1. Contract duties are obligations imposed by law.

True

False 

2. Contract law reduces the cost of economic transactions.

True

False 

3. A quasi-contract is not a contract, but a fiction created by the courts to prevent injustice.

True

False 

4. An agreement that is illegal is void.

True

False 

5. A contract need not be in writing to be enforceable.

True

False 

6. Specific performance is a limited remedy as it is only available for breach of contract to sell a unique item.

True

Fasle 

7. A _____ is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.

tort

tender

contract

law

bailment

8. A(n) _____ contract is one in which the terms are spelled out directly and the parties are conscious that they are making an enforceable agreement.

quasi-

implied

express

voidable

void

9. An agreement that is lacking one of the legal elements of a contract is said to be _____.

valid

unenforceable

voidable

void

lawful

10. _____ is the quid pro quo between the contracting parties, in the absence of which the law will not enforce the promise or promises made.

Restitution

Capacity

Quasi-contract

Consideration

Compensation

11. In practice, a person asserting a claim for breach of warranty will have a good chance of success under an express warranty or implied warranty theory of merchantability or fitness for a particular purpose.

True

False 

12. The Uniform Commercial Code permits sellers to exclude warranties in whole or in part.

True

False 

13. _____ imposes a liability on a merchant-seller of defective goods without fault.

Statute of repose

Strict products liability

Limited warranty

Negligence

Preemption

14. Strict liability is liability without proof of negligence and without privity.

True

False 

15. A limited warranty may cover only parts, not labor.

True

False 

16. A contract is no less binding when negotiated by an agent than by the principal.

True

False 

17. A general agent has the authority to act in any way required by the principal’s business.

True

False 

18. Most agencies are created by contracts.

True

False 

19. The fiduciary responsibility of an agent is imposed by law.

True

False 

20. A(n) _____ is defined as a person who acts in the name of and on behalf of another, having been given and assumed some degree of authority to do so.

grantor

insured

agent

testator

tenant

21. Even if the agent possessed no actual authority and there was no apparent authority on which the third party could rely, the principal may still be liable if he ratifies or adopts the agent’s acts before the third party withdraws from the contract.

True

False 

22. A principal can be held liable for actions by an agent that the principal had no knowledge of.

True

False 

23. If a principal directs the agent to commit a tort or knows for a fact that the agent carrying out his instructions could cause someone harm, then the principal is liable.

True

False 

24. Which of the following is true of ratification by the principal?

It can only occur prior to the actions of the agent.

It is a voluntary act by the principal.

It discharges the principal of liability for the agent’s actions.

It requires the usual consideration of contract law.

It must be made in writing to be effective.

25. According to the doctrine of _____, a person will not be allowed to deny a promise or assertion he/she previously made where there has been detrimental reliance on that promise or assertion.

employment-at-will

shop rights

ultra vires

respondeat superior

estoppel