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1. Hannah orally agrees to sell her house to Brett for $175,000. If she delivers the deed to Brett with the expectation of
payment in two weeks and he fails to pay, most courts will not enforce the contract since it was not in writing.
a.
True
b.
False
2. Any contract involving a sale of goods of $100 or more must be in writing.
a.
True
b.
False
3. Bry, Inc. and Gangl Co. entered into an oral agreement for the sale of 3,000 sweaters. Both parties performed as
required under the contract. Bry delivered the sweaters and Gangl accepted and paid for them. Since the contract is fully
executed, it makes no difference that it was an oral agreement.
a.
True
b.
False
4. The original statute of frauds is the English law that began the practice of requiring written evidence of certain kinds of
contracts, but now the British government has repealed the writing requirement for most contracts.
a.
True
b.
False
5. Sweet Plantation, Inc. made a written contract with Candy, Inc. whereby Sweet Plantation agreed to supply all of
Candy's sugar requirements for the next year at $.25 per pound. A dispute arose as to how much sugar Sweet is to supply.
The parol evidence rule will bar Sweet's introduction of evidence concerning the intent of the requirements of Candy.
a.
True
b.
False
6. Raymond agrees to transfer an easement right to Sandra for $1,000. This contract is within the statute of frauds and
therefore needs to be in writing to be enforceable.
a.
True
b.
False
7. Ramona, age 42, orally agreed to work for Brahma, Inc. for the rest of her life for $50,000 per year. This agreement
would not be enforceable since it violates the one-year rule of the statute of frauds.
a.
True
b.
False
8. Parol evidence refers to anything (other than the written contract itself) that was said, done, or written before or as the
parties signed the contract.
a.
True
b.
False
9. Patrick owned an acre of land which was being divided into building lots. Nancy was interested in purchasing the
corner lot. In a signed writing, Patrick stated “I will sell Nancy Grimes a lot on Route 70 for $5,500 cash, payable on
April 30, 2012.” This writing is sufficient under the statute of frauds to make the contract enforceable.
a.
True
b.
False
10. The Uniform Commercial Code provides that, under certain circumstances, a merchant may be liable on a written
contract, even though that merchant has NOT signed it.
a.
True
b.
False
11. Amanda, a recent university graduate, needed a car to get to her new job. To help Amanda secure a loan for the car,
Ted, a friend, agreed to pay the loan should Amanda default. Ted's promise to pay the loan is a collateral promise. His
promise must be in writing to be enforceable.
a.
True
b.
False
12. E-signatures are valid in all 50 states.
a.
True
b.
False
13. Either party may demand rescission of a fully executed oral contract if it was required to have been in writing under
the statute of frauds.
a.
True
b.
False
14. Under the statute of frauds, the writing must: be signed by the defendant; and must state with reasonable certainty the
name of each party, the subject matter of the agreement, and all of the essential terms and promises.
a.
True
b.
False
15. Rest Well Hotel orally ordered 1,000 blankets monogrammed with its initials, RWH, from TriColor Textiles. TriColor
had just finished monogramming the blankets when Rest Well called and canceled the order. TriColor will be able to
enforce the agreement even though there was no writing.
a.
True
b.
False
16. Tuan is president and sole shareholder of Entertainment, Inc. Entertainment, Inc. wishes to borrow money, but to do
so, the bank requires Tuan to orally agree to personally pay the debt of the corporation if Entertainment, Inc. cannot.
Tuan's guarantee to repay is
a.
enforceable under the parol evidence rule.
b.
unenforceable because there is no insurable interest.
c.
enforceable because of the leading object rule.
d.
unenforceable because it is a collateral promise.
17. For the purposes of the statute of frauds, an interest in land includes
a.
a long-term lease on an apartment.
b.
a real estate mortgage.
c.
an easement.
d.
All of the above.
18. Under the merchants' exception rule of the UCC, within a reasonable time of making an oral contract, if a merchant
sends a written confirmation to another, and if the confirmation is definite enough to bind the sender herself, then the
merchant who receives the confirmation will also be bound by it unless he objects in writing within
a.
