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1. Royal Properties, Inc., mails a flyer to select firms, a proposal for a building for sale with definite terms that invited acceptance. Standard Manufacturing Company responds by saying, "We accept your offer under your terms." Between Royal and Standard, there is Select one: a. a contract for the sale of the building. b. a possible contract depending on all facts and circumstances. c. a contract to negotiate a sale of the building. d. no contract. 2. Elle is an agent for Fresh Food Corporation. Elle makes an innocent misrepresentation when entering into a contract on behalf of Fresh with Gala Grocery Stores, Inc. Gala Select one: a. is estopped from performing the contract. b. may rescind the contract. c. must perform the contract. d. must ratify the contract. 3. If TV Inc. hires Y to do weather reports on a per day basis, does not withhold taxes or provide benefits but controls the location and hours,Y will likely be not found to be an employee. True 4. Joyce works for Kappa Services Corporation as an independent contractor, and not as an employee, if Select one: a. Joyce says that she works as an independent contractor. b. Joyce works on a permanent basis. c. Kappa does not control Joyces work. d. Kappa withholds taxes from its payments to Joyce. 5. Only an agent should require the right of indemnification in an an agency agreement. True 6. When an agent enters into a contract on behalf of a principal, the principal must ratify the contract to be bound to it. False 7. A contract can be created when an offer is accepted by the offerees performance. True 8. On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil says that he has changed his mind. Under the modern-day view, these parties had a. an expired contract when Neil said that he had changed his mind.

b. a quasi contract when Neil said that he would pay for certain work. c. a unilateral contract as soon as Outdoor began to perform. d. no contract. 9. Nora enters into a contract with Owens Transport Company for the delivery of a shipment of fresh produce. If ambiguities appear in the contract, they will be construed against a. the party who drafted the contract. b. the party with the greater bargaining power. c. the promisor. d. the promisee. 10. A counteroffer does not terminate but continues an offer. False 11. Lara applies for a firefighter's job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is "a conditional employment offer." This letter would be considered Select one: a. a bilateral contract that Lara accepted by applying for the job. b. a quasi contract on which Lara can rely for employment. c. a unilateral contract that Lara can accept by passing the exam. d. no contract. 12. Apparent authority exists if a principal causes a third party to believe reasonably that an agent has authority to act. True 13.Quality Vehicles, Inc., offers to sell a truck to Regional Delivery Company. Before accepting the offer, Regional learns that the truck has been sold to State Trucking, Inc. Quality is a. liable to Regional for breach of contract. b. liable to State for breach of contract. c. not liable, because the sale revoked the offer to Regional. d. not liable, if Quality offers a substitute truck to Regional. 14. An "agreement to agree" usually is not an enforceable contract even if the parties intend to be bound. False 15. An electronic contract (e-contract) must meet same basic requirements (e.g. agreement, consideration, capacity, legality) as a paper contract. True 16. A principal owes an agent a duty of ratification. False 17.Dan, an agent for Eve, signs an agreement with Fred on Eves behalf but neglects to tell Eve that the agreement requires the payment of a certain tax. The government prosecutes Eve for failing to pay the tax. Eve is a. liable, because Dan's knowledge is imputed to Eve. b. liable, because Fred's knowledge is imputed to Eve.

c. not liable, because Dan did not tell Eve about the tax. d. not liable, because Fred did not tell Eve about the tax. 18. An agreement includes an offer and consideration. True 19. Cal employs Daily Employment Agency as an agent under a written agreement that describes the rights and duties of both parties. This is a. apparent authority. b. equal authority. c. express authority. d. implied authority 20.Laura and Mike enter into what Laura later claims is a contract. In deciding whether a valid contract was formed, a court will not look at Select one: a. the circumstances surrounding the alleged contract. b. the parties conduct at the time of the alleged contract. c. the parties statements at the time of the alleged contract. d. the parties subjective beliefs at the time of the alleged contract. 21. Internet Services, Inc., employs Joe as an agent. During the agency, Joe acquires new skills. After the termination of the relationship, Joe uses those skills in a new job. Joe has breached Select one: a. no duty. b. the duty of loyalty. c. the duty of notification. d. the duty of performance. 22. If a contract is in writing, the agents authority to perform the same duty must be in writing. True 23.Fox College contracts with ABC Builder Inc. to build an addition. ABC subcontracts with CB Inc. to do the addition plumbing. ABC then asked CB to do five extra plumbing projects for Fox and paid three of CB's invoices for extra projects but not two of them. The legal theory CB should use in a suit to collect is: Select one: a. implied in law contract. b. objective theory of contracts. c. implied in fact contract. d. express contract. 24. Bill is an executive for Omega Corporation. When acting for Omega in an ordinary business situation, Bill is Select one: a. an agent only. b. an agent and a principal. c. a principal only. d. neither an agent nor a principal.

