James threatens to hit Kenneth on the head with a baseball bat unless Kenneth signs a contract agreeing to pay James $300 for his latest painting. Because of the threat, Kenneth signs the contract.
A) This contract is voidable at Kenneth’s option.
B) James has committed physical duress against Kenneth.
C) This is an example of economic duress.
D) All of the above.
A contract was made for 125 bales of cotton to arrive on a ship named “Peerless” from Bombay. Unbeknownst to either party to the contract, there were two ships named “Peerless,” both of which were sailing from Bombay. One sailed in October and the other in December. The buyer had in mind the ship sailing in October, but the seller had in mind the ship sailing in December. Each party held his belief in good faith. When the goods failed to arrive on time, the buyer sued for breach of contract.
A) The seller is in breach and must pay damages.
B) The seller is guilty of fraud in the inducement for failing to disclose to the buyer which ship would contain the goods.
C) No contract exists due to mutual mistake of fact as to the existence or identity of the subject matter of the contract.
D) Two of the above, (a) and (b).
Sam wants to sell his Golden Retriever to Jordan. Sam tells Jordan that the dog is three years old and that he will point, back, and retrieve. Although the dog is three years old and will point at birds, he will not back (honor another dog’s point). Jordan relies on these statements and purchases the bird dog. The buyer has most probably been a victim of:
B) undue influence.
C) fraud in the inducement.
D) fraud in the execution.
Stewart entered into a contract with Will to have Will build a 10-unit apartment complex on Elm Street in Randolph County. Unknown to both parties, this land had recently been rezoned and only single-unit dwellings can be constructed.
A) This is a mutual mistake of law.
B) This is a unilateral mistake of fact.
C) Stewart is obligated to buy land elsewhere and have the complex constructed on property zoned for apartments.
D) Will is liable to Stewart since Will is a contractor.
Albert found a stone in his yard and took it to Bob, a jeweler, for evaluation. Although Bob knew what the stone was, he told Albert that he wasn’t sure as to the nature of the stone, but that he thought it was a topaz. Bob then offered to buy the stone for $25 and Albert agreed. Later Albert found out the stone was an uncut diamond worth about $700.
A) The sale was a valid contract that should be enforced by the law.
B) This contract can be voided based upon fraud in the execution.
C) This contract can be voided based upon fraud in the inducement.
D) This contract can be voided based upon mistake as to the identity of the subject matter.
Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract?
A) No, because Robbie gave no benefit to Aunt Ellie.
B) No, because Robbie did not suffer any detriment.
C) Yes, because stopping smoking will benefit Robbie’s health.
D) Yes, because Robbie gave up a legal right.
Mary agrees to sew Georgia’s prom dress for $50 plus costs. After making this deal, Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay:
A) $50, since that is the original agreement.
B) $50, since a modification must be in writing.
C) $60, since the modified agreement is supported by additional consideration.
D) $60, since any subsequent agreement is enforceable.
Wayne helped Hank study all night for an important exam. After Hank got an A on the exam, he told Wayne, “I will give you $10 for helping me study for the exam last night.” Wayne said, “Thanks, I’ll take it.”
A) There is no contract because there is no mutual assent.
B) There is no contract because there is no valid consideration.
C) There is no contract because $10 is reasonably inadequate consideration.
D) There is a contract with sufficient consideration.
E) There is no contract because there is no mutual assent. There is no contract because there is no valid consideration. There is no contract because $10 is reasonably inadequate consideration. There is a contract with sufficient consideration.
Andrew agrees to paint Betty’s house for $500. Two days after he starts the job, he decides that $500 isn’t enough money. He refuses to finish the job unless Betty agrees to pay him $100 more. What law applies to this fact situation?
A) The acceptance of additional money to settle a disputed claim is supported by consideration.
B) A past obligation is sufficient consideration for a new promise.
C) Andrew was already obligated to paint the house. He gives no additional consideration in return for Betty’s promise to pay more money.
D) Betty has made a promise in exchange for a forbearance.
Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia agrees never to open a hair salon in the world. Which of the following best describes this contract clause?
A) Void as an illegal primary restraint.
B) Valid as a reasonable restraint on trade.
C) An unenforceable restraint against public policy.
D) Binding as fair protection.
Don has an employment contract with Dunkirk Ice Cream. He sells ice cream and novelty ice cream products for Dunkirk as a full-time employee. He has nine children and needs more money, so he takes a part-time job with a competitor. “After all,” he reasons, “most stores carry four or five different brands.” His employment contract prohibits him from competing. If Don sells ice cream for a competitor, will he be in trouble under his contract?
