Flashcards and Answers – Business Law Test 2
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Some promises are not legally binding
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True
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Resolving whether a promise should be enforced is a function of contract law
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T
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A party's intent to enter into a contract is judged by their personal, subjective intent or belief. If a contractual promise is not fulfilled, the person who made it may be required to perform the promised act.
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F
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If a contractual promise is not fulfilled, the person who made it may be required to perform the promised act.
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T
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The only requirement of a valid contract is that it be voluntarily entered into
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F
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Every contract involves at least 3 parties
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F
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"Consideration" Refers to the voluntary consent of all the parties to a contract.
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F
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One of the elements of a valid contract is a fair price
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F
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A bilateral contract comes into existance at the moment an offer is made
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F
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An offer to form a unilateral contract is accepted by a promise to perform
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F
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A contract can be created only when a promise is given in exchange for another promise
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F
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No offer may be revoked before it is accepted
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F
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Informal contracts are usually based on their sub¬stance rather than their form
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T
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An express contract must be in writing. An express contract must be in writing
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F
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An implied contract is not an actual contract
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F
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Informal contracts include all contracts other than formal contracts.
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T
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In an express contract, the terms are fully stated in words
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T
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An implied contract is implied from the words of the parties. An executory contract is one that has been fully performed.
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F
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F
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An executed contract is one that has been fully performed.
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T
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If a voidable contract is avoided, the parties to it are released from it.
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T
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A void contract is enforceable if it is in writing.
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F
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An unenforceable contract is one that cannot be enforced because of cer¬tain legal defenses against it.
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T
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A void contract produces legal obligations on the parties but is not otherwise enforceable
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F
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A quasi contract is a true contract
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F
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A party who confers a benefit on someone else unnecessarily can invoke the principle of quasi contract to recover the cost
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F
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The doctrine of quasi contract can be used only when there is an actual con-tract that covers the matter in controversy.
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F
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Plain language laws regulate some types of contracts to require "legalese."
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F
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A reasonable, lawful, and effective meaning will normally be given to all of a contract's terms.
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t
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When the words in a contract have more than one meaning, they are cut from the contract.
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F
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An agreement is evidenced by a single event: an offer.
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F
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An offer must be practical to be effective.
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F
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An offeror must have a serious intention to become bound by the offer.
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t
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An invitation to submit bids—"how much would you charge to do this work?"—is an offer
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f
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An invitation to negotiate—"can you afford this?"—is an offer.
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f
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An expression of opinion—"your customers will like this"—is an of¬fer.
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f
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A statement of future intent—"I plan to sell my 700-pound sow"—is an offer.
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f
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A price list is an offer
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f
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An advertisement—"this property for sale"—is an offer.
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f
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An auction—"we ask you to bid on this item"—is an offer
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f
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A contract lacking a quantity term, when appropriate, may not be enforceable
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t
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An offer may invite an acceptance to be worded in such specific terms that the contract is made definite.
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f
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If no time for acceptance is specified in an offer, the offer terminates at the end of a reasonable time
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t
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A counteroffer does not terminate but continues an offer
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f
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An offeree's power of acceptance is terminated when the offeror dies unless the offer is irrevocable
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t
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An offer that a statute makes illegal automatically terminates the offer.
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t
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An unequivocal acceptance operates as a rejection of the original offer
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f
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No offer can be accepted by silence
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f
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An acceptance subject to new conditions implicitly rejects the offer.
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t
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If an offeror does not expressly authorize a certain mode of acceptance, then acceptance may be made by any reasonable means.
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t
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Under the mailbox rule, an acceptance takes effect at the time it is sent.
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t
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An e-contract must meet the same basic requirements as a paper contract.
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t
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Terms in a shrink-wrap agreement have been enforced in the same way as the terms of other contracts
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t
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Browse-wrap terms are often unenforceable.
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t
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Under federal law, an electronic document can be as enforceable as a paper one.
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t
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The UETA covers only e-records and e-signatures relating to a transaction.
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t
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The UETA does not apply to a transaction unless the parties agreed to conduct the transaction electronically
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t
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Contracting parties cannot opt out of the terms of the UETA.
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f
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The UETA applies to all writings and signatures.
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f
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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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f
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To be legally sufficient, consideration must include something of economic value
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f
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A bargained-for exchange is one of the elements of consideration.
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t
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Inadequate consideration may indicate undue influence.
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t
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Normally, a court of law will not question the adequacy of consideration.
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t
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A promise to do something that one has a prior legal duty to do is not consideration
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t
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Unforeseen difficulties that justify a demand for additional compensa¬tion in-clude risks ordinarily assumed in business
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f
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Rescission is the substitution of one party to a contract for a third party, who agrees to assume the contractual duties
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f
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A promise to pay for an act that has already occurred is enforceable because the event is certain
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f
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An illusory promise is a promise that is enforceable without consideration.
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f
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An accord and satisfaction requires that the amount of a debt be certain.
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f
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A release does not require consideration to be legally binding.
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f
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A covenant not to sue is against public policy.
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f
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A covenant not to sue is the substitution of a contractual obligation for a legal action
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t
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The doctrine of promissory estoppel requires a clear and definite promise.
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t
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Contractual capacity refers to the legal ability to enter into a contract.
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t
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A minor may disaffirm a contract only after attaining the age of majority.
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f
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A minor may disaffirm a contract only if the subject matter is illegal.
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f
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A minor's right to disaffirm a contract terminates sixty days after the contract's date
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f
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Parents are ordinarily liable for the contracts made by their minor chil¬dren, even if the children acted on their own
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f
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A person who enters into a contract when he or she is intoxicated can void the contract if the terms are obviously favorable to the other party
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f
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A guardian can enter into legally binding contracts on behalf of a mentally incompetent person
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t
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A usurious contract involves the purchase and sale of usable goods.
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f
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If there is a statute that prohibits a certain action, a contract to do it is unenforceable
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t
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If the purpose of a licensing statute is to protect the public from unlicensed practitioners, a contract with an unlicensed professional is illegal.
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t
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A covenant not to compete is enforceable only if it is necessary to restrain trade
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f
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A covenant not to compete in the sale of an ongoing business is unenforceable.
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f
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Adhesion contracts are often held to be contrary to public policy.
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t
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An exculpatory clause in an employment contract is not enforceable if the clause is against public policy
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t
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An illegal contract is valid if the parties to it were unaware of the illegality.
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f
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A severable contract is unenforceable as a violation of public policy.
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f
