Contracts MCQs

Carson Corp., a retail chain, asked Alto Construction to fix a broken window at one of Carsonâ€™s stores. Alto offered to make the repairs with...

Price involved.
Nature of the subject matter.
Parties to the contract.
Time for performance.

On September 10, Harris, Inc., a new car dealer, placed a newspaper advertisement stating that Harris would sell ten cars at its showroom for a spec...

Offer was unenforceable.
Advertisement was not an offer.
Television announcement revoked the offer.
Offer had not been accepted.

On June 15, Peters orally offered to sell a used lawn mower to Mason for $125. Peters specified that Mason had until June 20 to accept the offer. On...

Masonâ€™s acceptance would be effective when received by Peters.
Masonâ€™s acceptance would be effective when mailed.
Petersâ€™ offer had been revoked and Masonâ€™s acceptance was ineffective.
Peters was obligated to keep the June 15 offer open until June 20.

Calistoga offers to sell her home to Drake for $300,000. Drake asks her if she would accept $250,000. Which of the following is true?

Drakeâ€™s response is mere inquiry; therefore, the $300,000 offer by Calistoga is still in force.
Drakeâ€™s response is a counteroffer effectively terminating the $300,000 offer and instigating an offer for $250,000.
Drakeâ€™s response is a rejection of the $300,000 offer, and there is no offer for $250,000 because it is too indefinite to be an offer
Because of ambiguity, both offers are terminated by operation of law.

Opal offered, in writing, to sell Larkin a parcel of land for $300,000. If Opal dies, the offer will

Terminate prior to Larkinâ€™s acceptance only if Larkin received notice of Opalâ€™s death.
Remain open for a reasonable period of time after Opalâ€™s death.
Automatically terminate despite Larkinâ€™s prior acceptance.
Automatically terminate prior to Larkinâ€™s acceptance.

On April 1, Fine Corp. faxed Moss an offer to purchase Mossâ€™ warehouse for $500,000. The offer stated that it would remain open only until Ap...

No contract was formed because Moss sent the acceptance by an unauthorized method.
No contract was formed because Fine received Mossâ€™ acceptance after April 4.
A contract was formed when Moss sent the acceptance.
A contract was formed when Fine received Mossâ€™ acceptance.

On February 12, Harris sent Fresno a written offer to purchase Fresnoâ€™s land. The offer included the following provision: â€œAcceptance o...

A contract was formed on February 19.
Fresnoâ€™s letter constituted a counteroffer.
Fresnoâ€™s use of the overnight delivery service was an effective form of acceptance.
A contract was formed on February 18 regardless of when Harris actually received Fresnoâ€™s letter.

Kay, an art collector, promised Hammer, an art student, that if Hammer could obtain certain rare artifacts within two weeks, Kay would pay for Hamme...

Unilateral contract.
Unjust enrichment.
Public policy.
Quasi contract.

On September 27, Summers sent Fox a letter offering to sell Fox a vacation home for $150,000. On October 2, Fox replied by mail agreeing to buy the ...

No, because Fox failed to sign and return Summersâ€™ letter.
No, because Foxâ€™s letter was a counteroffer.
Yes, because Summersâ€™ offer was validly accepted.
Yes, because Summersâ€™ silence is an implied acceptance of Foxâ€™s letter.

Wick Company made a contract in writing to hire Zake for five years for $150,000 per year. After two years, Zake asked Wick for a raise of $20,000 p...

Zake, because Wick agreed to the bonus.
Zake, if the bonus was agreed to in writing.
Wick, even though Wick agreed to the bonus.
Wick, because Zake had applied some pressure to get the bonus.

Grove is seeking to avoid performing a promise to pay Brook $1,500. Grove is relying on lack of consideration on Brookâ€™s part. Grove will pre...

Prior to Groveâ€™s promise, Brook had already performed the requested act.
Brooksâ€™ only claim of consideration was the relinquishment of a legal right.
Brookâ€™s asserted consideration is only worth $400.
The consideration to be performed by Brook will be performed by a third party.

Dunne and Cook signed a contract requiring Cook to rebind 500 of Dunneâ€™s books at $0.80 per book. Later, Dunne requested, in good faith, that...

