Liberty University
BUSI 301 quiz 2 solutions
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Exam 2
Ally, a minor, purchases a car from a
used-car dealer. The law allows minors the right to cancel a contract until the
time the minor turns 18. The contract between Ally and the dealer is:
ABC Land Co. is negotiating the sale of an
office building to Mega Co. Which laws will govern the contract for the sale of
the building?
Offers that the offeree partly performed
or detrimentally relied on are:
If the offer specifies no time limit in
which to accept:
Generally, courts do enforce a strict
compliance standard for contract conditions.
Incidental beneficiaries are known about
when the contract is entered into.
Just as in common law, the UCC recognizes
the concept of anticipatory repudiation, allowing a breach to be declared prior
to performance being due.
In a shipping contract, the risk of loss
passes to the buyer when:
What is the test to determine whether an
entity has monopoly power?
Proof of a seller's economic power in the
market is necessary to prove an antitrust violation under the Clayton Act A
promise that can be accepted only by the performance of the person to whom it
is offered is an example of:
A unilateral contract is a promise that
can be accepted only by performance.
Most contracts require a specific format
or ceremony.
Most contracts, while they require
evidence that the elements are met, do not require a specific format or
ceremony.
The mailbox rule provides that the
acceptance of an offer is generally effective upon receipt of the acceptance
when sent in a commercially reasonable manner.
Acceptance of an offer is generally
effective upon dispatch of the acceptance when sent in a
commercially reasonable manner.
Which of the following promises ordinarily
need not be in writing to be enforceable?
A contract with a personal trainer is for
services and is not covered under the statute of frauds.
Which of the following involves a
third-party substitution?
In a novation a third party substitutes
for one of the original contracting parties.
When an assignment is made, the assignee
has the right to reform the contract and change the obligor's rights and duties
as the assignee wishes.
The assignment is invalid if the contract
is materially altered such that the obligor's duties are increased and
additional burdens or risks are created.
UCC gap fillers will not be used and are
not applicable to contracts when the contract clearly specifies a contract term
or condition.
If the parties clearly state their terms
and conditions, the UCC need not fill in gaps to make the contract enforceable.
The UCC permits a contract to be
considered formed entirely by the parties' conduct even if no definite time of
formation can be determined.
The UCC lowers the bar for formation of
contracts by allowing an enforceable contract to arise in any sufficient
manner, such as examining the parties' conduct.
An entity's share of the relevant market
is used to determine whether the entity has a monopoly.
The Sherman Act does not prevent an entity
from becoming a monopoly.
It outlaws affirmative action toward monopolizing.
A naturally created monopoly does not violate the law.
Aimee goes online and orders a pair of
jeans, three T-shirts, and a pair of boots. This is an example of:
This is an example of a divisible contract
because it can be broken into independent parts and each part is able to stand
alone.
A unilateral contract is formed by an
exchange of promises.
A bilateral contract is formed by an
exchange of promises.
Larry has had a few beers and is starting
to get a bit drunk. He isn't acting strange, and in conducting conversations
with others he's slurring only an occasional word or two. Larry, should he
enter into a contract in this condition, would be considered mentally
incompetent and his contract would be void.
Larry is not unable to understand or unable
to act in a reasonable manner, so his contract would likely be valid or, at
most, voidable.
An offer may be terminated in all but
which of the following ways?
An offer may be terminated by action of
the parties in one of three ways: (1) revocation, in which the offeror
withdraws the offer prior to acceptance; (2) rejection, in which the offeree
rejects the offer; and (3) counteroffer, in which the offeree rejects the
original offer and proposes a new offer with different terms. Offers may also
be terminated by operation of law.
In a delegation situation, the
nondelegating party is called the:
When an accord and satisfaction is agreed
to, the original obligation subject to the accord is immediately discharged.
The International Chamber of Commerce
abbreviation indicating that goods are to be picked up by the buyer and not
delivered is:
In American Needle Inc. v.
National Football League, the 32 football teams were treated as a
single entity because they belong to the same sports league.
The court order for Microsoft to break
apart into multiple entities in U.S. v. Microsoft was
overturned on appeal.
Unjust enrichment is a theory used to
impose an obligation in the absence of an actual agreement.
Divisible contracts are often referred to
as severable contracts in many states.
Jon owns two cars. He says to Rachel,
"I'll sell you either car for $8,000." This is a valid offer.
Each of the following is a discharge by
mutual consent except:
Frustration of purpose discharges a
contract by operation of law.
A party to a contract may be discharged
from performance due to operation of law if the other party unilaterally alters
the contract.
UCC risk of loss provisions will govern
the terms of a contract even if the parties have specified risk allocation in
the contract.
The test for determining a monopoly under
the Sherman Act is the entity's share of the relative market.
There is a bright-line test for
determining the amount of market share necessary to be considered a monopoly.
Mike is walking through a parking lot and
finds Kathy lying unconscious. He puts her in his car and takes her to the
hospital. The hospital saves her life, and when she becomes conscious, it
presents her with a bill.
