Quiz
Business Law Exam 3
Questions in this quiz (184)
1To make an offer, the offeror must appear to intend to create a binding obligation
- ATrue
- BFalse
2Generally, advertisements, catalog prices, and circulars are offers that can be accepted
- ATrue
- BFalse
3Social invitations can be offers
- ATrue
- BFalse
4Advertisements that call for an act may be deemed to be a unilateral contract
- ATrue
- BFalse
5If an offer is indefinite or vague, no contract arises from an attempt to accept it
- ATrue
- BFalse
6Contractual intention is determined by objective standards
- ATrue
- BFalse
7An otherwise vague contract may be clarified by references in the contract to other documents or agreements
- ATrue
- BFalse
8An agreement cannot be enforced if it does not set forth every contractual detail
- ATrue
- BFalse
9Contract terms may not be implied from conduct
- ATrue
- BFalse
10When it is claimed that a contract is too indefinite to be enforced, a court will do its best to find the intent of the parties and thereby reach the conclusion that the contract is not too indefinite
- ATrue
- BFalse
11A "best efforts" clause is always deemed too indefinite to be enforceable
- ATrue
- BFalse
12A requirements contract is too vague to be a legally-enforceable agreement
- ATrue
- BFalse
13An output contract is too vague to be a legally-enforceable agreement
- ATrue
- BFalse
14An offer is effective only if it is communicated by the offeror in person
- ATrue
- BFalse
15An offer gives the offeror the power to bind the offeree by contract
- ATrue
- BFalse
16A revocation of an offer is ordinarily effective only when it is communicated to the offeree
- ATrue
- BFalse
17Offers, acceptances of offers, and revocations of offers are all effective when mailed in a properly addressed envelope bearing the proper amount of postage
- ATrue
- BFalse
18An option contract is a binding promise to keep an offer open for a stated period of time or until a specified date
- ATrue
- BFalse
19An option is itself a contract to refrain from revoking an offer
- ATrue
- BFalse
20A firm offer is an offer that states that it is to irrevocable, or irrevocable for a stated period of time
- ATrue
- BFalse
21If the offeree purports to accept an offer but in so doing makes any change to the terms of the offer, such action is a counteroffer that rejects the original offer
- ATrue
- BFalse
22If no time is stated for the duration of an offer, it continues indefinitely if the offer relates to durable goods or land
- ATrue
- BFalse
23If an offer does not state how long it shall remain open, it remains open for ten days
- ATrue
- BFalse
24If either the offeror or offeree dies or becomes mentally incompetent before the offer is accepted, the offer is automatically terminated
- ATrue
- BFalse
25An acceptance must be absolute and unconditional
- ATrue
- BFalse
26The fact that there has been a series of contracts between the parties and that one party's offer has always been accepted before by the other does not create any legal obligation to continue to accept subsequent offers
- ATrue
- BFalse
27A party to existing contract can modify the agreement without the other party's actual acceptance or approval
- ATrue
- BFalse
28Acceptance of an offer to form a unilateral contract need not be communicated to the offeror to be effective
- ATrue
- BFalse
29A properly mailed acceptance takes effect when mailed, even if it never is received by the offeror
- ATrue
- BFalse
30At an auction sale, a statement made by the auctioneer to draw forth bids constitutes an offer
- ATrue
- BFalse
31The willingness of an offeror to enter into a contractual agreement regarding a particular subject is expressed by a(n)
- Aoffer
- Bacceptance
- Ccontract
- Dagreement
32If not an offer, the first statement made by one of two persons is most properly termed a(n):
- Aoption
- Bacceptance
- Cinvitation to negotiate
- Dcontract
33A customer went into a store and saw a beautiful leather jacket bearing a price tag of $29. The customer handed the cahsier a $50 bill and said, "I accept, We have a deal." The cashier then noticed the price tag and told the customer an error had been made and that the price was $229. In this case:
- Athe customer validly accepted the stores offer
- Bthe price tag was a firm offer
- Cno contract was formed because the customer's offer was refused
- Dthe customer is the offeree
34A customer requested a price from a carpenter on a teak cabinet to be built according to the buyer's specifications. Because teak wood is difficult to obtain, the customer agreed to pay the cost of the wood plus $175 and the carpenter agreed to build it. Which of the following is correct?
