exam 3 multiple choice Flashcards by Krista D'Archangelo

Noncompetition agreements are:

more common today than they were in the past, although policy issues they raised in the 1700s have never gone away.

How well did you know this?

Not at all

Perfectly

In January, Alex promised to pay Y-K Inc. $5,000 if it would refrain from filing suit against him on a breach of contract action. Y-K agreed and accepted a $5,000 check from Alex. Which of the following statements is correct?

Y-K’s promise to refrain from suing Alex was supported by legal consideration and is enforceable.

How well did you know this?

Not at all

Perfectly

The intent of the offeror to extend an offer to the offeree is generally determined by reference to:

the words and conduct of the offeror.

How well did you know this?

Not at all

Perfectly

If Rudy offers Oscar $200 for his laptop valued at $600 and Oscar agrees, a court will probably:

not set aside the agreement based on the adequacy of the consideration.

How well did you know this?

Not at all

Perfectly

Zero, Inc. agreed to build Millie a storage building for $8,000. After beginning the project, Zero realized that it could not complete the job and make a profit. Zero demanded $9,500 to complete the building. Millie agreed to pay the $9,500. When the project was complete, Millie tendered $8,000 to Zero for the job. If Zero sues Millie for the remaining $1,500:

Zero will lose because there was no legal consideration to support the additional $1,500.

How well did you know this?

Not at all

Perfectly

Barb has been a children’s day care provider for several years in the small town of Sallton. She has decided to give it all up and move to the big city for excitement and adventure. She sells her business to Ken, agreeing not to open a competing business within five miles of Sallton for a period of nine months. After five months of the big city life, Barb is broke and moves back to Sallton. She opens a small day care business. Ken sues on the noncompete clause. What is the most likely result?

Ken wins. The agreement is enforceable.

How well did you know this?

Not at all

Perfectly

Which of the following is an example of an exculpatory clause?

Seller is not responsible for property damage regardless of the cause of the injury.

How well did you know this?

Not at all

Perfectly

When Mohammed was hired by Pomico, Inc., he signed the following agreement, “Upon termination of my employment with Pomico, I agree not to work for a competing company within 30 miles of Pomico’s headquarters for one year.” This agreement, important to protecting secret information developed in the employer’s business, is:

an enforceable agreement not to compete.

How well did you know this?

Not at all

Perfectly

Marty, a 16-year-old, contracts with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle. Marty agrees to make monthly payments until the purchase price plus interest are paid in full. Which of the following is correct?

The contract is voidable by Marty.

How well did you know this?

Not at all

Perfectly

Marty, a 16-year-old, contracted with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle. He agreed to make monthly payments until the purchase price plus interest were paid in full. It is three years later and Marty has not disaffirmed the contract and has made regular payments on the cycle since turning 18. Which of the following is correct?

Marty has ratified the contract and is now bound by its terms.

How well did you know this?

Not at all

Perfectly

Deborah purchased a boat from Sun ‘N Surf Marine. She later learned that the salesman had made misrepresentations to induce her to make the purchase. Under UCC Section 2-721, Deborah can rescind the contract:

and sue for damages whether the misrepresentation was fraudulent or innocent

How well did you know this?

Not at all

Perfectly

Ryan, a minor, contracted to sell his auto to Ed, a 28-year-old. Ryan later refused to complete the sale. If Ed sues to enforce the contract, Ed will:

lose, because the contract is voidable by Ryan.

How well did you know this?

Not at all

Perfectly

Mentally infirmed Sasha contracts to purchase a piano for $2,500 in 60 monthly installment payments. Six months later she tries to void the contract on grounds of mental impairment. A court will:

normally void the contract but will require Sasha to return the piano.

How well did you know this?

Not at all

Perfectly

If Becky promises not to drink alcohol until she becomes a legal adult in exchange for Ben’s promise of $1,000, the agreement is:

not enforceable because Becky does not have a legal right to drink alcohol.

How well did you know this?

Not at all

Perfectly

Claude agrees to lease his house to Irvin for nine months, the lease to begin six months from the signing of the contract. Under the statute of frauds:

the lease is required to be in writing because of the one-year rule.

How well did you know this?

Not at all

Perfectly

Under a contract for the sale of land, the statute of frauds:

requires the defendant to sign the agreement.

How well did you know this?

Not at all

Perfectly

Which of the following promises ordinarily must be in writing to be enforceable?