Real estate deeds and mortgages that
require a seal to be enforceable are considered:
The term option contract refers
to the choices that one has when entering into a contract.
On February 1, Frank's Fedora
Manufacturers sends an offer to Metropolitan Outfitters by letter with all
price, quality, quantity, and delivery terms clearly stated, indicating that
the offer will remain open until October 1. On September 1 Metropolitan sends
an acceptance of the offer to Frank's with no material alterations to any of
the stated terms in the offer. The acceptance makes the contract valid and
enforceable.
Your cousin, who is a CPA, calls you and
says that a client paid him in diamonds and he's selling them. If you purchase
one of those diamonds, at the time of the sale your cousin would be considered
a merchant of those diamonds.
The per se standard applies to nonprice
vertical restraints.
The courts use the rule of reason
standard.
Which act does the Robinson-Patman Act
amend?
An offer of a reward, if it is fulfilled,
forms:
All of the following are necessary
elements of a contract except:
Which of the following is not required for
promissory estoppel to apply?
Bud calls Lou and says, "I'll sell
you my car for a thousand bucks, interested?" Lou says, "I'll look it
up on the Internet. If the Blue Book price is close, I'll pay you $1,000 in the
morning." At sunrise Lou shows up with $1000.
In which of the following scenarios would
enforcement of specific performance be appropriate?
If a seller has delivered nonconforming
goods that have been rejected, upon notice of an intent to cure, the seller automatically
then has 15 days to deliver conforming goods.
Absent specific agreements between the
parties, the reasonableness requirement of the UCC governing delivery of goods
requires each of the following except:
Circumstantial evidence is not enough to
show a meeting of the minds.
The Clayton Act was enacted to limit the
provisions of the Sherman Act.
Any meeting of the minds resulting in
mutual assent to do or refrain from doing something is called a contract.
Amanda, a recent university graduate, needed
a car to get to her new job. To help Amanda secure a loan for the car, Ted, a
friend, agreed to pay the loan should Amanda default. Ted's promise is
enforceable as long as he goes to the bank, declares his promise to guarantee
Amanda's loan in front of witnesses, and shakes hands on the deal, giving his
word.
An option contract is a contract that
gives one of the parties a choice of consideration to accept.
When a party breaches a contract, the
nonbreaching party always has the option of seeking legal or equitable
remedies.
An anticipatory repudiation is allowed
when a party has verifiable knowledge that the other party will not or cannot
perform. Courts do not permit speculation or mere supposition to support an
anticipatory repudiation.
Beth has a contract with Annie in which
Annie is to deliver 1,000 hand-decorated beverage holders in 60 days. When Beth
calls the Psychic Hotline for her weekly reading, the psychic informs her that
she has entered into a contract and the other party will not perform all the
conditions and specifications in accordance with the agreement. Beth may sue
for an anticipatory repudiation.
Shovels R Us sends a purchase order to
Acme Snow Shovel Inc., for 500 shovels to be delivered by September 30, 2014,
in time for the winter season. Acme returns an acknowledgment form indicating
that the shovels will be delivered on March 1, 2015. The acknowledgment letter
forms a valid contract.
Which economist/philosopher is cited in
support of frequent meetings being circumstantial evidence of anticompetitive
collusion?
The U.S. Supreme Court held that the
Sherman Act applies to commercial agreements in which the parties acted in
________ manner.
Express contracts arise from the parties'
conduct.
In general, contracts for the sale of
goods are governed by:
Contractual consideration is defined as
the thought process a party uses to decide whether or not to accept the offer
and enter into a contract.
In an assignment or delegation, any
third-party rights or duties occur after the contract is formed.
In Merchants Acceptance Inc., v.
Jamison, Jamison ordered encyclopedias and the contract specified that
delivery was to be made to Jamison's home. Instead, the encyclopedias were
delivered to her post office box and she never received them. She refuses to
pay for them and is sued.
Normally, the buyer's offer in a
commercial transaction takes the form of:
Price-fixing is a clear example of a per
se violation.
Antitrust legislation was enacted in
response to the robber barons of the late 19th century.
An agreement between two adults to pay
$300 cash for a bicycle is an example of a contract that is:
Void contracts are seemingly valid
contracts that one party has the right to declare void.
In Leonard v. PepsiCo Inc., the
court ruled against Leonard and refused to enforce the purchase of a Harrier
jet because:
With regard to the court, adequacy of
consideration means:
Patios R Us contracts with Karl's Concrete
to have 35 yards of concrete delivered to a job site it is working on. Payment
is to be made 30 days after delivery. Five days after the concrete is
delivered, Patios R Us files for bankruptcy and the filing is accepted by the
court. Karl's cannot sue to enforce the contract and receive payment.
When a party successfully sues for an
equitable remedy for a breach of contract, that party does not receive a
monetary award.
The 2003 revisions to the UCC have been
adopted by only about half of the states.
Adam Smith's book, The Wealth of
Nations, is a source of support for some elements of antitrust law.
Horizontal restraints are agreements
between:
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