25. An agency relationship can be created by estoppel if an agent holds out him/herself as an agent of a principal. Select one: True 26. An agent whose employer does not have the right to control the agents performance is generally an independent contractor. True 27. Rejection of an offer made to the general public should be communicated in the same manner in which the offer was communicated. False 28.Jill introduces Kelly to her friends as "old classmate." Kelly later purports to act as Jills agent in several business transactions with those friends. If Jill is liable for Kellys actions, it will be under Select one: a. the doctrine of estoppel. b. the equal dignity rule. c. the fiduciary principle. d. none of the choices. 29. Mary is treated for allergies at a clinic inside the hospital by doctors on the hospital staff (clinic uses same name as hospital on invoices). Mary can effectively bring a lawsuit if she sues the hospital (for malpractice by the clinic) under an apparent agency theory. Select one: True 30. Bob offers to sell Carol his computer but conditions the sale on Carol accepting the offer by May 1. Bob may revoke the offer Select one: a. before Carol accepts the offer. b. before May 1, whether or not Carol has accepted the offer. c. only after Carol accepts the offer. d. only after May 1. 31.Dina files a suit against Engineering Associates to enforce a written contract between the parties. Parol evidence will be admitted to prove a. an orally agreed-on condition. b. contemporaneous negotiations that contradict the written contract. c. prior negotiations that contradict the terms of the written contract. d. any of these choices. 32.Lava Excavators, Inc., needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company. Lava tells Mining that it must receive the drill by Tuesday or it will lose $10,000. Mining ships the drill late. Lava can recover a. $13,000. b. $10,000.

c. $3,000. d. $0. 33. Cody and Dora enter into an oral contract under which Cody agrees to work on Doras farm for not less than one week. This contract is enforceable by a. Cody only. b. Dora only. c. either party. d. neither party. 34. One requirement of recovery under quasi contract is to that one party conferred a benefit with no expectation of being paid. False 35. Notice is not legally required to establish the validity of an assignment. True 36.Rod operates a scrap metal business and contracts to provide ten tons of scrap steel at $50 per ton to be delivered to Pablo in six months. An unforeseen shortage of scrap steel suddenly develops, making it impossible for Rod to fulfill his contract for less than $500 per ton. Rods best defense against performing the contract would be a. the mirror image rule. b. impossibility of performance. c. commercial impracticability. d. none of the choices. 37.Roy and Sheila are parties to a contract for goods. Roy informs Sheila he cannot perform on the contract. Roy calls Sheila back the next morning and said he can comply with the contract. Sheila can: a. not disregard the contract.. b. treat as a breach. c. retract her agreement. d. treat as a anticpatory repudiation. 38.Uri and Vicky orally agree on the sale of Uris Nite Club to Vicky and note terms on a pair of the Clubs napkins, which they both sign. A written memorandum evidencing an oral contract that would otherwise be unenforceable must contain a. every term, except quantity. b. the essential terms. c. the preliminary terms particularly quantity. d. the qualitative terms. 39. The injury suffered by a breaching party due to the breach of a contract may be remedied by payment of compensatory damages. False 40.Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week. When Handy cancels the contract, Ilsa spends $100 to obtain a similar job

that pays $450 per week for a year. Ilsa is entitled to recover a. the amount of the wages that Handy promised only. b. the difference between the wages at the two jobs only. c. the difference between the wages at the two jobs plus $100. d. $100 only. 41. Musical Production Company and Nora enter into a contract for Nora to write six songs for which Musical agrees to pay her. Nora transfers her right to payment under the contract to Omni Entertainment Agency. Nora is a. a delegator. b. an assignor. c. a payor. d. a righter. 42. Under the Statute of Frauds, the writing requirement applies as to likely performance of a contract within one year. False 43. In a contract involving a transfer of an interest in land, a court may grant specific peformance of an oral contract that has been partially performed. True 44. An intended third party beneficiary is entitled to enforce the promise of a promisor when the rights of the promisor are vested. False 45. In a contract for a sale of land, the typical remedy for a seller's breach is specific performance. True

