BAS 267 – Flashcard
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A unilateral contract is formed when the one receiving the offer completes the requested act or performance.
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true
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While intoxicated, Tim contracts to buy a bicycle for double its normal price. The contract is
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enforceable only if Tim understood its legal consequences.
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The UETA creates rules for electronic transactions.
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false
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Quality Contractors contracts to build a warehouse for Retail Storage Company. Quality completely performs. Retail Storage is entitled to
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nothing more.
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Local Delivery Service, Inc., offers to deliver computers to Micro Store's customers for a certain price. Local's intent to extend a serious offer to Micro is determined by reference to Local's
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words and conduct.
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To be valid, a contract must be enforceable by all of the parties to it.
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false
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Loyal Engineers, Inc., needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company. Loyal tells Mining that it must receive the drill by Tuesday or it will lose $10,000. Mining ships the drill late. Loyal can recover
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Page 288...**not 'nothing'**
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Max begins to perform, intending that the completion of his performance act as an acceptance of Nia's offer, which can only be accepted by the completion of the act. Nia can revoke her offer any time
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before Max has substantially begun performance of the act.
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Only a mistake of fact allows a contract to be avoided.
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false
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Jay tells Kim that he will buy her textbook from the last semester for $80. Kim agrees. Jay and Kim have
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an express contract.
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Employment Sources, Inc., enters into a contract with Fred. If Fred is a minor, this contract is most likely
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**not- unenforceable** Page 209
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Emma advertises a reward for the return of her lost dog. Frank, who does not know of the reward, finds and returns the dog. Frank cannot recover the reward because he
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did not know of the reward when Frank found and returned the dog.
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Joy signs a contract with Kent, an unlicensed physician, to perform a medical procedure. This contract is enforceable by
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no one.
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A contract under seal is a formal contract.
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true
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An obligation is enforceable only if it is supported by past consideration.
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false
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Jean contracts to sell her backhoe to Kyla for $2,000. Before performing, Jean and Kyla decide to cancel the deal. This is an example of
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a rescission.
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A breach of contract occurs only when a party fails to perform all of his or her duties under a contract.
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false
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Adam, a seventeen-year-old, signs a contract to sell his car to Best Used Cars. Adam receives a better offer the next day from Cars & Trucks, Inc., and accepts the new offer. Adam is
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**not- not liable to Best because he is a minor** pg 237
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Through fraudulent means, Roy induces Sal to sign a contract to invest with him her profits from Tasty CafÈ. When Sal learns the truth, she may
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**not- recover the money paid only.** pg 252
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Don wants to exchange his performance for Earl's promise. As consideration, performance
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**not- may consist of an act only.** pg 222
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To rescind a contract, the party that received a benefit in exchange for his or her promise to perform is required to return the benefit.
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true
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An offer may not be revoked before it is accepted.
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false
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Reliance on a misrepresentation is required in an action based on fraud.
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true
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Anticipatory repudiation discharges a contract.
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false
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A contract entered into under undue influence is voidable.
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true
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An offer may not be revoked before it is accepted.
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False
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Alan promises to pay Beth $500 to install a pump in his factory. Beth completes the installation. The act of installing the pump
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is the consideration that creates Alan's obligation to pay Beth.
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Nora signs a contract to buy a car just before reaching the age of majority. After reaching the age of majority, Nora does not take possession or make payments. Most courts would hold that she had
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disaffirmed the contract.
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A guardian cannot enter into a legally binding contract on behalf of a mentally incompetent person.
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False
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Disaffirmance is the legal avoidance of a contractual obligation.
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True
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Under the Statute of Frauds, all promises must be in writing to be enforceable.
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False
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Three elements--agreement, consideration, and contractual capacity--are sufficient to form a binding contract.
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False
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Gary threatens physical harm to force Hugh to sell his business, Imported Goods, Inc., to Gary for a below-market price. This is
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duress.
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Cathy assures Don that she will deliver his products as he directs. An assertion that one will do something in the future is part of the definition of
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a promise.
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Macro Corporation and Micro, Inc., enter into an agreement. To constitute a contract
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the terms may be express, implied, or a mix of both.
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Through fraudulent means, Roy induces Sal to sign a contract to invest with him her profits from Tasty CafÈ. When Sal learns the truth, she may
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enforce the contract or recover the money paid.
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Employment Sources, Inc., enters into a contract with Fred. If Fred is a minor, this contract is most likely
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voidable.
