Business Law Alternate Edition Text and Summarized Cases 12th Edition Miller Test Bank

Business Law Alternate Edition Text
and Summarized Cases 12th Edition

Miller Test Bank
Visit to download the full and correct content document: https://testbankdeal.com/dow
nload/business-law-alternate-edition-text-and-summarized-cases-12th-edition-miller-t
est-bank/
Chapter 10
Nature and Terminology
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.

+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
B1. Contract law shows what excuses our society accepts for breaking certain types of
promises.
ANSWER: T PAGE: 188 TYPE: N

NAT: AACSB Analytic AICPA Critical Thinking
B2. Contract law provides stability and predictability for buyers and sellers.

NAT: AACSB Analytic AICPA Legal
B3. A party’s intent to enter into a contract is judged by their personal, subjective intent
or belief.
ANSWER: F PAGE: 189 TYPE: N

B4. One of the elements of a valid contract is a fair price.

117
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.
118 TEST BANK B—UNIT THREE: CONTRACTS AND E-CONTRACTS
ANSWER: F PAGE: 189 TYPE: =

B5. “Consideration” refers to the legality of the subject matter of a contract.

B6. A bilateral contract comes into existence at the moment an offer is made.

B7. An offer to form a unilateral contract is accepted by a promise to perform.

B8. A contract can be created only when a promise is given in exchange for another
promise.

B9. Informal contracts include all contracts other than formal contracts.

B10. A promissory note is a formal contract.

NAT: AACSB Reflective AICPA Legal
B11. In an express contract, the terms are fully stated in words.
ANSWER: T PAGE: 193 TYPE: =
whole or in part.
CHAPTER 10: NATURE AND TERMINOLOGY 119
B12. An implied contract is implied from the words of the parties.

whole or in part.
B13. An executory contract is one that has been fully performed.

B14. If a voidable contract is avoided, the parties to it are released from it.

B15. An unenforceable contract is one that cannot be enforced because of certain legal
defenses against it.
ANSWER: T PAGE: 194 TYPE: =

B16. A void contract produces legal obligations on the parties but is not otherwise
enforceable.

B17. A quasi contract is a true contract.

B18. A party who confers a benefit on someone else unnecessarily can invoke the principle
of quasi contract to recover the cost.

B19. The existence of an express contract does not bar an action in quasi contract
concerning the same transaction.

whole or in part.
B20. When the words in a contract have more than one meaning, they are cut from the
contract.

whole or in part.
MULTIPLE CHOICE QUESTIONS
B1. Viola assures Wendell that she will deliver a truckload of pine seedlings to his tree
farm. A person’s manifestation of an intent to act in a specified way is part of the
definition of
a. an expectation.
b. a moral obligation.
c. an ethical principle.
d. a promise.
ANSWER: D PAGE: 188 TYPE: +

NAT: AACSB Reflective AICPA Critical Thinking
B2. Digital Architecture, Inc., agrees to design robotic software for equipment owned by
Chassis Assembly Corporation. Whether or not this agreement meets all of the
requirements of a contract, the parties are most likely to follow the rules of contract
law because they
a. want to avoid potential disputes.

b. are conscious of those rules.
c. are not conscious of those rules.
d. have a moral obligation to do so.
ANSWER: A PAGE: 189 TYPE: N

B3. Cassandra accepts what she believes was an offer to work for Destination Vacations,
Inc., as a chef. In determining whether a contract has been formed, an element of
prime importance is
a. the condition of the workplace.

b the duration of the work.
c. the intent of the parties.
d. the subject of the contract.
ANSWER: C PAGE: 189 TYPE: N

whole or in part.
whole or in part.
B4. Jack promises to buy Kelly’s computer for $400. Jack is
a. an executor.
b. an offeree.
c. a promisee.
d. a promisor.
ANSWER: D PAGE: 189 TYPE: =

B5. Lilith promises to buy Marv’s handheld game-player for $75. Marv is
a. an executee.
b. an offeror.
c. a promisee.
d. a promisor.
ANSWER: C PAGE: 189 TYPE: =

B6. Stu makes an offer to Tina to enter into a contract. Tina accepts the offer. A valid
contract requires
a. an offer only.
b. an acceptance only.
c. an offer and an acceptance.
d. neither an offer nor an acceptance.

B7. Paco offers to pay Quik Delivery (QD) $50 if it picks up and delivers to him a package
from Rich within 30 minutes. QD can accept the offer only by meeting the deadline. If
QD performs as directed, these parties will have
a. a bilateral contract.
b. a trilateral contract.
c. a unilateral contract.
whole or in part.
d. no contract.

whole or in part.
B8. An agreement between Pinnacle Oil Company and Omega Refinery, Inc., requires
Omega’s bank to pay Pinnacle on receipt of invoices and bills of lading. This letter of
credit is
a. a formal contract.
b. no contract.
c. an implied contract.
d. a quasi contract.

