PART (3) : 

1.   Ed contracts with Nathan to kill Nathan’s mother-in-law for $1,000. Which element of consideration is missing from this contract? 

A. All the elements of consideration are present

B. Legality of consideration

C. Consideration wasn’t a bargained-for exchange

D. Adequacy of consideration

2.   At his 80th birthday party, Graham declares that Elsie is his favorite grandchild and that he will leave Elsie $100,000 on his death. Sadly, Graham dies just three days later. No provision of his will leaves Elsie the $100,000. Elsie files a breach of contract claim against Graham’s estate. The most likely result is that Elsie will lose because no contract existed due to lack of 

A. agreement and consideration.

B. contractual capacity and form.

C. contractual capacity and consideration.

D. form and agreement.

3.   Juan thinks he would like to purchase Tara’s house, but doesn’t know whether he will be able to save enough money for a down payment on a loan. Juan agrees to give Tara $5,000 for the option to purchase her house for $150,000 sometime within the next five years. Juan and Tara reduce their agreement to writing, sign it, and Juan gives Tara $5,000. Two years later, Juan wins the lottery and now is financially able to purchase Tara’s house. However, that same day Juan receives a letter from Tara revoking her offer to sell for $50,000. Which of the following is true? 

A. Tara’s revocation is effective as long as she refunds the $5,000.

B. Juan can’t complain because he failed to accept Tara’s offer before it was revoked.

C. Tara’s revocation is effective.

D. Tara’s revocation isn’t effective.

4.   Esther lives with a caregiver on whom she is greatly dependent and trusts. The caregiver persuades Esther to sign a contract with the caregiver that greatly favors the caregiver. If the contract is set aside, it will likely be on what grounds? 

A. Mistake

B. Duress

C. Fraud

D. Undue influence

5.   Tom is selling his motorcycle to Carl. Tom tells Carl that the motorcycle runs perfectly, though he knows that the motorcycle leaks oil. Carl purchases the motorcycle and discovers the problem. Which of the following is true? 

A. Tom committed active fraud.

B. Tom committed passive fraud.

C. Tom committed fraud in the inception.

D. Tom hasn’t committed fraud.

6.   Carlos promises to pay $100 for someone to paint his house. Timothy hears about the offer and paints Carlos’s house on 123 Oak Street. However, Carlos intended that his other house, at 456 Maple Street, be the one to be painted and refuses to pay Timothy, claiming that there’s no contract because they never discussed which house would be painted. If Carlos has a legal right to payment, it’s most likely based on 

A. implied-in-law contract.

B. implied-in-fact contract.

C. express contract.

D. fraud.

7.   Delivery of unordered merchandize is considered 

A. a contract to purchase unless the recipient contacts the sender to reject the merchandize.

B. a contract to purchase if the items aren’t returned.

C. performance of a contract.

D. an offer to sell.

8.   Carrie decides to offer Shelley the opportunity to purchase her motorcycle for just $500. Carrie told Jim, a mutual friend of Shelley and her, that she intended to make the offer. Later, Carrie changes her mind. Shelley approaches Carrie and says she accepts the offer. No contract was formed most likely because 

A. Carrie never communicated the offer to Shelley.

B. Jim was acting as an agent for Shelley without telling Carrie.

C. the terms of the offer weren’t definite enough to form a contract.

D. Carrie didn’t possess a serious, objective intention.

9.   On the Internet, Sara came across a software package she wanted to download. To download the software, she had to read a disclaimer and click an “I Agree” button. Sara didn’t bother to read the contents of the “Agreement and Warranties” disclaimer, but she clicked “I Agree.” The software caused her computer to crash. Sara filed suit against the company that ran the Web site, and the company’s defense is that the “Agreement and Warranties” disclaimer to which Sara agreed disclaimed any responsibility for such occurrences. The most likely result is that Sara will 

A. win her lawsuit because she didn’t the read disclaimer.

B. lose her lawsuit because she didn’t read the disclaimer, which isn’t enforceable.

C. lose her lawsuit because the disclaimer will be enforced.

D. win her lawsuit because disclaimers aren’t enforceable.

10.   Daisy contracts with Mike that in exchange for $50 Daisy won’t whistle for a week. This contract is 

A. unenforceable due to fraud.

B. not enforceable due to lack of consideration.

C. enforceable only if Daisy is a musician who whistles for a living and would suffer significant income loss by not whistling for a week.

