Contract law is one of the most significant areas of law relating to business and commerce.
(T)(F) 2. The party that breaches a contract will be subject to legal but not equitable penalties because a contract
is a legal document.
(T)(F) 3. An executed contract is one that has been fully performed.
(T)(F) 4. Quasi-contracts do not arise from a mutual agreement by the parties but are imposed by courts to avoid unjustly enriching a party who should not profit from improper behavior.
(T)(F) 5. Advertisements are generally treated as offers, which if accepted, become immediately binding.
(T)(F) 6. A rejection of an offer by the offeree will not necessarily terminate an offer.
(T)(F) 7. Under the common law, the mirror image rule permitted the offeree’s acceptance of a contract to vary to some degree from the offeror’s offer.
(T)(F) 8. For the doctrine of promissory estoppel (detrimental reliance) to apply, there still must be a contract with adequate consideration.
(T)(F) 9. In order for consideration to have “legally sufficient value”, it must consist of goods or money.
(T)(F)10. In general, promises based on moral obligations are always enforceable due to the pre-existing duty rule.
(T)(F)11. A promise to do what one already has a legal duty to do is not consideration.
(T)(F)12. Parents still owe a legal duty to provide food, clothing, and shelter for their children regardless of emancipation.
(T)(F)13. The fact that a minor has a right to disaffirm a contract permits an adult who is a party to that very same contract to cancel it without penalty or liability.
(T)(F)14. In some states, some contracts for such things as student loans and insurance may not be disaffirmed by a minor under any circumstances.
(T)(F)15. Only a legal guardian can enter into a legally binding contract on behalf of a person who has been adjudicated
as mentally incompetent.
(T)(F)16. Mistakes in judgment as to value or quality will always be grounds to permit voiding a contract.
(T)(F)17. Fraudulent contracts may be voided based on the argument that the innocent party was unable to consent to the agreement due to the fraud.
(T)(F)18. Restrictive covenants and covenants not to compete are always struck down because they are unreasonable restraints of trade.
(T)(F)19. Impossibility, excusing performance of a contract, is measured objectively.
(T)(F)20. If Rose and Peter sign a contract in which Peter agrees to buy a handmade shawl from Rose, then the fact that Peter decides to breach the contract will give Annie, a close friend of Rose, the right to sue Peter for
his breach.
(T)(F)21. An accord and satisfaction discharges the original contract upon the offer of the accord.
(T)(F)22. Because of the uncertainty that they add to contracts, conditions must be express.
(T)(F)23. The termination of an enforceable contract by full performance of the duties is called discharge.
(T)(F)24. Specific performance is the remedy customarily used when one party has breached a contract for the sale of ordinary goods.
(T)(F)25. A third party who is not in privity of contract but who has rights under the contract and can enforce the contract against the obligor is said to be an intended beneficiary.
