BUSINESS LAW DEPARTMENTAL EXAM
TEST BANK(2021-2022
DEPARTMENT EXAM TEST BANK
True/
False
Indicate whether the sentence or statement is true or false.
1. _F The offeror is the party with the power to decide whether to create a contract.
2. T An offer made as a joke, where a reasonable person would conclude that it was
made as a joke, cannot result in a contract.
3. T The communication of an offer can be made by the offeror or the offeror's agent.
4. T Generally, advertisements, catalogs, price lists, etc. are not treated as offers.
5. _F A counteroffer is treated as both a revocation and a new offer.
6. T Consideration can consist of giving up a legal right.
7. _T A promise to act or to refrain from doing an act can serve as consideration.
8. F The mirror image rule permits the offeree's acceptance of a contract to vary from the
offer.
9. F A person who delegates his contractual duties is fully relieved of any further duty to
perform under that contract.
10. _T When both parties to a contract are minors, either or both of them may avoid the
contract.
11. _F A parent or parents who sign a contract on behalf of their minor child may
disaffirm the contract just as their child may.
12. F A party who makes a mistake about the value of the object of a contract is
normally permitted to avoid the contract.
13. _T A plaintiff must prove that he suffered actual injury to recover damages for fraud.
14. _F A party to a contract may delegate his rights arising from the contract to another
person.
15. T The nonbreaching party normally may not recover punitive damages in a breach of
contract claim.
16. _F Expenses, such as those incurred to obtain performance from a source other
, BUSINESS LAW DEPARTMENTAL EXAM
TEST BANK(2021-2022
than the original contracting party, are called consequential damages.
17. T An express contract may be either written or oral.
18. F An incidental beneficiary can directly sue the maker of a contract in the case of
breach.
19. T The mirror image rule requires that the acceptance exactly match the offer.
20. T Giving up a legal right to do something is enough to legally qualify as consideration.
21. F_ A quasi contract is another name for an oral contract.
22. F "I promise to pay you $100 if you will promise to fix my car next month." This is
an offer for a unilateral contract.
23. _T If a person who has been declared incompetent by a court enters into an
agreement, that agreement is void, because it does not meet all the requirements of a
binding contract.
24. T Alice makes a material misrepresentation of fact to Betty, and based upon the
misrepresentation, Betty enters into a contract. Betty now realizes she was deceived and
wants to get out of the contract. This contract is voidable at Betty's option only.
25. _F Nathan promises to take Debra to the show on Friday night. He then changes his
mind so that he can stay home and study his business law. Nathan can be sued for
breach of contract by Debra for breaking his promise.
26. _F Generally, an offer is effective as soon as it is dispatched.
27. _T An offer must be communicated to the offeree or his agent in order for the
offer to be effective.
28. _F If Bill tells Sara that he will give her two days to decide if she wants to buy his car,
he cannot sell it to anyone else during that time.
29. _T Generally, a contract exists when an offer has been accepted.
30. T If the offer specifies it MUST be accepted by letter, a telegram will not be a valid
means of acceptance.
31. _F If an offer states that it MUST be received by a certain date, receipt is presumed
in those situations when acceptance is mailed.
, BUSINESS LAW DEPARTMENTAL EXAM
TEST BANK(2021-2022
32. _T The party to whom an offer is made is an offeree.
33. T A counteroffer operates as a rejection of the original offer.
34. T Contracts have a number of legally essential elements, among which are an
agreement and consideration.
35. F The law enforces all promises, therefore, all promises are contracts.
36. _T On July 12th, 2008, Louis offers to employ Teresa as head chef in his restaurant
next year. The very next day, Teresa accepts the offer. The parties agree on a term of
nine
(9) months, and a $10,000 salary per month. Per their agreement, Teresa is to begin
work on January 1. This contract falls within the scope of the statute of frauds, and thus
will likely have to be in writing to be enforceable.
37. _F An offer can never be validly accepted by the offeree’s silence.
38. F Wendy offers to pay Jose $1,000 if he agrees to promise to paint her house
this month. If Jose accepts the offer, it will create a unilateral, executed contract.
39. T A contract to provide lawn and landscaping service for “the next six (6)
months” falls within the scope of the statute of frauds, and must be in writing to be
enforceable.
