Question

3) Forbearance is defined as:

A) An invitation to negotiate.

B) An offer.

C) A counteroffer.

D) A bilateral contract.

E) Promising to refrain from doing something you are legally entitled to do.

4) In a bilateral contract, the consideration for each promise is ________.

A) an invitation to negotiate

B) forbearance

C) actually doing the act called for in the contract

D) a return promise

E) refraining from doing something the contracting party is otherwise legally entitled to do

5) For a promise to be enforced by the courts, there must be ________.

A) a written contract

B) forbearance

C) an invitation to negotiate

D) consideration

E) a bilateral contract

6) An example of forbearance is ________.

A) selling assets to avoid payment to creditors

B) one party making a promise, knowing the other party will rely on it

C) refraining from the use of liquor, assuming the promisor is of legal drinking age

D) a promise to do something that you are already obligated to do

E) past consideration

7) Suppose that Dakiyah promises to pay Fernando $300 for his television. Fernando promises to sell Dakiyah his television for $300. The parties have not documented the transaction in writing. Which of the following is an accurate statement regarding this arrangement?

A) There is no contract between the parties because the promises are not in writing.

B) This is a unilateral contract.

C) This is merely an invitation to negotiate.

D) There is an oral contract.

E) Dakiyah's promise constitutes an offer, while Fernando's promise is a counteroffer.

8) In a unilateral contract, the consideration for a promise is ________.

A) an act

B) a return promise

C) forbearance

D) an invitation to negotiate

E) a counteroffer

9) Which of the following is an exception to the rule requiring consideration?

A) Bilateral contracts

B) Promissory estoppel

C) Unilateral contracts

D) Forbearance

E) Specific performance

10) When would a court consider the adequacy of consideration?

A) To verify that property was sold at its fair market value.

B) To verify that a sale of assets was not done to avoid payment to creditors.

C) To verify that one party gave a promise in return for the act of another party.

D) To verify that each party gave a valid promise to the other party.

E) When one party has promised forbearance as consideration.

11) Sam offers Betty his bicycle for $75. Which of the following is an example of an illusory promise on the part of Betty?

A) "I'll take it."

B) "I'll take it if I decide to do so."

C) "I won't pay $75, but I will pay $50."

D) "I'll take it if you will let me try it out first and the brakes work well."

E) "I'll take it if you will put new tires on it first."

12) A person who has legal ________ to contract is one who has the mental ability to understand his or her rights and obligations under a contract.

A) affirmance

B) capacity

C) ratification

D) construction

E) assent

13) A person may have either no capacity, and therefore any attempted contract is ________, or limited capacity, resulting in ________ contracts.

A) void; voidable

B) voidable; void

C) conditional; unconditional

D) unconditional; conditional

E) informal; formal

14) A minor may be given full legal capacity to enter into contracts when he or she becomes ________.

A) emancipated

B) aware

C) sentient

D) employed full-time

E) employed at least part-time

15) In order to disaffirm a contract, a minor must ________.

A) petition the court

B) express in writing the intention to disaffirm

C) express an intention by words or actions

D) have his parents confirm in writing their consent to the disaffirmance

E) select a portion of the contract to disaffirm, because a minor cannot disaffirm an entire contract

16) When must a disaffirmance of a contract based on minority occur?

A) Before or within a reasonable time of the minor's reaching the age of majority

B) Within thirty days of the minor's reaching the age of majority

C) Within sixty days of the minor's reaching the age of majority

D) Within ninety days of the minor's reaching the age of majority

E) Within one year of the minor's reaching the age of majority

17) As a general rule, most states will not allow a minor to disaffirm contracts for which of the following?

A) Life insurance

B) Health insurance

C) Psychological counseling

D) Life insurance, health insurance, and psychological counseling

E) Health insurance and psychological counseling, but a minor does have the right to disaffirm a contract for life insurance, because life insurance premiums have a disparate impact (actuarially) on minors

18) What is the purpose of the minor's right to disaffirm contracts?

A) To reduce the judicial caseload for breach of contract actions

B) To allow minors a windfall in terms of keeping property without paying for it

C) To punish adults who contract with minors

D) To give minors superior bargaining power in negotiating contracts

E) To protect the minor from competent parties that might otherwise take advantage of the minor

19) A contract that supplies the minor with the basic needs such as food, clothing, and shelter is called ________.

