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Legal Environment
Ch. 11, 12, 12
| Question | Answer |
|---|---|
| Joe buys Flo’s Chili Shop and pays Flo $250,000 for the business. To protect himself from Flo taking his money and reopening another chili shop, Joe should put in the contract: | A covenant not to compete forbidding Flo from opening a Chili shop for a reasonable time in a reasonable geographic area. |
| George was Adam’s right hand man from the first day Adam started his business. After 34 years George told Adam he was retiring. Friday afternoon the office went to the Buffalo Wild Wing Café to say goodbyes. Adam announced that in consideration of all the | This contract is void for lack of consideration. |
| In contract law, “consideration” may be defined as: | Something of value given in exchange for a promise. |
| One cold and rainy night, Bill hears a whimpering dog on his back porch. He lets it in and feeds it. He notices the dog has a collar with the owner’s address and brings it to her. | Bill has performed a moral obligation and is not eligible for the reward, Bill is not eligible for the reward because he had no foreknowledge of it. (b) and (c) |
| The five elements of a contract are: | Offer, acceptance, consideration, mutuality, legality, and definiteness. |
| Bell enters into a contract agreeing to subdivide and sell housing lots in Cole’s hillside if Dell City annexes the property within the next year. Belle’s duty to perform is: | Conditional |
| A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written. | Express Contract |
| A contract, which is missing one of the five elements of a contract, is: | Void |
| A common law rule that requires, for a valid contractual agreement, that the terms of the offeree’s acceptance adhere exactly to the terms of the offeror’s offer. | Mirror Image Rule |
| Stuart claims that he and Trina entered into a contract. The intent to enter into a contract is determined with reference to: | The objective theory of contracts. |
| Julie buys a new textbook for $100 and a car for $15,000. She also leases an apartment for $1,000 monthly rent for two years. Which contract(s) must be evidenced by a writing in order to be enforceable? | The apartment lease and the car purchase only. |
| Bill offers to sell his Harley. John says he will pay Bill $50 to keep the offer open until Friday noon. Bill says okay. This $50 payment is: | An option contract and if John does not buy, Bill keeps the $50. |
| Peter’s mom’s house is in bad repair. The neighbor is complaining because his property value has gone down as a result. Peter contracts to have his mom’s house painted. | Mom is an intended beneficiary and can sue on the contract. |
| Sixteen year old Laura looks like she is twenty-two. She goes to a jewelry store and buys a diamond bracelet with some of the money she saved for college. Eighteen months later she realizes she does not have enough money for college. What can she do? | Laura can return the bracelet and get all her money back. |
| Bill offers to sell his Consumer Service Center to Dina for $100,000. Dina replies, “The price is to high. I will buy it for $90,000.” Dina has: | Rejected the offer and made a counter offer. |
| One of the main purposes of contract law is: | To ensure that certain types of promises made among private parties are enforceable. |
| John has 100 widgets and mailed offers to sell all of them, one to Sally and one to Flo. Sally mailed her acceptance on Monday and John received it Thursday. Meanwhile Flo called John Tuesday and he shipped the 100 widgets on Wednesday. | Sally has a contract with John and Flo has a contract with John. |
| Bozo and Ditzy start slamming tequila shooters at 4pm Tuesday. They average about 3 or 4 an hour. About 2am Wednesday, while high as Georgia Pines, they decide to swap Harleys with Ditzy to pay Bozo an extra $5,000 for Bozo’s better Harley. They get out t | Under the objective theory of contracts, the jury will likely find a contract based on the actions taken by the parties. |
| Grandma has been getting a little senile lately. Sometimes she’s sharp as a tack and other times she seems to be not all there. She bought a Maserati convertible on the installment plan. The kids want to void the contract. | If grandma has not been adjudicated incompetent, the contract is likely good. |
| With respect to a contract, a condition is: | A qualification, provision or clause, the occurrence or nonoccurrence of which creates, suspends, or terminates the obligations of the contracting party. |
| An unconditional offer to perform an obligation by a person who is ready, willing and able to so is a(n): | Tender |
