Law Multiple Choice
1. Bruce went to work as a salesman at Don’s furniture store. He entered into an agreement with Don that stated that if he left he would not work for another furniture store within 35 miles for 3 years. Don trained Bruce in a number of new sales techniques. After a year, Bruce was offered a great job down the street at a new furniture store. He quit Don and had a number of customers follow him to his new location. Don claimed that Don had signed a contract and had no right to go to work at the new store. Bruce disagreed and told Don that he had a right to work for the new store, in spite of the contract, and no court across the country would enforce it. Which of the following is true regarding Bruce’s claim that no court would enforce such an agreement?
A. He is incorrect because all courts approve such agreements so long as it can be shown the employee gained a benefit other than pay from the employment.
B. He is correct because such agreements are considered in restraint of trade in every state.
C. He is incorrect because courts across the country vary in regards to the enforceability of such agreements
D. He is incorrect because such agreements are criminally illegal in every state.
E. He is incorrect because, while no court would approve a geographical restriction, some courts recognize time restrictions as being valid.
2. Calvin contracted with Biggie Construction to build an addition to his home for $150,000. Biggie was to supply all materials at a cost to Biggie of $50,000. Calvin refused to let Biggie do the renovations for the studio. However, Calvin cancelled the job before Biggie spent any money on material. Biggie was able to find another job that netted a profit of $75,000 during that same time that Calvin’s studio house was to be built. How much can Biggie recover from Calvin in damages?
A. $100,000 B. $150,000 C. Nothing D. $1 E. $25,000
3. Rhonda decided to go on a trip. However, she needed someone to take care of her pool while she was gone. She hired Matt months in advance. Matt was to be paid $250 for keeping the pool for three weeks. Matt came over two months before Rhonda was set to leave, looked at the pool and said they it looked like it was going to be very difficult to keep clean. Nothing further was said. Rhonda hired someone else to care for the pool. Which of the following is true regarding Matt’s refusal to care for the pool?
A. He committed an anticipatory repudiation.
B. He is guilty of a nominal breach
C. He is guilty of an immaterial breach because of the low value of the contract.
D. He is not guilty of any breach because the contract is not over $1,000.
E. He is not guilty of any breach because he gave Rhonda sufficient warning that he was not willing to perform.
4. Ernie agreed to shovel snow from Martin’s driveway for $400 for the winter. Martin wished to assign the contract to his friend. Ernie objected because Martin’s driveway is very small while his friend’s driveway is very large. Which of the following is the correct legal outcome for the dispute between Ernie and Martin?
A. Martin will win because he may validly assign the contract without Ernie’s consent.
B. Martin will win so long as he tells Ernie about the assignment prior to the time he begins any performance whatsoever.
C. Ernie will win because all assignments are invalid without the obligor’s consent.
D. Ernie will win because Martin’s attempted assignment would increase the duties to which Ernie agreed.
E. Ernie will win unless Martin paid him the $400 in advance in which case Martin will win.
5. In connection with contracts, punitive damages:
A. Are recoverable whenever a breach of contract is intentional.
B. If awarded, they are held by the court to be distributed to other parties with whom the defendant has breached a contract.
C. Can be recovered for tortious conduct in connection with a contract, but generally not for the breach of a contract.
D. All of the above are correct
E. None of the above is correct
6. A manufacturer ordered some parts by phone from a supplier. The order was for 1,000 parts from the supplier’s inventory at $20 each. The supplier sent the manufacturer a fax moments later detailing the order. The manufacturer looked at the fax and was satisfied that it stated the terms of the contract, but never responded in any way. When the parts were delivered on time a month later, the manufacturer refused to accept them, asserting that the contract was unenforceable because the manufacturer never sent a written order. Which is true?
A. No writing is needed because of one of the exceptions to the Statute of Frauds.
B. Because the contract is a requirement contract, it is enforceable.
C. The contract is enforceable under the written confirmation rule.
D. The contract is unenforceable because the manufacturer has not signed anything in writing.
E. The contract is enforceable because it would be unconscionable not to enforce it.
7. In which of the following situations have both parties given consideration to support a contract?
A. Because of the great job that a contractor did in building an addition painting his house last year, Daniel promised to give the contractor an extra $2,500.
B. Daniel, a math professor, agreed to tutor one of his students in the study of Italian for $25 per hour.
C. Daniel, a police officer, agreed to patrol someone’s neighborhood while on duty for $3450 a week.
D. Daniel promised to give his brother $250 per month for the next 5 years for all the work that his brother did in raising Daniel.
E. All of the above are correct.
8. Assuming the existence of a complete and final written contract, the parol evidence rule would
prohibit evidence of
A. subsequent oral statements that modify the contract
B. prior or contemporaneous oral statements that explain ambiguities in the contract
C. prior or contemporaneous oral statements that alter, contradict, or add to the terms of the contract
D. A and C
E. None of the above
9. Pro Renovation (Pro Renovation) agreed to remodel Frank’s home for $250,000. Pro Renovation remodeled the home to Frank’s specifications with one exception. The entry flooring was not exactly what Frank specified. That was a mistake by Pro Renovation. When Frank saw the entry way flooring, he told Pro Renovation that he will not pay Pro Renovation anything for the job. Frank said it would take $4,500 to put in correct flooring. Pro Renovation said that it was willing to pay Frank $2,500 for the errors, which was its estimate of replacing the flooring. Which of the following is true regarding the appropriate amount of damages, if any?
