66. The language “I offer to sell you my 1974 White Ford Torino” is:
a. a valid offer.
b. not a valid offer because it lacks a definite price.
c. not a valid offer because there are no terms for payment.
d. not a valid offer because it is oral.
67. Day 1: Mike sends Tina a letter offer to sell his fish tank to her for $125.
Day 2: Tina faxes Mike an acceptance.
Day 2: Mike receives Tina‘s fax.
Day 3: Mike calls Tina to revoke his offer.
Mike and Tina:
a. do not have a contract since Tina used the wrong means of acceptance.
b. do not have a contract because Mike revoked his offer before Tina accepted properly.
c. have a contract as of the receipt of the fax.
d. have a contract as of when the fax was sent.
68. Walt’s Pool World’s fax to Pat’s Pumps: “I’ll take 10 4 hp pool pumps @ $175 each.”
Pat’s Pumps’ return fax: “Ok. Will deliver tomorrow AM.”
Pat and Walt:
a. do not have a contract because the faxes will not satisfy the statute of frauds.
b. do not have a contract because of the mirror image rule.
c. had a contract when Pat‘s fax was sent.
d. had a contract when Pat‘s fax was received.
69. Which of the following contract subject matters must be evidenced by a writing to be enforceable under the statute
of frauds?
a. a contract for the sale of an easement for $75
b. a contract for the sale of a computer monitor for $220
c. a contract for consulting for 6 months @ $10,000 per month plus expenses
d. All of the above must be in writing.
70. Jane: “I’ll pay you $50 if you will clean my windows.”
Al: “I‘ll do it for $75.”
Jane: “$65 and it’s a deal.”
Al: “No way.”
Jane: “Too late. We have a contract.”
Which of the following statements is true?
a. Jane is correct, there is a contract.
b. There is no contract.
c. There is a contract to clean the windows for $65.
d. There is a contract to clean the windows for $75.
71. Which of the following contracts must be in writing to be enforceable?
a. A contract for the sale of an easement for $250.
b. A contract for the sale of a bike for $175.
c. A six–month marketing consulting contract.
d. All of the above must be in writing to be enforceable.
72. Abe and Gabriel entered into a contract for Abe to furnish landscaping services for Gabriel’s office complex. The
contract provides the fee will be $75 per month. At the time Gabriel signs the agreement, the two discuss the fact
that the services required in the winter will be less and the fee will be reduced to $50 per month. Abe adds as
Gabriel is signing, “I just forgot to put that sliding scale in this contract. Don’t worry – I’ll take care of it because we
understand each other.” Gabriel:
a. will be permitted to introduce evidence about the winter fee reduction.
b. will only need to pay $50 during the winter months.
c. will pay $75 per month every month because of parol evidence.
d. none of the above
73. Andy: “This is to confirm our telephone conversation of earlier today. 200 lbs. of T-bone at $2.89 per pound.”
Barb: “Yes, but that’s 100 pounds at $2.99.”
Andy: “Too late, we already reached agreement by phone.”
Barb: “Too bad, it wasn‘t in writing.”
Which of the following statements is true?
a. Barb is incorrect. The phone conversation was a contract.
b. Barb is correct. The agreement must be in writing to be enforceable.
c. Andy can enforce the agreement with the parol evidence rule.
d. none of the above
74. Day 1: A wires an offer to B
Day 2: B receives the offer
Day 3: B phones an acceptance
A states, “Too late. I changed my mind.”
Which of the following statements is true?
a. A and B do not have a contract
b. A and B have a contract under common law only
c. A and B have a contract
d. none of the above
75. Melanie: “I‘ll buy that armoire for $775.”
Judith: “It’s not for sale.”
Melanie: “How about $875?”
Judith: “I don’t know. It’s been in my family for 130 years.”
Melanie: “How about $1000?”
Judith: “I‘ll think about it.”
a. There is an option contract.
b. There is no contract.
c. There is a reliance case.
d. There is a quasi contract.
76. Which of the following contracts would not be governed by the UCC?
a. a contract for dentures
b. a contract for the purchase of an Arabian horse
c. a contract for the purchase of an oil painting for $550
d. a contract for the purchase of an ATR jet
e. All of the above are governed by the UCC.
77. Which of these is an example of a bank’s commitment to pay?
a. Bill of lading
b. Fee arbitration agreement
c. Letter of credit
d. A warrant
78. John: “I will sell you my laptop computer for $330.”
Mary: “Will you include the carrying case”?