40. _T Fred offers to paint Debbie’s home for $500. Debbie tells Fred she will only pay
$450, and Fred agrees. Under these facts, Debbie is the “offeror.”
41. T Sarah, an artist, e-mails Patricia and offers to paint her portrait for $499.99. Patricia
calls Sarah back and accepts the offer. Sarah promises to paint the portrait within one (1)
year, if not sooner, and Patricia agrees to pay within six (6) months of the portrait’s
receipt. This is an enforceable, bilateral, executory contract.
42. F Sue leases her 3 Bedroom, 2-bath home to Trisha for $300,000 for one year. The
parties sign a written lease. Article 2-A of the UCC governs this contract.
43. _F Bob, a schoolteacher, sells his neighbor Sam an old office chair at a garage sale.
Bob has given Sam an “implied warranty of merchantability.”
44. _F Sue sells her 3 bedroom, 2 bath home to Trisha for $300,000. The parties sign
a written contract. Article 2 of the UCC governs this contract.
45. F A contract for lawn mowing services falls under the scope of Article 2 of the UCC.
46. _F For Article 2 of the UCC to apply, at least one party to the contract must be a
, BUSINESS LAW DEPARTMENTAL EXAM
TEST BANK(2021-2022
merchant.
47. _F Pat, who owns an appliance store, has a garage sale at his home where he sells
old furniture and books. He sells a set of books to his neighbor Judy. Pat is considered a
merchant under Article 2 of the UCC in selling the books to Judy.
48. T The UCC imposes a duty of good faith on the performance and enforcement
of every contract it covers.
49. T Under a unilateral contract only one party makes a promise.
50. F A void contract is a contract that one or both parties may cancel, at their option.
51. T A promises to pay B $50 if B will mow A's lawn. B completely and
satisfactorily mows A's lawn. This is a unilateral contract.
52. F An express contract is a contract that is evidenced by a writing.
53. F A revocation normally is effective at the time it is dispatched by the offeror.
54. F A rejection normally is effective at the time it is dispatched by the offeree.
55. F The offeror's death automatically terminates an offer, but the offeree's death
does not.
56. T An advertisement offering a reward for the return of lost property usually is
treated as an offer for a uilateral contract.
57. F An assignee must give consideration to the assignor in exchange for the assignment.
TEST BANK(2021-2022
DEPARTMENT EXAM TEST BANK
True/
False
Indicate whether the sentence or statement is true or false.
1. _F The offeror is the party with the power to decide whether to create a contract.
2. T An offer made as a joke, where a reasonable person would conclude that it was
made as a joke, cannot result in a contract.
3. T The communication of an offer can be made by the offeror or the offeror's agent.
4. T Generally, advertisements, catalogs, price lists, etc. are not treated as offers.
5. _F A counteroffer is treated as both a revocation and a new offer.
6. T Consideration can consist of giving up a legal right.
7. _T A promise to act or to refrain from doing an act can serve as consideration.
8. F The mirror image rule permits the offeree's acceptance of a contract to vary from the
offer.
9. F A person who delegates his contractual duties is fully relieved of any further duty to
perform under that contract.
10. _T When both parties to a contract are minors, either or both of them may avoid the
contract.
11. _F A parent or parents who sign a contract on behalf of their minor child may
disaffirm the contract just as their child may.
12. F A party who makes a mistake about the value of the object of a contract is
normally permitted to avoid the contract.
13. _T A plaintiff must prove that he suffered actual injury to recover damages for fraud.
14. _F A party to a contract may delegate his rights arising from the contract to another
person.
15. T The nonbreaching party normally may not recover punitive damages in a breach of
contract claim.
16. _F Expenses, such as those incurred to obtain performance from a source other
, BUSINESS LAW DEPARTMENTAL EXAM
TEST BANK(2021-2022
than the original contracting party, are called consequential damages.
17. T An express contract may be either written or oral.
18. F An incidental beneficiary can directly sue the maker of a contract in the case of
breach.
19. T The mirror image rule requires that the acceptance exactly match the offer.
20. T Giving up a legal right to do something is enough to legally qualify as consideration.
21. F_ A quasi contract is another name for an oral contract.
22. F "I promise to pay you $100 if you will promise to fix my car next month." This is
an offer for a unilateral contract.
23. _T If a person who has been declared incompetent by a court enters into an
agreement, that agreement is void, because it does not meet all the requirements of a
binding contract.