46.Pure Oil Company enters into a contract with QuikBilt, Inc., to construct an oil pipeline to withstand specific conditions. If QuikBilt fails to meet this standard, which is construed as a breach of contract and a breach of a duty of care, Pure might be awarded punitive damages to a. establish, as a matter of principle, that QuikBilt acted wrongfully. b. provide Pure with funds for a foreseeable loss beyond the contract. c. punish Pure and deter others from similar acts. d. none of the choices. 47.Dina and Elle agree that Elle can satisfy a debt owed to Dina by paying the money directly to Fava. If the designation of this contract as a third party beneficiary contract is accepted, what is the significance if it is deemed an intended instead of a incidental beneficiary contract? a. Dina, Elle, and Fava cannot sue on the contract. b. Dina and Elle only can sue on the contract.. c. Dina, Elle, and Fava can sue on the contract. d. Fava only can sue on the contract..

48. With substantial performance, the other party is entitled to damages to compensate for the failure to comply with the contract. True 49. Oral evidence of otherwise clear terms in a contract can be introduced at a trial to contradict those terms. False 50. Privity of contract refers to the rights and liabilities that contracting and third parties have to each other under the contract. False 51. If a contract cannot possibly completed within a year, the contract does not have to be in writing to be enforceable. False 52.General Contractors (GC) and Holly enter into an oral contract under which Holly agrees to work on a GC project for fourteen months. Holly thinks it likely that she can complete the project in eleven months but experience has shown it is not possible to complete within a year. This contract is enforceable by Select one: a. either party. b. GC only. c. Holly only. d. neither party. 53. Xavier enters into a contract to operate a Yummy Yogurt franchise, which Yummy agrees to support as long as Xavier maintains his business license. Yummys duty to perform is Select one: a. absolute. b. conditional. c. required. d. operational. 54. Enforceable, the contract must be in writing if the land is valued at Select one: a. $50. b. $500. c. $5,000. d. $50, $500, or $5,000. 55. To be enforceable under the UCC, a contract for a sale of goods priced at $500 or less must be in writing. False 56. Yvon enters into a contract to manage the operations of Zacks bank for one year, renewable for subsequent one-year terms. If this contract is discharged like most contracts, it will be a. canceled. b. delegated.

c. litigated. d. performed. 57.Commercial Shipping, Inc., and Dock Services Corporation enter into a contract for Dock to load Commercials trucks for which Commercial agrees to pay Dock. Dock transfers its duty to load the trucks to East Harbor Transport Company. Dock is a. a delegator. b. an assignor. c. a payor. d. a righter. 58. A breach discharges the nonbreaching party from the contract. False 59. An integration clause will usually block parol evidence being admitted regarding a contract. True 60. A conditional assignment of rights in a contract will extinguish the rights of the assignor. False 61. One of the main purposes of contract law is: a. to ensure that one party does not threaten another. b. to ensure that certain promises made among private parties are enforced. c. to discourage harms against society. d. to discourage misuse of the environment. 62. In order to determine a party's intent in a contract case, a court will apply: a. the subjective theory of contracts. b. the alternate-party theory of contracts. c. the consideration theory of contracts. d. the objective theory of contracts. 63. Which of the following IS NOT a basic element of a valid contract? a. Integrity b. Agreement c. Consideration d. Contractual capacity 64. A quasi contract may be defined as: a. a true contract. b. an actual contract. c. a fictional contract. d. an implied-in-time contract. 65. A formal contract requires which of the following? a. It must be signed by the president. b. It must be deposited in the county courthouse. c. It must be in a special form or be created using a special method. d. It need only be signed by the offeror. 66. An example of a void contract would be: a. a contract formed for an illegal purpose. b. a contract entered into by a minor without his or her parents' consent.

