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Unformatted text preview: Sample Questions Exam 2 1. Jill offers to pay Kyle $500 if he jogs across the Golden Gate Bridge. Kyle can ac cept the offer only by jogging across the bridge. If Kyle jogs across the bridge, he and Jill will have formed: A bilateral contract. A moral obligation. A unilateral contract. A social contract. Michelle makes an offer to Tiger. The offer is effective even if: Michelle does not communicate it to Tiger. Michelle secretly does not intend to be bound by the offer. The terms of the offer are not reasonably definite. The subject matter and the consideration are not stated in the offer. Tim tells Mack that he plans to sell his Microsoft stock for $150 per share. Mack accepts and gives Tim $150 per share for the stock. Which of the following is true: A contract is formed because Mack timely accepted. A contract is formed because consideration is given by Mack. A contract is not formed because the parties issued an agreement to agree. A contract is not formed because Tim made a statement of intention. Wanda, who is quite ill, writes to her friend Amanda, offering to sell Amanda her grand piano for only $400. That night, Wanda dies. The next day, Amanda, not knowing of Wanda's death, writes a letter to Wanda accepting the offer and enclosing a check for $400. Has a contract been formed? Yes, because when Amanda accepted the offer, she did not know about Wanda's death. Yes, because Amanda can enforce the contract against Wanda's Estate. No, because Wanda was ill. No, because the offer terminated automatically when Wanda died. a. b. c. d. 2. a. b. c. d. 3. a. b. c. d. 4. a. b. c. d. 1 Sample Questions Exam 2 5. Jay promises to give Trudy, his daughter, $15,000 towards the purchase of a car. In reliance, Trudy buys a car for $13,000. If Jay refuses to pay Trudy the $13,000, which of the following is true: Jay is liable for the $13,000 based on promissory estoppel. Jay is liable for the $13,000 based on preexisting duty. Jay is not liable for the $13,000 because the agreement lacked consideration. Jay is not liable for the $13,000 because the agreement should have been in writing. a. b. c. d. Fact pattern for Questions 6 8: Boulder Construction Company (BCC) enters into a contract with Burger Madness Company to build a restaurant for Burger Madness. Three months after construction begins, BCC demands an additional $200,000 from Burger Madness on the contract price. Burger Madness agrees to pay. 6. If BCC offers no reason for the extra $200,000 but only says that it will immediately stop construction if the amount is not paid, the agreement to increase the contract price by $200,000 is likely: a. Enforceable as an accord and satisfaction. b. Enforceable because of unforeseen difficulties. c. Unenforceable as an illusory promise. d. Unenforceable due to the preexisting duty rule. 7. If BCC offers, as a reason for the extra $200,000, that ordinary business expenses have increased, the agreement to increase the contract price by $200,000 is likely: a. Enforceable as an accord and satisfaction. b. Enforceable because of unforeseen difficulties. c. Unenforceable due to the preexisting duty rule. d. Unenforceable as an illusory promise 8. If BCC offers, as a reason for the extra $200,000, that unforeseen soil conditions will add considerable cost to the project, the agreement to increase the contract price by $200,000 is likely: a. Enforceable as an accord and satisfaction. b. Enforceable because of unforeseen difficulties. Unenforceable as an illusory promise. c. d. Unenforceable due to the preexisting duty rule. 2 Sample Questions Exam 2 9. a. b. c. d. 10. The state of New Mexico enacts a usury statute. The purpose of this statute is to: Establish a maximum rate of interest that can be charged for certain loans. Establish a minimum rate of interest that can be charged for certain loans. Prevent the misuse of money advanced as loans. Prevent the misuse of money paid back on loans. Brad, who is 17 years of age, convinces his parents to allow him to become emancipated. If Brad becomes legally emancipated at age 17, which of the following is true: Brad still has minority status because emancipation cannot terminate it. Brad's parents cannot give up the legal right to exercise control over Brad. Brad loses his right to disaffirm contracts. A guardian must be appointed for Brad. Anne and Kim enter into an oral contract for a sale of Anne's house. Before Kim takes possession of the house, this contract is: Enforceable by Anne only. Enforceable by Kim only. Enforceable by either Anne or Kim. Unenforceable by either Anne or Kim. When an anticipatory repudiation occurs: The repudiation is a present, material breach