BUL4310 Law document Exam II Practice Questions and answers from
Florida International University
BUL4310: Exam II Practice Questions
True or False:
1. True or False: Sam, a known alcoholic who lives next door, comes over one day and says
that since you have been such a great neighbor, he will sell you his $100,000 house for
only $60,000. Sam is obviously intoxicated. You immediately agree and draft a contract
for the sale. Sam signs it and leaves, but a week later he comes to you and claims he didn’t
know what he was doing and wants to disaffirm the contract. Sam is legally bound to the
terms of the contract. False. In order to legally bind yourself to a contract, you must have
capacity at the time the contract was formed. Specifically, minors, drunks, insane people,
enemy aliens, and convicts lack the capacity to be bound to a contract. Habitual drunkard
statutes mandate that someone who is continually drunk and lacks self-control can be
permanently prevented from entering contracts.
2. Sidney and Halle create an integrated contract that completely and unambiguously lays out
the terms of their agreement. Sidney is to wash Halle’s car with soap and water, vacuum
every room in her house, and mow her lawn. Halle is to pay Sidney $200 for all of this. A
dispute erupts between the two parties over the terms of their contract. Halle argues that
Sidney had mentioned that Sidney would wax the car, also. Halle attempts to offer
evidence that Sidney agreed to wax it and even asked what kind of wax to use. True or
False: Ordinarily, Halle can present that evidence. False. The parol evidence rule (PER)
prohibits the use of evidence of prior or contemporaneous words (written or oral) that
contradict an integrated written agreement. It is an efficiency idea – if the document is
meant to cover it all, we want people to be assured that the document truly is it. LSB266
3. Seeking an order of specific performance can serve as a valuable postjudgment bargaining
tool to induce a losing defendant to agree to a new contract more attractive to the plaintiff.
4. Sal owns a baseball card store and is selling a Rob Emerson rookie card for 50 cents.
Thirteen-year-old Timmy comes in and buys the card. As Timmy walks out, Sal opens a
price guide and sees that the card has gone up in value since the last issue, to $500. He
catches Timmy outside the store and tells Timmy that he made a mistake and the card
must be returned or Timmy must pay the $500. True or False: Timmy must return the card
or pay the $500. False. Courts ordinarily do not recognize mistakes about value
(ordinarily, no effect on an alleged contract) and thus do not let parties out of a contract for
mistake in value. LSB225.
5. Under Common Law, offers can be revoked at any time before acceptance, unless the
parties have agreed to an “option” contract to keep it open. True. Usually an offer can be
, revoked at any time (until there is an acceptance). But there are four situations in which
offers cannot be revoked: (1) firm written offers, (2) Options, (3) Unilateral contracts, and
sometimes (4) Promissory Estoppel. LSB204
6. A merchant’s failure to answer a customer’s material question about the merchant’s goods
generally will not suffice as an element of fraud. False. Silence usually is NOT grounds
for a fraud claim. One way that such a duty might arise is if clarification or other
information was sought. Courts or regulators are more likely to find silence a problem if: a
fiduciary relationship exists between the parties, or there was a serious defect – a potential
problem knowable only to the seller. LSB223-224. If a buyer asks an important question
about a material fact and the seller simply changes the subject and does not answer, it may
amount to fraud. Smokin Notes.
,7. Countries with a more liberal (in other words, less formalistic) interpretation of contracts
usually have a higher economic growth rate. True.
8. Jane walks into an electronics shop to look at stereos. She finds a stereo that has labels on
it reading “all the features you could want and more.” Jane decides to purchase the stereo.
The store clerk tells Jane that she has ten days to try out the stereo risk-free, during which
she can return it for a full refund. A month later, Jane brings back the stereo and says that
it does not have surround-sound features as she originally thought it must, and therefore
she wants her money back. The clerk refuses. Choose the best answer: D. Jane probably
cannot win in court; even if the text on the stereo labels was somewhat misleading, the
fact that Jane had ten risk-free trial days gave her ample time to test the functions and
make up her mind.
