Business Law Final Exam Questions With Accurate Answers
Identify the three essential elements required to form a contract - correct answer -Offer
Consideration
Acceptance
T/F The uniform commercial code applies to all contracts made by any two or more parties - correct
answer -False
T/F The statute of frauds is a law created yo prevent oral evidence from being considered by a court to
determine the intent of the parties - correct answer -False
In a unilateral contract, the offer is accepted when the - correct answer -offeree performs the requested
act
T/F If a party materially breach a contract, the opposing party has no duty to mitigate or reduce the
losses they experience as a result of the breach - correct answer -False
A material breach is best described as - correct answer -performance of a party that fails to reach the
level expected and bargained for by the other party
Tim's Surf Shop runs an advertisement that reads: 5 surfboards for sale, $25 each, to the first 5
customers to come into the shop beginning at 9:00 am on Saturday, April 23, 2016, This advertisement is
- correct answer -a binding offer
T/F Under an assignment of a contractual right, an assignee is entitles to all the rights the assignor had
under the original contract and can sue the promisor for his or her nonperformance so long as the
performance has not already occurred - correct answer -True
The parole evidence rule provides that oral evidence can always vary or modify a written contract -
correct answer -False
Jimmy is age 16 and is on of the top downhill skiers in the world. He signs a contract with a ski
manufacturer to exclusively use their skis. Jimmy continues to honor his contract for the next year which
of the following is true?
A) If jimmy is emancipated( living on his own) he cannot dis affirm his contract
B) Jimmy can disaffirm his contract but only within a reasonable time of signing the contract
C) Jim can only disffirm the contract while he is a minor
D) Jimmy can disaffirm the contract while still a minor and for a reasonable time after reaching the age
of majority( no longer a minor, past the age of 18) - correct answer -D
Driver hits pedestrian while pedestrian is lawfully crossing the street in a crosswalk. Pedestrian is
injured, incurs medical bills and lost wages because she cannot work after being hit by Driver. Drive
agrees to pay Pedestrian for her losses as long as she promises not to sue Driver. Is this an enforceable
agreement - correct answer -Yes
, A promise to give or donate money to charity is always an enforceable contract - correct answer -False
An offeree or his or her agent are the only parties who can accept an offer in a bilateral contract -
correct answer -True
Lynn is a licensed contract in Idaho. He agrees to build a Two-story outbuilding for Marnie on her
property in Caldwell, Idaho. Lynn injures his back and delegates his duty to build Marnie's outbuilding to
Sam. Sam is a licensed contract in Wyoming but not Idaho. Which of the following statements are true
A) Lynn cannot delegate his duty to Sam because he is not A licensed contractor in Idaho
B) Lynn can delegate his duty to Sam even though he is not a licensed contractor in Idaho.
C) Marnie cannot prevent Sam from starting to work on the project
D) Marnie has no right to sue Lynn for his delegation of his duty to build her outbuilding - correct answer
-A) Lynn cannot delegate his duty to Sam because he is not a licensed contract in Idaho
An executory contract is a contract - correct answer -that has not yet been fully performed by all parties
A rejection of an offer is implied even if an offeree accepts an offer but complains about the terms of the
offer - correct answer -False
The uniform commerical code has an exception to the mirror image rule in cases where a contract for
the sale of goods are made by exchanging forms - correct answer -True
Cool Uncle Michael promises to buy his nephew Jack a corvette on his 18th birthday. Cool Uncle Mike
reneges on his promise. Is this an enforceable agreement - correct answer -False/No
Tom is selling his boat and knows that the engine does not work. Tom convinces Zachary to buy the boat
after Tom says " this is the best boat I have ever owned" which is actually a true statement since it is the
only boat Tom has ever owned. Which of the following is true - correct answer -There is
misrepresentation or fraud on Tom's part even though his statement his true
All contract are unenforceable unless there is some written confirmation of the agreement - correct
answer -False
A counteroffer - correct answer -impliedely rejects an offer
The statute of frauds is a law that automatically imposes liability based upon a fraudulent
misrepresentation by one of the parties to a contract - correct answer -False
Contracts that are traditionally required to be in writing by the statute of frauds are - correct answer -
Contracts for the sale of goods costing more than $500
How long is an offer open? Mark all that apply - correct answer -Until Revoked
For a reasonable amount of time if a period is not specifically identified
Until it is expressly rejected
Until a counter offer is tendered
An agreement that leaves a material term for future negotiation is an enforceable contract - correct