John: “Sold.“
a. There is a contract for the sale of the computer with the carrying case.
b. There is a contract for the sale of the computer but the carrying case is not included.
c. There is no contract for the sale of the laptop computer.
d. There is a contract but it is unenforceable because it must be in writing.
e. none of the above
79. Alpha Enterprises sent an offer to Omega Enterprises. The offer read as follows: AVAILABLE FOR
IMMEDIATE SHIPMENT: 600 WIRELESS NOKIA PHONES – MODEL HCG5321 (THE PHONE FROM
“CHARLIE’S ANGELS”). PRICE IS $10 EACH. 30 DAYS, SAME AS CASH. ALL WARRANTIES IN
EFFECT. THIS OFFER EXPIRES ON TUESDAY, MARCH 15, 2004. Omega sent the following letter in
response on March 14, 2002, via overnight delivery: HAPPY TO ACCEPT YOUR OFFER ON THE NOKIA
PHONES. SHIP IMMEDIATELY. There was a major snowstorm that hit the east coast on March 14, 2004, and
Omega’s letter did not arrive at Alpha’s headquarters until March 18, 2004. Alpha had sold the phones to another
company. Omega demanded the 600 phones for $10 each claiming that it had accepted the offer in time.
a. Omega is correct; it had valid and timely acceptance and had a contract.
b. Omega is incorrect; the acceptance must arrive for it to be effective.
c. Omega is incorrect; the offeree assumes the risk of the delivery means chosen.
d. Omega is correct, but any damages must be recovered from the overnight shipping company.
e. none of the above
80. An ad in a newspaper reads: “AVAILABLE TODAY ONLY. FRIENDLY‘S APPLIANCES. CLEARANCE
SALE FOR ALL FLOOR ITEMS. 75% OFF RETAIL PRICES.” Joan Ludwig arrived at Friendly‘s about one
hour after it opened and there were no appliances left. The issues in the situation are governed by:
a. The Uniform Commercial Code
b. UETA
c. common law
d. restatement of contracts
e. none of the above
81. With respect to the facts in number 80, the newspaper ad:
a. is an offer.
b. is not an offer.
c. is a merchant’s firm offer.
d. cannot be revoked.
e. none of the above
82. With respect to the fact pattern in #80:
a. Friendly’s has breached a contract and owes damages to Joan.
b. There is no breach of contract.
c. Joan has no rights of recovery because the contract was required to be in writing.
d. There was no contract, but Joan can recover on the basis of quasi contract.
e. none of the above
83. Which of the following eliminates the effect of the mailbox rule?
a. The UCC eliminates the mailbox rule.
b. Common law eliminates the mailbox rule.
c. An offer that includes, “Acceptance is effective upon receipt only.”
d. Any attempt to eliminate the mailbox rule is void.
e. none of the above
84. Day 1 – School teacher sends superintendent letter of resignation.
Day 4 – Superintendent mails letter accepting resignation.
Day 5 – School teacher hand delivers letter withdrawing resignation.
Day 6 – Teacher receives superintendent’s letter.
a. The above negotiations are governed by the UCC.
b. The resignation was accepted and the withdrawal is too late.
c. both a and b
d. The resignation offer was revoked.
85. Buyer on fax: “Will take house for $587,500 if front lawn is fixed.”
Seller on fax in response: “Price is $589,000 and no front lawn.”
Buyer on fax in response: “$588,000 plus the front lawn.”
Seller on fax in response: $589,000 plus the front lawn.”
a. There is a contract for the sale of the house at $588,000 plus the lawn.
b. There is a contract for the sale of the house at $589,000 plus the lawn.
c. There is no contract.
d. none of the above
86. Which of the following is/are governed by the UCC?
a. a contract for the sale of water
b. a contract for the sale of extracted oil
c. a contract for the sale of barges
d. All of the above are governed by the UCC.
87. Which of these can be a valid contract agreement under ESIGN?
a. A fax
b. A PDF file
c. An online click or check on an “I accept” button
d. All of the above
88. “Point and click” refers to:
a. the right of the FBI to search web sites.
b. the formation of contracts via the Internet.
c. the registration of domain names under ICANN.
d. pornographic web sites.
e. none of the above
89. E-Sign:
a. applies only to interstate transactions.
b. must still be adopted by the states to be effective.
c. does not apply to contracts for the sale of goods.
d. applies in all 50 states.
e. none of the above
90. The Uniform Electronic Transaction Act (UETA):
a. has been adopted in all 50 states.
b. has been declared unconstitutional.
c. is the same as E-sign.
d. none of the above
91. The following exchange took place in a series of e-mails between Mitchell Raines and Leslie Carroll:
Mitchell: I am looking at the Trek bike advertised on your website for $650.00. Would you take $600.00?
Leslie: I would take $600 if there were no delivery required.
Mitchell: Well, I have to have it delivered because you are two states away.
Leslie: Well, then if there has to be delivery, I could do it for $630.00.