9. Samuel Student, desperate for money for textbooks, looks around his apartment for
something he can sell. Sam decides to sell his three-year-old DVD player, a gift from his
parents, and places an ad in the local student newspaper. The next day Sam gets a call
from Latoya, who comes to Sam’s apartment to look at the DVD player. Latoya, after
looking at the DVD player, and trying out a disc in the machine, purchases the DVD
player from Sam for cash and leaves with the DVD player. The next day Latoya is
watching a film on this DVD player, when the movie stops and she realizes the player
does not work anymore. Latoya probably has a good claim of fraud against Sam. False.
All six elements of MKIRDC: misrepresentation, knowledge, intent, reliance, damages,
and causation must be proven to demonstrate fraud. LSB229
10. Which of the following is not an exception to the Statute of Frauds? C. The Parol evidence
rule LSB262-263
11. An American business, Big Kids Toy Company, needs inventory for its retail stores. On
January 1, 2013, it sends a signed letter to a Mexican business, Mass Plastico Creations,
Inc. offering to buy 10,000 G.I. Joe figures for $10,000. Big Kids states in its letter that it
will keep its offer open until January 30, 2013. Mass Plastico contemplates this offer and
draws up an acceptance letter. Just before sending the acceptance, Mass Plastico receives a
letter from Big Kids revoking its offer on January 25. Mass Plastico then sends the
acceptance, anyway, the following day (January 26). Big Kids receives the acceptance on
January 29. Will Big Kids be required to proceed with the contract by Mass Plastico’s
acceptance? D. Yes, the offer was accepted before Big Kids could revoke; Firm Written
Offers by Merchants – UCC 2-205 requires that a merchant offeror keep his/her offer open
for the period he/she stated or for three month, whichever is less; the merchant must keep
it open even though there is no consideration to do so. LSB204.
12. Even if showing pornographic movies is illegal, courts, such as in New York, have found
that it is legal to finance and make these movies. False. If showing pornographic movies is
illegal, then making and financing it may also be illegal – and the contracts about that
would be rendered void. A family financing such ventures gone bad is the subject of a NY
case, Braunstein v. Jason Tarantella, parents sued the son to get their money back, but
courts held the contract void against public policy. LSB246
13. Dave is a daredevil. Corey promises to pay Dave $200 in return for Dave’s promise to
come to Corey’s party and perform various stunts on his bicycle. True or False: Dave and
Corey have made a unilateral contract, with payment contingent upon Dave showing up
and performing. False. Dave and Corey made a bilateral contract. Under a bilateral
, contract, one party offers a promise, and the other party accepts by making a promise in
return. Smokin Notes. A promise for a promise LSB185
14. The Uniform Commercial Code (U.C.C.) does not govern contracts for cleaning houses.
True. The UCC covers Sale of goods, not services. LSB 196
15. Gulliver builds houses and contracted with Skeeter to build a 3-story mansion for
$800,000. Gulliver builds the house and is about to put the finishing touches by installing
the closet doors in 3 of the bedrooms. He runs out of wood for the doors and must wait 2
months before he can have the doors ready. Gulliver notifies Skeeter that he has performed
under the contract, will finish the doors when he gets the wood, and requests payment.
True or False: Skeeter will have to pay Gulliver for Gulliver’s performance, although
Skeeter can – for now – reduce the payment by the value of the missing closet doors. True.
If that nonetheless constitutes substantive performance in good faith, there is no discharge
of the other side. That is a breach, but not a material breach. It is just enough to subtract
the difference between complete and substantial performance. LSB276
16. Alex is preparing to have a party for his 18th birthday on February 20. On February 19th ,
Alex purchases a $400 stereo on sale and not returnable, to play music for his party. His
party is a success and the stereo keeps everyone dancing to fun music. Two months later,
on April 21st, Alex sees a computer on sale and wants to raise money for it. He figures he
can void the purchase of the stereo and get his money back because he was a minor when
he bought it. True or False: Alex will be able to void the contract? False. Until the child
attains the age of majority, the child simply cannot be bound to a contract.
