Question

48.  A “novation” in contract law means that:

a. a debt is completely erased

b. agreed upon settlement of a debt

c. the case is completely dropped as to any party

d. none of the above

49.  A valid basis for “terminating” of a contract may be:

a. duress

b. fraud

c. not reading the contract

d. not negotiating the contract

e. all of the above

f.  a and b only

50. “Promissory estoppel” is:

a. when a person includes in a written contract a binding term

b. when a person takes steps in furtherance of a contract

c. a legal theory to enforce the parole adhesion rule

d. all of the above

e. b and c only

51.  Circulars, catalogs and newspaper advertisement are:

a. considered an offer

b. considered an invitation to bid or bargain

c. contracts with reserve

d. all of the above

e. none of the above

52.  In a contract situation the common law requirement to agree to the exact language is referred to as:

a. mirror consent rule

b. acceptance rule

            c. unilateral agreement rule

d. mailbox rule

e. none of the above

Answer 1

48. The answer is option (b) Agreed upon settlement of debt.

Novation is the process by which the original contract is extinguished and replaced with another, under which a third party takes up rights and obligations duplicating those of one of the parties to the original contract.

This means that the original party transfer both the benefits and burdens under the contract. The benefits could be in the form of money or the benefit of a service, while burdens are what the party is obliged to do in order to receive the benefits, for example, payment for a service or goods, or the performance of a service.

49.The answer is option (b) Fraud.

Fraud – A contract may be terminated by a party in the event where the other party has committed a fraudulent activity to obtain the consent of the innocent party by deceiving them

50. The answer is option(c) a legal theory to enforse parole adhesion rule

Parol evidence specifically refers to oral testimony given in court, though the term is most commonly used in the context of contract law, where it refers to extraneous or superfluous evidence, such as an oral or written agreement that was not part of the original contract. The parol evidence rule states that once a written agreement has been signed by all of the parties, it cannot be changed by an oral agreement, except when fraud or a serious mistake is involved

51. The answer is option (b) considered as an invitation to bid or bargain

An advertisement is usually not seen as an offer (even if it may use the word 'OFFER'); instead it is seen as an invitation to treat - that is, an invitation for you as a consumer to go forth and make an offer to the advertiser. Even advertisements with published price lists are not offers. The sellers do not have an obligation

to sell the goods to you at the advertised prices.

However, an advertisement can be seen as an offer for a unilateral contract.

52. The answer is option (b) acceptance rule