Business Essentials Exam 2 Questions With
Correct Answers
Elias |offered |to |sell |his |computer |to |Kevin. |- |CORRECT |ANSWER✔✔-Elias |is |the |offeror.
Software |clickwrap |and |shrinkwrap |agreements |limiting |the |manufacturer's |maximum |
responsibility |to |a |refund |of |the |purchase |price |even |if |the |software |destroys |your |hard |drive |
have |generally |been |found |to |be |binding |against |consumers. |- |CORRECT |ANSWER✔✔-True
A |seller's |form |clearly |states |no |warranty |is |included. |The |buyer's |form |states |that |the |seller |
warrants |the |goods |for |one |year. |In |this |case: |- |CORRECT |ANSWER✔✔-the |warranty |term |is |a
|"different |term," |and |the |majority |of |states |hold |that |a |contract |can |be |formed |but |the |
contradictory |terms |cancel |each |other |out.
Mike |made |the |following |offer |to |Mick: |"I |will |pay |you |$500 |if |you |agree |to |paint |my |house." |
Mick |replied |that |he |would. |At |this |point, |the |contract |is |an: |- |CORRECT |ANSWER✔✔-
executory, |bilateral, |express |contract.
Robert |offers |to |buy |a |car |from |Jane |for |$400. |Jane |must |accept |this |offer |in |order |to |form |an |
enforceable |contract. |- |CORRECT |ANSWER✔✔-true
Which |of |the |following |statements |about |an |express |contract |is |true?: |- |CORRECT |
ANSWER✔✔-The |two |parties |explicitly |state |all |important |terms |of |their |agreement.
A |quasi-contract |is |the |legal |designation |of |an |oral |contract. |- |CORRECT |ANSWER✔✔-false
Alex |promises |to |pay |$100 |to |anyone |who |finds |his |lost |watch. |Kate |finds |and |returns |the |
watch |to |Alex |after |hearing |of |the |reward |money. |Alex |and |Kate |have |an |enforceable |
unilateral |contract. |- |CORRECT |ANSWER✔✔-true
,Wally |owns |200 |acres |of |land. |Wally |offers |to |sell |the |land |to |Robert |for |$1,500 |per |acre. |
Robert |replies |that |he |does |not |need |200 |acres |of |land |but |would |like |to |buy |40 |acres |at |
$1,500 |per |acre. |Wally |agrees |to |sell |but |does |not |identify |which |40 |acres. |Later, |Wally |refuses
|to |sell |any |land |to |Robert. |What |is |the |result? |- |CORRECT |ANSWER✔✔-Wally |wins; |this |
agreement |is |too |indefinite |since |it |does |not |identify |which |40 |acres |are |to |be |sold.
In |the |case |Baer |v. |Chase, |the |court |decided |that |Chase's |promise |to |remunerate |Baer |for |his |
services |was |sufficiently |definite |to |be |enforced. |- |CORRECT |ANSWER✔✔-false
Regency |Construction |placed |an |order |for |two |hundred |2 |x |4s |from |Lumber |Jack. |If |the |place |
of |delivery |and |time |for |shipping |the |goods |are |not |specified, |the |UCC |provides: |- |CORRECT |
ANSWER✔✔-the |place |of |delivery |is |Lumber |Jack's |and |the |time |for |delivering |the |lumber |is |a
|reasonable |time |based |on |normal |trade |practice.
Which |of |the |following |is |generally |considered |to |be |a |legal |offer? |- |CORRECT |ANSWER✔✔-
None |of |the |above.
On |January |8, |Quastrar, |Inc. |sent |Hylavian |Company |a |letter |offering |to |sell |$10,000 |in |
restaurant |supplies. |On |January |18, |Hylavian |mailed |a |letter |to |Quastrar |accepting |the |offer. |
Quastrar |received |the |acceptance |letter |on |January |20. |On |January |17, |Quastrar |sent |a |letter |
revoking |the |offer. |Hylavian |received |this |letter |on |January |21. |A |contract |between |Quastrar |
and |Hylavian: |- |CORRECT |ANSWER✔✔-was |formed |on |January |18.
