BAM 317 Common law as a source of law for contracts: a. comes primarily from federal law

BAM 317 Business Law Unit 31) Common law as a source of law for contracts:a. comes primarily from federal lawb. comes exclusively from state lawc. comes exclusively from federal lawd. comes primarily from state lawe. comes equally from state and federal law2) A contract is formed by the performance of the requested act in what kind(s) ofcontract?a. bilateralb. unilateralc. both A and Bd. neither A nor B3) What is required for a contract to be an express contract?a. It is written.b. Agreement has been inferred.c. It is written and signed.d. It is performed immediately after formation.e. It is performed for mutual bene t.4) What kind of contract is based on the conduct of the parties?a. expressb. action-orientedc. implied-in-factd. implied-in-lawe. quasi-contract5) Under the objective theory of contracts, a contract could result from an offermade:a. in jestb. in angerc. due to a need to sell an item quicklyd. due to undue excitement6) What is the distinguishing characteristic that makes a contract a formal contract?a. a signature by both partiesb. the contract being in writingc. a legal requirement that the contract be in a speci c formd. all possible scenarios are addressed in the contract termsUnit 3 ExaminationBAM 317 Business Law1637) Otto approaches Edie and says, “If you pick up my new suit for me at the malltomorrow, I’ll pay you $20.” Edie replies, “I don’t know if I’ll have time to get it, butI’ll see if I get a chance.” As a result of this conversation, which of the following istrue?a. Otto and Edie have formed a bilateral contract.b. Edie has a legal obligation to use her best efforts to pick up the suit.c. A contract will be formed only if Edie picks up the suit.d. The contract which they have formed is voidable because Edie did not obligateherself.8) Tim and his boss conspire by contract to cheat the IRS out of money. The bosslater changes her mind. What is the status of the contract with respect to Tim?a. It is a valid contract.b. It is a void contract.c. It is a voidable contract.d. It is a unenforceable contract.9) Chad is sixteen years old. He went to a local used-car dealership and looked at anautomobile. The salesperson never asked Chad his age, nor asked for identi cation.Chad agreed to purchase the vehicle, and then shortly thereafter changed his mind.What is the status of the contract with respect to Chad?a. It is an illegal contract.b. It is a void contract.c. It is a voidable contract.d. It is a valid contract.10) Which of the following are necessary to meet the requirements of a de nite offer?a. identi cation of the parties, subject matter, and quantityb. consideration to be paidc. time of performanced. A, B, and Ce. A and B only11) In general, who can effectively accept an offer for a unilateral contract?a. Any person who performs the action requested in the offer, which can occur eitherbefore or after learning of the offer.b. Any person who performs the action requested in the offer, so long as the offerhad been communicated to that person prior to the performance of the act.c. Any person who promises to perform the action requested in the offer, which canoccur either before of after learning of the offer.d. Any person who promises to perform the action requested in the offer, so long asthe offer had been communicated to that person prior to the making of the returnpromise.Unit 3 ExaminationBAM 317 Business Law16412) Which of the following will not generally automatically terminate an open offer?a. death of the offerorb. death of the offereec. changed economic circumstancesd. destruction of the subject matter of the contract e. supervening illegality of theobject of the contract13) The mailbox rule means which of the following?a. Offers and acceptances must be communicated through the mail in order to beeffective.b. Offers and acceptances are effective when placed in the mail.c. A properly dispatched acceptance is effective even if the offeror never receives it.d. A revocation is effective when sent.14) Sandy notices a dog tied to a chain behind a fence and recognizes it as belongingto an acquaintance who lives a couple of blocks away. Sandy goes to theacquaintance’s house and says, “Your dog is tied up in someone’s yard, and for $100I will tell you where.” The dog’s owner says, “No way! I can’t believe you won’t simplytell me where the dog is!” The dog’s owner drives around the neighborhood and ndsthe dog and retrieves it. The next day Sandy