EXAM 3 (FINAL) ACCT 2700 BUSINESS LAW
(COCHRAN) EXPECTED QUESTIONS WITH VERIFIED
ANSWERS
Question 1.
T/F: to have a contract you must have an agreement
ANSWER
True
Question 2.
Our economy will not survive if...
ANSWER
we don't fullfil their promises
Question 3.
Contracts are all about...
ANSWER
personal responsibility and taking care of your own self interest
Question 4.
Contract law comes from the
ANSWER
common law
Question 5.
Sources of contract law
ANSWER
Common law for all contracts except sales and leases
Question 6.
Function of Contract Law
ANSWER
Provides stability and predictability for commerce
1
,Question 7.
contract
ANSWER
A promise or a set of promises for the breach of which the law gives a remedy, or the performance of
which the law in some way recognizes as a duty.
Question 8.
Objective Theory of contracts
ANSWER
We determine what a contract and/or its terms means by what the parties did, not by what the
parties tell us they meant. "Actions speak louder than words."
Question 9.
"reasonable person" standard
ANSWER
degree of care that a reasonable person would exercise under all the circumstances
Question 10.
*If you don't read your contract, but you sign it:
ANSWER
1. You are held responsible and liable because you
signed it
2. Don't stand up in court and say you read it, but
didn't understand it SHAME ON YOU
Question 11.
The most important reasons courts enforce contracts is because sonal responsibility and
accountability
ANSWER
contracts are a foundation of our economy
Question 12.
Elements of a Contract
ANSWER
•Agreement •Consideration (Value) •Contractual Capacity •Legality
2
, Question 13.
***Bilateral Contract
ANSWER
exchange of a promise for a promise
Question 14.
***Unilateral Contract
ANSWER
A promise for an act (performance)
Question 15.
***Formal contract
ANSWER
Requires a special form for creation ( specified in law)
Question 16.
***Informal Contract
ANSWER
Requires no special form for creation
Question 17.
***Express Contracts
ANSWER
Formed by words
Question 18.
***plain meaning rule
ANSWER
However, if terms are unclear or ambiguous, court may admit "extrinsic" (external) evidence.
Question 19.
***Implied Contracts
ANSWER
Formed by the conduct of the parties
3
(COCHRAN) EXPECTED QUESTIONS WITH VERIFIED
ANSWERS
Question 1.
T/F: to have a contract you must have an agreement
ANSWER
True
Question 2.
Our economy will not survive if...
ANSWER
we don't fullfil their promises
Question 3.
Contracts are all about...
ANSWER
personal responsibility and taking care of your own self interest
Question 4.
Contract law comes from the
ANSWER
common law
Question 5.
Sources of contract law
ANSWER
Common law for all contracts except sales and leases
Question 6.
Function of Contract Law
ANSWER
Provides stability and predictability for commerce
1
,Question 7.
contract
ANSWER
A promise or a set of promises for the breach of which the law gives a remedy, or the performance of
which the law in some way recognizes as a duty.
Question 8.
Objective Theory of contracts
ANSWER
We determine what a contract and/or its terms means by what the parties did, not by what the
parties tell us they meant. "Actions speak louder than words."
Question 9.
"reasonable person" standard
ANSWER
degree of care that a reasonable person would exercise under all the circumstances
Question 10.
*If you don't read your contract, but you sign it:
ANSWER
1. You are held responsible and liable because you
signed it
2. Don't stand up in court and say you read it, but
didn't understand it SHAME ON YOU
Question 11.
The most important reasons courts enforce contracts is because sonal responsibility and
accountability
ANSWER
contracts are a foundation of our economy
Question 12.
Elements of a Contract
ANSWER
•Agreement •Consideration (Value) •Contractual Capacity •Legality
2
, Question 13.
***Bilateral Contract
ANSWER
exchange of a promise for a promise
Question 14.
***Unilateral Contract
ANSWER
A promise for an act (performance)
Question 15.
***Formal contract
ANSWER
Requires a special form for creation ( specified in law)
Question 16.
***Informal Contract
ANSWER
Requires no special form for creation
Question 17.
***Express Contracts
ANSWER
Formed by words
Question 18.
***plain meaning rule
ANSWER
However, if terms are unclear or ambiguous, court may admit "extrinsic" (external) evidence.
Question 19.
***Implied Contracts
ANSWER
Formed by the conduct of the parties
3
