of farmland
d. A contract to buy living room furniture
34. Lee has been declared incompetent by the court and is under the care of his sister. Without his sister’s knowledge,
Lee rents the 30,000-seat civic center for his birthday party. Lee’s contract to rent the civic center is best described
as a:
a. valid contract.
b. voidable contract.
c. void contract.
d. quasi contract.
35. A contract in which both parties exchange promises is a:
a. voidable contract.
b. bilateral contract.
c. unilateral contract.
d. quasi contract.
36. Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is
governed by:
a. Article 2 of the UCC.
b. state common law.
c. federal statute.
d. the law of quasi contract.
37. Contract law:
a. has seen little change during the nineteenth and twentieth centuries.
b. has experienced an expansion of the absolute freedom of contract during the twentieth century.
c. today usually recognizes contractual obligations whenever the parties manifest an intent to be bound.
d. requires privity between parties seeking to enforce contractual rights.
38. Any property other than an interest in real property is:
a. goods.
b. personal property.
c. tangible property.
d. intangible property.
39. Contracts are governed primarily by:
a. state common law.
b. federal common law.
c. statutory law.
d. federal case law.