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A contract between Kim and Larry to lease real property contains an exculpatory clause. This clause is
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***NOT generally enforceable as a matter of public policy.***
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Joy signs a contract with Kent, an unlicensed physician, to perform a medical procedure. This contract is enforceable by
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no one.
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Amber offers to buy a laser printer, with a case of paper and an extra cartridge, from Best Office Products for $200. Cris, Best's representative, says, "OK, but no paper and no extra cartridge." Cris has
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rejected the offer and made a counteroffer.
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Parties can form a contract without putting the terms in writing.
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True
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A counteroffer does not terminate but continues an offer.
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False
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A-One Pavers, Inc., contracts with Best Building Corporation to repave Best's parking lot. The elements of a contract do not include
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practicality.
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Betty, a minor, signs a contract to buy an SUV by misrepresenting her age to be twenty-one. In most states, Betty may
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disaffirm the contract.
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Alpha Design Company and Beta Products, Inc., sign a document that states Alpha agrees to design a Web page for Beta and Beta agrees to pay Alpha for this service. Alpha and Beta have made
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***NOT***an implied-in-fact contract.
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Gwen agrees to paint Holly's Gift Shop. Gwen does the work, but Holly does not pay. To recover the price, Gwen can collect from Holly on the basis of their
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express contract.
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Lana applies for a firefighter's job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is "a conditional employment offer." Based on the court's reasoning in Case 7.1, Ardito v. City of Providence, this letter is
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a unilateral contract that Lana can accept by passing the exam.
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Tom enters a coffee shop in which he has an open account, fills a cup of coffee, holds it up so the cashier can see it, acknowledges the cashier's nod, and walks out with the coffee, knowing that he will be billed for it at the end of the month. Tom has formed
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an implied-in-fact contract.
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Scot and Tiffany enter into an implied-in-fact contract. The parties' conduct
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defines the contract's terms.
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Informal contracts are usually based on substance rather than form.
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True
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Jill offers to pay Kyle $500 if he jogs across the Golden Gate Bridge. Kyle can accept the offer only by jogging across the bridge. If Kyle jogs across the bridge, he and Jill will have formed
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a unilateral contract.
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City Construction Corporation substantially performs its contract with Downtown Apartments, Inc. Downtown is entitled to
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***NOT nothing more or specific performance. Response Feedback: Learning Objective 1 & 2 - Textbook Page 280
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A contract for a sale of land from Best Properties, Inc., to Commercial Investments Corporation contains an erroneous legal description. The most appropriate remedy for these parties is
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reformation.
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A third party beneficiary contract is formed when a contract confers a benefit on any third party.
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True
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Liquidated damage clauses typically require a party who breaches a contract to pay a certain amount to the nonbreaching party.
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True
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Damages compensate a party for harm suffered as a result of another's wrongful act.
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True
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Generally, any duty can be delegated.
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True
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Diners Restaurant signs an agreement with Eagle Bank to borrow $10,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest from 15 percent. Diners' best argument for avoiding payment to Eagle is that
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the law has rendered performance of the contract illegal.
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the law has rendered performance of the contract illegal.
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False
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Uma makes a contract with Val with the intent to benefit Wat. This is
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a third party beneficiary contract.
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An assignee can compel the obligor to perform.
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True
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Ira and Jill can discharge their contract through novation. This requires
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an agreement by all of the parties to a new contract.
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Carol pays Dick $10,000 for Dick to design an advertising campaign for Carol's health club. The next day, Dick tells Carol that he has accepted a job in New York and cannot design the campaign. Carol files a suit against Dick. Carol can recover
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$10,000.
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Jean contracts to sell her backhoe to Kyla for $2,000. Before performing, Jean and Kyla decide to cancel the deal. This is an example of
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a rescission.
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Fred and Ed sign a contract by which Fred agrees to deliver a washing machine on July 31 in exchange for Ed's promise to pay the $500 purchase price on July 31. The delivery of the washing machine and the payment of $500 are examples of
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concurrent conditions.
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Outstate Properties, Inc. (OPI), agrees to sell certain acreage to Pia. OPI repudiates the deal. Pia sues OPI and recovers damages. Pia can now obtain
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nothing more.
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Lois takes out a life insurance policy that names her son, Matt, as the beneficiary. This is
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a third party intended beneficiary contract.
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The terms of a contract must have been read to be enforced.
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false
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A click-on agreement is an agreement whose terms are expressed inside a box in which the goods are packaged.
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False
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Under the UETA, a signature may be denied legal effect solely because it is in electronic form.
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false
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Under the Electronic Signatures in Global and National Commerce Act, a signature may be denied legal effect solely because it is in electronic form.