Hensley |and |Boyer |have |been |negotiating |for |several |months |over |issues |related |to |the |
purchase |and |sale |of |some |real |estate. |They |draft |a |letter |of |intent |which: |- |CORRECT |
ANSWER✔✔-may |or |may |not |be |an |offer, |depending |on |the |exact |language |and |whether |the |
document |indicates |that |the |parties |have |reached |an |agreement.
Public |policy |means |the |law |that |comes |from |the: |- |CORRECT |ANSWER✔✔-courts |that |decide |
what |would |have |a |negative |impact |on |society.
,Wendell, |new |to |the |area, |selects |a |doctor |from |the |telephone |book |and |visits |that |doctor |to |
have |a |splinter |extracted. |Unbeknownst |to |Wendell, |the |doctor |has |never |passed |the |state |
licensing |exams. |Later, |when |Wendell |discovers |the |truth, |he |refuses |to |pay |his |bill. |If |the |
doctor |sues |for |recovery |of |the |fee, |will |the |court |support |the |doctor's |claim? |- |CORRECT |
ANSWER✔✔-No, |the |court |is |likely |to |take |the |position |that |it |is |not |in |the |public's |best |
interests |to |enforce |contracts |with |unlicensed |doctors.
To |be |valid, |a |noncompete |clause |must |be: |- |CORRECT |ANSWER✔✔-ancillary |to |a |legitimate |
bargain.
reasonable |in |time, |geographical |area, |and |scope |of |activity |when |ancillary |to |the |sale |of |a |
business.
necessary |to |protect |trade |secrets, |confidential |information, |or |customer |lists |developed |over |
an |extended |time |when |ancillary |to |an |employment |contract.
L |& |M |loaned |Joan |$400 |so |that |she |could |buy |her |textbooks |for |the |current |semester. |L |& |
M's |terms |for |repayment |of |the |loan |are, |$200 |in |two |months, |$200 |in |four |months, |and |
another |$100 |at |the |end |of |the |fifth |month. |The |legal |rate |of |interest |on |this |type |of |loan |is |
six |percent |per |annum. |L |& |M's |loan |is |usurious. |- |CORRECT |ANSWER✔✔-true
Sanders |Co. |and |Gaines, |Inc. |enter |into |a |contract |for |the |manufacture |and |sale |of |200 |patio |
wooden |tables. |If |both |parties |agree |that |a |modification |is |necessary: |- |CORRECT |
ANSWER✔✔-an |agreement |to |rescind |the |contract |will |terminate |the |contractual |rights |of |
Sanders |Co. |and |Gaines, |Inc. |if |neither |of |them |had |completed |their |obligations.
Courts |normally |require |adequate |consideration. |- |CORRECT |ANSWER✔✔-false
Upon |graduating |from |college, |Kathy |announced |her |plans |to |enter |law |school |the |following |
fall |and |to |marry |Rick |in |December. |Kathy's |father |was |afraid |that |marriage |during |her |first |
year |in |law |school |might |cause |her |to |fall |behind |in |her |studies |or |cause |her |to |drop |out |of |
school. |He |called |Kathy |and |promised |her |$10,000 |if |she |postponed |her |wedding |until |after |
completion |of |her |first |year |of |law |school. |Kathy |agreed |and |postponed |the |wedding |for |a |
year. |Kathy |successfully |completed |her |first |year |of |law |school, |but |soon |thereafter, |Kathy's |
, father |died. |The |administrator |of |her |father's |estate |claimed |she |was |not |entitled |to |the |
$10,000 |because |there |was |no |consideration |for |her |father's |promise. |If |Kathy |sues |the |estate,
|she |will |probably |be: |- |CORRECT |ANSWER✔✔-successful, |as |there |was |consideration.
The |Utah |Court |of |Appeals |in |the |Dementas |v. |Estate |of |Tallas |case |found: |- |CORRECT |
ANSWER✔✔-the |trial |court |correctly |determined |that |there |was |no |consideration |to |support |
Tallas's |promise.