answer -False
Identify the three essential elements required to form a contract - correct answer -Offer
Consideration
Acceptance
T/F The uniform commercial code applies to all contracts made by any two or more parties - correct
answer -False
T/F The statute of frauds is a law created yo prevent oral evidence from being considered by a court to
determine the intent of the parties - correct answer -False
In a unilateral contract, the offer is accepted when the - correct answer -offeree performs the requested
act
T/F If a party materially breach a contract, the opposing party has no duty to mitigate or reduce the
losses they experience as a result of the breach - correct answer -False
A material breach is best described as - correct answer -performance of a party that fails to reach the
level expected and bargained for by the other party
Tim's Surf Shop runs an advertisement that reads: 5 surfboards for sale, $25 each, to the first 5
customers to come into the shop beginning at 9:00 am on Saturday, April 23, 2016, This advertisement is
- correct answer -a binding offer
T/F Under an assignment of a contractual right, an assignee is entitles to all the rights the assignor had
under the original contract and can sue the promisor for his or her nonperformance so long as the
performance has not already occurred - correct answer -True
The parole evidence rule provides that oral evidence can always vary or modify a written contract -
correct answer -False
Jimmy is age 16 and is on of the top downhill skiers in the world. He signs a contract with a ski
manufacturer to exclusively use their skis. Jimmy continues to honor his contract for the next year which
of the following is true?
A) If jimmy is emancipated( living on his own) he cannot dis affirm his contract
B) Jimmy can disaffirm his contract but only within a reasonable time of signing the contract
C) Jim can only disffirm the contract while he is a minor
D) Jimmy can disaffirm the contract while still a minor and for a reasonable time after reaching the age
of majority( no longer a minor, past the age of 18) - correct answer -D
Driver hits pedestrian while pedestrian is lawfully crossing the street in a crosswalk. Pedestrian is
injured, incurs medical bills and lost wages because she cannot work after being hit by Driver. Drive
agrees to pay Pedestrian for her losses as long as she promises not to sue Driver. Is this an enforceable
agreement - correct answer -Yes
, A promise to give or donate money to charity is always an enforceable contract - correct answer -False
An offeree or his or her agent are the only parties who can accept an offer in a bilateral contract -
correct answer -True
Lynn is a licensed contract in Idaho. He agrees to build a Two-story outbuilding for Marnie on her
property in Caldwell, Idaho. Lynn injures his back and delegates his duty to build Marnie's outbuilding to
Sam. Sam is a licensed contract in Wyoming but not Idaho. Which of the following statements are true
A) Lynn cannot delegate his duty to Sam because he is not A licensed contractor in Idaho
B) Lynn can delegate his duty to Sam even though he is not a licensed contractor in Idaho.
C) Marnie cannot prevent Sam from starting to work on the project
D) Marnie has no right to sue Lynn for his delegation of his duty to build her outbuilding - correct answer
-A) Lynn cannot delegate his duty to Sam because he is not a licensed contract in Idaho
An executory contract is a contract - correct answer -that has not yet been fully performed by all parties
A rejection of an offer is implied even if an offeree accepts an offer but complains about the terms of the
offer - correct answer -False
The uniform commerical code has an exception to the mirror image rule in cases where a contract for
the sale of goods are made by exchanging forms - correct answer -True
Cool Uncle Michael promises to buy his nephew Jack a corvette on his 18th birthday. Cool Uncle Mike
reneges on his promise. Is this an enforceable agreement - correct answer -False/No
Tom is selling his boat and knows that the engine does not work. Tom convinces Zachary to buy the boat
after Tom says " this is the best boat I have ever owned" which is actually a true statement since it is the
only boat Tom has ever owned. Which of the following is true - correct answer -There is
misrepresentation or fraud on Tom's part even though his statement his true
All contract are unenforceable unless there is some written confirmation of the agreement - correct
answer -False
A counteroffer - correct answer -impliedely rejects an offer
The statute of frauds is a law that automatically imposes liability based upon a fraudulent
misrepresentation by one of the parties to a contract - correct answer -False
Contracts that are traditionally required to be in writing by the statute of frauds are - correct answer -
Contracts for the sale of goods costing more than $500
How long is an offer open? Mark all that apply - correct answer -Until Revoked
For a reasonable amount of time if a period is not specifically identified
Until it is expressly rejected
Until a counter offer is tendered
An agreement that leaves a material term for future negotiation is an enforceable contract - correct
answer -False