A) a unilateral contract

B) an implied contract

C) a contract for a necessary

D) a ratification

E) a contract of adhesion

20) Which of the following occurs when a person reaches the age of majority and states, either orally or in writing, that he or she intends to be bound by the contact entered into as a minor?

A) Implied ratification

B) Express ratification

C) Express novation

D) Implied novation

E) Disaffirmance

21) Which of the following is a correct statement regarding the remedy available for an unenforceable agreement?

A) Only compensatory damages are available for an unenforceable agreement.

B) Only consequential damages are available for an unenforceable agreement.

C) No remedy is available for an unenforceable agreement.

D) Compensatory damages and punitive damages are available for an unenforceable agreement, depending on the circumstances of the case.

E) Compensatory damages, consequential damages, and punitive damages are available for an unenforceable agreement, depending on the circumstances of the case.

22) Bob is hired to do computer sales for an electronics store. He agrees that if he leaves his employment, he will not work for another computer store within twenty-five miles for a period of two years. This type of agreement is called a(n) ________.

A) covenant not to compete

B) implied-in-law contract

C) quasi-contract

D) termination agreement

E) public policy agreement

23) Major obstacles to genuine assent include all but which of the following?

A) mistake

B) misrepresentation

C) factual capacity

D) undue influence

E) duress

24) A(n) ________ is an erroneous belief about the facts of a contract at the time the contract is concluded.

A) assumption

B) projection

C) abeyance

D) mistake

E) accord

25) Which of the following is necessary in order to establish that a mutual mistake involving a basic assumption about the subject matter of a contract was made?

A) That the mistake involved the existence, quality, or quantity of the items to be exchanged.

B) That the mistake involved whether a party could profit from the contract.

C) That the mistake involved whether a party could profit from the contract or whether a party misunderstood the time constraints involved in the contract.

D) That the mistake involved the identity of parties to the contract or whether a party misunderstood the time constraints involved in the contract.

E) That the mistake involved a misunderstanding regarding the applicability of the Uniform Commercial Code to the contract.

26) For a mutual mistake to interfere with legal consent, it must involve a ________ effect on the agreement.

A) conditional

B) material

C) tertiary

D) criminal

E) statutory

27) An error by one party about a material fact is known as a ________ mistake.

A) primary

B) mutual

C) unilateral

D) secondary

E) conditional

28) Distinguishing between unilateral and mutual mistakes is important because the classification bears on which contracts ________.

A) are void

B) are voidable

C) lack consideration

D) lack legality

E) are entitled to enforcement in a court of equity

29) George offers to sell Penelope a ring that George found in his yard. He and Penelope look at the ring and decide that they are not sure what it is, probably just a shiny stone. Penelope pays George $10 for the ring. The ring turns out to be a diamond worth much more than $10. George wants the ring back, and Penelope refuses. What is the most likely result?

A) The ring will be returned to George because of mutual mistake.

B) The ring will be returned to George because of unilateral mistake.

C) The ring will be returned to George because of equity.

D) The ring will remain with Penelope unless George can establish that she was negligent in not recognizing the ring's true value.

E) The ring will remain with Penelope because the parties contracted on the assumption that they did not know the value of the ring.

30) Which of the following must a mutual mistake involve in order for a mutual mistake to interfere with legal consent?

A) A basic assumption about the subject matter of the contract.

B) A material effect on the agreement.

C) A basic assumption about the subject matter of the contract and an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement, but not a material effect on the agreement.

D) A basic assumption about the subject matter of the contract, a material effect on the agreement, and an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement.

E) An admission by one of the parties that a misrepresentation occurred.

31) A person who makes a misrepresentation but has no knowledge about the falsity of the statement does not have ________.

A) information

B) premeditation

C) planning

D) plotting

E) scienter

32) When the party making the statement would have known the truth about the fact had he used reasonable care to discover or reveal it, the statement is a(n) ________.

A) innocent misrepresentation

B) fraudulent misrepresentation

C) non-material misrepresentation

D) negligent misrepresentation

E) commercial disparagement

33) Which of the following are elements of fraudulent misrepresentation?

A) A false statement and a mutual mistake

B) A false statement and intent to deceive

C) Intent to deceive and negligent representation of a material fact

D) A commercial relationship between the parties and negligent misrepresentation of a material fact

E) A non-commercial relationship between the parties and duress

Answer 1

3. E Promising to refrain from doing something you are legally entitled to do. forbearance means tolerance. a forbearance agreement is a bilateral contract.