- AAlthough the price is somewhat unclear, the parties have entered into a contract
- BThis is an agreement to agree, and is not binding
- CThis agreement fails for indefiniteness
- DThe carpenter is bound by the agreement, but not the customer
35An offer that is indefinite may be clarified by reference to another writing through
- Aincorporation
- Breference
- Cannotation
- Dindexing
36An agreement that consists of two or more parts and calls for corresponding performance of each part by the parties is called a
- Apartial contract
- Bdivisible contract
- Cperformance contract
- Ddivided
37If an offeree accepts an offer before it is effectively revoked
- Aa void contract is formed
- Ba voidable contract is formed
- Can unenforceable contract is formed
- Da valid contract is formed
38A(n) ___________ contract is a contract to buy all requirements of the buyer from the seller
- Aoutput
- Bessentials
- Cnecessaries
- Drequirements
39Under the Uniform Commercial Code (UCC); a firm offer applies to:
- Aa written, signed offer by a merchant to buy or sell goods
- Ban unwritten but definite offer to buy or sell goods
- Ca written, signed offer by anyone to buy or sell goods
- Dan unlimited, stipulated period of time
40A counteroffer is a(n):
- Aacceptance of the original offer
- Brejection of the original offer
- Cacceptance of the original offer and invitation to further negotiate
- Da revocation of the original offer
41A said to B, "I'll give you $100 for that bracelet." B replied, "$135." A said, "no thanks." B then said that B accepted the $100, but A was no longer interested and said there was no contract. B insists there is a contract. Result?
- AA's offer of $100 was open and accepted by B, thereby forming a contract
- BB's counteroffer of $135 terminated A's offer of $100
- CB's statement, "$135." was a negotiating statement that did not terminate A's original offer of $100
- DA's offer of $100 was irrevocable
42An offer is terminated upon rejection by the offeree unless
- Athe period of time for which the offeror agreed to keep the offer open has not yet expired
- Bthe offeror renews the offer
- Cthe offeree revokes the rejection
- Dthe offeree makes a counteroffer
43If no termination date is specified for an offer, the offer will remain open
- Afor one year
- Bfor six months
- Cfor a reasonable period of time
- Duntil someone accepts the offer
44If an offeree dies before the offer has been accepted, the offer:
- Amay be rejected by the surviving spouse of the offeree
- Bmay be accepted by the surviving spouse of the offeree
- Cis automatically revoked by the death of the offeree
- Dmay be accepted by the guardian appointed for any minor children of the offeree
45In general, an acceptance occurs when:
- AA particular form of words is stated to the offeror
- Ba particular mode of expression is made to the offeror
- Cthe offeree reserves the right to reject the offer
- Da clear expression of the offeree's agreement to be bound by the terms of the offer occurs
46When an offer has been accepted:
- Aa subsequent revocation of the offer may serve to nullify the resulting contract
- Ba contract is formed, assuming that all of the other elements of a contract are present
- Ceither party may withdraw from the resulting contract without consent
- Dthe acceptance is executory
47If an offer requires that acceptance be communicated by a specific date and the acceptance is properly dispatched by the offeree on the final date,
- Ano contract is formed, since the offeror will undoubtedly receive the dispatched acceptance after the deadline for acceptance
- Ba contract is formed, but the contract is voidable at the election of the offeror
- Cthe acceptance is timely and a contract is formed, even though the offeror actually receives the acceptance by the deadline specified for acceptance
- Dthe acceptance is timely and a contract is formed, but only if the offeror actually receives the acceptance by the deadline specified for an acceptance
48In an auction _________, the auctioneer takes bids as a gent for the seller with the understanding that no contract is formed until the seller accepts the transaction
- Awithout reserve
- Bwith reserve
- Cwithout preserve
- Dwith preserve
49At an auction sale, each bid is:
- Aa counteroffer to the auctioneer's offer of the merchandise
- Ban acceptance of the auctioneer's offer
- Can invitation to negotiate
- Dan offer
50Arthur made a bid at an auction by calling out of the amount of $250. The auctioneer ackowledged Arthur's bid. There were no higher bids, and before the fall of the auctioneer's hammer, Arthur announced that he was withdrawing the bid. The auctioneer said that it was too late for Arthur to withdraw his bid, because the bid had already been acknowledged. What is the result?