Mitchell: Is that cash?
Leslie: Yes.
a. Mitchell and Leslie have a contract for the sale and purchase of the bike for $630.00 with delivery.
b. Mitchell and Leslie have a contract for the sale and purchase of the bike for $630.00 without delivery.
c. Mitchell and Leslie have an offer on the table of $600 with no delivery.
d. Mitchell and Leslie do not have a contract.
92. Julia Pitt runs a boutique that specializes in luggage and travel items. Julia contacts Tumi luggage about carrying its
line of messenger satchels. The Tumi representative tells Julia that Tumi would be happy to sell her 100 Tumi Black
Messenger bags for $318 each. Julia is happy with the price and asks Tumi to send the bags. The Tumi
representative then faxes a confirmation of the shipment of the 100 bags at $318 each. Julia receives the fax.
When the bags arrive, Julia contacts Tumi and says there is a business downturn and that she does not want the
bags and that there was no contract anyway.
a. Julia is correct; the contract requires some type of authentication from Julia to be enforceable.
b. Julia is correct; the contract required more than a fax to have a sufficient record.
c. Julia is incorrect; she and Tumi have a valid and enforceable contract.
d. both a and b
93. Fred Twain sends the following e-mail to Ralph Barnes: “Will sell you my 2006 Audi A4 for $23,500, will carry or
take cash. This offer to remain open until November 11, 2007.” Ralph responds, “I know how much you love that
car. I’ll think about it.” On November 12, 2007, Ralph e-mails Fred and writes, “Fred, I am ready to buy your car.”
Fred responds, “Ralph, I sold the car this morning because I didn’t hear from you.”
a. Fred has breached a contract because Ralph accepted.
b. Fred was required to notify Ralph before he sold the car to someone else.
c. Ralph no longer had the power of acceptance.
d. both a and b
94. On Monday, Sam’s Computer Company wires Bob’s Computer Mart, “I have two IBM XT’s for sale for $1700
each. You pay cost of shipping.” Bob received the offer on Monday afternoon and wired back, “You have a deal.
30 days same as cash.” On Tuesday morning Sam called to revoke the offer. On Tuesday afternoon Sam received
the wire. Sam says there is no contract and Bob says there is. Who is correct?
95. List the types of contracts required to be in writing.
96. H2O Plumbing has been working on a residential subdivision project for Paradise Builders. H2O agreed to do all
plumbing work on each of the houses for a fee of $5200 per house. H2O has reviewed the market and decided that
most plumbers are getting between $5500 and $6000 for houses of comparable size. H2O has done the initial work
on all of the houses and has told Paradise it will stop work unless the price is increased to $5500 per house.
Paradise is on a tight schedule with its construction lender and with home buyers and succumbs to the demand.
Later, when the houses are constructed, Paradise refuses to pay any more than $5200 per house. Explain H2O’s
rights to them.
97. Trevor Jones accepted a summer internship with Hailey & Thomas, a management consulting firm. The
negotiations and offer were all oral. Hailey & Thomas’ managing partner did send a letter with the following
language:
Welcome to Hailey & Thomas. We are looking forward to working with you. When you arrive in New York,
please call me so that we may help you locate lodging for the summer.
Discuss whether Trevor has a contract and if he has sufficient proof of its existence. Also discuss whether the
agreement needed to be in writing.
98. Barnes & Noble faxes to Woodchip Publishing Company on May 1, 2002 the following:
Please ship immediately six copies of NOBODY FIXES REAL CARROT STICKS ANYMORE.
Price: $6.00 Shipping: $2/book
Woodchip ships six books with an invoice as follows:
Six NOBODY FIXES REAL CARROT STICKS ANYMORE @ $6.00 = $36.00
Shipping and Handling = $6.00
Is there a contract?
99. In #98 above, suppose that the fax from Barnes & Noble read:
Please ship immediately via priority mail – 10 Copies of NOBODY FIXES REAL CARROT STICKS
ANYMORE.
Price: $6.00 per book Shipping: $3.95 total
Woodchip ships the books at the $6 price but ships them via two-day UPS at a price of $5.95. Is there a contract?
100. Name the statutes that affect contract formation in cyberspace.
101. Discuss whether a contract to solicit names of potential subscribers using pop-up Internet ads for a newspaper is
considered goods or services under the UCC.
102. The Equal Credit Opportunity Act was passed to ensure equal credit opportunity regardless of past credit history.
a. True
b. False
103. A negative credit decision cannot be based on an applicant’s plans for having children.
a. True
b. False
104. The Truth-in–Lending Act applies to all credit transactions.
a. True
b. False
105. The solicitation of credit card customers is not regulated by the federal government.
a. True
b. False