BUL 3310 TEST QUESTIONS WITH
CERTIFIED ANSWERS
The Uniform Commercial Code requires that any modification to a contract for the sale
of goods must be supported by new consideration
T/F - Answer-False
In a bilateral contract, each party must gain a legal benefit, but only one party need
incur a legal detriment
T/F - Answer-False
Under an output contract, the seller loses the right to sell his goods to anyone but the
buyer named in the output contract
T/F - Answer-True
Sham consideration is sufficient for a unilateral contract, but not for a bilateral contract
T/F - Answer-False
The contract remedy that requires that each party return whatever has already been
received of value is - Answer-Restitution
Kevin, a minor, sold his home gym to Buyer, who in turn sold it to a good faith purchaser
for value (GFP). Under the Uniform Commercial Code, Buyer took title
from Kevin, and transferred title to the GFP - Answer-Voidable ----
Good
A seller who fills a motor with heavy grease to keep it from knocking is engaged in mere
"sales dressing" and is not liable for fraudulent misrepresentation
T/F - Answer-False
A party who misstates an important fact during contract negotiations has an affirmative
duty to correct that misstatement before entering into the contract
T/F - Answer-True
One of the elements of fraudulent misrepresentation is that the victim's reliance on the
false representation was justifiable
T/F - Answer-True
If a bidder seeks to withdraw a bid based on a unilateral mistake, courts require, at a
minimum, that the bid was made in good faith, without gross negligence, and that the
other party received prompt notice
T/F - Answer-True
If a unilateral mistake of fact is apparent to one party, he or she may take advantage of
that knowledge and profit from the other party's ignorance
T/F - Answer-False
,Grace has a valid contract with Al to buy a desk owned by James Madison. Al now
refuses to go through with the sale. Because the item is unique, Grace can seek a
decree of specific performance to enforce the contract
T/F - Answer-True
Courts generally cannot order specific performance when the contract is for personal
services because of the Thirteenth Amendment
T/F - Answer-True
Rescission is the remedy that cancels the contract and returns each party to his pre-
contract position
T/F - Answer-True
Which element of a contract is met by a bargained-for exchange?
A. Agreement
B. Consideration
C. Capacity
D. Legality - Answer-Consideration
To meet the element of consideration, each party to a contract must gain a legal benefit
and incur a legal detriment
T/F - Answer-True
What does consideration in a bilateral contract always involve?
A. A legal benefit and a legal detriment
B. A legal detriment and a legal impediment
C. A legal benefit and a legal waiver
D. A legal waiver and a legal renunciation - Answer-A legal benefit and a legal detriment
Legal detriments always entail economic losses
T/F - Answer-False
Which of the following statements about nominal consideration is correct?
A. Nominal consideration is good to use when there are liquidated damages.
B. Nominal consideration will support an enforceable contract.
C. Nominal consideration is another term for sham consideration.
D. Both A and B - Answer-Nominal consideration will support an enforceable contract
,In bilateral contracts, both parties must be bound to the contract or neither party is
bound
T/F - Answer-True
Mutuality of consideration is a requirement for which of the following?
Bilateral contract
Unilateral contract
Action for promissory estoppel
Firm offer under the Code - Answer-A bilateral contract
An illusory promise is not a promise at all
T/F - Answer-True
When is an illusory promise created?
A. When the promise is conditional on any other event happening first.
B. When the promise is conditional on an event happening first that is outside the
promissor's control.
C. When the promise is conditional on an event happening first that is totally within the
promissor's control.
D. When the promise cannot be performed within one year of the contract date. -
Answer-When the promise is conditional on an event happening first that is totally within
the promissor's control
Famous Chef told Shrimp Boat Captain: "I will buy your catch if I think the shrimp are
large enough". What is the status of this promise?
A. This is a valid promise because the chef must make the decision in good faith.
B. This is a valid promise because the chef must make the decision in good faith.
C. This is an illusory promise because the chef has complete control over whether or
not he will keep the promise.
D. This is an illusory promise for a contract but a valid promise for promissory estoppel.
- Answer-This is an illusory promise because the chef has complete control over
whether or not he will keep the promise.
, Which of the following is an illusory promise? - Answer-I will go with you to the donkey
basketball game if I can't think of anything better to do
Courts do not enforce output contracts as a matter of public policy
T/F - Answer-False
Big Oil Company has a contract with Homeowner to deliver however much heating oil
Homeowner needs for the fall and winter seasons. This is an example of contract
Requirements
Output
Unilateral
Consumer lease - Answer-A requirements
Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim
catches during the season for $35 per bushel. Which of the following actions would
constitute a breach of the contract between Bay Crab and Jim?
A. Jim sells crabs to another buyer.
B. Jim buys crabs from other crabbers at $25 per bushel so that he can sell them to Bay
Crab at the contract price of $35 per bushel.