B9. Following negotiations with Lester’s Landscaping for maintenance services for a lawn
and garden, Moore enters into an informal contract. This means that the parties’
contract
a.requires no special form.

b. is not enforceable.
c. is not a true contract.
d. is voidable.

B10. Cameron enters a coffee shop in which she has an open account, fills a cup of coffee,
holds it so the cashier can see it, acknowledges the cashier’s nod, and walks out with
the coffee, knowing that she will be billed for it at the end of the month. Cameron has
formed
a. an express contract.
b. an implied contract.
c. no contract.
d. a quasi contract.
ANSWER: B PAGE: 193 TYPE: +

whole or in part.
B11. On behalf of the rock group Uno, their manager Thalia agrees to a performance in
Seaside Amphitheatre on July 4. Rex, acting for Seaside, sends a written copy of the
agreement to Thalia to be signed. If Thalia signs the copy, the parties will have
a. an express contract.
b. an implied contract.
c. a quasi contract.
d. no contract.

B12. Macro Corporation and Micro, Inc., enter into an agreement. To constitute a contract,
the terms
a. must all be express.

b. must all be implied.
c. may be express, implied, or a mix of both.
d. may be express or implied, but not both.

B13. Cole drives into Dino’s Service Station and asks Erin, the attendant, to fill the tank in
Cole’s sport utility vehicle. After Erin fills the tank, but before Cole pays for the gas,
any contract between Cole and Dino’s is
a. executed.
b. executory.
c. quasi.
d. unenforceable.
ANSWER: B PAGE: 193 TYPE: =

whole or in part.
B14. Debit & Credit Accounting Services and Brickwork Construction Company negotiate a
contract. If it has all of the elements necessary for one of the parties to enforce it in
court, it is
a. a valid contract.
b. a voidable contract.
c. a void contract.
d. an unenforceable contract.

B15. Vernon claims that his contract with Ulani for catering services is voidable. If their
contract is avoided
a. both parties are released from it.

b. both parties must fully perform their obligations under it.
c. a wholly different contract is agreed to.
d. a wholly different contract is imposed “as if” the parties had agreed.

B16. Dot, a real estate agent, tells Elbert, a home seller, that her commission is 12 percent.
Elbert agrees that Dot can sell his house but refuses to sign a contract unless the
amount of the commission is reduced. After Dot sells the house, Elbert refuses to pay
12 percent. Dot is most likely to recover
a. nothing.
b. on a theory of an express contract.
c. on a theory of an implied contract.
d. on a theory of a quasi contract.
ANSWER: D PAGE: 194 TYPE: =

whole or in part.
B17. Courtney promises to buy illegal digital copies of music and movies from Devin, who
promises to deliver on August 15. These promises are most likely
a. enforceable.
b. valid.
c. void.
d. voidable.

B18. Ada mistakenly pays property taxes that should have been assessed against Bud. Ada
can recover the amount from Bud in quantum meriut
a. even if Bud was not aware of the error.

b. only if Bud tried to conceal the error.
c. only if Bud was aware of the error.
d. under no circumstances.
ANSWER: A PAGE: 194 TYPE: =

B19. In negotiations with Diamond Refining Company, Coastal Oil, Inc., insists that their
contract be drafted according to certain plain language laws. These laws concern the
phrasing of
a.contracts that include unfamiliar legal terms.

b. ads that contain vague guaranties.
c. instruction manuals that are difficult to follow.
d. epithets that are too colorful.

whole or in part.
B20. Cory enters into a contract with Diane to act as her personal sports trainer. If they
later dispute the meaning, and the contract contains unclear terms, the rules of
contract interpretation will give effect to
a.the parties’ intent as expressed in their contract.

b. what the defendant claims was the parties’ intent.
c. what the plaintiff claims was the parties’ intent.
d. what the parties now agree they intended.
ANSWER: A PAGE: 197 TYPE: =

ESSAY QUESTIONS
B1. Cody signs and returns a letter from Deb, referring to Deb’s Double-D Ranch and its
price. When Cody attempts to complete the deal, Deb refuses, claiming that they have
no contract. Cody claims they do. What standard determines whether these parties
have a contract?
ANSWER: The objective theory of contracts is the standard to determine whether

the parties have a contract. Under this standard, if a reasonable person would have
thought that the offeree (Cody) accepted a legitimate offer by the offeror (Deb) when
the offeree signed and returned the letter, a contract was made, and both parties are
bound. This assessment is determined in part by what was said in the letter (did the
letter constitute a valid offer?) and what was said in response (did the response
constitute a valid acceptance?). Under any circumstances, the issue is not whether ei-
ther party subjectively believed that they did, or did not, have a contract.
PAGE: 189 TYPE: =