- AArthur's bid is an ordinary offer that can be revoked
- BArthur's bid is firm and cannot be withdrawn
- CSince the auctioneer had in fact acknowledged Arthur's bid, the bid became an option exercisable at the election of the seller
- DSince the auctioneer had in fact acknowledged Arthur's bid, a contract had been formed by way of offer and acceptance; accordingly, Arthur's subsequent attempt to withdraw his bid was ineffective
51Certain persons cannot make contracts that will bind them
- ATrue
- BFalse
52Contractual capacity can exist even though a party does not understand every provision of the contract
- ATrue
- BFalse
53Ordinarily, every party to a contract is presumed to have a contractual capacity until the contrary is shown
- ATrue
- BFalse
54Discriminatory and punitive in-capacities have largely disappeared
- ATrue
- BFalse
55Factual incapacity is imposed because of the class or group to which a person belongs
- ATrue
- BFalse
56A factual incapacity may exist when, because of a mental condition caused by medication, drugs, alcohol, illness, or age, a person does not understand that a contract is being made or understand its general nature
- ATrue
- BFalse
57Generally, when a person of legal age makes a contract with a minor, the contract is voidable by either party
- ATrue
- BFalse
58When a minor avoids contracts, the minor always must return the other contracting parties to their original financial positions
- ATrue
- BFalse
59The "necessaries" of minors are precisely defined by law
- ATrue
- BFalse
60When necessary medical care is provided to a minor, a parent is liable at common law for the medical expenses provided the minor child
- ATrue
- BFalse
61At common law, a minor cannot be held contractually liable for his or her necessary medical expenses when the parent is unable or unwilling to pay
- ATrue
- BFalse
62Ratification consists of any words or conduct of a former minor manifesting an intent to be bound by the terms of a contract made while a minor
- ATrue
- BFalse
63A contract made by an incompetent person after a guardian has been appointed is voidable
- ATrue
- BFalse
64An incompetent person may ordinarily avoid a contract in the same manner as a minor
- ATrue
- BFalse
65A person who has drunk too much alcohol at a party and signs a contract may be able to rescind that contract
- ATrue
- BFalse
66A unilateral mistake as to a fact does not affect the contract when the mistake is unknown to the other contracting party
- ATrue
- BFalse
67The seller of a painting is not bound by the sales contract if the painting purchased was considered of little value and only later discovered to be valuable to the surprise of both buyer and seller
- ATrue
- BFalse
68A party who speaks with a reckless disregard for the truth not knowing of the falsity of his or her words cannot be liable for fraud
- ATrue
- BFalse
69Fraud requires a misstatement of either a fact or an option
- ATrue
- BFalse
70Fraud requires intent that the listener rely on the false statement of fact
- ATrue
- BFalse
71In order for fraud liability to arise, the listener must actually rely on the false statement of fact
- ATrue
- BFalse
72Ordinarily, a party to a contract has no duty to volunteer information to the other party
- ATrue
- BFalse
73As a general rule, the nondisclosure of information that is not asked for does not impose fraud liability or impair the validity of a contract
- ATrue
- BFalse
74A claim of undue influence will be unsuccessful unless the contracting parties have a close relationship of trust
- ATrue
- BFalse
75A contract obtained by physical duress is void
- ATrue
- BFalse
76Contractual capacity is the ability to
- Aread and write
- Bsign a written contract
- Cunderstand that a contract is being made and to understand its general nature
- Dunderstand the legal meaning of the contract being made
77A person lacks contractual capacity if
- Athe person is a chronic alcoholic
- Bthe person is a drug addict
- Cbecause of mental impairment, the person does not comprehend that a contract is being made or understand its consequences
- Dall of the above
78The key time for determining whether a party lacked contractual capacity is
- Athe time the contract was made
- Bthe time the value of the bargain becomes clear
- Cthe time set for performance of the contract
- Dthe time the plaintiff expresses dissatisfaction with the contract terms
79The maximum amount of time that a minor has to disaffirm a contract is
- Aone year from the date of agreement
- B30 days from learning of his or her right to disaffirm
- Cthe age of majority
- Da reasonable period of time after reaching the age of majority
80A minor cannot avoid a contract to purchase a car if the:
- Acar has been destroyed
- Bcar has been damaged
- Ccar is used for non-commercial purposes
- Dminor is able to return the car but does not do so
81A minor cannot avoid a contract that has been
- Aratified
- Bsigned
- Cprocessed
- Ddisallowed by the court
82When a minor avoids a contract to purchase a car
- Athe parents of the minor are liable for the purchase price
- Ba relative who cosigned the contract is liable for the purchase price
- Ca friend to whom the minor loaned the car is liable for thepurchase price
- Dthe automobile insurance company is liable for the purchase price
83The obligation of a cosigner is discharged by:
- Athe minority status of one of the parties
- Bthe majority status of one of the parties
- Cthe courts declaration of the contract's provision of necessaries
- Dthe payment of the debt
84In which of the following cases is a contract between A and B binding?