4. In a bilateral contract, the consideration for each promise is ________.

B. forbearance. the bilateral agreement means to the agreement between two parties with tolerance.

5) For a promise to be enforced by the courts, there must be ________.

A) a written contract, without a contract one can't enforcedby legal framework.

B) forbearance

C) an invitation to negotiate

D) consideration

E) a bilateral contract

6) An example of forbearance is ________.

A) selling assets to avoid payment to creditors

B) one party making a promise, knowing the other party will rely on it. this is all about the forbearing of a lender with consideration of borrowers' condition.

C) refraining from the use of liquor, assuming the promisor is of legal drinking age

D) a promise to do something that you are already obligated to do

E) past consideration

7) Suppose that Dakiyah promises to pay Fernando $300 for his television. Fernando promises to sell Dakiyah his television for $300. The parties have not documented the transaction in writing. Which of the following is an accurate statement regarding this arrangement?

A) There is no contract between the parties because the promises are not in writing.

B) This is a unilateral contract.

C) This is merely an invitation to negotiate.

D) There is an oral contract.

E) Dakiyah's promise constitutes an offer, while Fernando's promise is a counteroffer.

8) In a unilateral contract, the consideration for a promise is ________.

A) an act

B) a return promise

C) forbearance

D) an invitation to negotiate

E) a counteroffer

9) Which of the following is an exception to the rule requiring consideration?

A) Bilateral contracts

B) Promissory estoppel

C) Unilateral contracts

D) Forbearance

E) Specific performance

10) When would a court consider the adequacy of consideration?

A) To verify that property was sold at its fair market value.

B) To verify that a sale of assets was not done to avoid payment to creditors.

C) To verify that one party gave a promise in return for the act of another party.

D) To verify that each party gave a valid promise to the other party.

E) When one party has promised forbearance as consideration.

11) Sam offers Betty his bicycle for $75. Which of the following is an example of an illusory promise on the part of Betty?

A) "I'll take it."

B) "I'll take it if I decide to do so."

C) "I won't pay $75, but I will pay $50."

D) "I'll take it if you will let me try it out first and the brakes work well."

E) "I'll take it if you will put new tires on it first."

12) A person who has legal ________ to contract is one who has the mental ability to understand his or her rights and obligations under a contract.

A) affirmance

B) capacity

C) ratification

D) construction

E) assent

13) A person may have either no capacity, and therefore any attempted contract is ________, or limited capacity, resulting in ________ contracts.

A) void; voidable

B) voidable; void

C) conditional; unconditional

D) unconditional; conditional

E) informal; formal

14) A minor may be given full legal capacity to enter into contracts when he or she becomes ________.

A) emancipated

B) aware

C) sentient

D) employed full-time

E) employed at least part-time

15) In order to disaffirm a contract, a minor must ________.

A) petition the court

B) express in writing the intention to disaffirm

C) express an intention by words or actions

D) have his parents confirm in writing their consent to the disaffirmance

E) select a portion of the contract to disaffirm, because a minor cannot disaffirm an entire contract

16) When must a disaffirmance of a contract based on minority occur?

A) Before or within a reasonable time of the minor's reaching the age of majority

B) Within thirty days of the minor's reaching the age of majority

C) Within sixty days of the minor's reaching the age of majority

D) Within ninety days of the minor's reaching the age of majority

E) Within one year of the minor's reaching the age of majority

17) As a general rule, most states will not allow a minor to disaffirm contracts for which of the following?

A) Life insurance

B) Health insurance

C) Psychological counseling

D) Life insurance, health insurance, and psychological counseling

E) Health insurance and psychological counseling, but a minor does have the right to disaffirm a contract for life insurance, because life insurance premiums have a disparate impact (actuarially) on minors

18) What is the purpose of the minor's right to disaffirm contracts?

A) To reduce the judicial caseload for breach of contract actions

B) To allow minors a windfall in terms of keeping property without paying for it

C) To punish adults who contract with minors

D) To give minors superior bargaining power in negotiating contracts

E) To protect the minor from competent parties that might otherwise take advantage of the minor

19) A contract that supplies the minor with the basic needs such as food, clothing, and shelter is called ________.

