Legal Environment of Business Final Exam Study Guide – LAW 2221 – 2026 –
Comprehensive Review
If two parties enter into an oral contract that falls under the Statute of Frauds and both parties
have fully performed according to its term then: - correct answer ✔✔ neither party can set
aside the transition on the ground that there was writing.
The breach of contractual obligation is called: - correct answer ✔✔ default
Which of the following is an exception to the statute of frauds and does not have to be in
writing? - correct answer ✔✔ an agreement where a promise is an original promise by the
promisor rather than a promise to pay the debt of another.
According to the federal Electronic Signatures in Global and National Commerce Act: - correct
answer ✔✔ signatures on a contract no longer have to be on paper
A complete, written contract may not be modified by oral testimony unless evidence of fraud,
accident or mistake exists. This rule is known as the: - correct answer ✔✔ parol evidence rule
Which of the following demonstrates an advantage of a written contract over an oral contract? -
correct answer ✔✔ The existence of a contract cannot be denied if it is in writing.
The law requires a contract that cannot be performed within ______ year(s) of the date of
formation to be in writing. - correct answer ✔✔ 1
An agreement to _______ comes under the Statute of Frauds and must be in writing. - correct
answer ✔✔ sell any interest in land
,A __________ is a person to whom the promisee owes an obligation or duty that will be
discharged to the extent that the promisor performs the promise. - correct answer ✔✔ creditor
beneficiary
Which of the following substitutes a new party for one of the original parties in an existing
contract at the mutual agreement of the original parties, such that the prior contract
terminates, and a new one substitutes for it? - correct answer ✔✔ a novation
A _________ means that one party conveys rights in a contract to another who is not a party to
the original undertaking. - correct answer ✔✔ assignment
An assignor is: - correct answer ✔✔ the party who makes an assignment
A ________ is a contract in which two or more parties have all promised the entire
performance, which is the subject of the contract. - correct answer ✔✔ joint contract
While notice of an assignment need not be given to the other party in order to make the
assignment effective as between the assignor and the assignee, why is it recommended that
notice be give to the other party? - correct answer ✔✔ The assignee may not receive payment
if notification of the assignment is not given to the original promisor.
A _________ arises when two or more people individually agree to perform the same
obligation, even though the individual agreements are contained in the same document. -
correct answer ✔✔ several contract
An offer to carry out an obligation in satisfaction of the terms of a contract is called: - correct
answer ✔✔ a tender of performance
A person's right to sue must be exercised within the time fixed by a statute called the: - correct
answer ✔✔ statute of limitaions
, A ________ clause is a contract provision excusing performance when an extraordinary event
occurs. - correct answer ✔✔ force majeure
In a contract, if one party, prior to the time the other party is entitled to performance,
announces an intention not to perform, a __________ occurs. - correct answer ✔✔ anticipatory
breach
If a plaintiff in a breach of contract suit can prove that the defendant broke the contract, but
cannot prove any loss was sustained because of the breach, the court will award
_____________ damages. - correct answer ✔✔ nominal
When a contract is breached, the aggrieved party may elect to __________ the contract, which
releases this party from all obligations not yet performed. - correct answer ✔✔ rescind
In cases where neither a suit for damages nor for rescission will constitute an adequate remedy,
the injured party's remedy is a suit in the equity to compel _______, which is the carrying out of
the specific terms of the contract. - correct answer ✔✔ specific performance
____________ occurs when a professional person fails to perform a contract for professional
services with the ability and care normally exercised by others in the profession. - correct
answer ✔✔ malpractice
An assurance that the article sold will conform to a certain standard or will operate in a certain
manner is called a: - correct answer ✔✔ warranty
The statement of the seller in which the article sold is warranted or guaranteed is known as a: -
correct answer ✔✔ express warranty
Comprehensive Review
If two parties enter into an oral contract that falls under the Statute of Frauds and both parties
have fully performed according to its term then: - correct answer ✔✔ neither party can set
aside the transition on the ground that there was writing.
The breach of contractual obligation is called: - correct answer ✔✔ default
Which of the following is an exception to the statute of frauds and does not have to be in
writing? - correct answer ✔✔ an agreement where a promise is an original promise by the
promisor rather than a promise to pay the debt of another.
According to the federal Electronic Signatures in Global and National Commerce Act: - correct
answer ✔✔ signatures on a contract no longer have to be on paper
A complete, written contract may not be modified by oral testimony unless evidence of fraud,
accident or mistake exists. This rule is known as the: - correct answer ✔✔ parol evidence rule
Which of the following demonstrates an advantage of a written contract over an oral contract? -
correct answer ✔✔ The existence of a contract cannot be denied if it is in writing.
The law requires a contract that cannot be performed within ______ year(s) of the date of
formation to be in writing. - correct answer ✔✔ 1
An agreement to _______ comes under the Statute of Frauds and must be in writing. - correct
answer ✔✔ sell any interest in land
,A __________ is a person to whom the promisee owes an obligation or duty that will be
discharged to the extent that the promisor performs the promise. - correct answer ✔✔ creditor
beneficiary
Which of the following substitutes a new party for one of the original parties in an existing
contract at the mutual agreement of the original parties, such that the prior contract
terminates, and a new one substitutes for it? - correct answer ✔✔ a novation
A _________ means that one party conveys rights in a contract to another who is not a party to
the original undertaking. - correct answer ✔✔ assignment
An assignor is: - correct answer ✔✔ the party who makes an assignment
A ________ is a contract in which two or more parties have all promised the entire
performance, which is the subject of the contract. - correct answer ✔✔ joint contract
While notice of an assignment need not be given to the other party in order to make the
assignment effective as between the assignor and the assignee, why is it recommended that
notice be give to the other party? - correct answer ✔✔ The assignee may not receive payment
if notification of the assignment is not given to the original promisor.
A _________ arises when two or more people individually agree to perform the same
obligation, even though the individual agreements are contained in the same document. -
correct answer ✔✔ several contract
An offer to carry out an obligation in satisfaction of the terms of a contract is called: - correct
answer ✔✔ a tender of performance
A person's right to sue must be exercised within the time fixed by a statute called the: - correct
answer ✔✔ statute of limitaions
, A ________ clause is a contract provision excusing performance when an extraordinary event
occurs. - correct answer ✔✔ force majeure
In a contract, if one party, prior to the time the other party is entitled to performance,
announces an intention not to perform, a __________ occurs. - correct answer ✔✔ anticipatory
breach
If a plaintiff in a breach of contract suit can prove that the defendant broke the contract, but
cannot prove any loss was sustained because of the breach, the court will award
_____________ damages. - correct answer ✔✔ nominal
When a contract is breached, the aggrieved party may elect to __________ the contract, which
releases this party from all obligations not yet performed. - correct answer ✔✔ rescind
In cases where neither a suit for damages nor for rescission will constitute an adequate remedy,
the injured party's remedy is a suit in the equity to compel _______, which is the carrying out of
the specific terms of the contract. - correct answer ✔✔ specific performance
____________ occurs when a professional person fails to perform a contract for professional
services with the ability and care normally exercised by others in the profession. - correct
answer ✔✔ malpractice
An assurance that the article sold will conform to a certain standard or will operate in a certain
manner is called a: - correct answer ✔✔ warranty
The statement of the seller in which the article sold is warranted or guaranteed is known as a: -
correct answer ✔✔ express warranty