NAT: AACSB Reflective AICPA Decision Modeling
B2. On May 1, Faith, a real estate agent, and Grace, a commercial property owner, sign an
agreement to find a buyer for Grace’s office building. Under the terms, if a buyer
makes a serious offer within sixty days, Grace must pay Faith’s commission. Faith puts
signs on the building, ads in real estate pamphlets and a local newspaper, and
features the property in a “walking” tour on the Internet. On June 1, Grace tells Faith
that she is canceling their arrangement. Ten days later, Grace closes a sale on the
whole or in part.
building without Faith’s participation. Faith files a suit against Grace for the amount of
her commission. In whose favor is the court most likely to rule and why?
ANSWER: The court is most likely to issue a judgment in Faith’s favor on the basis
that the parties in this situation had agreed to a unilateral contract. The court would
likely reason that Faith had begun performance under this contract by putting up the
signs, placing the ads, and adding a featured tour of the building on the Internet.
Under the present-day view of unilateral contracts, once a party to such a contract
has begun performance, the other party cannot legitimately revoke or otherwise
cancel the deal. Thus, Grace’s attempted revocation in this problem—which was
probably based on her desire to avoid paying a commission to Faith—would
constitute a breach of her contract with Faith, and Grace would owe Faith her
commission even though Faith did not participate in the closing of the sale on the
property. The problem does not mention whether Faith found the buyer, but Grace
would most likely be liable for the payment of the commission under the terms of her
contract with Faith even if Grace found the buyer herself.
PAGES: 190–192 TYPE: =

NAT: AACSB Reflective AICPA Decision Modeling
whole or in part.

Business Law Alternate Edition Text and Summarized Cases 12th Edition Miller Test Bank

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Business Law Alternate Edition Text and Summarized Cases 12th Edition Miller Test Bank

Uploaded by

Copyright:

Available Formats

Business Law Alternate Edition Text

and Summarized Cases 12th Edition

Nature and Terminology

N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.

N A question new to this edition of the Test Bank.

ANSWER: T PAGE: 188 TYPE: N

ANSWER: T PAGE: 188 TYPE: N

ANSWER: F PAGE: 189 TYPE: N

B4. One of the elements of a valid contract is a fair price.

ANSWER: F PAGE: 189 TYPE: =

B5. “Consideration” refers to the legality of the subject matter of a contract.

ANSWER: F PAGE: 189 TYPE: =

ANSWER: F PAGE: 190 TYPE: N

B7. An offer to form a unilateral contract is accepted by a promise to perform.

ANSWER: F PAGE: 190 TYPE: =

ANSWER: F PAGE: 190 TYPE: =

ANSWER: T PAGE: 192 TYPE: N

B10. A promissory note is a formal contract.

ANSWER: T PAGE: 192 TYPE: N

B11. In an express contract, the terms are fully stated in words.

ANSWER: T PAGE: 193 TYPE: =

NAT: AACSB Analytic AICPA Legal

B12. An implied contract is implied from the words of the parties.

ANSWER: F PAGE: 193 TYPE: N

B13. An executory contract is one that has been fully performed.

ANSWER: F PAGE: 193 TYPE: =

ANSWER: T PAGE: 194 TYPE: N

ANSWER: T PAGE: 194 TYPE: =

ANSWER: F PAGE: 194 TYPE: N

B17. A quasi contract is a true contract.

ANSWER: F PAGE: 194 TYPE: =

ANSWER: F PAGE: 196 TYPE: =

ANSWER: F PAGE: 196 TYPE: =

ANSWER: F PAGE: 197 TYPE: N

MULTIPLE CHOICE QUESTIONS

ANSWER: D PAGE: 188 TYPE: +

a. want to avoid potential disputes.

ANSWER: A PAGE: 189 TYPE: N

a. the condition of the workplace.

ANSWER: C PAGE: 189 TYPE: N

B4. Jack promises to buy Kelly’s computer for $400. Jack is

ANSWER: D PAGE: 189 TYPE: =

ANSWER: C PAGE: 189 TYPE: =

ANSWER: C PAGE: 189 TYPE: =

ANSWER: C PAGE: 190 TYPE: =

ANSWER: A PAGE: 192 TYPE: N

a.requires no special form.

ANSWER: A PAGE: 192 TYPE: N

ANSWER: B PAGE: 193 TYPE: +

ANSWER: A PAGE: 193 TYPE: N

a. must all be express.

ANSWER: C PAGE: 193 TYPE: =

ANSWER: B PAGE: 193 TYPE: =

ANSWER: A PAGE: 193 TYPE: N

a. both parties are released from it.

ANSWER: A PAGE: 194 TYPE: N

ANSWER: D PAGE: 194 TYPE: =

ANSWER: C PAGE: 194 TYPE: =

a. even if Bud was not aware of the error.

ANSWER: A PAGE: 194 TYPE: =

a.contracts that include unfamiliar legal terms.

ANSWER: A PAGE: 197 TYPE: N

a.the parties’ intent as expressed in their contract.

ANSWER: A PAGE: 197 TYPE: =