17. A contract may be discharged by meeting the fundamental conditions of the agreement.
These conditions may be either agreed to in the contract or may be implied. True
18. Which one of the following is not one of the 6 essential elements needed to form a
contract? (Hint: I gave you an acronym for these elements.) C. Form. LSB 172 Offer-
Acceptance-Consideration-Mutuality-Capacity-Legality of Purpose. (There is nothing
about form, since that ordinarily is not required)
19. All of the following are characteristics of specific performance as a remedy EXCEPT: D.
Defendants will be required to fulfill their services are under contract. LSB297 What
about services? If the contracted-for services have not yet been performed, courts are
extremely reluctant to order performance; instead, they just order a damages award
20. A contract is a consensual transaction that can be made over even insignificant items or
services. True. It is not just “Big Ticket” items, such as car purchases, apartment leases,
and employment agreements, but also small items/services that can be the subject of a
contract. The principles of contract are generally the same for all contracts, no matter the
size. LSB171
21. Jim is an American consumer ordering a product (goods) online from a Swedish business.
Unless the sales form specifies otherwise, Jim’s agreement with the business from Sweden
must follow the CISG (the Convention on Contracts for the International Sale of Goods).
False. The CISG only applies to business-to-business transactions, and it is only applicable
when two businesses are engaged in the sale of goods and each business is from a different
country, both of which are signatories to the CISG. LSB194
22. True or False: Matias and Nancy are friends. Nancy recently got an internship with a
marketing firm and is looking to sublease her apartment for the summer semester. Matias
noticed that Nancy’s apartment sublease was advertised on “Facebook Marketplace.”
Matias telephoned Nancy, who indicated to Matias that she was willing to immediately
Florida International University
BUL4310: Exam II Practice Questions
True or False:
1. True or False: Sam, a known alcoholic who lives next door, comes over one day and says
that since you have been such a great neighbor, he will sell you his $100,000 house for
only $60,000. Sam is obviously intoxicated. You immediately agree and draft a contract
for the sale. Sam signs it and leaves, but a week later he comes to you and claims he didn’t
know what he was doing and wants to disaffirm the contract. Sam is legally bound to the
terms of the contract. False. In order to legally bind yourself to a contract, you must have
capacity at the time the contract was formed. Specifically, minors, drunks, insane people,
enemy aliens, and convicts lack the capacity to be bound to a contract. Habitual drunkard
statutes mandate that someone who is continually drunk and lacks self-control can be
permanently prevented from entering contracts.
2. Sidney and Halle create an integrated contract that completely and unambiguously lays out
the terms of their agreement. Sidney is to wash Halle’s car with soap and water, vacuum
every room in her house, and mow her lawn. Halle is to pay Sidney $200 for all of this. A
dispute erupts between the two parties over the terms of their contract. Halle argues that
Sidney had mentioned that Sidney would wax the car, also. Halle attempts to offer
evidence that Sidney agreed to wax it and even asked what kind of wax to use. True or
False: Ordinarily, Halle can present that evidence. False. The parol evidence rule (PER)
prohibits the use of evidence of prior or contemporaneous words (written or oral) that
contradict an integrated written agreement. It is an efficiency idea – if the document is
meant to cover it all, we want people to be assured that the document truly is it. LSB266
3. Seeking an order of specific performance can serve as a valuable postjudgment bargaining
tool to induce a losing defendant to agree to a new contract more attractive to the plaintiff.
