LSB 2 Exam Questions with Correct Answers| Latest Update Guaranteed Success
Suppose that Cromartie is involved in an automobile accident with Frazier, and Frazier is clearly
at fault for the accident. Cromartie sustains $4,650 in damages to his car. Cromartie's loss is
known as __________.
liquidated damages
consequential damages
compensatory damages
restitution compensatory damages
What type of damages compensate the nonbreaching party for foreseeable indirect losses not
covered by compensatory damages?
Consequential
Nominal
Punitive
Liquidated Consequential
Which of the following is generally true regarding courts that support freedom of contract
principles?
They interfere with the contracting process.
They assess the wisdom of the deal.
They will enforce valid contracts against parties absent evidence of fraud, mistake, oppression,
or lack of legal purpose.
,They will enforce valid contracts against parties even with evidence of fraud, mistake,
oppression, or lack of legal purpose in the transaction. They will enforce valid contracts
against parties absent evidence of fraud, mistake, oppression, or lack of legal purpose.
Which rule states that any writing intended by the parties to be the final expression of their
agreement may not be contradicted by any oral or written agreements made prior to the
writing?
The substantial performance doctrine
The rule against perpetuities
The statute of frauds
The parol evidence rule The parol evidence rule
The defense of __________ gives legal relief to a party who has been induced to enter into a
contract through the improper pressure of a trusted relationship.
fraudulent misrepresentation
duress
undue influence
promissory estoppel undue influence
In contracts, __________ refers to the problem of contracts in which one contracting party has
more or better information that the other.
,undue influence
information asymmetry
duress
fraud information asymmetry
Suppose that Tamara offers to paint Jamal's house next week for $8,000, and Jamal attempts to
accept for $7,500. Under the common law:
- there is a contract between Tamara and Jamal due to the doctrine of promissory estoppel, and
the contract price is $7,750 (an average of the two conflicting price terms proposed by the
parties.)
- there is a contract between Tamara and Jamal due to the theory of detrimental reliance, and
the contract price is the reasonable (i.e., fair market) value for painting a house of the type and
dimensions of Tamara's house.
- there is no contract between Tamara and Jamal due to the common law's general prohibition
of bilateral contracts.
- there is no contract between Tamara and Jamal due to a violation of the mirror image rule.
there is no contract between Tamara and Jamal due to a violation of the mirror image rule.
For most contracts, the remedy at law will be __________.
- specific performance
- substantial performance
- money damages
, - equity money damages
In a contract cancellation known as a __________, each party gives up rights under the contract
in exchange for the release by the other party from performing his or her obligations.
- novation
- revocation
- notation
- rescission rescission
Which of the following is true regarding the amount and type of consideration?
- The consideration exchanged between the parties must be of equal value.
- The consideration exchanged between the parties must be of comparable value.
- In deciding whether the consideration requirement of contract formation has been met,
courts will look at the type of consideration exchanged between the parties.
- So long as some bargained-for exchange between the parties is contemplated, the contract
will be deemed enforceable. So long as some bargained-for exchange between the parties is
contemplated, the contract will be deemed enforceable.
When Bavarian Motor Works (BMW), a German company, opened a production facility in
Spartanburg, South Carolina in 1994, a number of its existing suppliers (particularly of
component parts) opened facilities there as well. Both BMW and its suppliers depend on each
other for their business success, and they have developed strong business relationships over
many years. The many contracts that BMW and its suppliers enter into each year are known as
__________ contracts.
Suppose that Cromartie is involved in an automobile accident with Frazier, and Frazier is clearly
at fault for the accident. Cromartie sustains $4,650 in damages to his car. Cromartie's loss is
known as __________.
liquidated damages
consequential damages
compensatory damages
restitution compensatory damages
What type of damages compensate the nonbreaching party for foreseeable indirect losses not
covered by compensatory damages?
Consequential
Nominal
Punitive
Liquidated Consequential
Which of the following is generally true regarding courts that support freedom of contract
principles?
They interfere with the contracting process.
They assess the wisdom of the deal.
They will enforce valid contracts against parties absent evidence of fraud, mistake, oppression,
or lack of legal purpose.
,They will enforce valid contracts against parties even with evidence of fraud, mistake,
oppression, or lack of legal purpose in the transaction. They will enforce valid contracts
against parties absent evidence of fraud, mistake, oppression, or lack of legal purpose.
Which rule states that any writing intended by the parties to be the final expression of their
agreement may not be contradicted by any oral or written agreements made prior to the
writing?
The substantial performance doctrine
The rule against perpetuities
The statute of frauds
The parol evidence rule The parol evidence rule
The defense of __________ gives legal relief to a party who has been induced to enter into a
contract through the improper pressure of a trusted relationship.
fraudulent misrepresentation
duress
undue influence
promissory estoppel undue influence
In contracts, __________ refers to the problem of contracts in which one contracting party has
more or better information that the other.
,undue influence
information asymmetry
duress
fraud information asymmetry
Suppose that Tamara offers to paint Jamal's house next week for $8,000, and Jamal attempts to
accept for $7,500. Under the common law:
- there is a contract between Tamara and Jamal due to the doctrine of promissory estoppel, and
the contract price is $7,750 (an average of the two conflicting price terms proposed by the
parties.)
- there is a contract between Tamara and Jamal due to the theory of detrimental reliance, and
the contract price is the reasonable (i.e., fair market) value for painting a house of the type and
dimensions of Tamara's house.
- there is no contract between Tamara and Jamal due to the common law's general prohibition
of bilateral contracts.
- there is no contract between Tamara and Jamal due to a violation of the mirror image rule.
there is no contract between Tamara and Jamal due to a violation of the mirror image rule.
For most contracts, the remedy at law will be __________.
- specific performance
- substantial performance
- money damages
, - equity money damages
In a contract cancellation known as a __________, each party gives up rights under the contract
in exchange for the release by the other party from performing his or her obligations.
- novation
- revocation
- notation
- rescission rescission
Which of the following is true regarding the amount and type of consideration?
- The consideration exchanged between the parties must be of equal value.
- The consideration exchanged between the parties must be of comparable value.
- In deciding whether the consideration requirement of contract formation has been met,
courts will look at the type of consideration exchanged between the parties.
- So long as some bargained-for exchange between the parties is contemplated, the contract
will be deemed enforceable. So long as some bargained-for exchange between the parties is
contemplated, the contract will be deemed enforceable.
When Bavarian Motor Works (BMW), a German company, opened a production facility in
Spartanburg, South Carolina in 1994, a number of its existing suppliers (particularly of
component parts) opened facilities there as well. Both BMW and its suppliers depend on each
other for their business success, and they have developed strong business relationships over
many years. The many contracts that BMW and its suppliers enter into each year are known as
__________ contracts.