of the contract. The nonbreaching party can sue the breaching party when performance is due. The contract is discharged by rescission. A condition precedent has occurred. Sally buys a lottery ticket at the local gas station. Immediately after the purchase of the lottery ticket, what type of contract is formed: Bilateral contract. Unilateral contract. Void contract. Voidable contract. Unenforceable contract. a. b. c. d. 11. a. b. c. d. 12. a. b. c. d. 13. a. b. c. d. e. 3 Sample Questions Exam 2 14. Mike hired Cynthia to landscape his house for $5,000. Mike paid Cynthia in advance for the work. Cynthia is almost finished with the landscape project. Which of the following is true about this contract: It is executed. It is voidable. It is executory as to Cynthia and executed as to Mike. It is executed as to Cynthia and executory as to Mike. The Statute of Frauds: Is a code of federal criminal laws pertaining to fraud. Includes undue influence. Requires that certain types of contracts be in writing. Requires a formality to the writing of a contract. The requirements that typically are raised as defenses to the enforcement of an otherwise valid contract are: Genuineness of assent and form. Genuineness of assent and conscionability. Form and objective theory of contracts. Form and ratification. Brian enters into a contract with Julius. Under the contract, Julius agrees to paint Brian's house next Friday if it does not rain. This is an example of: A condition precedent. A condition subsequent. A concurrent condition. An implied condition. All of the gas stations in Boulder enter into a contract to fix the price of gas. This is an example of: A void unconscionable contract. A void immoral contract. A void contract in restraint of trade. A void contract for covenant not to compete. a. b. c. d. 15. a. b. c. d. 16. a. b. c. d. 17. a. b. c. d. 18. a. b. c. d. 4 Sample Questions Exam 2 19. Mike is a regular customer at Moe's Bagels and has an open account there. Mike goes into Moe's one morning, takes a bag of bagels and a container of cream cheese, holds the goods up so that the cashier can see them, knowing that he will be billed for them at the end of the month, then leaves the store. Mike has formed: An express contract. A quasi contract. An impliedinfact contract. A contract based on promissory estoppel. Pam, the President of ABC Company, signs an agreement with Ruth, her only employee, agreeing to pay Ruth a $10,000 bonus at the end of the year if Pam determines that profits are sufficient. Is this agreement enforceable? Yes, because Pam signed a written agreement. Yes, because the agreement contains sufficient consideration. No, because the agreement lacks consideration. No, if the agreement was not notarized. Which of the following is a true statement regarding contracts: An oral contract is an impliedinfact contract. Parties cannot form a contract without expressly putting the terms in writing. An express contract must be in writing. A quasi contract is not a true contract. Theresa and Ben agree that Theresa will deliver 10 snowmobiles to Ben's Outdoor Country store in exchange for $35,000. Theresa delivers the 10 snowmobiles, but Ben does not pay. To recover the price, Theresa can collect from Ben on the basis of their: Impliedinfact contract. Express contract. Quasi contract. Promissory estoppel contract. Voidable contract. a. b. c. d. 20. a. b. c. d. 21. a. b. c. d. 22. a. b. c. d. e. 5 Sample Questions Exam 2 23. Carl hires Stan to paint the outside of his house. Stan tells Carl that he thinks the paint should be dry in 24 hours. Two days after the painting project is completed, a bad rain storm washes some of the paint off the house because the paint was wet. Regarding a breach of contract claim by Carl, Stan is likely: Liable. Not liable, because the statement was a preliminary negotiation. Not liable, because the statement was an opinion. Not liable, but Carl is excused from paying Stan. Which of the following parties to a contract can communicate a rejection of an offer: The offeror only. The offeree only. Both the offeror and the offeree can communicate a rejection in certain situations. The initiator of the offer. Which of the following best describes the mailbox rule: An acceptance is not effective if it is lost in transmission. An acceptance must be mailed with adequate postage in order to be effective. An acceptance is not effective unless it is delivered to the offeror. An acceptance is effective when sent even if it is lost in transmission if the offeree dispatches the acceptance by authorized means. The mailbox rule only applies to rejections. a. b. c. d. 24. a. b. c. d. 25. a. b. c. d. e. 6 ...
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- Spring '07