Contract Law and Business Law Quiz

1. The assent of parties to a contract must be voluntary. True False 2. Assent may only be demonstrated by words. True False 3. Assent may still be present even if a party entered into a contract based on mistake. True False 4. A fraudulent misrepresentation may be used to show that genuine assent was lacking in a parties’ contract. True False 5. Intentional misrepresentation is commonly referred to as “fraud. ” True False 6. In undue influence, the persuasion by the dominate party must have overcome the free will of the innocent party. True False 7.

The primary purpose of the Statute of Frauds is to ensure that the terms of important contracts are not forgotten, misunderstood, or fabricated. True False 8. The source of the Statute of Frauds today is a federal statute. True False 9. Fixtures, such as cabinets, start out as personal property but become part of the real estate when they are attached to the wall. True False 10. The Statute of Frauds does not apply to mortgage contracts. True False 11. Under the U. C. C. Statute of Frauds, a contract for the sale of goods for the price of $500. 00 must be in writing. True False 12. Where there is a contradiction in the terms of a contract, specific terms will control over general terms. True False 13.

The parole evidence rule prohibits any evidence outside of the “four corners” of the written contract from being used to supplement or explain the contract. True False 14. Third parties never acquire rights under other people’s contracts. True False 15. Someone who owes a duty under a contract is an obligor. True False 16. Under the American rule, when an assignor assigns the same right to more that one person, the first assignment in time prevails. True False 17. Parties to a contract can include an “anti-delegation clause” if they so choose.

True False 18. Joe, a well known plastic surgeon, decides he would rather be golfing than perform surgery on his patient Missy’s nose. As such, he delegates the job to a colleague, Frank, who is a highly respected foot doctor. Because Joe chose a competent medical professional to do Missy’s nose, the delegation is valid.. True False 19. If a third-party beneficiary tries to enforce a contract, the promisor may use any defense against the third party that could have been used against the original promisee. True False 20. A contract cannot be based on the satisfaction of a third party, such as an engineer or architect. True False 21. A unilateral rescission is effective in terminating a contract if done in good faith.

True False 22. Impossibility, excusing performance of a contract, is measured objectively. True False 23. A debtor who files for bankruptcy and receives a discharge from the federal bankruptcy court is relieved of the legal liability to pay the debts. True False 24. Substantial performance constitutes a minor breach of the contract. True False 25. When there is substantial performance of a contract with a minor breach, the non-breaching party may sue to recover the cost to repair the defect. True False 26. A material breach allows the other party to rescind the contract.

True False 27. A breach of contract cannot occur until the time for performance of the duty in question. True False 28. When one party materially breaches a contract, the non-breaching party is discharged from any further performance. True False 29. When there is an anticipatory breach, the non-breaching party’s obligations under the contact are discharged immediately. True False 30. The primary goal of compensatory damages is to compensate a non-breaching party for the loss of the bargain. True False 31.

A buyer can generally recover the additional cost of acquiring substitute goods if the seller breaches by not delivering the goods. True False 32. Only those consequential damages that are unforeseeable can be collected. True False 33. Liquidated damages will be invalidated if they are unreasonably large or small. True False 34. Rescission and restitution are designed to give the parties the benefit of the bargain. True False 35. When rescinding a contract, the parties must make restitution of the consideration they received under the contract. True False 36. Equitable remedies are available if there has been a breach of contract that cannot be adequately compensated by a legal remedy.

True False 37. Specific performance is usually available for the buyer in contracts for the sale of land. True False 38. The general standard to obtain an injunction is that the party seeking the injunction would suffer irreparable injury without the injunction. True False 39. Punitive damages are always available for breach of contract. True False 40. Under the Uniform Computer Information Transaction Act, a cause of action (lawsuit) must be brought within 1 year after the breach was or should have been discovered, but not more than 5 years after the actual breach. True False