Hilda |owes |Lex |$3,000, |which |is |an |undisputed |amount. |If |she |offers |him |her |car |in |full |
settlement |of |the |debt |and |he |accepts, |the |agreement |is |binding |and |he |can |no |longer |claim |
she |owes |him |anything |on |the |original |debt. |- |CORRECT |ANSWER✔✔-true
Denton |agreed |to |build |a |cedar |deck |for |the |Thrashers |for |$7,000. |After |he |began |the |work, |
the |Thrashers |asked |him |to |add |cedar |flower |boxes |at |one |side. |Denton |replied |he |would, |but |
it |would |cost |an |additional |$600. |The |Thrashers |would |not |be |obligated |to |pay |the |additional |
sum |because |the |original |agreement |already |obligated |Denton |to |complete |the |deck |for |
$7,000. |- |CORRECT |ANSWER✔✔-false
If |a |salesperson |says, |"This |is |a |great |car," |but |the |car |turns |out |to |be |a |lemon, |the |
salesperson |has |committed |fraud. |- |CORRECT |ANSWER✔✔-false
Both |fraudulent |AND |innocent, |misrepresentation |permit |the |injured |party |to |rescind |a |
contract. |- |CORRECT |ANSWER✔✔-true
Ian, |a |16-year-old, |contracted |with |Anderson |Used |Cars |to |buy |a |$6,000 |motorcycle. |He |
agreed |to |make |monthly |payments |until |the |purchase |price |plus |interest |were |paid |in |full. |Ian |
is |now |18 |and |he |has |not |disaffirmed |the |contract. |He |has |made |payments |on |the |car |since |
turning |18. |Which |of |the |following |is |correct? |- |CORRECT |ANSWER✔✔-Ian |has |ratified |the |
contract |and |is |now |bound |by |its |terms
Miles |purchased |a |motorcycle |from |LB |Cycles. |He |later |learned |that |the |salesman |had |made |
misrepresentations |to |induce |him |to |make |the |purchase. |Under |UCC |Section |2-721, |can |Miles |
Correct Answers
Elias |offered |to |sell |his |computer |to |Kevin. |- |CORRECT |ANSWER✔✔-Elias |is |the |offeror.
Software |clickwrap |and |shrinkwrap |agreements |limiting |the |manufacturer's |maximum |
responsibility |to |a |refund |of |the |purchase |price |even |if |the |software |destroys |your |hard |drive |
have |generally |been |found |to |be |binding |against |consumers. |- |CORRECT |ANSWER✔✔-True
A |seller's |form |clearly |states |no |warranty |is |included. |The |buyer's |form |states |that |the |seller |
warrants |the |goods |for |one |year. |In |this |case: |- |CORRECT |ANSWER✔✔-the |warranty |term |is |a
|"different |term," |and |the |majority |of |states |hold |that |a |contract |can |be |formed |but |the |
contradictory |terms |cancel |each |other |out.
Mike |made |the |following |offer |to |Mick: |"I |will |pay |you |$500 |if |you |agree |to |paint |my |house." |
Mick |replied |that |he |would. |At |this |point, |the |contract |is |an: |- |CORRECT |ANSWER✔✔-
executory, |bilateral, |express |contract.
Robert |offers |to |buy |a |car |from |Jane |for |$400. |Jane |must |accept |this |offer |in |order |to |form |an |
enforceable |contract. |- |CORRECT |ANSWER✔✔-true
Which |of |the |following |statements |about |an |express |contract |is |true?: |- |CORRECT |
ANSWER✔✔-The |two |parties |explicitly |state |all |important |terms |of |their |agreement.