| Sam buys a $750 TV from Acme TV for $500 on sale. Acme is to deliver the TV the next Saturday and collect on delivery. If Acme sells the TV to Wally for $825, Sam can sue for compensatory damages of: | $250 |
| If you do not voluntarily consent to a contract, you may: | Rescind or cancel the contract. |
| Jahna and Ike contract for the sale of Jahna’s horse for $1,000. Unknown to either party, the horse has died. Ike is: | Not required to pay due to the mutual mistake. |
| Gina induces Hugh to enter into a contract for the purchase of condominium about which Gina knowingly misrepresents a number of material features. When Hugh discovers the truth, Hugh can: | Cancel the contract on the basis of fraud. |
| Equity Company and Faye enter into a contract for Faye to cater a meeting of shareholders. When Faye’s schedule conflicts, she asks George to serve Faye’s coffee and pastries at the meeting. This transfer of duties is: | A delegation |
| Bell Medical Education Services enters into a contract to employ Chris as an instructor for two years to begin May 1st. One month before the term begins, Bell is underbid by a competitor and loses a major client, Delta Hospital Center. Bell calls up Chris | Bring an action immediately. |
| Sammy signs a real estate contract selling his house to Betty. Sammy changes his mind and refuses to sell. Betty sues Sammy: | The court can grant specific performance. |
| Acme painting offers 100% satisfaction guaranteed or your money back. Snidely contracts with Acme to have his house painted for $5,000. Upon completion Snidely nitpicks about barely visible brush strokes and refuses to pay anything. Acme sues. | At trial, expert testimony may establish that the paint job was up to commercial standards accepted by reasonable consumers and Snidely is unreasonably refusing. |
| The Uniform Commercial Code (UCC) attempts to provide which of the following: | A consistent and integrated framework of rules to deal with all aspects of commercial sales transactions. |
| City Car Company and Dave’s Autos enter into a contract for a sale of motor vehicles. City assures Dave’s that it has valid titles to the vehicles. Under the UCC, a warranty of title arises. | Automatically in most sales contracts. |
| Article 2 of the UCC governs: | Contracts for the sale of tangible movable property. |
| Under the UCC’s perfect tender rule, what options does a buyer have when the seller tenders nonconforming goods? | The buyer may accept all, part or none of the goods. |
| Goods that conform to contract specifications are called __________ under the UCC. | Conforming goods. |
| This warranty automatically arises in every sale or lease of goods made by a merchant who deals in goods of the kind sold or leased. | Implied warranty of merchantability. |
| Under the UCC, an offer can be accepted by any means reasonable under the circumstances. | True |
| Until the time for performance under a contract expires, the seller has a right to cure. | True |
| Retail Music, Inc. offers to buy from Super, Inc., a particular brand of blank CD’s. Without notifying Retail, Super shipped the CD’s of a different brand. This shipment is: | An acceptance of the offer and a breach of contract. |
| Liz, a salesperson for Moto-Cross Inc. tells Nancy, “This is the best bike I’ve ever seen. Anywhere else you would pay way over $10,000 for it.” This is: | Mere puffery, and expression of opinion. |
| Roy’s Chicken Shack orders 500 pounds of split chickens from Standard Foods, Inc., but Standard fails to deliver. Roy’s will probably be unable to enforce the contract since the parties: | |
| Among other things, the UCC governs contracts regarding: | The kinds of stuff people buy at Wal-Mart. |
| A company may be sued in products liability if: | It omitted instructions or warnings that could have reduced or avoided foreseeable risk. |
| Nita leaves her weed eater with OK Garden Sales & Services for repairs. OK repairs it and accidentally sells the weed eater to Prince who does not know that OK has no right to sell the weed eater. Under the Entrustment Act, Nita can recover from: | OK only and innocent Price is protected. |
| Charles goes to Charleston for some Charleston she-crab soup at a crab house known for its extra meaty crab soup. While slurping it down, he chokes on a bit of carb shell that the muscle is attached to. He incurs medical expenses and ruins his $1,500 desi | He loses because the soup is merchantable, crabmeat can be expected to have some shell in it. |
| The effect of open terms on a contract covered by the UCC is that: | The contract will be valid if the parties intended to form a contract and there is a reasonable basis for the court to grant a remedy. |
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sfrase
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