LSB Exam 2 Study Guide.docx

Illegal contracts are A) Void B) Voidable C) Unjust D) A violation of the Uniform Commercial Code - correct answer A) Void In general, contracts for the sale of goods are governed by: A) the Uniform Commercial Code. B) state statutory law based on the Uniform Commercial Code. C) state common law. D) federal regulations - correct answer B) state statutory law based on the Uniform Commercial Code. Will and Kendrick live in a state that requires that contracts involving transactions over $500 be in writing. If they enter a verbal agreement to buy a car for $1,500, this contract is A) void. B) unenforceable. C) valid. D) voidable. - correct answer B) unenforceable. In general, contracts for services are governed by A) federal law. B) the Uniform Commercial Code. C) state statutory law. D) state common law. - correct answer D) state common law. Caleb contracts with Eliza to beat up Mickey for $50.00. Is that agreement enforceable? A) No it is illegal. B) Yes as long as they understand the consequences of their actions. C) It is voidable at Eliza's discretion. D) No unless Caleb has already given her the money. - correct answer A) No it is illegal. Aimee and Claire both own their own bakeries in Edwardsville. They both agree with each other to sell their cupcakes for $5.00. Is this contract enforceable? A)Yes because the promise to sell the cupcakes at $5.00 each by each person is consideration. B)No because it lacks mutual assent. C)No as it is a restraint on trade which is against public policy. D)Yes as long as the price is fair and does not take advantage of consumers - correct answer C)No as it is a restraint on trade which is against public policy. Karen offers to sing five songs at Meyer's wedding for $500.00. Meyer responds that he will pay her $500.00, but he needs her to sing six songs. Meyer's actions constitute A) An acceptance B) A substantial counter offer C) A counter offer D) A substantial acceptance - correct answer C) A counter offer According to the mailbox rule, an acceptance if effective A) When received by the offeror B) when dispatched by the offeree in a commercially reasonable manner. C) Once received by the offeree D) One day after dispatched by offeree - correct answer B) when dispatched by the offeree in a commercially reasonable manner. A meeting of the mind requires A)the court to determine that both parties entered into a wise agreement. B)both parties to compromise in reaching a final agreement. C)both parties to make a fair offer. D)a true understanding, and acceptance, of the terms of the offer. - correct answer D)a true understanding, and acceptance, of the terms of the offer. The requirement that both the subject matter and performance of a contract must be legal is called A) Capacity B) Validity C) Legality D) Consideration - correct answer C) Legality Fraud requires A) Evil motive of a lie B) The appearance of a lie C) Actual knowledge of a lie D) Reasonable likelihood of a lie - correct answer C) Actual knowledge of a lie The age when an individual becomes an adult is an example of A) A flexible standard B) A fairness standard C) A bright-line rule D) A reasonableness standard - correct answer C) A bright-line rule Hannah shops at a high-end doggy boutique and purchases a designer dog collar for $3500.00. As soon as she got home, she put it on her dog who wore it for a couple of days. After a few days, she realized that she could not afford the collar and did not really like it. She attempted to return it to the store and they refused. Hannah filed suit against the store stating that they charged way too much for their products and made an unfair and unreasonable profit. What would most likely be the outcome of the case? A)The court would determine no consideration existed because the profit was unreasonable. B)The court would protect Hannah's interests and determine that no consideration existed because a reasonable person would not pay such a price for dog collar. C)The court will rule that as long as Hannah understood her actions there was consideration as two things of legal value were exchanged. D)The court will rule that - correct answer C)The court will rule that as long as Hannah understood her actions there was consideration as two things of legal value were exchanged. Josh sells t-shirts at an amusement park. When selling t-shirts, he often tells people that the shirts are the softest shirts ever created. If he did not truly believe that and it was a lie, would this be an example of misrepresentation? A) Yes because he lied. B) No because it is not an important opinion. C) Yes because it is a lie about an opinion. D) No because