- AA makes a mistake of material fact, and the mistake is unknown by B
- BA and B make the same mistake of the material fact
- CA recklessly but honestly misrepresents a material fact
- DA innocently misrepresents a material fact
85An agreement is not binding when:
- Aone party makes a mistake regarding a material fact
- Bboth parties make a mistake regarding a material fact
- Cone party makes a mistake of law
- Dall of the above
86A contract based on a mutual mistake in judgement is:
- Avoidable by the adversely affected party
- Bnot voidable by the adversely affected party
- Cvoid ab initio
- Dnone of the above
87All of the following statements refer to an element of fraud except:
- Athe defendant desired to obtain a financial benefit
- Bthe defendant made a false statement
- Cthe defendant knew that the statement was false or was recklessly indifferent regarding its truth
- Dthe defendant intended for the other party to rely on the false statement
88Jack sells Jim a used car that Jack falsely described as having been driven only 12,000 miles. Fraud has occurred if:
- AJim bought the car solely because of its color
- BJim knew that the mileage was more than 12,000 miles
- CJim relied upon Jack's statement
- DJack is a merchant
89I believe that I own a very valuable vase. I tell you this information and state that I will sell it to you for $800. I sell the vase to you, and you later find out that the vase is worth only $200. Fraud:
- Ahas occurred
- Bhas not occurred
- Ccan always be based upon a statement of opinion or value
- Dnone of the above
90A finding of undue influence would most likely not occur in a contract between
- Aparent and child
- Battorney and client
- Cneighbor and neighbor
- Dguardian and ward
91An apparently voluntary agreement may in fact not be voluntary if:
- Aundue influence is present
- Bphysical duress is present
- Ceconomic duress is present
- Dall of the above
92Generally, a promise is legally enforceable even if nothing is given or received for the promise
- ATrue
- BFalse
93Consideration is what a promisor demands and receives as the price for a promise
- ATrue
- BFalse
94The fact that the consideration supplied by one party is slight when compared with the burden undertaken by the other party is immaterial
- ATrue
- BFalse
95Consideration always must be an act or the promise to perform an act
- ATrue
- BFalse
96Consideration is the bargained-for exchange between the parties to a contract
- ATrue
- BFalse
97One promise may serve as consideration for many return promises
- ATrue
- BFalse
98A promise to make a gift is enforceable
- ATrue
- BFalse
99Charitable subscriptions by which individuals make pledges to finance the construction of a college building, a church or another structure for charitable purposes are binding to the extent that the donor should have reasonably realized that the charity was relying on the promise in undertaking the building program
- ATrue
- BFalse
100True considerations occurs only when the value of one promise is equal to the value of the promise given by the other party
- ATrue
- BFalse
101The promise of a creditor to refrain from collecting a debt is consideration for a promise by the debtor to modify the terms of the transaction
- ATrue
- BFalse
102Forbearance may constitute consideration
- ATrue
- BFalse
103An illusory promise creates a bilateral contract
- ATrue
- BFalse
104A promise that in fact does not impose any obligation on the promisor is known as an elusive promise
- ATrue
- BFalse
105A binding contract cannot contain a cancellation provision
- ATrue
- BFalse
106Ordinarily, doing or promising to do what one is already under legal obligation to do is not consideration
- ATrue
- BFalse
107A second promise to pay a contractor a higher amount on the original contract may be enforceable
- ATrue
- BFalse
108In a contract for the sale of goods, any modification made by the parties to the contract must be supported by consideration to be binding
- ATrue
- BFalse
109With regard to an unliquidated debt, payment by the debtor of less than the amount claimed by the creditor is consideration for the latter's agreement to release or settle the claim
- ATrue
- BFalse
110If a merchant receives and cashes a check for partial payment of a debt and the check bears the notation that the amount is in full payment of a disputed sum, the total debt is released
- ATrue
- BFalse
111Sara Student wished to pay off her $5,000 student loan. If she sends in a check for $3,000 and the creditor cashes the check, the debt will be fully satisfied provided the check is marked "paid in full."