4. Sal owns a baseball card store and is selling a Rob Emerson rookie card for 50 cents.
Thirteen-year-old Timmy comes in and buys the card. As Timmy walks out, Sal opens a
price guide and sees that the card has gone up in value since the last issue, to $500. He
catches Timmy outside the store and tells Timmy that he made a mistake and the card
must be returned or Timmy must pay the $500. True or False: Timmy must return the card
or pay the $500. False. Courts ordinarily do not recognize mistakes about value
(ordinarily, no effect on an alleged contract) and thus do not let parties out of a contract for
mistake in value. LSB225.
5. Under Common Law, offers can be revoked at any time before acceptance, unless the
parties have agreed to an “option” contract to keep it open. True. Usually an offer can be
, revoked at any time (until there is an acceptance). But there are four situations in which
offers cannot be revoked: (1) firm written offers, (2) Options, (3) Unilateral contracts, and
sometimes (4) Promissory Estoppel. LSB204
6. A merchant’s failure to answer a customer’s material question about the merchant’s goods
generally will not suffice as an element of fraud. False. Silence usually is NOT grounds
for a fraud claim. One way that such a duty might arise is if clarification or other
information was sought. Courts or regulators are more likely to find silence a problem if: a
fiduciary relationship exists between the parties, or there was a serious defect – a potential
problem knowable only to the seller. LSB223-224. If a buyer asks an important question
about a material fact and the seller simply changes the subject and does not answer, it may
amount to fraud. Smokin Notes.
,7. Countries with a more liberal (in other words, less formalistic) interpretation of contracts
usually have a higher economic growth rate. True.
8. Jane walks into an electronics shop to look at stereos. She finds a stereo that has labels on
it reading “all the features you could want and more.” Jane decides to purchase the stereo.
The store clerk tells Jane that she has ten days to try out the stereo risk-free, during which
she can return it for a full refund. A month later, Jane brings back the stereo and says that
it does not have surround-sound features as she originally thought it must, and therefore
she wants her money back. The clerk refuses. Choose the best answer: D. Jane probably
cannot win in court; even if the text on the stereo labels was somewhat misleading, the
fact that Jane had ten risk-free trial days gave her ample time to test the functions and
make up her mind.
9. Samuel Student, desperate for money for textbooks, looks around his apartment for
something he can sell. Sam decides to sell his three-year-old DVD player, a gift from his
parents, and places an ad in the local student newspaper. The next day Sam gets a call
from Latoya, who comes to Sam’s apartment to look at the DVD player. Latoya, after
looking at the DVD player, and trying out a disc in the machine, purchases the DVD
player from Sam for cash and leaves with the DVD player. The next day Latoya is
watching a film on this DVD player, when the movie stops and she realizes the player
does not work anymore. Latoya probably has a good claim of fraud against Sam. False.
All six elements of MKIRDC: misrepresentation, knowledge, intent, reliance, damages,
and causation must be proven to demonstrate fraud. LSB229
10. Which of the following is not an exception to the Statute of Frauds? C. The Parol evidence
rule LSB262-263
11. An American business, Big Kids Toy Company, needs inventory for its retail stores. On
January 1, 2013, it sends a signed letter to a Mexican business, Mass Plastico Creations,
Inc. offering to buy 10,000 G.I. Joe figures for $10,000. Big Kids states in its letter that it
will keep its offer open until January 30, 2013. Mass Plastico contemplates this offer and
draws up an acceptance letter. Just before sending the acceptance, Mass Plastico receives a
letter from Big Kids revoking its offer on January 25. Mass Plastico then sends the
acceptance, anyway, the following day (January 26). Big Kids receives the acceptance on
January 29. Will Big Kids be required to proceed with the contract by Mass Plastico’s
acceptance? D. Yes, the offer was accepted before Big Kids could revoke; Firm Written
Offers by Merchants – UCC 2-205 requires that a merchant offeror keep his/her offer open
for the period he/she stated or for three month, whichever is less; the merchant must keep
it open even though there is no consideration to do so. LSB204.