Enforceable, but proof of it is inadmissible into evidence.
Enforceable, and proof of it is admissible into evidence.
Unenforceable, because Dunne failed to give consideration, but proof of it is otherwise admissible into evidence.
Unenforceable, due to the statute of frauds, and proof of it is inadmissible into evidence.

In which of the following situations does the first promise serve as valid consideration for the second promise?

A police officerâ€™s promise to catch a thief for a victimâ€™s promise to pay a reward.
A builderâ€™s promise to complete a contract for a purchaserâ€™s promise to extend the time for completion.
A debtorâ€™s promise to pay $500 for a creditorâ€™s promise to forgive the balance of a $600 liquidated debt.
A debtorâ€™s promise to pay $500 for a creditorâ€™s promise to forgive the balance of a $600 disputed debt.

Which of the following will be legally binding despite lack of consideration?

An employerâ€™s promise to make a cash payment to a deceased employeeâ€™s family in recognition of the employeeâ€™s many years of service.
A promise to donate money to a charity on which the charity relied in incurring large expenditures.
A modification of a signed contract to purchase a parcel of land.
A merchantâ€™s oral promise to keep an offer open for sixty days.

Rail, who was sixteen years old, purchased an $800 computer from Elco Electronics. Rail and Elco are located in a state where the age of majority is...

Correct, because Railâ€™s multiple requests for service acted as a ratification of the contract.
Correct, because Rail could have transferred good title to a good-faith purchaser for value.
Incorrect, because Rail disaffirmed the contract within a reasonable period of time after reaching the age of eighteen.
Incorrect, because Rail could disaffirm the contract at any time.

Green was adjudicated incompetent by a court having proper jurisdiction. Which of the following statements is correct regarding contracts subsequent...

All contracts are voidable.
All contracts are valid.
All contracts are void.
All contracts are enforceable.

All of the following are effective methods of ratifying a contract entered into by a minor except

Expressly ratifying the contract after reaching the age of majority.
Failing to disaffirm the contract within a reasonable time after reaching the age of majority.
Ratifying the contract before reaching the age of majority.
Ratifying the contract by implication after reaching the age of majority.

Under a personal services contract, which of the following circumstances will cause the discharge of a partyâ€™s duties?

Death of the party who is to receive the services.
Cost of performing the services has doubled.
Bankruptcy of the party who is to receive the services.
Illegality of the services to be performed.

Which of the following would be unenforceable because the subject matter is illegal?

A contingent fee charged by an attorney to represent a plaintiff in a negligence action.
An arbitration clause in a supply contract.
A restrictive covenant in an employment contract prohibiting a former employee from using the employerâ€™s trade secrets.
An employerâ€™s promise not to press embezzlement charges against an employee who agrees to make restitution.

Which of the following, if intentionally misstated by a seller to a buyer, would be considered a fraudulent inducement to make a contract?

Nonexpert opinion.
Appraised value.
Prediction.
Immaterial fact.

If a buyer accepts an offer containing an immaterial unilateral mistake, the resulting contract will be

Void as a matter of law.
Void at the election of the buyer.
Valid as to both parties.
Voidable at the election of the seller.

If a person is induced to enter into a contract by another person because of the close relationship between the parties, the contract may be voidabl...

Fraud in the inducement.
Unconscionability.
Undue influence.
Duress.

Long purchased a life insurance policy with Tempo Life Insurance Co. The policy named Longâ€™s daughter as beneficiary. Six months after the po...

Win, because Longâ€™s daughter is an incidental beneficiary.
Win, because of Longâ€™s failure to disclose the preexisting heart condition.
Lose, because Longâ€™s death was from natural causes.
Lose, because Longâ€™s daughter is a third-party donee beneficiary.

Petersen went to Jacksonâ€™s home to buy a used car advertised in the newspaper. Jackson told Petersen that â€œit is a great carâ€ and...

Yes, Jacksonâ€™s statement that â€œit is a great carâ€ is actionable fraud.
Yes, Jacksonâ€™s statement about the overhaul is actionable fraud.
Yes, both the statement that â€œit is a great carâ€ and the statement about the overhaul are actionable fraud.
No.