- ATrue
- BFalse
112In a composition of creditors, the various creditors of a single debtor mutually agree to accept a fractional part of their claims in full satisfaction of the claims
- ATrue
- BFalse
113Past benefits already received by a promisor cannot be consideration for a later promise
- ATrue
- BFalse
114In most states, promises made to another based on moral obligation lack consideration and are not enforceable
- ATrue
- BFalse
115The doctrine of promissory estoppel is also known as the doctrine of beneficial reliance
- ATrue
- BFalse
116Under the doctrine of promissory estoppel, a promisor may be prevented from asserting that his or her promise is unenforceable because the promisee gave no consideration for the promise
- ATrue
- BFalse
117Damages recoverable in a case of promissory estoppel are determined by the profits that the promisee expected
- ATrue
- BFalse
118Will the law enforce every promise
- AYes, in all cases
- BYes, with or without consideration
- CGenerally yes, if consideration is given for the promise
- DYes, but only if there is no consideration
119Consideration is:
- Athe concern shown by the other contracting party
- Bwhat is demanded by the promisor as the price for the promise
- Ca stand number of dollars
- Dthe concern of both contracting parties for the protection of the environment
120Under the ______ approach, consideration is defined as a benefit received by the promisor or detriment incurred by the promisee
- Apro-con
- BI win, you lose
- Cgain-loss
- Dbenefit-detriment
121When there is no consideration for a promise, the agreement is:
- Aa quasi contract
- Bequitable
- Cnot binding
- Dunethical
122Courts will consider the adequacy of consideration when:
- Aone party clearly has the better of the deal
- Bone party has more business experience than the other
- Cone party claims to have been defrauded
- Done party shows a much lower price nationally-advertised on television
123Which of the following can be consideration for a promise?
- ARefraining from beating one's spouse
- BPromising to refrain from beating one's spouse
- CRefraining from smoking cigarettes
- DRefraining from using cocaine
124For a bilateral contract to be enforceable there must be:
- Amutuality of obligation
- Ban illusory promise
- Cforbearance
- Dadequacy of consideration
125Examples of illusory promises include:
- Acancellation provisions
- Bapparent promises
- Cconditional obligations
- Dreal obligations
126A cancellation provision:
- Amakes a promise illusory
- Bgives a person a free way out
- Cis limited to the terms set forth by the provision
- Dnone of the above
127A contract in which one party agrees to purchase goods from another contingent upon the purchaser's ability to locate suitable financing is said to
- Abe illegal
- Bresult from undue influence
- Ccontain a waiver
- Dcontain a conditional promise
128Ordinarily, a promise to perform an existing legal obligation is:
- Anot consideration
- Bbinding if the promisor promises to perform with extra care
- Cbinding if the promisor promises to perform to suit the personal satisfaction of the promisee
- Dbinding if the promisee would experience substantial loss due to breach of the promise
129Which of the following is not consideration for a present promise
- Aa good faith adjustment
- Bcompromise and release of claims
- Cthe promise to pay one's child support obligation, consistent with pre-existing court order
- Dthe performance of requested act
130A landowner's promise to p ay a contractor a bonus to complete construction of a building according to the terms of a pre-existing contract between the landowner and the contractor is:
- Abinding if the promise is in writing
- Bbinding, since the promise is made by a non-merchant
- Cbinding, since the promise is made to a merchant
- Dordinarily not binding on the promisor
131An agreement to pay reasonable additional compensation to a contractor for the performance of pre-existing contract when the contractor faces extraordinary circumstances caused by unforeseen difficulties is called a:
- Agood-faith adjustment
- Bbribe
- Ccompensatory allowance
- Drelief payment
132The effect of the making of a partial payment to satisfy an admitted debt is an example of the rule that:
- Apast benefits cannot be consideration for a later promise
- Ba conditional promise may be consideration
- Cdoing what one is already under a legal obligation to do is not consideration
- Dconsideration must be adequate to be binding
133The rule that doing or promising to do what one is already legally bound to do is not consideration applies to part payment made in satisfaction of a(n) ______ debt
- Aunliquidated
- Bsuperfluous
- Cnon-superfluous
- Dliquidated
134Consideration is not required in
- Acontracts for the sale of goods
- Bemployment contracts
- Cagreements to modify employment contracts
- Dagreements to modify contracts for the sale of goods
135When a debtor tender a check stating "paid in full" and the creditor cashes the check, the debt:
- Ais always discharged
- Bmay be discharged if it is a liquidated debt
- Cmay be discharged if it is an unliquidated debt
- Dis never discharged
136Which of the following is not a necessary element of promissory estoppel?