3 days.
b.
5 days.
c.
10 days.
d.
30 days.
19. In order to satisfy the statute of frauds, a writing must
a.
be a formal written document drafted by an attorney.
b.
be signed by the defendant and contain the name of each party, the subject matter of the agreement, and the
essential terms and promises.
c.
be notarized.
d.
All of the above.
20. Willis and Leslie orally agree to the sale of a parcel of land for $50,000: one-half payable now as a down payment;
one-half payable in 30 days at the time of closing when the title will be transferred. The buyer, Willis, is to have
possession immediately. Willis pays Leslie $25,000, takes possession of the land, and starts building a house. At the time
of closing, Willis has made a substantial beginning on the house. However, Leslie refuses to transfer the title, claiming the
oral contract is not enforceable. This contract is
a.
enforceable, because the statute of frauds does not apply to this interest in land.
b.
unenforceable, because there is no writing signed by Leslie.
c.
enforceable, because Willis has partially performed the oral contract and made improvements on the land.
d.
unenforceable, because the parol evidence rule applies.
21. Abby hires a contractor to make repairs on her house. Before the repairs are finished, Abby dies. Her good friend,
Clay is appointed executor of Abby's estate. Clay orally promised that if the estate could not pay the repair bill, he would
pay it even though he does not live in the house and has no entitlement under Abby's estate. If the contractor's bill does
not get paid, who can the contractor collect from, if anyone?
a.
The contractor can collect from either the estate or Clay.
b.
The contractor can collect from the estate only.
c.
The contractor can collect from Clay only.
d.
The contractor must collect from the estate first, and then collect any deficiency from Clay.
22. Derek and Abyan were discussing business over lunch when they agreed on the sale of a five-acre parcel of land.
Since neither of them had any paper with them, Derek wrote the following on a napkin: "Abyan agrees to purchase from
Derek a 5-acre parcel located at the local address of 123 105th Street, St. Joseph, Minnesota, U.S.A. for the price of
$4,500 per acre. Transfer of title, payment, and possession to take place on May 1, 2011." Abyan signed the napkin. On
May 1, 2011, Derek was ready to close the deal and transfer title but Abyan refused to pay the purchase price. If Derek
sues Abyan for the price of the land, the most likely result will be:
a.
Abyan will win because the writing is not sufficient under the statute of frauds.
b.
Derek will win because the writing is sufficient under the statute of frauds.
c.
Abyan will win because Derek did not sign the writing.
d.
Derek will win because the statute of frauds does not apply to this situation.
23. Which of the following types of contracts cannot be either contradicted or supplemented by evidence of prior
agreements or expressions?
a.
integrated contracts
b.
incomplete contracts
c.
ambiguous contracts
d.
implied contracts
24. Claude agrees to lease his house to Irvin for nine months, the lease to begin six months from the signing of the
contract. Under the statute of frauds
a.
the lease is not required to be in writing.
b.
the lease is required to be in writing because of the one-year rule.
c.
the parol evidence rule renders the lease voidable.
d.
the lease is a collateral promise which must be in writing.
25. The main difference between the UCC requirement for a writing for a contract for the sale of goods and the common-
law rule is that the
a.
UCC requires the signature of only one party.
b.
UCC does not require all the terms of the agreement to be in writing.
c.
common-law requires only an indication that the parties reached an agreement.
d.
common-law requires only the signature of the defendant and the quantity of goods being sold.
26. Which of the following promises ordinarily must be fully executed in writing to be enforceable?
a.
promises made between two merchants for the sale of goods
b.
an agreement between two parties to sell a piece of jewelry for $350
c.
a six-month lease on an apartment beginning in 30 days
d.
a promise made by an executor of an estate to pay a debt of the estate
27. Renita, a merchant, has received a signed, written confirmation from Merchants, Inc. referring to goods she had not
ordered. Renita should
a.
ignore the confirmation.
b.
call the seller and object to the confirmation as soon as she gets back from her two-week vacation.
c.
object to the confirmation in writing within 10 days.
d.
return the goods within two weeks of their delivery with a note attached saying she will not pay for the goods.