A. Frank will have to pay for the work and accept Pro Renovation’s offer to pay for the errors, because Pro Renovation substantially performed.
B. Even though Pro Renovation substantially performed, Frank will not have to pay for the work because Pro Renovation materially breached the contract.
C. Any damages awarded would be in the range of the amount it would take to fix the breach.
D. Frank will not have to pay for the work because Pro Renovation failed to substantially perform.
E. Frank is released from paying for the house because of the breach.
10. Mort had a contract to repair the roof on Jim’s house for $4,500, including cleaning up all debris. The contract between Mort and Jim did not contain an anti-assignment clause. The work was to be done. While Jim was on vacation. Mort assigned the contract to Jessie, with all rights and obligations under the contract Mort did not tell Jim about the assignment. The work was competently done, but Jessie forgot and left some roofing debris Jim’s house. Jim demanded that Mort come clean up the site and dispose of the debris. Mort refused and told Jim that he would have to get Jessie to dispose of the debris because that was his responsibility. Jim called Jessie who told him that he was busy and that clearing up the debris was Mort’s responsibility. Which of the following is true regarding Mort’s claim that he had no duty to pick up the debris?
A. Mort is correct because he had validly delegated that duty to Jessie.
B. Mort is correct only because Jessie properly repaired the roof and was, therefore, responsible for ancillaries. If Jessie had improperly repaired the roof, Mort would have had remaining duties.
C. Mort is incorrect because his delegation did not affect his obligation to Jim.
D. Mort is incorrect because the job was a personal service, and he had no right to assign either rights or duties under the contract.
E. Mort is incorrect but only because the job was for under $5,000.
11. College president Wally contracted with Alice to teach business law. Alice does a fine job teaching but got mad at Wally and refused to turn in grades. What type of order would Wally seek to require Alice to abide by her contract?
A. A consequential order.
B. A demand order
C. A nominal order.
D. An order of specific performance.
E. None of the above
12. Delphi Enterprises hired a contractor to build a ten-unit apartment building. The total cost of the construction contract is for $1,200,000. Some of the building materials were delivered, but the contractor refused to build the apartment. An alternate contractor agreed to build the apartment using the same materials for $1,500,000. Is Delphi entitled to damages? If so, how much?
A. Yes; Delphi is entitled to contract of $1,500,000.
B. Yes; Delphi is entitled to contract damages of $300,000.
C. No; the contract was terminated before construction began and the apartment was still built.
D. Yes; Delphi is entitled to contract of $1,200,000.
E. None of the above.
13. Harry contracted with Desert Pools to construct a pool in Harry’s back yard. Desert quoted $15,000 for the job. After digging a short distance, Desert discovered hard bedrock, which was unexpected in this locality. To dig through this would take substantially more time and cost more. Desert said it would continue, but only if Jones pays $5,000 more, or $20,000 for the job. Jones agreed. Jones’ promise to pay an increased amount is enforceable for what reason?
A. This is an unforeseen circumstance.
B. This is a valid settlement of a liquidated debt.
C. This is an acceptable contract modification.
D. This is a valid preexisting duty.
E. None of the above
14. Sid wants to buy Mark’s car. Mark ran back the odometer on the car before Sid got to test drive it. Sid was impressed by the low mileage and agreed to buy the car. Later, Sid found out that the odometer was run backwards from another friend to whom Mark had confided. Which of the following is true regarding Sid’s rights in regards to the car purchase?
A. He will be able to rescind the agreement because Mark was guilty of fraudulent misrepresentation
B. He will not be able to rescind the contract unless he can prove that he expressly asked Mark if the mileage was run backwards on the car and Mark failed to reveal that it had been altered.
C. He will be able to rescind the contract because of duress practiced by Mark.
D. He will not be able to rescind the contract because the mileage alteration did not affect the engine of the car.
E. He will not be able to rescind the contract because Mark made no affirmative statements.
15. Dave awoke one morning to find Paint Pro, Inc. (Paint Pro) painting his garage. He had not contracted with Paint Pro for this service; however, he let Paint Pro continue. Later, it was discovered that the painting was intended to go next door. Paint Pro sued Dave for the value of the painting. What is the probable result?
A. Paint Pro wins, but it only gets its costs, not profits
B. Dave wins; there was no contract upon which Paint Pro could recover, and people are not liable for benefits that are thrust upon them.
C. Dave wins; unjust enrichment does not apply here because Dave had no duty to tell Paint Pro that it had the wrong house.
D. Paint Pro wins; although there is no contract, this is a case of unjust enrichment, and because Dave accepted the painting, he must pay for it.
E. Paint Pro wins; this is a case of a contract implied-in-fact, and Dave implicitly agreed to pay for the painting.
16. Melvin told his friend, “I’ll sell you my mountain bike for $150.” The friend said, “I’ll take it,” and they agreed. However, Melvin intended the offer as a joke. The friend didn’t know this. There was a contract if which of the following is true?