c. a contract for the sale of alcohol to a competent adult. d. a contract for the sale of land to a competent adult. 67. If the terms of a contract are clear and unambiguous, a court may not consider extrinsic evidence (any evidence not contained in the contract itself) when interpreting the document. This is known as: a. the mailbox rule. b. the single letter rule. c. the plain meaning rule. d. the rule against perpetuities. 68. Under the doctrine of quasi contract, a plaintiff may recover in quantum meruit, a Latin phrase that means: a. "as much as he deserves." b. "treble damages." c. "only a token sum." d. "nihilius"--nothing at all. 69. Which of the following IS NOT a requirement of a valid contract? a. Both parties must be consenting adults. b. There must be an agreement (offer and acceptance) c. There must be consideration. d. The contract must be formed for a legal purpose. 70.If a court is required to interpret an ambiguous contractual term, which of the following is the court NOT likely to do? a. Interpret a word or term according to its ordinary, commonly accepted meaning. b. Interpret language according to what the parties CLAIM their intent was. c. Give greater consider to handwritten or typewritten terms over preprinted words. d. Interpret the contract as a whole, with regard to the general intent of the document. 71. In contract cases, courts generally adhere to which of the following theories when deciding the issue of the offeror's intent? a. The objective theory of contracts b. The revision theory of contracts c. The just price theory of contracts d. The subjective theory of contracts 72.In order for an offer to be effective, which of the following IS NOT necessary? a. The offer must be communicated to the offeree. b. The price requested must be acceptable by a reasonable person. c. The terms of the offer must be reasonably certain and definite. d. There must be a serious, objective intent by the offeror. 73.You read in a catalogue about a great new laptop computer that you would love to have and see that the computer is priced so that you can afford it. If you call the company to place an order and are told "Sorry, we're all out!", you may: a. sue for breach of contract. b. sue based on a valid offer.

c. try somewhere else; this is not an effective offer. d. hold the company liable, because this was an unreserved auction. 74.The communication requirement of an offer requires: a. the offeror to mail an offer to the offeree before a communication is valid. b. the offeror to tell the offeree about the offer in person. c. the offeror to inform the offeree about the offer in some effective way. d. the offeree to accept the offer within seven days. 75. Filomena offers to sell Rhonda her collection of rare books. Before Rhonda even has a chance to accept, Filomena says, "Sorry, I changed my mind, no deal." This is an example of: a. a revocation. b. a rejection. c. a counteroffer. d. a restitution. 76. An acceptance must exactly match the terms of the offer in order to be valid. This is known as: a. the specificity principle. b. the mailbox rule. c. the legal sufficiency rule. d. the mirror image rule 77. The mailbox rule says that: a. an offer is valid only if mailed. b. an acceptance is valid only if mailed. c. an offer is valid once it is deposited in a mailbox. d. an acceptance is effective upon dispatch by an authorized means of acceptance. 78.An e-contract can be defined as: a. any contract formed between merchants involved in e-commerce, regardless of whether the contract is formed online or offline. b. any contract formed electronically, such as over the Internet. c. an electronic contract formed between merchants only. d. an electronic contract formed between a merchant and a consumer. 79.A forum-selection clause indicates: a. the location for the resolution of any dispute arising under the contract. b. the specific court in which arbitration proceedings will be held. c. which state or nation's laws will govern any dispute that arises under the contract d. that a force majeure will excuse the parties from showing up at the disputeresolution forum if a dispute arises under the contract. 80.The Uniform Electronic Transactions Act (UETA) is: a. the name of the preliminary draft of the UCITA. b. the name of the final proposed draft of the UCITA. c. a uniform law proposed by the NCCUSL to support the enforcement of econtracts. d. a uniform law proposed by the ALI to amend UCC Article 2 to include provisions relating to e-contracts.

81. Often, consideration is broken down into two parts, something of legal value and: a. some kind of income redistribution. b. some kind of coercive behavior. c. a clear moral hazard. d. a bargained-for exchange. 82.Liz contracts with Brian. Liz agrees to cook twenty dinners for Brian, in exchange for which Brian will repair all of the plumbing in Liz's house. In this consideration legally sufficient? a. No, because it is clear that one dinner is not worth as much as repairing all of the plu...