TBCh07RF - CHAPTER 7 Contracts TRUE-FALSE QUESTIONS 1. Most...

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C H A P T E R 7 Contracts T RUE -F ALSE Q UESTIONS 1. Most advertisements are treated not as offers but as invitations to negotiate. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 2. An objective standard is used in determining whether an offer has been made. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 3. An offer terminates at the end of a reasonable period if the offeror did not specify a time. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 4. An offeror may not revoke an offer before the offeree has had a reasonable time in which to consider it. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 5. A counteroffer does not terminate the original offer. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 6. An option contract holds an offer open for a certain amount of time in exchange for some consideration. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 7. In a requirements contract, the buyer agrees to purchase all of the seller’s output of a particular product. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 8. The statute of frauds requires that all contracts be in writing to be enforceable. 92
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93 MANAGERS AND THE LEGAL ENVIRONMENT ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 9. Consideration can be either a promise to do a certain act or the performance of the act itself. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 10. A novation occurs when a new party is substituted for one of the original parties to a contract. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 11. Unconscionability has both a procedural and a substantive element. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 12. In a unilateral contract, a promise is given in exchange for another promise. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 13. Void means the same thing as voidable in contract law. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 14. Only an attorney can hold a power of attorney. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 15. Any breach of a contract discharges the nonbreaching party from its obligations and provides grounds to sue for damages. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 16. Consequential damages are compensation for losses that occur as a foreseeable result of the breach. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal
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CHAPTER 7 CONTRACTS 94 17. Reliance damages are awarded in addition to expectation damages. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 18. Courts enforce liquidated damages as a form of a penalty. ANSWER:
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This note was uploaded on 12/11/2011 for the course LEG100 BUSINESS L taught by Professor Ipfeacha during the Spring '08 term at Strayer.

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TBCh07RF - CHAPTER 7 Contracts TRUE-FALSE QUESTIONS 1. Most...

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