A. The approximate fair value of the bike is $150.
B. Melvin failed to disaffirm the contract within a reasonable time after the offer was accepted.
C. A reasonable person would have concluded that Melvin was serious when making the offer.
D. There was a written agreement spells out all provisions of the contract.
E. None of the above is correct
17. For a contract to be enforceable, which of the following is/are needed?
A. agreement, consideration, and contractual capacity
B. agreement and consideration
C. agreement, consideration, contractual capacity, and a lawful objective
E. More than just what is listed above
18. Sam promised his uncle, Bob, that he would lose 10 pounds and exercise every day during the spring semester in exchange for having his tuition paid for the fall semester. The uncle agreed; but after Sam has lost 10 pounds and exercised all semester, Bob refused to pay saying that no contract existed. Which of the following is true?
A. There was consideration present, but Bob is not required to pay because Bob did not receive a benefit personally.
B. Consideration was present, there was an enforceable contract, and Bob has wrongfully refused to pay.
C. There was consideration present, but Bob is not required to pay because the contract was illusory.
D. There was no consideration present, but Bob must pay under principles of promissory estoppel.
E. There was no consideration present, and Bob has no obligation to pay.
19. John, the seller, and Bill contracted for the sale of 250 flat screen display panels. They agree on size and style, but not on price or time of delivery. John refused to deliver the flat screen display panels and Bill sued. What will be the outcome?
A. Bill will win; the courts will fill in all the above-mentioned missing terms.
B. John will win; the courts will fill in many missing terms, but never price.
C. John will win; because all these terms were omitted from the agreement, the contract is not definite enough to be valid.
D. John will win; the courts will fill in many missing terms, but never time of delivery.
E. None of the above is correct
20. Edward and Ivan made an oral contract for the sale of some land at a price of $490,000. After paying Edward $90,000 of the purchase price, Ivan took possession of the land. One month later, Edward got an offer to sell the land to someone else for a greater amount than Edward paid. Edward argued that the parties’ oral agreement is unenforceable under the statute of frauds. Which of the following is most correct?
A. Edward is correct, because this is an oral contract for the sale of real estate
B. Edward is incorrect, because Ivan paid part of the purchase price and took possession
C. Edward is incorrect, because the contract is for an indefinite period of time
D. Edward is correct, because the contract is for an amount greater than $500
E. none of the above is correct
21. Harold wanted to buy Allen’s land and use it to breed horses. Harold, assumed that the neighbors would be pleased. After the contract was signed, Harold received a petition signed by all surrounding landowners objecting to the presence of the horses and threatening to sue Harold for nuisance. Which of the following would be the result if Harold attempts to rescind the contract and recover damages only on the basis of the neighbor’s objection to a horse farm?
A. Harold may rescind the contract but may not recover damages because he had made a unilateral mistake
B. Harold may rescind the contract and recover damages because Allen made an implied misrepresentation.
C. Harold may not rescind the contract nor may he recover damages because he had made a unilateral mistake.
D. Harold may recover damages but may not rescind the contract because Allen made an implied misrepresentation.
E. Harold may rescind the contract but may not recover damages because Allen made an implied misrepresentation.
22. Zeke promised to give his state-of-the-art camera to his friend. The friend then sold his camera for a low price because he expected to get Zeke’s camera. Unfortunately, Zeke changed his mind and decided to keep the camera. If the friend sued Zeke, the court most likely will:
A. require Zeke to give his friend the camera because his sale of his camera was consideration.
B. require Zeke to pay damages to the friend for any loss he incurred in connection with Zeke not keeping his promise.
C. not require Zeke to do anything because this was a gift promise.
D. require Zeke to give his friend the camera because Zeke made an illusory promise.
E. None of the above answers is correct.
23. Ernie wanted to buy a house but was unsure whether he could get a loan. The provision that Ernie did not have to buy the house unless he was able to get a loan is referred to as:
A. A condition precedent
B. Both an implied condition and a bona fide condition
C. An express condition
D. A condition subsequent
E. Both a condition precedent and an express condition
24. Hal offered to sell his couch to Susan for $350. Susan said thought that $350 was too much, so she offered Hal $250. Hal said no. Then, Susan said that he would pay Hal the full $350.
A. Susan has accepted Hal’s original offer.
B. Susan’s statement that he would give Hal $250 was a rejection of Hal’s original offer.
C. Susan’s statement that he would give Hal $250 was an offer by Susan.
D. A and C only are true.
E. B and C only are true.
25. Which of the following factors are considered by the court when determining whether a party is an intended or incidental beneficiary?
A. Whether performance of the contract is done directly to the third party, and the third party’s ability to control the specifics of performance of the contract, but not whether the contract directly states that the third party is the benefiting party.
B. The third party’s ability to control the specifics of performance of the contract.
C. Whether the contract directly states that the third party is the benefiting party.
D. Whether performance of the contract is done directly to the third party, the third party’s ability to control the specifics of performance of the contract, and whether the contract directly states that the third party is the benefiting party.
E. Whether performance of the contract is done directly to the third party.
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