24. T Alice makes a material misrepresentation of fact to Betty, and based upon the
misrepresentation, Betty enters into a contract. Betty now realizes she was deceived and
wants to get out of the contract. This contract is voidable at Betty's option only.
25. _F Nathan promises to take Debra to the show on Friday night. He then changes his
mind so that he can stay home and study his business law. Nathan can be sued for
breach of contract by Debra for breaking his promise.
26. _F Generally, an offer is effective as soon as it is dispatched.
27. _T An offer must be communicated to the offeree or his agent in order for the
offer to be effective.
28. _F If Bill tells Sara that he will give her two days to decide if she wants to buy his car,
he cannot sell it to anyone else during that time.
29. _T Generally, a contract exists when an offer has been accepted.
30. T If the offer specifies it MUST be accepted by letter, a telegram will not be a valid
means of acceptance.
31. _F If an offer states that it MUST be received by a certain date, receipt is presumed
in those situations when acceptance is mailed.
, BUSINESS LAW DEPARTMENTAL EXAM
TEST BANK(2021-2022
32. _T The party to whom an offer is made is an offeree.
33. T A counteroffer operates as a rejection of the original offer.
34. T Contracts have a number of legally essential elements, among which are an
agreement and consideration.
35. F The law enforces all promises, therefore, all promises are contracts.
36. _T On July 12th, 2008, Louis offers to employ Teresa as head chef in his restaurant
next year. The very next day, Teresa accepts the offer. The parties agree on a term of
nine
(9) months, and a $10,000 salary per month. Per their agreement, Teresa is to begin
work on January 1. This contract falls within the scope of the statute of frauds, and thus
will likely have to be in writing to be enforceable.
37. _F An offer can never be validly accepted by the offeree’s silence.
38. F Wendy offers to pay Jose $1,000 if he agrees to promise to paint her house
this month. If Jose accepts the offer, it will create a unilateral, executed contract.
39. T A contract to provide lawn and landscaping service for “the next six (6)
months” falls within the scope of the statute of frauds, and must be in writing to be
enforceable.
40. _T Fred offers to paint Debbie’s home for $500. Debbie tells Fred she will only pay
$450, and Fred agrees. Under these facts, Debbie is the “offeror.”
41. T Sarah, an artist, e-mails Patricia and offers to paint her portrait for $499.99. Patricia
calls Sarah back and accepts the offer. Sarah promises to paint the portrait within one (1)
year, if not sooner, and Patricia agrees to pay within six (6) months of the portrait’s
receipt. This is an enforceable, bilateral, executory contract.
42. F Sue leases her 3 Bedroom, 2-bath home to Trisha for $300,000 for one year. The
parties sign a written lease. Article 2-A of the UCC governs this contract.
43. _F Bob, a schoolteacher, sells his neighbor Sam an old office chair at a garage sale.
Bob has given Sam an “implied warranty of merchantability.”
44. _F Sue sells her 3 bedroom, 2 bath home to Trisha for $300,000. The parties sign
a written contract. Article 2 of the UCC governs this contract.
45. F A contract for lawn mowing services falls under the scope of Article 2 of the UCC.
46. _F For Article 2 of the UCC to apply, at least one party to the contract must be a
, BUSINESS LAW DEPARTMENTAL EXAM
TEST BANK(2021-2022
merchant.
47. _F Pat, who owns an appliance store, has a garage sale at his home where he sells
old furniture and books. He sells a set of books to his neighbor Judy. Pat is considered a
merchant under Article 2 of the UCC in selling the books to Judy.
48. T The UCC imposes a duty of good faith on the performance and enforcement
of every contract it covers.
49. T Under a unilateral contract only one party makes a promise.
50. F A void contract is a contract that one or both parties may cancel, at their option.
51. T A promises to pay B $50 if B will mow A's lawn. B completely and
satisfactorily mows A's lawn. This is a unilateral contract.
52. F An express contract is a contract that is evidenced by a writing.
53. F A revocation normally is effective at the time it is dispatched by the offeror.
54. F A rejection normally is effective at the time it is dispatched by the offeree.
55. F The offeror's death automatically terminates an offer, but the offeree's death
does not.
56. T An advertisement offering a reward for the return of lost property usually is
treated as an offer for a uilateral contract.
57. F An assignee must give consideration to the assignor in exchange for the assignment.