A building subcontractor submitted a bid for construction of a portion of a high-rise office building. The bid contained material computational erro...

Not liable because the contractor knew of the errors.
Not liable because the errors were a result of gross negligence.
Liable because the errors were unilateral.
Liable because the errors were material.

Maco, Inc. and Kent contracted for Kent to provide Maco certain consulting services at an hourly rate of $20. Kentâ€™s normal hourly rate was $...

Win, because Maco refused to pay the fair market value of Kentâ€™s services.
Win, because Maco was aware of Kentâ€™s serious financial problems.
Lose, because Macoâ€™s actions did not constitute duress.
Lose, because Maco cannot prove that Kent, at the time, had no other offers to provide consulting services.

To prevail in a common law action for fraud in the inducement, a plaintiff must prove that the

Defendant was an expert with regard to the misrepresentations.
Defendant made the misrepresentations with knowledge of their falsity and with an intention to deceive.
Misrepresentations were in writing.
Plaintiff was in a fiduciary relationship with the defendant.

On June 1, 2010, Decker orally guaranteed the payment of a $5,000 note Deckerâ€™s cousin owed Baker. Deckerâ€™s agreement with Baker provi...

Decker is liable under the oral guaranty because Decker did not object to Bakerâ€™s June 3 letter.
Decker is not liable under the oral guaranty because it expired more than one year after June 1.
Decker is liable under the oral guaranty because Baker demanded payment within one year of the date the guaranty was given.
Decker is not liable under the oral guaranty because Deckerâ€™s promise was not in writing.

Nolan agreed orally with Train to sell Train a house for $100,000. Train sent Nolan a signed agreement and a down payment of $10,000. Nolan did not ...

Train will win because Train signed the agreement and Nolan did not object.
Train will win because Train made a down payment and took possession.
Nolan will win because Nolan did not sign the agreement.
Nolan will win because the house was worth more than $500.

Cherry contracted orally to purchase Picks Company for $1,500,000 if it is profitable for one full year after the making of the oral contract. An au...

Yes, because the contract could not be completed within one year.
Yes, because the contract was for $500 or more.
No, because the company was profitable as agreed for one year.
No, because Picks Company relied on Cherryâ€™s promise.

Which of the following statements is true with regard to the Statute of Frauds?

All contracts involving consideration of more than $500 must be in writing.
The written contract must be signed by all parties.
The Statute of Frauds applies to contracts that can be fully performed within one year from the date they are made.
The contract terms may be stated in more than 1 document.

Carson agreed orally to repair Ivesâ€™ rare book for $450. Before the work was started, Ives asked Carson to perform additional repairs to the ...

$0
$200
$450
$650

Landry Company contracted orally with Newell to pay her $50,000 for the completion of an ethics audit of Landry Company. The report is to span a per...

Yes, because the contract is for $500 or more.
Yes, because the deadline for the contract is over one year.
No, despite the due date of fourteen months.
No, because both parties waived the Statute of Frauds by their oral agreement.

Rogers and Lennon entered into a written computer consulting agreement that required Lennon to provide certain weekly reports to Rogers. The agreeme...

Not apply to any of the partiesâ€™ agreements because the consulting agreement did not have to be in writing.
Not prevent Lennon from proving the partiesâ€™ oral agreement that Lennon could use Rogersâ€™ computer.
Not prevent the admission into evidence of testimony regarding Lennonâ€™s right to report on a monthly basis.
Not apply to the partiesâ€™ agreement to allow Lennon to use Rogersâ€™ computer because it was contemporaneous with the written agreement.

Joan Silver had viewed some land that she wished to purchase. It was offered for sale by Daniel Tweney over the Internet for $200,000. Silver believ...

Only I is correct.
I and II only are correct.
I and III only are correct.
Neither I, II, nor III is correct.

One of the criteria for a valid assignment of a sales contract to a third party is that the assignment must

Be supported by adequate consideration from the assignee.
Be in writing and signed by the assignor.
Not materially increase the other partyâ€™s risk or duty.
Not be revocable by the assignor.

Your client, Bugle, owns a parking lot near downtown San Francisco. One day Bugle is excited because he learns that Fargo, who owns a parking lot ne...