A |quasi-contract |is |the |legal |designation |of |an |oral |contract. |- |CORRECT |ANSWER✔✔-false
Alex |promises |to |pay |$100 |to |anyone |who |finds |his |lost |watch. |Kate |finds |and |returns |the |
watch |to |Alex |after |hearing |of |the |reward |money. |Alex |and |Kate |have |an |enforceable |
unilateral |contract. |- |CORRECT |ANSWER✔✔-true
,Wally |owns |200 |acres |of |land. |Wally |offers |to |sell |the |land |to |Robert |for |$1,500 |per |acre. |
Robert |replies |that |he |does |not |need |200 |acres |of |land |but |would |like |to |buy |40 |acres |at |
$1,500 |per |acre. |Wally |agrees |to |sell |but |does |not |identify |which |40 |acres. |Later, |Wally |refuses
|to |sell |any |land |to |Robert. |What |is |the |result? |- |CORRECT |ANSWER✔✔-Wally |wins; |this |
agreement |is |too |indefinite |since |it |does |not |identify |which |40 |acres |are |to |be |sold.
In |the |case |Baer |v. |Chase, |the |court |decided |that |Chase's |promise |to |remunerate |Baer |for |his |
services |was |sufficiently |definite |to |be |enforced. |- |CORRECT |ANSWER✔✔-false
Regency |Construction |placed |an |order |for |two |hundred |2 |x |4s |from |Lumber |Jack. |If |the |place |
of |delivery |and |time |for |shipping |the |goods |are |not |specified, |the |UCC |provides: |- |CORRECT |
ANSWER✔✔-the |place |of |delivery |is |Lumber |Jack's |and |the |time |for |delivering |the |lumber |is |a
|reasonable |time |based |on |normal |trade |practice.
Which |of |the |following |is |generally |considered |to |be |a |legal |offer? |- |CORRECT |ANSWER✔✔-
None |of |the |above.
On |January |8, |Quastrar, |Inc. |sent |Hylavian |Company |a |letter |offering |to |sell |$10,000 |in |
restaurant |supplies. |On |January |18, |Hylavian |mailed |a |letter |to |Quastrar |accepting |the |offer. |
Quastrar |received |the |acceptance |letter |on |January |20. |On |January |17, |Quastrar |sent |a |letter |
revoking |the |offer. |Hylavian |received |this |letter |on |January |21. |A |contract |between |Quastrar |
and |Hylavian: |- |CORRECT |ANSWER✔✔-was |formed |on |January |18.
Hensley |and |Boyer |have |been |negotiating |for |several |months |over |issues |related |to |the |
purchase |and |sale |of |some |real |estate. |They |draft |a |letter |of |intent |which: |- |CORRECT |
ANSWER✔✔-may |or |may |not |be |an |offer, |depending |on |the |exact |language |and |whether |the |
document |indicates |that |the |parties |have |reached |an |agreement.
Public |policy |means |the |law |that |comes |from |the: |- |CORRECT |ANSWER✔✔-courts |that |decide |
what |would |have |a |negative |impact |on |society.
,Wendell, |new |to |the |area, |selects |a |doctor |from |the |telephone |book |and |visits |that |doctor |to |
have |a |splinter |extracted. |Unbeknownst |to |Wendell, |the |doctor |has |never |passed |the |state |
licensing |exams. |Later, |when |Wendell |discovers |the |truth, |he |refuses |to |pay |his |bill. |If |the |
doctor |sues |for |recovery |of |the |fee, |will |the |court |support |the |doctor's |claim? |- |CORRECT |
ANSWER✔✔-No, |the |court |is |likely |to |take |the |position |that |it |is |not |in |the |public's |best |
interests |to |enforce |contracts |with |unlicensed |doctors.
To |be |valid, |a |noncompete |clause |must |be: |- |CORRECT |ANSWER✔✔-ancillary |to |a |legitimate |
bargain.
reasonable |in |time, |geographical |area, |and |scope |of |activity |when |ancillary |to |the |sale |of |a |
business.
necessary |to |protect |trade |secrets, |confidential |information, |or |customer |lists |developed |over |
an |extended |time |when |ancillary |to |an |employment |contract.
