Business & Consumer Law

business & personal law Gary Nelson NAME: ______Contracts, Part I, Review

TRUE/FALSE: If the statement is true, circle the letter T in the answer column; if the statement is false, circle the letter F.

T or F 1. An oral contract is not enforceable at law.

T or F 2. Advertisements in newspapers, price tags, and signs in store windows are treated by the law as invitations to negotiate.

T or F 3. An acceptance of an offer to sell goods may not change the terms of the offer if both offeror and offeree are nonmerchants.

T or F 4. A valid contract must contain at least four of the six elements of a contract.

T or F 5. Consideration is the legal ability to enter a contract.

T or F 6. A contract between a minor and an adult may be voided by the minor but not by the adult.

T or F 7. In a unilateral contract, one person promises to do something if and when the other person performs some act.

T or F 8. An express contract must be written.

T or F 9. An offer must be definite and certain to be enforceable.

T or F 10. If the offeree uses a different method of communication from the offeror, the contract exists when the acceptance is received.

T or F ii. The UCC is a unified set of statutes that covers only the law of sales.

T or F 12. When a bilateral mistake is made, neither party may avoid the contract.

T or F 13. Individuals can make a false representation by not saying something that they should say.

T or F 14. A person may win a lawsuit for fraud even if no loss is suffered.

T or F 15. A threat to exercise one's legal rights is a form of duress.

T or F 16. People who cannot read English, but sign a contract written in English, are not bound by that contract.

T or F 17. A unilateral mistake usually does not void a contract.

T or F 18. If a false representation is innocently made, the injured party has no right to damages.

T or F 19. Fraud can be either intentional or accidental.

T or F 20. A contract entered into under duress cannot be enforced.

T or F 21. A material fact is one that can be touched or seen.

T or F 22. The purpose of contract law is to fulfill the reasonable expectations of one of the parties to a contract.

T or F 23. The term infancy describes a minor under 13 years old.

T or F 24. A minor has an absolute right to avoid a contract.

T or F 25. Minors who wish to avoid their contracts must do so before reaching the age of majority.

T or F 26. A minor may affirm part of a contract while disaffirming another part.

T or F 27. Minors entering into contracts with other minors have the right to avoid the contracts.

T or F 28. A person who enters into a contract while intoxicated may not disaffirm the contract. T or F 29. Under common law, one's "station in life" has no bearing on determining the necessity of a particular item.

T or F 30. In some states, married minors are treated as adults.

T or F 31. Aliens are not limited in their capacity to contract.

T or F 32. In most states, people reach a particular age at the beginning of the day before their birthday.

COMPLETION: Complete the sentence with the correct word or phrase.

33. After reaching the age of majority, a person may ______a contract made during minority by using, selling, or keeping the item, or by making payments.

34. Food, shelter, and medical care are ______.

35. Many states have given minors the capacity to enter into contracts for life insurance or ______insurance.

36. An offer to return merchandise is a ______.

37. A person who has not reached the age of majority is still in his or her ______.

38. The court may appoint a(n) ______to look after a mentally impaired person's affairs.

39. Contracts made by a mentally ill person who has been declared insane by a court action are ______.

40. Minors may avoid, or ______their contracts.

41. Agreements made under duress are either void or ______.

42. The party bringing suit in a lawsuit for fraud must prove that the party making the representation knew it was ______.

43. Overcoming a person's will through force is ______.

44. When actual physical force is used to cause another to enter a contract, the contract is ______.

45. A person who enters a contract because of fraud may either sue for damages or ______the contract.

46. To fully understand the nature of contracts we must understand the ______that make up a contract.

47. An offer must be definite, communicated to the offeree, and ______.

CASES: Read the case(s) below. Then write Yes or No to indicate your decision. Also check the letter of the supporting legal principle. yes or no 48. Alfred Levitz saw an advertisement in the Morning Blade that read, "Designer Swimsuits for Women Available at $5.00 each to the first 50 people to arrive at Berger's Department Store at 9 a.m. tomorrow." Although he was the first person to arrive at Berger's the next day, the salesperson refused to sell him a swimsuit, stating that they were for women only. Levitz claimed that Berger's had to sell him the swimsuit because the advertisement was an offer, which he accepted. Is Levitz correct? A. Advertisements are considered offers when they appear in a daily newspaper. B. Advertisements are always considered invitations to negotiate. C. Advertisements that contain very particular promises may be considered offers. D. Advertisements have no relationship to contract law. yes or no 49. Carl Monroe mailed an order to Keesha Hunt's company. Hunt mailed Monroe a confirmation. Hunt later learned that Monroe had a bad credit record and called to tell Monroe the deal was off. Monroe told Hunt she could not rescind without liability--the contract came into existence when Hunt sent the confirming letter. Is Monroe correct? When the offeree uses the same method of communication as the offeror, the contract exists when the A. acceptance is sent. B. acceptance is received. C. offer is received. D. offer is reconfirmed by the offeror. yes or no 50. Maria Santos, a recent immigrant, had not yet learned to read or speak English. Nevertheless, she went to buy an expensive stereo set without asking an English- speaking friend to accompany her. After signing the contract, Santos found out that she had not understood the payment plan. When she could not make the payments as detailed in the written agreement, the finance company threatened to repossess the stereo. Santos claimed she should not be bound by the terms because she could not read English. Is she correct? A. People are not bound by contract terms in a written agreement that they cannot understand. B. People are bound by contract terms in a written agreement that they have signed, even if they do not understand the terms. C. The parol evidence rule will allow non-English speaking people to void contracts. D. Only English-language contracts are recognized in court. yes or no 51. A camera salesman told Nick Nugent that the 35mm camera Nugent wanted to buy came with a telephoto lens. When Nugent examined the camera, its extra attachments, and a sales brochure, he found out that the salesman was incorrect. Nugent bought the camera anyway. Later he claimed that the salesman had defrauded him and that he was, therefore, entitled to rescind the contract. Is Nugent correct? A. Fraudulent agreements can be rescinded. B. The law allows a certain amount of "sales talk" without considering it to be fraudulent. C. If a person pays no attention to a misrepresentation, he cannot win a lawsuit based on fraud. D. Oral promises are considered part of a sales contract. yes or no 52. Charles Kubert, 17, wanted to buy a car. His father offered to help him, but Charles insisted on doing it himself. Accordingly, he purchased a brand new Corvette. A week later, Charles saw a TransAm he liked better. He took the Corvette back to the dealer. The car dealer told Charles that he could not disaffirm the contract. Is the car dealer correct? A. A minor is held responsible for the fair value of necessities. B. Contracts of minors are voidable. C. Contracts of minors are void. D. An adult may choose to enforce a contract made with a minor.