A) a unilateral contract

B) an implied contract

C) a contract for a necessary

D) a ratification

E) a contract of adhesion

20) Which of the following occurs when a person reaches the age of majority and states, either orally or in writing, that he or she intends to be bound by the contact entered into as a minor?

A) Implied ratification

B) Express ratification

C) Express novation

D) Implied novation

E) Disaffirmance

21) Which of the following is a correct statement regarding the remedy available for an unenforceable agreement?

A) Only compensatory damages are available for an unenforceable agreement.

B) Only consequential damages are available for an unenforceable agreement.

C) No remedy is available for an unenforceable agreement.

D) Compensatory damages and punitive damages are available for an unenforceable agreement, depending on the circumstances of the case.

E) Compensatory damages, consequential damages, and punitive damages are available for an unenforceable agreement, depending on the circumstances of the case.

22) Bob is hired to do computer sales for an electronics store. He agrees that if he leaves his employment, he will not work for another computer store within twenty-five miles for a period of two years. This type of agreement is called a(n) ________.

A) covenant not to compete

B) implied-in-law contract

C) quasi-contract

D) termination agreement

E) public policy agreement

23) Major obstacles to genuine assent include all but which of the following?

A) mistake

B) misrepresentation

C) factual capacity

D) undue influence

E) duress

24) A(n) ________ is an erroneous belief about the facts of a contract at the time the contract is concluded.

A) assumption

B) projection

C) abeyance

D) mistake

E) accord

25) Which of the following is necessary in order to establish that a mutual mistake involving a basic assumption about the subject matter of a contract was made?

A) That the mistake involved the existence, quality, or quantity of the items to be exchanged.

B) That the mistake involved whether a party could profit from the contract.

C) That the mistake involved whether a party could profit from the contract or whether a party misunderstood the time constraints involved in the contract.

D) That the mistake involved the identity of parties to the contract or whether a party misunderstood the time constraints involved in the contract.

E) That the mistake involved a misunderstanding regarding the applicability of the Uniform Commercial Code to the contract.

26) For a mutual mistake to interfere with legal consent, it must involve a ________ effect on the agreement.

A) conditional

B) material

C) tertiary

D) criminal

E) statutory

27) An error by one party about a material fact is known as a ________ mistake.

A) primary

B) mutual

C) unilateral

D) secondary

E) conditional

28) Distinguishing between unilateral and mutual mistakes is important because the classification bears on which contracts ________.

A) are void

B) are voidable

C) lack consideration

D) lack legality

E) are entitled to enforcement in a court of equity

29) George offers to sell Penelope a ring that George found in his yard. He and Penelope look at the ring and decide that they are not sure what it is, probably just a shiny stone. Penelope pays George $10 for the ring. The ring turns out to be a diamond worth much more than $10. George wants the ring back, and Penelope refuses. What is the most likely result?

A) The ring will be returned to George because of mutual mistake.

B) The ring will be returned to George because of unilateral mistake.

C) The ring will be returned to George because of equity.

D) The ring will remain with Penelope unless George can establish that she was negligent in not recognizing the ring's true value.

E) The ring will remain with Penelope because the parties contracted on the assumption that they did not know the value of the ring.

30) Which of the following must a mutual mistake involve in order for a mutual mistake to interfere with legal consent?

A) A basic assumption about the subject matter of the contract.

B) A material effect on the agreement.

C) A basic assumption about the subject matter of the contract and an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement, but not a material effect on the agreement.

D) A basic assumption about the subject matter of the contract, a material effect on the agreement, and an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement.

E) An admission by one of the parties that a misrepresentation occurred.

31) A person who makes a misrepresentation but has no knowledge about the falsity of the statement does not have ________.

A) information

B) premeditation

C) planning

D) plotting

E) scienter

32) When the party making the statement would have known the truth about the fact had he used reasonable care to discover or reveal it, the statement is a(n) ________.

A) innocent misrepresentation

B) fraudulent misrepresentation

C) non-material misrepresentation

D) negligent misrepresentation

E) commercial disparagement

33) Which of the following are elements of fraudulent misrepresentation?

A) A false statement and a mutual mistake

B) A false statement and intent to deceive

C) Intent to deceive and negligent representation of a material fact

D) A commercial relationship between the parties and negligent misrepresentation of a material fact

E) A non-commercial relationship between the parties and duress