- AThe promisor and the promisee must engage in a bargained-for exchange
- BThe promisor must intend or should reasonably expect that the promisee will rely on the promise
- CThe promisee must in fact rely on the promise in some definite and substantial manner
- DEnforcement of the promise is the only way to avoid injustice
137What damages are recoverable in a case of promissory estoppel
- Aprofits that the promisor expected
- Bprofits that the promisee expected
- Can amount necessary to restore the promisee to the position he or she would have been in had the promisee not relied on the promise
- Dan amount necessary to restore the promisor to the position he or she would have been in had the promisor not relied on the promise
138An agreement is illegal when either its formation or performance is a crime or tort, or its contrary to public policy
- ATrue
- BFalse
139When an agreement is illegal, parties are usually not entitled to help from the courts
- ATrue
- BFalse
140If an illegal agreement has already been performed parties can sue for damages
- ATrue
- BFalse
141If a contract appears to be legal on its face, it will be enforceable even if it was entered into for an illegal purpose
- ATrue
- BFalse
142When parties are not equally guilty, the least guilty party is granted relief when it is in the public interest
- ATrue
- BFalse
143Even if part of a contract is illegal, the court may enforce a divisible, legal part of the contract
- ATrue
- BFalse
144If a contract can be interpreted in two ways, one legal and the other illegal, the court will assume that the legal meaning was intended unless the contrary is clearly indicated
- ATrue
- BFalse
145An agreement that calls for the comission of a civil wrong is illegal and void
- ATrue
- BFalse
146In every contract there exists an expressed covenant of good faith and fair dealing
- ATrue
- BFalse
147A provision in a contract that gives what the court believes is too much of an advantage over a buyer may be held void as unconscionable
- ATrue
- BFalse
148Ordinarily, a court will not consider whether a contract is fair or unfair
- ATrue
- BFalse
149Company wide standardized form contracts imposed on a "take-it-or-leave it" basis by a party with superior bargaining strength are called contracts of collusion
- ATrue
- BFalse
150Substantive unconscionability has to do with matters of freedom of assent
- ATrue
- BFalse
151When a court finds a clause of a contract unconscionable at the time it was made, it may enforce the remainder of the contract
- ATrue
- BFalse
152Agreements that are contrary to public policy are not binding
- ATrue
- BFalse
153Courts are quick to invalidate contracts on the ground that they are contrary to public policy because such contracts are so offensive to society
- ATrue
- BFalse
154Legislation commonly requires that an installment-sale contract specify the cash price, down payment, finance charges and insurance costs
- ATrue
- BFalse
155Legislation commonly requires that an installment-sale contract specify the cash price, down payment, finance charges and insurance costs
- ATrue
- BFalse
156An unlicensed insurance broker who cannot personally recover a fee because of the absence of a license can effectively circumvent the statutory requirements by having a friend who is a licensed broker bill for the services and collect the payment for him
- ATrue
- BFalse
157To stabilize the industry, manufacturers of the same or similar products may agree that each will market to its product in a specified geographic area of the country and will not market its product in the territory assigned to other manufacturers.