28. When one person agrees to pay the debt of another as a favor to that debtor, it is called
a.
promisory representation.
b.
a mutual promise.
c.
promisory estoppel.
d.
a collateral promise.
29. Brahma entered into an oral agreement to sell 50 jet skis to Summer Sports. Brahma delivered 20 of the skis on May
1. On June 1, Summer Sports notified Brahma that it will not honor the agreement. Which statement is correct?
a.
The contract is void since it was oral.
b.
The contract is enforceable for 20 jet skis.
c.
The contract is enforceable for the 50 jet skis
d.
The contract is obsolete.
30. Alfred orally promised to pay Robert a salary of $30,000 per year for five years and his moving expenses up to
$10,000 if Robert would quit his job and come to work for him at his manufacturing plant. Robert agreed to do so, but
requested a written contract. Alfred assured him that the company attorney would prepare such a contract as soon as
possible, but Alfred needed Robert to start at once. Accordingly, Robert sold his house, moved his family, and
commenced to work for Alfred. He was fired without cause two months later. No written contract was ever executed. Can
Robert enforce Alfred's oral promise?
a.
No. This was a contract for longer than one year and is not applicable to exception. It violates the statute of
frauds and is not enforceable.
b.
Maybe. Robert should go to court under the theory of promissory estoppel. Alfred made an oral promise that
Robert relied upon, and the way to avoid injustice is to enforce the promise.
c.
Yes. This is a personal satisfaction contract, and Alfred gave no reason for dissatisfaction. Robert can recoup
the loss he took on the sale of his house.
d.
Yes. This is a partial performance of the sale of goods. Robert can recoup the loss he took on the sale of his
house.
31. Under a contract for the sale of land, the statute of frauds
a.
does not apply if the purchase price for the land is less than $500.
b.
does not apply if the buyer must secure a loan for the purchase of the land.
c.
requires the defendant to sign the agreement.
d.
does not apply if the total price of the land is to be paid in less than one year.
32. Ethel's Exercise World plans to order three weight machines from Pete's Push, Pedal and Pull, Inc. for a total of
$15,000. Pete's demands that Ethel's friend, Moneybags, a wealthy independent businesswoman (not connected with
Ethel's business in any way) promise to pay Pete's for the three machines if Ethel's Exercise World does not. Which of the
promises in this problem must be in writing to be enforceable?
a.
The promise made by Ethel's Exercise World to buy the weight machines.
b.
Moneybag's promise to pay if Ethel's Exercise World doesn't.
c.
Both Moneybag's promise and Ethel's Exercise World's promise.
d.
None of the promises in this problem need to be in writing.
33. Which of the following would suffice for a signature on a writing under the statute of frauds?
a.
A stamped signature
b.
A handwritten signature
c.
A name keyed at the bottom of an e-mail
d.
Any of the above would suffice. Judges define “signature” very broadly.
34. Amy Hudson has been trying to purchase Glen Cappel's antique desk for some time, but Glen has been reluctant to
sell. One evening Glen said to Amy, "Okay, I'll sell the desk for $550." Amy replied, "Thank you, Glen. I accept." The
agreement was not reduced to writing, but Glen and Amy did shake hands. Two days later, Amy sent Glen a letter
outlining the terms of the agreement, and stating that she would deliver $550 cash according to the agreement within ten
days. The letter was signed, "Best regards, Amy." Later, Amy had second thoughts, and refused to go through with the
purchase. Nothing had been exchanged at this point. Glen
a.
can enforce the contract against Amy because the statute of frauds is satisfied under this situation.
b.
cannot enforce the contract against Amy because her signature was inadequate without her last name under the
statute of frauds.
c.
cannot enforce the contract against Amy because he did not sign the letter.
d.
can enforce the contract because they shook hands on the agreement.