Promises made as a part of a prenuptial agreement.
The agreement to sell a car for $1500.
The promise by an executor of an estate to pay a debt of the decedent.

How well did you know this?

Not at all

Perfectly

Wally owns 200 acres of land. Wally offers to sell the land to Robert for $1,500 per acre. Robert replies that he does not need 200 acres of land but would like to buy 40 acres at $1,500 per acre. Wally agrees to sell but does not identify which 40 acres. Later, Wally refuses to sell any land to Robert. What is the result?

Wally wins; this agreement is too indefinite since it does not identify which 40 acres are to be sold.

How well did you know this?

Not at all

Perfectly

Willis and Leslie orally agree to the sale of a parcel of land for $50,000: one-half payable now as a down payment; one-half payable in 30 days at the time of closing when the title will be transferred. The buyer, Willis, is to have possession immediately. Willis pays Leslie $25,000, takes possession of the land, and starts building a house. At the time of closing, Willis has made a substantial beginning on the house. However, Leslie refuses to transfer the title, claiming the oral contract is not enforceable. This contract is:

enforceable, because Willis has partially performed the oral contract and made improvements on the land.

How well did you know this?

Not at all

Perfectly

In order to satisfy the statute of frauds, a writing must:

be signed by the defendant and contain the name of each party, the subject matter of the agreement, and the essential terms and promises.

How well did you know this?

Not at all

Perfectly

Which of the following is most likely to constitute fraud?

Silence as to a toxic waste problem on real property that the buyer would not reasonably find.

How well did you know this?

Not at all

Perfectly

When a party to a contract makes a unilateral mistake, the contract:

generally cannot be rescinded by the mistaken party unless the contract is unconscionable or it is proven that the nonmistaken party knew of the error.

How well did you know this?

Not at all

Perfectly

For the purposes of the statute of frauds, an interest in land includes:

a house.
a real estate mortgage.
an easement.

How well did you know this?

Not at all

Perfectly

Which of the following promises ordinarily must be in writing to be enforceable?

Promises made as a part of a prenuptial agreement.
The agreement to sell a car for $1500.
The promise by an executor of an estate to pay a debt of the decedent.

How well did you know this?

Not at all

Perfectly

Brandon orally assigned his right to $100 to Will as a gift. This assignment is:

valid even though it was oral and there was no consideration from Will.

A third party beneficiary's status occurs:

when the contract is created.

The beneficiary of a life insurance policy paid for by the insured would ordinarily be:

a donee beneficiary.

The status of a third party is determined by:

the intent of the contracting parties.

A nonparty to a contract may enforce the contract if the person is:

- a donee beneficiary. | - a creditor beneficiary.

Johann, a well-known musician, agrees to give ten guitar lessons to Elton for $2,000. Nothing in the contract itself prohibits a delegation. If Johann delegates his obligation to Eugene, a second-year musical student and enthusiastic guitar player, then the delegation will probably be:

prohibited because Johann and Eugene have very different skill levels.

Linda assigns to Ben a right to receive rent payments. The law implies the following warranty on Linda’s part:

Linda actually has a right to the rental payments.

Molly and Craig are the original parties to a contract. Craig is obligated to design a Website for Molly. They subsequently make an agreement with Eric that Eric should take the place of Craig and assume all of Craig's rights and duties under the contract. The agreement releases Craig from his obligations under the contract. This agreement is:

an accord and satisfaction.

A donee beneficiary:

usually does not give consideration in return for the gift.

Which statement most accurately describes third party beneficiary rights?

A beneficiary may enforce a contract if the parties intended to benefit him and if enforcing the promise will satisfy a duty of the promisee to the beneficiary.

Wright Company contracted with the city of St. Louis to train and employ disadvantaged youths. If Wright fails to fulfill the contract and is sued by one of the disadvantaged youths, the youth would:

lose, as he is an incidental beneficiary.

Tyron purchased a vacant lot and entered into a contract with BZ Inc. to construct a shopping center on the site. Douglas heard about this contract and built a restaurant on an adjoining piece of property because of the planned shopping center. Tyron was unable to raise the necessary capital and was unable to perform the contract with BZ, Inc. Douglas sued Tyron for breach of contract as a third party beneficiary. Douglas will probably:

lose as a third party incidental beneficiary.

Which of the following duties can probably be delegated?