A) No, it is unenforceable because this is against public policy.
B) Yes, it is likely to be enforceable while he is employeed full-time by Dunkirk.
C) No, the prohibition against competing is enforceable only after he quits Dunkirk.
D) A court would have to rule on the enforceability of the covenant not to compete since courts are reluctant to enforce such covenants during a period of employment.
Which of the following would generally be considered a revenue-raising licensing law?
A) A statute requiring that medical doctors be licensed.
B) A statute requiring that salespeople be licensed, but not establishing any educational or training requirements.
C) A statute requiring public school teachers to be licensed.
D) A statute that requires insurance agents to pass a test before selling insurance in a state.
Which of the following promises in consideration of marriage would not have to be in writing?
A) In consideration of Joan’s promising to marry him, a man promises to pay her an allowance and to give her all of his property upon his death.
B) John and Mary mutually agree that their marriage shall not affect the existing property rights of the other.
C) John and Joan mutually promise to marry each other in a formal ceremony on June 23.
D) Joan promises to release a money judgment against Steven in consideration of his marrying her.
Al has a tax service and accounting business in Redwood City. He decides to move to Center City, which is 150 miles away and sells his accounting practice to Able and Baker, a CPA firm. In the sales contract, he agrees that he will refrain from practicing accounting anywhere within a 20-mile radius of Redwood City for a period of one year. However, on weekends he returns to his house in Redwood City, and when clients call him, he meets with them in his home.
A) Al is probably in violation of the sales agreement because the restraint is reasonable.
B) The agreement is invalid, because it is an illegal restraint on trade.
C) The agreement is illegal, because it is a violation of public policy.
D) The two-year provision is likely to be held invalid, because it is too long a period of time.
Tim, who is a minor, enters into a contract with Violet, who is an adult. Which of the following is correct?
A) Violet may not disaffirm the contract.
B) Violet may disaffirm the contract at any time.
C) Violet may disaffirm the contract when Tim becomes an adult.
D) Tim may ratify the contract at any time during his minority.
Which of the following promises does not have to be evidenced by writing?
A) Jones’ agreement with Smith to sell his condominium for $100,000.
B) Stewart’s promise to work for Austin for a two-year period.
C) Dad’s promise to the credit union that he will make payments on his son’s truck if his son fails to pay.
D) Mindy’s agreement with Susan to buy her bike for $400.
On March 1, 2009, Sara, a student, received a telephone call from ComputerChip, Inc. offering her a job for one year beginning on June 15, 2009 . According to the personnel manager, she will have to move to California and be ready to start work at 8:00 a.m. on June 15, 2009. Should Sara ask for a letter confirming the telephone conversation if she accepts the offer immediately?
A) Yes, because the job offer is a collateral promise.
B) Yes, because the job offer is covered by the parol evidence rule.
C) Yes, because the job offer is for longer than one year from March 1.
D) No, because the job offer is only for one year starting on June 15th.
Which of the following would be considered a valid and legally enforceable agreement?
A) An agreement to pay a legislator to vote for a particular bill.
B) An agreement under which Arthur agrees to pay Barbara $3,000 to disparage the product of Arthur’s competitor.
C) An agreement by the seller of a service station not to enter the service station business in Ohio for a period of 30 years after the sale of his business.
D) An agreement by a car salesman not to sell automobiles or automobile parts in Marion County for a period of one year after terminating his employment with a dealership.
Which of the following is not true regarding the contracts of intoxicated persons?
A) If an intoxicated person is unable to understand the nature and consequences of his act, then the contract is voidable.
B) The effect of intoxication is generally the same as that given to contracts that are voidable because of incompetency.
C) Slight intoxication will destroy one’s contractual capacity.
D) Contracts made while a person is too intoxicated to act in a reasonable manner may be ratified when the intoxicated person regains his capacity.
Sam, a shopkeeper, dies unexpectedly at the age of 46. His lifelong business associate, Paul, is appointed the administrator of his estate. Sam had a personal debt of $8,000 which he owed to Art’s Appliance Store. Paul says to Art, “If there isn’t enough money in the estate, I’ll personally see that the bill is paid.” Which of the following is correct?
A) The oral statement is enforceable because Paul is the Administrator.
B) An oral statement such as this is not enforceable because it is not in writing.
C) An oral statement such as this is enforceable under the doctrine of implied contract.
D) The oral statement is enforceable because it is a collateral promise.