notices an advertisement in the paperwhere the owner offered a reward of $200 for information leading to the return of herdog. Sandy is:a. entitled to $100 because she made a counteroffer to the $200 reward offer,thereby lowering the amount she can claimb. entitled to $200 solely because she gave the dog’s owner information leading tothe return of the dogc. entitled to the $200 because she offered to pay money and the reward offer wasoutstandingd. not entitled to any money because she rejected the original offer and the dog’sowner did not accept Sandy’s counteroffere. not entitled to any money because Sandy did not have prior knowledge to anyreward15) Susan offered to sell her couch to Martin for $200. Martin said that $200 was toomuch, but that he would give her $125. Susan said no. Then, Martin said that hewould pay Susan the entire $200.a. Martin has accepted Susan’s original offer.b. Martin’s statement that he would give Susan $125 was a rejection of Susan’soriginal offer.c. Martin’s statement that he would give Susan $125 was an offer by Martin.d. A and C only are true.e. B and C only are true.Unit 3 ExaminationBAM 317 Business Law16516) Which is true about consideration?a. A legal detriment must be suffered.b. A bene t must be received.c. A legal bene t must be received or legal detriment must be suffered.d. Each party must suffer a legal detriment.17) ”Legal detriment” in the context of consideration means:a. giving up an existing legal rightb. taking on a new legal dutyc. giving up an existing legal right or taking on a new legal dutyd. being found guilty in a criminal casee. getting the short end of the deal in a contract18) ________ is a promise to refrain from doing an unlawful act, and therefore is apromise that will not support a contract.a. Preexisting dutyb. Illusory promisec. Illegal considerationd. Gift promise19) Which of the following constitutes legal consideration?a. a promise to make a giftb. a promise based upon a change in duties and payments c. a promise based upon amoral obligationd. a promise based upon past consideratione. a promise based upon a preexisting duty20) Shirley promised Jill that she would give her $50,000 if she won the lottery.Shirley later won the lottery and gave Jill $50,000. Shirley later changed her mindand demanded the money back. What happened?a. Shirley had to give the money to Jill because she promised it in certain terms andJill was willing to accept.b. Shirley did not have to give the money, but once she did, Jill did not have to returnit.c. Shirley had to give the money, but Jill had to return it when Shirley asked that shedo so.d. Shirley did not have to give Jill the money, and Jill had to return it.Unit 3 ExaminationBAM 317 Business Law16621) The main purpose for making contracts involving minors voidable at the minor’soption is:a. to protect the minor from unscrupulous adultsb. to reduce the amount of litigation in the courtsc. to support the policy of not enforcing gift promises.d. to punish adults for entering into contracts with minors e. to prevent minors fromentering into contracts22) A computer retailer sells some computer games to a minor. This contract is:a. unenforceableb. voidablec. voidd. enforceable23) The contract of a person who has been adjudicated insane, but enters into acontract during a lucid interval, is:a. voidb. voidable by the insane personc. voidable by either partyd. unenforceablee. valid24) A minor, unable to live at home, contracts to rent an apartment for one year at$600 per month. After living there for three months, he disaf rms the contract. Thereasonable value of that apartment was only $500 per month. Assuming no rent hasbeen paid, the minor must pay which of the following?a. Nothing; the contract has been disaf rmed.b. $1,800; the contract rate for three months.c. $1,500; the reasonable value for three months.d. $7,200; the contract rate for one year.e. $6,000; the reasonable rate for one year.25) Julie buys an auto from John when she is 17. When she turns 21, Julie decides thatshe does not want the automobile. The age of majority in Julie’s state is 18. Can Juliedisaf rm this con- tract?a. Yes; all contracts made while a minor may be disaf rmed.b. Yes; Julie has a “reasonable time” after reaching majority to disaf rm this contract,and she acted within a “reasonable time.”c. No; Julie had a “reasonable time” within which to disaf rm the contract, but a“reasonable time” has passed.d. No; to disaf rm the contract, Julie must have acted before she turned 18. Now it istoo late.