An agreement to paint a house.

An assignment:

for consideration is irrevocable.

An assignment is valid and enforceable against all parties:

from the moment the obligor is notified from any source.

Jerry purchased a state-of-the-art computer for his personal use from Computer City on an installment loan contract thinking he would make monthly payments directly to Computer City. The sales contract stated that in the event the contract is assigned to a third party, the purchaser (Jerry) promises he will not assert any claim or defense against the assignee which he might have against Computer City. Computer City immediately assigns the contract rights to Finance USA. The computer stops working within two weeks of the purchase.

In general, this type of waiver is not permitted in consumer contracts, so Jerry can raise his claim against Finance USA.

Cheryl enters into a contract with Gabe. In this contract, Cheryl asks Gabe to pay the money he owes her from the contract to her friend Leah because Leah is having financial troubles. Leah is:

a third party donee beneficiary.

Susan took out a life insurance policy on herself, paying all of the premium payments. She named her daughter, Jessica, as the beneficiary under the policy. Jessica has not given anything in consideration for the policy. Jessica is:

a donee beneficiary who has rights to enforce the policy once Susan dies.

Ted and Alice own their recreational vehicle subject to a security agreement to Third U.S. Bank to secure the repayment of the purchase money loan. Ted and Alice sell their RV to Bob and Carol, who agree to take over the loan payments to the bank. There is no novation with the bank. Under these facts, if Bob and Carol do not make the loan payments, Third U.S. Bank:

can sue Bob, Carol, Ted, and Alice.

A rock group assigns its payment under a performance contract to the Costume Shop, a business that has supplied the group with outrageous stage outfits, and to which the group owes a great sum of money. Under this arrangement the rock group is the:

assignor.

a valid assignment because this is a simple transfer of the right to receive money.

Garth's Imports sold a car to Wally on credit for $30,000. Garth assigned to Cassandra all of his rights to receive money from Wally. Cassandra did not inform Wally of the assignment. Therefore, Wally continued to make the next three payments directly to Garth. Shortly thereafter, Garth left the country with the money. If Cassandra sues Wally for the missing three payments:

Cassandra will not be able to collect the money from Wally.

M & E contracted to sell 500 music stands to Coda, Inc. M & E shipped the stands in accordance with the agreement. Coda paid for the stands as promised. The contract between M & E and Coda is discharged by:

full performance.

As set forth in the Restatement Second of Contracts, which of the following duties are imposed on the parties in the performance and enforcement of a contract?

good faith; fair dealing

The first step a court takes in choosing a remedy is to determine:

what interest it is trying to protect.

One reason you may not need a written contract is:

the terms of the agreement are simple and the value of the transaction is small.

What is a choice of law provision:

determine which state’s laws will be used to interpret the contract

When a party to a contract intentionally makes the terms of a contract unclear, it is called:

vagueness.

In determining whether parties intended to reduce their agreement to writing, which of the following factors would normally NOT be considered:

whether or not the terms are complete.

In the case of scrivener’s errors (commonly known as typos), a court will usually:

reform the contract if it is clear that the mistake is not what the parties intended.

If the subject of the contract includes issues that may be controversial, it is best

deal with them up front before the relationship is strained.

The title of a contract should be:

descriptive of the agreement, and typed in all capital letters.

When one party to a contract fails to perform as promised, it is called:

breach.

If each party’s promises are listed separately in the contract, the are probably:

reciprocal promises.

Statements of facts about the past and present are called:

representations and warranties.

Standard provisions in a contract that are often listed under the heading “Miscellaneous” are called:

boilerplate.

Which of the following is NOT a standard provision frequently found in contracts?

choice of compensation..

In a contract modification, the phrase, “charged with such amendment” means:

the party who will be adversely affected by the change.

Which of the following is NOT one of the three ways to amend a written contract?

verbally agreeing to the changes and shaking hands on the deal.

Bob, a house builder, contracts with Ollie to build a house on Ollie's lot. Bob hires Rob to take his place as the builder on this contract. What has Bob done?

Delegated his duties.

Which of the following statements is incorrect concerning arbitration?

The losing party in an arbitration can file an appeal in a District Appellate Court.

Ralph is a professional football player. He signs a valid contract with the Jets. Later, he claims that he was also promised free use of the Jets’ private jet, but this was not in the contract. What type of clause in his contract would prevent him from flying away with this claim?