If Fargo was the one who breached the contract, Bugle may sue her if ABC had already made some payments on the contract.
If ABC was the party who breached, ABC is liable to Bugle.
Bugle may sue either party, and the nonbreaching party may then recover from the breaching party.
Bugle has no legal rights against either party.

Baxter, Inc. and Globe entered into a contract. After receiving valuable consideration from Clay, Baxter assigned its rights under the contract to C...

Clay released Globe.
Globe paid Baxter.
Baxter released Globe.
Baxter breached the contract

Mackay paid Manus $1,000 to deliver a painting to Mackayâ€™s friend Mann. When they met and signed the contract, Mackay said she wanted the pai...

Manus only.
Mackay only.
Manus, but only if he also brings suit against Mackay.
Manus or Mackay at Mannâ€™s option.

Ferco, Inc. claims to be a creditor beneficiary of a contract between Bell and Allied Industries, Inc. Allied is indebted to Ferco. The contract bet...

Not prevail, because Ferco lacked privity of contract with either Bell or Allied.
Not prevail, because Ferco did not give any consideration to Bell.
Prevail, because Ferco was an intended beneficiary of the contract between Allied and Bell.
Prevail, provided Ferco was aware of the contract between Bell and Allied at the time the contract was entered into

Parc hired Glaze to remodel and furnish an office suite. Glaze submitted plans that Parc approved. After completing all the necessary construction a...

Glaze will lose because Glaze breached the contract by not completing performance.
Glaze will win because Glaze substantially performed and Parc prevented complete performance.
Glaze will lose because Glaze materially breached the contract by buying the accessories.
Glaze will win because Parc committed anticipatory breach.

Which of the following actions if taken by one party to a contract generally will discharge the performance required of the other party to the contr...

Material breach of the contract.
Delay in performance.
Tender.
Assignment of rights.

Which of the following actions will result in the discharge of a party to a contract? Prevention of performance . . . Accord and satisfaction

Yes Yes
Yes No
No Yes
No No

To cancel a contract and to restore the parties to their original positions before the contract, the parties should execute a

Novation.
Release.
Rescission.
Revocation.

Ordinarily, in an action for breach of a construction contract, the statute of limitations time period would be computed from the date the

Contract is negotiated.
Contract is breached.
Construction is begun
Contract is signed.

Kaye contracted to sell Hodges a building for $310,000. The contract required Hodges to pay the entire amount at closing. Kaye refused to close the ...

Punitive damages and compensatory damages.
Specific performance and compensatory damages.
Consequential damages or punitive damages.
Compensatory damages or specific performance.

Ames Construction Co. contracted to build a warehouse for White Corp. The construction specifications required Ames to use Ace lighting fixtures. In...

Whiteâ€™s recovery will be limited to monetary damages because Amesâ€™ breach of the construction contract was not material.
White will not be able to recover any damages from Ames because the breach was inadvertent.
Ames did not breach the construction contract because the Perfection fixtures were substantially as good as the Ace fixtures.
Ames must install Ace fixtures or White will not be obligated to accept the warehouse.

Master Mfg., Inc. contracted with Accur Computer Repair Corp. to maintain Masterâ€™s computer system. Masterâ€™s manufacturing process dep...

Win, unless the liquidated damage provision is determined to be a penalty.
Win, because under all circumstances liquidated damage provisions are enforceable.
Lose, because Accurâ€™s breach was not material.
Lose, because liquidated damage provisions violate public policy.

Nagel and Fields entered into a contract in which Nagel was obligated to deliver certain goods to Fields by September 10. On September 3, Nagel told...

Promissory estoppel.
Accord and satisfaction.
Anticipatory repudiation.
Substantial performance.

Maco Corp. contracted to sell 1,500 bushels of potatoes to LBC Chips. The contract did not refer to any specific supply source for the potatoes. Mac...

Lose, because it could have purchased potatoes from other growers to deliver to LBC.
Lose, unless it can show that the purchase of substitute potatoes for delivery to LBC would make the contract unprofitable.
Win, because the infestation was an act of nature that could not have been anticipated by Maco.
Win, because both Maco and LBC are assumed to accept the risk of a crop failure.

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Contracts MCQs