35. Vicki entered into a written contract to buy a car from Valley Motors. During the negotiations, the sales representative
said that the car had a two-year full warranty. The written contract included a provision that stated, "This writing is the
full and final expression of the parties' agreement; anything said before signing or while signing is irrelevant." The written
contract did not include a warranty. Two months after Vicki took delivery of the car, she discovered that the transmission
needed to be replaced. Vicki claimed that it was covered by the full warranty. Will Vicki be able to present evidence as to
the sales representative's statements concerning the warranty?
a.
No. The parol evidence rule will most likely exclude any evidence of the discussion of the warranty.
b.
Yes. The leading object rule will allow evidence as to the discussion of the warranty.
c.
Yes. The evidence is needed because the contract is ambiguous.
d.
No, because the contract was fully executed.
36. Vicki entered into a written contract to buy a car from Valley Motors. The written contract included a provision that
stated, "This writing is the full and final expression of the parties' agreement; anything said before signing or while
signing is irrelevant." This is
a.
an integration clause.
b.
a statute of frauds clause.
c.
parol evidence.
d.
an exculpatory clause.
37. When a contract falls within the Statute of Frauds but is not in writing, the contract is
a.
illegal.
b.
unenforceable.
c.
void.
d.
voidable.
38. Does the statement "The sale of goods will not be enforceable unless there is some writing, signed by the defendant,
indicating that the parties reached an agreement" accurately reflect the UCC's basic rule?
a.
No. It should also state that the contract must be signed by both parties, not just the defendant.
b.
No. It should state that the contract must require all of the terms of the agreement to be in writing.
c.
No. It should state that the contract must be for the sale of goods of $500 or more.
d.
Yes, the wording accurately reflects the UCC's basic rule.
39. Which of the following is a "special circumstance" in which an oral contract may be enforceable under the UCC?
a.
It is the first transaction between both parties who are not considered to be merchants.
b.
The contract is for goods in an amount of $750.
c.
The seller is specially manufacturing goods for the buyer and begins work on them before the buyer cancels
the order.
d.
There are no special circumstances to the UCC; it deems that all contracts must be in writing.
40. The Uniform Electronic Transmission Act (UETA)
a.
declares that a contract or signature may not be denied enforceability just because it is in electronic form.
b.
declares that E-signatures are invalid.
c.
creates a safe cyberspace environment in which business communications cannot be intercepted or
fraudulently altered.
d.
has only been adopted in a handful of states.
41. Herb was interviewed for a job on Wednesday. The employer orally offered Herb a job right on the spot. Herb orally
agreed to start working the following Monday, to be employed from that Monday, for one year thereafter. Three weeks
after starting the job Herb was fired without cause and replaced by the employer's friend. Will Herb be successful in an
action brought against the employer for breach of contract?
42. List the types of agreements that are within the statute of frauds and explain the consequences if the parties do not
comply with the requirements of the statute of frauds.
43. Tony signed a contract agreeing to purchase a used, high-powered boat for $10,000. Prior to signing the contract, the
sales representative explained that the boat motor was guaranteed for six months for all labor and parts. The written
contract contained nothing about the warranty; however, it did have an integration clause in it. Tony had problems with
the boat motor, causing expensive repairs. Tony returned the boat to the sales representative for the repairs, only to learn
the salesman denied knowing anything about a six-month warranty. If Tony sues, discuss the likely outcome.
44. J.T. Tidwell entered into an oral contract with Robert Anthony for the purchase of 100 head of cattle at a price of $500
each. When the oral contract was made, Tidwell gave Anthony a check for $1000 as "earnest money or good faith money
towards the purchase of the cattle." Anthony sold the cattle to someone else. Tidwell sued, asking the court to either
compel Anthony to perform the contract or to pay damages that Tidwell suffered from the alleged breach of contract.
What issues do you see and how would you resolve those issues?
45. Explain the reason behind having a statute of frauds and give arguments for and against having such a statute.