D. enforceable.

11.   Eric, a 17-year-old, signs a contract with the armed services to enlist. Later, Eric changes his mind and wants out of the contract. Can he void the contract based on incapacity to contract? 

A. Yes, after he turns 18

B. Yes

C. No

D. In some states

12.   Which of the following is a necessary element both for fraud and for misrepresentation? 

A. A false statement

B. A fiduciary relationship

C. A hidden problem

D. The intent to deceive

13.   Regan marries at age 17. Then, she enters into a contract with Art to purchase an automobile for $10,000. She later changes her mind and wants to void the contract. Which of the following is true? 

A. Regan can’t void the contract because she is over 15.

B. Regan can void the contract because she is married.

C. Regan can’t void the contract because she is married.

D. Regan can void the contract because she is a minor.

14.   Dave is declared insane and committed to an asylum. Dave escapes and goes to a car dealership, where he enters into a contract with Larry to buy a sports car. Which of the following statements is true? 

A. Only Larry can void the contract.

B. Because Dave is legally insane, the contract is void.

C. To void the contract, Dave must prove he is insane.

D. Only Dave can void the contract.

15.   Jacques offers to paint Alisha’s house for $100. Before Alisha responds, Jacques dies. Which of the following statements is true? 

A. A representative of Jacques’s estate must find someone to paint Alisha’s house.

B. A representative of Jacques’s estate must paint Alisha’s house for $100.

C. There’s no contract because Alisha failed to accept Jacques’s offer before he died.

D. Jacques’s offer has been revoked.

16.   Jackie tells a group of friends that she plans to sell her home. Meg asks how much Jackie hopes to get for the house, and Jackie replies, “$50,000.” Meg says, “I accept your offer. I’ll purchase your house for $50,000.” No contract exists because 

A. the terms of the offer aren’t reasonably certain.

B. Jackie doesn’t seriously intend to enter a contract.

C. Jackie’s statements are merely preliminary negotiations.

D. the offer isn’t properly communicated.

17.   Josh runs over Barbara’s dog. Barbara promises not to sue Josh if he pays her $200. Josh pays $200. Then Barbara sues, claiming an agreement not to sue doesn’t constitute consideration. Which of the following is true? 

A. Such contracts violate public policy and therefore are unenforceable.

B. Agreement not to sue is consideration only if it approximates what a court would have awarded.

C. Agreement not to sue isn’t consideration.

D. Agreement not to sue is consideration.

18.   Lance e-mails Fred, offering to buy his motorcycle for $750. Fred replies, agreeing. Later, Fred declines to honor the agreement, claiming that e-mail agreements aren’t enforceable. In both the initial e-mail and the reply Lance and Fred typed their names. Which of the following is true? 

A. There’s no contract because the e-mails weren’t witnessed.

B. There’s no contract because contracts must have hand-written signatures to be enforceable.

C. There’s no contract because e-mail agreements aren’t enforceable.

D. The e-mails constitute a contract if Lance and Fred have agreed that electronic signatures can be used to create the agreement.

19.   Tyler offers to dance naked on Main Street if Corey will mow Tyler’s yard. Corey mows Tyler’s yard. Which of the following statements is not potential grounds for setting aside the contract? 

A. Illegality of consideration

B. Lack of serious intent to contract

C. Inadequacy of consideration

D. All of the above are potential grounds for setting aside the contract

20.   Jack is a mature-looking 17-year-old who lives at home with his parents. Jack wants to purchase an automobile. Jack goes to Discount Car Sales, where Bud, the car salesman, never considers that Jack may be a minor. Bud sells Jack a car, with the agreement that Jack will pay Bud $100 per month over the next five years for the car. Which of the following is true? 

A. Bud can hold Jack’s parents liable for Jack’s contract, because Jack was a minor living in their home at the time the contract was formed.

B. Bud can disaffirm the contract because of Jack’s status as a minor at the time the contract was formed.

C. Jack can disaffirm the contract because of his status as a minor at the time the contract was formed.

D. Despite Jack’s status as a minor, Bud can prohibit Jack from disaffirming a contract for a necessary (or basic) need.