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False
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In a partnering agreement, a seller and a buyer agree in advance on the terms that will apply to all of their later electronic transactions.
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True
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The UETA requires the use of security procedures to verify changes to e-documents.
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False
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An e-record is considered received under the UETA only if a person is aware of its receipt.
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False
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International Inventory, Inc., does business online. Contracts may be formed online for the purpose of
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neither licensing nor sales of goods and services
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General Electronics, Inc., uses shrink-wrap agreements. In most cases, a shrink-wrap agreement is between
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the manufacturer of hardware or software and its user.
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Eagle Oil Company and Federated Refining, Inc., attempt to enter into a contract in electronic form. Under the Electronic Signatures in Global and National Commerce (E-SIGN) Act, solely because this contract is in electronic form, it
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may not be denied legal effect.
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Ann, a seller, and Bill, a buyer, make a deal over the Internet that involves e-signatures. Under the E-SIGN Act, for the e-signatures to be enforceable
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both parties must have agreed to use e-signatures.
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Standard Purchasing Corporation and Total Sales, Inc., enter into a partnering agreement. Under a partnering agreement, parties agree
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in advance to terms that apply to their future e-transactions.
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Mary and Nick make a deal that comes under the UETA. Under the UETA, "information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form" is
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a record.
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Alan and Beth, consumers, transact a deal over the Internet. Their contract does not mention the UETA. The UETA covers
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the entire contract.
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High-Tech Services, Inc., and Internet Investments Corporation enter into a contract that would otherwise be subject to the UETA but purports to "opt out." The UETA covers
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none of the contract.
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Applications Corporation (AC) sends an electronic record to Best Systems, Inc., an AC customer. Under the UETA, the record will be considered received when it
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enters Best's processing system in a readable form, even if no person is aware of its receipt.
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National Steel, Inc., and Overland Transport Company enter into a contract. Superior Oil Corporation, which will indirectly benefit from the deal, is prevented from having rights under the contract by the principle of
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privity
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Dina buys from E-Things, Inc., a product that includes a shrink-wrap agreement. A dispute arises, and E-Things files a suit against Dina. The court will enforce the agreement if Dina used the product
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after having had an opportunity to read the agreement.
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AAA Autos contracts to sell a customized car to Barb. AAA installs a slightly used engine in the car, arguing that a new engine would be too costly. Barb sues AAA. The court will most likely rule in favor of
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AAA, if the difference between the used and new engines is trivial.
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Over the Internet, Alpha Contractors, Inc., arranges to lease storage space from Beta Services Company. To complete the deal, Alpha clicks on a button that says, in reference to certain terms, "I agree." Most likely, the parties have
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a binding contract that includes the terms.
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First Design Corporation, a business firm, and Gary, a consumer, make a deal over the Internet that involves e-signatures. Under the E-SIGN Act, for the e-signatures to be enforceable
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both parties must have agreed to use e-signatures.
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Compensatory damages are designed to compensate a nonbreaching party for the loss of the bargain
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True
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Cathy assures Don that she will deliver his products as he directs. An assertion that one will do something in the future is part of the definition of
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a promise.
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Under federal law, an e-signature is as valid as a signature on paper, without exceptions.
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false
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An incidental beneficiary can sue directly to enforce a promisor's promise.
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False
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Any contract breach excuses the nonbreaching party's duty to perform.
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False
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A contract for a sale of land from Best Properties, Inc., to Commercial Investments Corporation contains an erroneous legal description. The most appropriate remedy for these parties is
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reformation.
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A void contract is enforceable if it is in writing.
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False
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Business Office, Inc., hires Carl to repair a computer on site for $400, but Carl does not show up as agreed. Business Office hires Dan to do the job for $350. Business Office may recover from Carl
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***NOT- compensatory damages. Response Feedback: Learning Objective 1 & 2 - Textbook Page 289
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The terms of a contract must have been read to be enforced.
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False
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Parties with contractual capacity may form an enforceable contract.
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True
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Fred and Ed sign a contract by which Fred agrees to deliver a washing machine on July 31 in exchange for Ed's promise to pay the $500 purchase price on July 31. The delivery of the washing machine and the payment of $500 are examples of
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concurrent conditions.
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Under federal law, an e-document is as valid as a paper document, without exceptions.
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False
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Lora signs a covenant not to compete with her employer, Midstate Distribution, Inc. The covenant will be enforced if it
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if it is reasonable with respect to geographic area and time.
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Reliance on a misrepresentation is required in an action based on fraud
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True