An integration clause.

A force majeure event is:

a natural disaster that claims human life or leads to the declaration of a state of emergency.

A+ Modeling Agency signs a contract with Sandi to do a photo shoot for the local used car dealer’s advertising. The contract was probably written by:

A+ Modeling Agency’s lawyer.

Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days. The parties negotiated and meant to say in the written agreement, delivery in 50 days. If the evidence is clear that the two parties intended to agree to 50 days, the courts will probably apply the remedy of:

reformation.

A letter of intent is not likely to be enforceable unless:

it is clear that both parties intended to be bound by the letter.

Nate works as a carnival barker. His employment contract specifies that he can be fired if he “loses his voice.” This is an example of:

ambiguity.

Farmer’s Fortune Insurance has a contract with Farmer Fran to insure her crops against insect damage. The contract does not specify which insects are covered or how much damage is necessary to make a claim. The contract will probably be enforced in favor of:

Farmer Fran.

Which of the following is generally NOT in the introductory paragraph of a contract?

The duties of the parties.

Which statement is true about definitions in a contract?

The parties to the contract may be defined with shorter designations than their actual names.

Affirmative action programs:

are permissible only if they have time limits and nondiscriminatory alternatives are not available.

Mark was refused employment at a Christian Bookstore because he was not a "born-again Christian." If Mark brings a Title VII action against the bookstore, its best defense would be:

being a "born-again Christian" is a bona fide occupational requirement

The Jesperson v. Harrahs case involved the issue:

Whether female employees could be forced to wear makeup while working.

Which of the following may be legitimate nondiscriminatory criteria for selection of an employee?

educational level.

ADA reasonable accommodations may include:

- modification of equipment. - ramps for accessibility. - flexible work schedules.

Which of the following would probably not be required of employers to reasonably accommodate for religious beliefs?

closing the business on Sundays.

Maude was denied employment with Trucks R Us as a warehouse worker because she didn't meet the weight requirement of 160 pounds. Trucks argued the weight requirement was reasonable because warehouse workers often have to lift things weighing up to 100 pounds. If she sues Trucks, she will probably:

win, as the weight requirement is discriminatory and doesn't appear necessary for the requirement of lifting 100 pounds.

Laura intends to file a Title VII lawsuit against her employer. Which of the following is true?

Laura is required to first submit her claim to the Equal Employment Opportunity Commission.

Larry works as an exotic dancer at Silly-Cone, an adult nightclub. Though he gets tips from the patrons, Larry is paid a weekly salary. Larry discovers that though he works the same number of hours, female dancers are paid a salary double his. If Larry sues the Silly-Cone management, who will win?

Silly-Cone if they have a legitimate non discriminatory reason for the pay disparity.

Mackey wants to work as a security guard. However the employer hires Wanda instead. The primary reason the employer chose Wanda is her gender. What is the best defense against Mackey’s sex discrimination suit?

Wanda will supervise girls and be responsible for searching female employees when necessary.

Which of the following is NOT an available remedy for infractions of Title VII?

punitive damages up to $1 million

When determining if an accommodation for a disability is reasonable, courts consider:

if it imposes undue hardship on the company

It is acceptable to ask a job candidate:

Are you currently using illegal drugs?

The Equal Pay Act requires:

Employees of each gender to receive equal pay for equal experience and equal work.

Title VII does NOT prohibit:

employment tests.

Discrimination under Title VII does NOT include:

refusing to hire a 15 year old boy

To prove a disparate treatment case: the plaintiff must:

show that any reasoning presented by the defendant is just a pretext, not legitimate reasons for the treatment.

To prove a disparate impact case, the plaintiff must:

only show that the employer has a rule that excludes too many people in a protected group.

Valid defenses to charges of discrimination include all of the following, except:

Test scores

Affirmative action programs have arisen from all of the following except:

Title VII requirements

Quid pro quo means:

“one thing for another”

A company is not liable for sexual harassment committed by its employees if:

it used reasonable care to prevent sexual harassment

Which statement is true about procedures for filing a Title VII case?

The Equal Employment Opportunity Commission will sue on behalf of the victim and pay the legal bills.

The Age Discrimination in Employment Act (ADEA) of 1967 prohibits age discrimination against employees or job applicants who are:

at least 40 years old

The definition of a major life activity (used in determining if a person is disabled) includes:

walking