Business Law, 8e: Chapter 9

Chapter 9
Introduction to Contract Law And Contract Theory:

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1. The Wells Fargo Bank v. U.S. case held that the conditional commitment constituted a unilateral contract.: a. True
b. False

2. In general, contracts must be written to be enforceable.: a. True
b. False

3. Elmore purchased a car which the dealer said once belonged to "Elvis." It turned out the seller lied about the car belonging to "Elvis." This contract is void.: a. True
b. False

5. A unilateral contract can be defined as one created by a promise given in exchange for another promise.: a. True
b. False

6. A void contract is one that is otherwise valid but may be rejected or set aside by one of the parties.: a. True
b. False

7. An executory contract is a special contract between an executive corporate officer and an employee.: a. True
b. False

8. To determine the validity of an offer or acceptance, the test is generally what a reasonable person would have understood.: a. True
b. False

9. Some type of contracts must be in writing to be enforced.: a. True
b. False

10. A bilateral contract is created when there is an exchange of promises.: a. True
b. False

11. Which of the following is a bilateral contract?: a. Eloise tells Griffin that she will pay him $20 if Griffin will wash her car which Griffin does.
b. Eloise writes Griffin a letter in which she promises that if Griffin will wash her car, she will pay him $20 which Griffin does.
c. Eloise and Griffin both sign a piece of paper which says, "Eloise agrees to pay Griffin $20 and Griffin agrees to wash Eloise's car in exchange for $20."
d. Griffin washes Eloise's car without her knowledge, then requests payment of $20.

12. A void agreement:: a. can never have legal effect.
b. can become enforceable by the passing of a reasonable amount of time.
c. has legal effect until set aside by a court.
d. includes a voidable contract as well.

13. Raul called his friend Marti and offered to give her two tickets to a concert by Nine Inch Nails. Marti said "okay" I love that group. A few days later Raul called Marti and told her he couldn't give her the tickets. Assuming Marti sued Raul,: a. she would probably win as a contract was formed.
b. she would probably lose because the contract wasn't in writing.
c. she would probably lose as most courts would hold no contract was formed.
d. none of the above.

14. Nadya is a college professor who has been employed for several years at the same college. She has been hired with a series of nine-month contracts that begin in September and end in May. In June, the Vice President of Nadya's college sends her a letter saying, "Commencing with your arrival at work on September 1, you will be hired for another nine-month contract, which will terminate on May 31. Your salary will be $40,000, and you will abide by the rules in the Faculty Manual." After receiving the letter, is there a binding contract between Nadya and her college?: a. No, because it is an offer to form a unilateral contract and Nadya has not yet provided the requested performance.
b. Yes, because it is an offer to form a unilateral contract and Nadya has received the letter.
c. Yes, because it is a bilateral contract.
d. No, because it is a bilateral contract.

15. An executory contract exists where:: a. all conditions and promises have been completed by all of the parties.
b. the promises have not been completed by one or more of the parties.
c. the elements for a valid contract are not present.
d. an executrix is called upon to perform.