L |& |M |loaned |Joan |$400 |so |that |she |could |buy |her |textbooks |for |the |current |semester. |L |& |
M's |terms |for |repayment |of |the |loan |are, |$200 |in |two |months, |$200 |in |four |months, |and |
another |$100 |at |the |end |of |the |fifth |month. |The |legal |rate |of |interest |on |this |type |of |loan |is |
six |percent |per |annum. |L |& |M's |loan |is |usurious. |- |CORRECT |ANSWER✔✔-true
Sanders |Co. |and |Gaines, |Inc. |enter |into |a |contract |for |the |manufacture |and |sale |of |200 |patio |
wooden |tables. |If |both |parties |agree |that |a |modification |is |necessary: |- |CORRECT |
ANSWER✔✔-an |agreement |to |rescind |the |contract |will |terminate |the |contractual |rights |of |
Sanders |Co. |and |Gaines, |Inc. |if |neither |of |them |had |completed |their |obligations.
Courts |normally |require |adequate |consideration. |- |CORRECT |ANSWER✔✔-false
Upon |graduating |from |college, |Kathy |announced |her |plans |to |enter |law |school |the |following |
fall |and |to |marry |Rick |in |December. |Kathy's |father |was |afraid |that |marriage |during |her |first |
year |in |law |school |might |cause |her |to |fall |behind |in |her |studies |or |cause |her |to |drop |out |of |
school. |He |called |Kathy |and |promised |her |$10,000 |if |she |postponed |her |wedding |until |after |
completion |of |her |first |year |of |law |school. |Kathy |agreed |and |postponed |the |wedding |for |a |
year. |Kathy |successfully |completed |her |first |year |of |law |school, |but |soon |thereafter, |Kathy's |
, father |died. |The |administrator |of |her |father's |estate |claimed |she |was |not |entitled |to |the |
$10,000 |because |there |was |no |consideration |for |her |father's |promise. |If |Kathy |sues |the |estate,
|she |will |probably |be: |- |CORRECT |ANSWER✔✔-successful, |as |there |was |consideration.
The |Utah |Court |of |Appeals |in |the |Dementas |v. |Estate |of |Tallas |case |found: |- |CORRECT |
ANSWER✔✔-the |trial |court |correctly |determined |that |there |was |no |consideration |to |support |
Tallas's |promise.
Hilda |owes |Lex |$3,000, |which |is |an |undisputed |amount. |If |she |offers |him |her |car |in |full |
settlement |of |the |debt |and |he |accepts, |the |agreement |is |binding |and |he |can |no |longer |claim |
she |owes |him |anything |on |the |original |debt. |- |CORRECT |ANSWER✔✔-true
Denton |agreed |to |build |a |cedar |deck |for |the |Thrashers |for |$7,000. |After |he |began |the |work, |
the |Thrashers |asked |him |to |add |cedar |flower |boxes |at |one |side. |Denton |replied |he |would, |but |
it |would |cost |an |additional |$600. |The |Thrashers |would |not |be |obligated |to |pay |the |additional |
sum |because |the |original |agreement |already |obligated |Denton |to |complete |the |deck |for |
$7,000. |- |CORRECT |ANSWER✔✔-false
If |a |salesperson |says, |"This |is |a |great |car," |but |the |car |turns |out |to |be |a |lemon, |the |
salesperson |has |committed |fraud. |- |CORRECT |ANSWER✔✔-false
Both |fraudulent |AND |innocent, |misrepresentation |permit |the |injured |party |to |rescind |a |
contract. |- |CORRECT |ANSWER✔✔-true
Ian, |a |16-year-old, |contracted |with |Anderson |Used |Cars |to |buy |a |$6,000 |motorcycle. |He |
agreed |to |make |monthly |payments |until |the |purchase |price |plus |interest |were |paid |in |full. |Ian |
is |now |18 |and |he |has |not |disaffirmed |the |contract. |He |has |made |payments |on |the |car |since |
turning |18. |Which |of |the |following |is |correct? |- |CORRECT |ANSWER✔✔-Ian |has |ratified |the |
contract |and |is |now |bound |by |its |terms
Miles |purchased |a |motorcycle |from |LB |Cycles. |He |later |learned |that |the |salesman |had |made |
misrepresentations |to |induce |him |to |make |the |purchase. |Under |UCC |Section |2-721, |can |Miles |