C. Bay Crab buys crabs from another crabber.
D. Both A and B - Answer-Both A and B
Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim
catches during the season for $35 per bushel. This is an example of contract
Requirements
Output
Unilateral
Implied in law - Answer-output
Parties to a contract may not offer as consideration promises to do what they are
already legally required to do
T/F - Answer-True
CERTIFIED ANSWERS
The Uniform Commercial Code requires that any modification to a contract for the sale
of goods must be supported by new consideration
T/F - Answer-False
In a bilateral contract, each party must gain a legal benefit, but only one party need
incur a legal detriment
T/F - Answer-False
Under an output contract, the seller loses the right to sell his goods to anyone but the
buyer named in the output contract
T/F - Answer-True
Sham consideration is sufficient for a unilateral contract, but not for a bilateral contract
T/F - Answer-False
The contract remedy that requires that each party return whatever has already been
received of value is - Answer-Restitution
Kevin, a minor, sold his home gym to Buyer, who in turn sold it to a good faith purchaser
for value (GFP). Under the Uniform Commercial Code, Buyer took title
from Kevin, and transferred title to the GFP - Answer-Voidable ----
Good
A seller who fills a motor with heavy grease to keep it from knocking is engaged in mere
"sales dressing" and is not liable for fraudulent misrepresentation
T/F - Answer-False
A party who misstates an important fact during contract negotiations has an affirmative
duty to correct that misstatement before entering into the contract
T/F - Answer-True
One of the elements of fraudulent misrepresentation is that the victim's reliance on the
false representation was justifiable
T/F - Answer-True
If a bidder seeks to withdraw a bid based on a unilateral mistake, courts require, at a
minimum, that the bid was made in good faith, without gross negligence, and that the
other party received prompt notice
T/F - Answer-True
If a unilateral mistake of fact is apparent to one party, he or she may take advantage of
that knowledge and profit from the other party's ignorance
T/F - Answer-False
,Grace has a valid contract with Al to buy a desk owned by James Madison. Al now
refuses to go through with the sale. Because the item is unique, Grace can seek a
decree of specific performance to enforce the contract
T/F - Answer-True
Courts generally cannot order specific performance when the contract is for personal
services because of the Thirteenth Amendment
T/F - Answer-True
Rescission is the remedy that cancels the contract and returns each party to his pre-
contract position
T/F - Answer-True
Which element of a contract is met by a bargained-for exchange?
A. Agreement
B. Consideration
C. Capacity
D. Legality - Answer-Consideration
To meet the element of consideration, each party to a contract must gain a legal benefit
and incur a legal detriment
T/F - Answer-True
What does consideration in a bilateral contract always involve?
A. A legal benefit and a legal detriment
B. A legal detriment and a legal impediment
C. A legal benefit and a legal waiver
D. A legal waiver and a legal renunciation - Answer-A legal benefit and a legal detriment
Legal detriments always entail economic losses
T/F - Answer-False
Which of the following statements about nominal consideration is correct?
A. Nominal consideration is good to use when there are liquidated damages.
B. Nominal consideration will support an enforceable contract.
C. Nominal consideration is another term for sham consideration.
D. Both A and B - Answer-Nominal consideration will support an enforceable contract
,In bilateral contracts, both parties must be bound to the contract or neither party is
bound
T/F - Answer-True
Mutuality of consideration is a requirement for which of the following?
Bilateral contract
Unilateral contract
Action for promissory estoppel
Firm offer under the Code - Answer-A bilateral contract
An illusory promise is not a promise at all
T/F - Answer-True
When is an illusory promise created?
A. When the promise is conditional on any other event happening first.
B. When the promise is conditional on an event happening first that is outside the
promissor's control.
C. When the promise is conditional on an event happening first that is totally within the
promissor's control.
D. When the promise cannot be performed within one year of the contract date. -
Answer-When the promise is conditional on an event happening first that is totally within
the promissor's control
Famous Chef told Shrimp Boat Captain: "I will buy your catch if I think the shrimp are
large enough". What is the status of this promise?
A. This is a valid promise because the chef must make the decision in good faith.
B. This is a valid promise because the chef must make the decision in good faith.
C. This is an illusory promise because the chef has complete control over whether or
not he will keep the promise.
D. This is an illusory promise for a contract but a valid promise for promissory estoppel.
- Answer-This is an illusory promise because the chef has complete control over
whether or not he will keep the promise.
, Which of the following is an illusory promise? - Answer-I will go with you to the donkey
basketball game if I can't think of anything better to do
Courts do not enforce output contracts as a matter of public policy
T/F - Answer-False
Big Oil Company has a contract with Homeowner to deliver however much heating oil
Homeowner needs for the fall and winter seasons. This is an example of contract
Requirements
Output
Unilateral
Consumer lease - Answer-A requirements
Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim
catches during the season for $35 per bushel. Which of the following actions would
constitute a breach of the contract between Bay Crab and Jim?
A. Jim sells crabs to another buyer.
B. Jim buys crabs from other crabbers at $25 per bushel so that he can sell them to Bay
Crab at the contract price of $35 per bushel.
C. Bay Crab buys crabs from another crabber.
D. Both A and B - Answer-Both A and B
Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim
catches during the season for $35 per bushel. This is an example of contract
Requirements
Output
Unilateral
Implied in law - Answer-output
Parties to a contract may not offer as consideration promises to do what they are
already legally required to do
T/F - Answer-True