- ATrue
- BFalse
158Agreements not to compete are void
- ATrue
- BFalse
159A non-competition covenant may be held invalid because of vagueness concerning the duration and geographic area of restriction
- ATrue
- BFalse
160When a nationally-known neurosurgeon in Chicago, Illinois sells her practice, the contract may specify that the seller will not practice within a 100-mile radius of Chicago for one year
- ATrue
- BFalse
161Fees charged by a lender for the reasonable expense of making a loan, such as the cost of appraising property, are treated as interest for purposes of usury law
- ATrue
- BFalse
162In most states the usury laws apply to loans made to both individuals and corporations
- ATrue
- BFalse
163In the case of an illegal contract, both parties usually are prohibited from seeking relief in the courts
- Aif the illegal contract has not been performed
- Bif the contract has been partially performed
- Cif the contract has been fully performed
- Dall of the above
164Agreement that are illegal are
- Aenforceable if one party acted in good faith
- Bvoidable by one of the parties
- Cvoid
- Dvoidable by either party
165Which party to an illegal agreement may get relief from the court
- APlaintiff
- BDefendant
- Cthe less-guilty party, when public interest is advanced by granting relief
- Da doctor who was unlicensed at the time of the making of an agreement for the provision of medical services, but who later obtained a proper license
166An illegal provision in a contract
- Acauses the entire contract to be voidable
- Bcauses the entire contract to be rescinded
- Ccan be ignored by the parties in their performance of the remaining provisions of the contract, assuming that the remaining portions of the contract can stand on their own
- Dcan be ignored by the parties, because an illegal provision in a contract is not deemed substantial
167An agreement to slander a third person would not be enforceable because slander is a(n)
- Acrime
- Bcivil wrong
- Cinfringement of privacy
- Dassualt
168Dealing honestly, reasonably and in good faith
- Ais implied in every contract for services
- Bis implied in every contract for the sale of goods
- Cis an expressed obligation in every contract
- Dboth a and b
169A contract that is deemed to be too harsh or oppressive to one of the contracting parties may be unenforceable under the concept of
- Aunilateral influence
- Bbilateral influence
- Cunconscionability
- Dconscionability
170One element involved in the determination of unconscionability is
- Athe comparative bargaining power of the parties
- Bthe opportunity to make a contract for better terms with someone else
- Cthe course of the economy after the contract is made
- Dwhether a loss will be sustained by performance of the contract
171The validity of a contract is not affected by
- Athe effect of the contract on the community
- Bunconscionability
- Cthe absence of good faith
- Dthe fact that the contract turned out to be a bad bargain for one of the parties
172Today, what is an important element in determining the validity of a contract
- Athe Uniform Contract Code
- Bwhether the agreement might harm the public welfare
- Cwhether the contract is wise or foolish
- Dwhether the contract operates unequally between the parties
173Which of the following types of contracts might be unenforceable as contrary to public policy
- Aa contract that is contrary to the protection of the public, welfare, health or safety
- Ba contract that is contrary to the protection of the person
- Ca contract that is contrary to the protection of recognized social institutions
- Dall of the above
174Public policy
- Acan be precisely defined
- Bis frequently used by the courts as a reason to invalidate contracts
- Cis protections from that which violates any established interest of society
- Dall of the above
175Private lotteries, which generally are held to be illegal, involve three elements
- Aprize, chance, and consideration
- Breturn, skill and wager
- Cprize, skill and consideration
- Dattractive return, minimal involvement and skill
176Which of the following is not illegal?
- Aan office football "pool" with a cash entry fee and cash prize
- Ba raffle with an entry fee to win a car
- Ca "giveaway" to every tenth person who buys meat at a butcher shop
- Da "giveaway" to every tenth person entering a department store
177The failure to have a license will not render agreements void if the license
- Ais based on formal education
- Bis required for engaging in a particular business or trade
- Cis a regulatory license
- Dis readily obtainable by anyone who offers payment of a required fee
178Which of the following agreements represent(s) an unreasonable restraint of trade?
- Aa combination to create a monopoly
- Ban agreement to obtain a "corner" on market
- Can association of merchants to increase prices
- Dall of the above
179An agreement to restrain trade may be void on the grounds that it is
- Afraudulent
- Bcontrary to public policy
- Cillegal lobbying
- Dunfair to merchants
180An agreement to restrain trade may be void on the grounds that it is
- Afraudulent
- Bcontrary to public policy
- Cillegal lobbying
- Dunfair to merchants
181An agreement to compete is enforceable
- Ain the sale of bussiness
- Bbetween competitors
- Cin contracts for the sale of goods
- Din contracts for the sale of securities
182In an employment contract, agreements not to compete are
- Aillegal
- Buniformly held to be in the public interest and therefore legal
- Cvalid only if the restriction protects the employee
- Dvalid, if the restriction is reasonable and necessary for the protection of the former employer
183When money is loaned at a greater rate of interest than is allowed by law, ______ is committed
- Ausury
- Bcredit misfeasance
- Cpetty theft
- Dcredit malfeasance
184Which of the following is not an example of a state penalty for violating usury law?
- Arestricting the lender to the recovery of the loan but no interest whatsoever
- Ballowing the lender to recover the loan principal and interest up to the maximum contract rate
- Crestricting the lender to the recovery of the loan plus seventy-fifty percent (75%) of the interest
- Drequiring the lender to pay as a penalty, double the interest the borrower paid on a usurious loan
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- Quiz on Business Law Exam 3, created by Marissa Boretz on 09/11/2014.
- Author
- Marissa Boretz
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- English
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