12. Even if showing pornographic movies is illegal, courts, such as in New York, have found
that it is legal to finance and make these movies. False. If showing pornographic movies is
illegal, then making and financing it may also be illegal – and the contracts about that
would be rendered void. A family financing such ventures gone bad is the subject of a NY
case, Braunstein v. Jason Tarantella, parents sued the son to get their money back, but
courts held the contract void against public policy. LSB246
13. Dave is a daredevil. Corey promises to pay Dave $200 in return for Dave’s promise to
come to Corey’s party and perform various stunts on his bicycle. True or False: Dave and
Corey have made a unilateral contract, with payment contingent upon Dave showing up
and performing. False. Dave and Corey made a bilateral contract. Under a bilateral
, contract, one party offers a promise, and the other party accepts by making a promise in
return. Smokin Notes. A promise for a promise LSB185
14. The Uniform Commercial Code (U.C.C.) does not govern contracts for cleaning houses.
True. The UCC covers Sale of goods, not services. LSB 196
15. Gulliver builds houses and contracted with Skeeter to build a 3-story mansion for
$800,000. Gulliver builds the house and is about to put the finishing touches by installing
the closet doors in 3 of the bedrooms. He runs out of wood for the doors and must wait 2
months before he can have the doors ready. Gulliver notifies Skeeter that he has performed
under the contract, will finish the doors when he gets the wood, and requests payment.
True or False: Skeeter will have to pay Gulliver for Gulliver’s performance, although
Skeeter can – for now – reduce the payment by the value of the missing closet doors. True.
If that nonetheless constitutes substantive performance in good faith, there is no discharge
of the other side. That is a breach, but not a material breach. It is just enough to subtract
the difference between complete and substantial performance. LSB276
16. Alex is preparing to have a party for his 18th birthday on February 20. On February 19th ,
Alex purchases a $400 stereo on sale and not returnable, to play music for his party. His
party is a success and the stereo keeps everyone dancing to fun music. Two months later,
on April 21st, Alex sees a computer on sale and wants to raise money for it. He figures he
can void the purchase of the stereo and get his money back because he was a minor when
he bought it. True or False: Alex will be able to void the contract? False. Until the child
attains the age of majority, the child simply cannot be bound to a contract.
17. A contract may be discharged by meeting the fundamental conditions of the agreement.
These conditions may be either agreed to in the contract or may be implied. True
18. Which one of the following is not one of the 6 essential elements needed to form a
contract? (Hint: I gave you an acronym for these elements.) C. Form. LSB 172 Offer-
Acceptance-Consideration-Mutuality-Capacity-Legality of Purpose. (There is nothing
about form, since that ordinarily is not required)
19. All of the following are characteristics of specific performance as a remedy EXCEPT: D.
Defendants will be required to fulfill their services are under contract. LSB297 What
about services? If the contracted-for services have not yet been performed, courts are
extremely reluctant to order performance; instead, they just order a damages award
20. A contract is a consensual transaction that can be made over even insignificant items or
services. True. It is not just “Big Ticket” items, such as car purchases, apartment leases,
and employment agreements, but also small items/services that can be the subject of a
contract. The principles of contract are generally the same for all contracts, no matter the
size. LSB171
21. Jim is an American consumer ordering a product (goods) online from a Swedish business.
Unless the sales form specifies otherwise, Jim’s agreement with the business from Sweden
must follow the CISG (the Convention on Contracts for the International Sale of Goods).
False. The CISG only applies to business-to-business transactions, and it is only applicable
when two businesses are engaged in the sale of goods and each business is from a different
country, both of which are signatories to the CISG. LSB194
22. True or False: Matias and Nancy are friends. Nancy recently got an internship with a
marketing firm and is looking to sublease her apartment for the summer semester. Matias
noticed that Nancy’s apartment sublease was advertised on “Facebook Marketplace.”
Matias telephoned Nancy, who indicated to Matias that she was willing to immediately
