ACCT 215 EXAM 3 IOWA STATE QUESTIONS WITH COMPLETE SOLUTIONS.
*Statute of Frauds - (ANSWER)Certain contracts have to be in writing to be enforceable in court.
• must be signed by the opposing party against whom the contract is being enforced.
*Wright vs. Wright - (ANSWER)• plaintiff gives birth to son
• defendant's son was the father
• defendant agrees to pay plaintiff if she will marry his son and the son leaves her
• son leaves plaintiff and child
• defendant argues he should not have to pay plaintiff because there was no consideration and this type
of contract violates public policy
• court disagrees and holds for plaintiff
*Contracts subject to Statute of Fraud - (ANSWER)• interests in land or anything permanently attached
to land
• contracts that cannot be performed within one year from date of formation**
• surety contracts (gratuitous guarantors only)
• promises made in consideration of marriage
• contracts for goods priced $500 or more
*Promises to pay for debt of another.. - (ANSWER)Has to be in writing if you don't get an economic
benefit
*Exceptions to statute of Frauds - (ANSWER)• Common Law
- partial performance
- promissory estoppel
• UCC
- Admission in court
- acceptance (or partial acceptance) of goods costing $500 or more
- specially manufactured goods
,ACCT 215 EXAM 3 IOWA STATE QUESTIONS WITH COMPLETE SOLUTIONS.
*Parole Evidence Rule - (ANSWER)• applies to written contract, court doesn't care about the negotiation
leading up to the contract being made.
• Exceptions:
- subsequent Modification
- Ambiguous terms
Parole Evidence - (ANSWER)• course of performance
• course of dealings
• usage of trade
Course of performance (P E) - (ANSWER)court looks how the parties have been interpreting the contract
terms to date as they have performed under the contract
Course of dealings (P E) - (ANSWER)court looks at how parties in question have transacted in the past
and interpreted similar terms
Usage of trade - (ANSWER)how do others involved in the trade in question interpret terms such as those
in dispute
Consent - (ANSWER)parties cannot enter into an agreement if they have not consented to the terms of
the agreement because they were mistaken, tricked or threatened
*Mistakes - (ANSWER)• mistake of law is not an excuse
• mistake of value
- courts generally don't care about this type of mistake
• mistake of fact
- bilateral mistakes
• both parties mistaken
• cannot have a meeting of the minds
, ACCT 215 EXAM 3 IOWA STATE QUESTIONS WITH COMPLETE SOLUTIONS.
*Bilateral Mistakes - (ANSWER)Both parties are mistaken
*Unilateral Mistake - (ANSWER)• only one party makes a mistake
- must be material
- courts not interested in unilateral mistakes
• 2 Exceptions**
- one party knows/ should have known the other party is mistaken
- mathematical or bookkeeping errors
*Aydin Corp vs. US - (ANSWER)• NAVALEX solicited orders for radio sets
• Aydin submits a bid for $158,800 per radio
• plaintiff learns of competitor's higher bid
• plaintiff claims unilateral mistake in calculating bid
• court states the plaintiff appears to have made an error in judgement not calculation per se
- no relief for errors of judgement
*Fraudulent Misrepresentation - (ANSWER)• No mutual assent when fraudulent misrepresentation has
occurred.
- puffing up a product or service not fraud
• Test:
- Misrepresentation of a material fact
• material: makes a difference in the decision making process
- Must be an intent to deceive
• scienter: intent by the defendant to tell deceiving lie
- the innocent party must rely on misrepresentation
Types of Misrepresentations - (ANSWER)• Misrepresentation of law
- don't generally care as parties should be informed of the law
• Misrepresentation by silence
*Statute of Frauds - (ANSWER)Certain contracts have to be in writing to be enforceable in court.
• must be signed by the opposing party against whom the contract is being enforced.
*Wright vs. Wright - (ANSWER)• plaintiff gives birth to son
• defendant's son was the father
• defendant agrees to pay plaintiff if she will marry his son and the son leaves her
• son leaves plaintiff and child
• defendant argues he should not have to pay plaintiff because there was no consideration and this type
of contract violates public policy
• court disagrees and holds for plaintiff
*Contracts subject to Statute of Fraud - (ANSWER)• interests in land or anything permanently attached
to land
• contracts that cannot be performed within one year from date of formation**
• surety contracts (gratuitous guarantors only)
• promises made in consideration of marriage
• contracts for goods priced $500 or more
*Promises to pay for debt of another.. - (ANSWER)Has to be in writing if you don't get an economic
benefit
*Exceptions to statute of Frauds - (ANSWER)• Common Law
- partial performance
- promissory estoppel
• UCC
- Admission in court
- acceptance (or partial acceptance) of goods costing $500 or more
- specially manufactured goods
,ACCT 215 EXAM 3 IOWA STATE QUESTIONS WITH COMPLETE SOLUTIONS.
*Parole Evidence Rule - (ANSWER)• applies to written contract, court doesn't care about the negotiation
leading up to the contract being made.
• Exceptions:
- subsequent Modification
- Ambiguous terms
Parole Evidence - (ANSWER)• course of performance
• course of dealings
• usage of trade
Course of performance (P E) - (ANSWER)court looks how the parties have been interpreting the contract
terms to date as they have performed under the contract
Course of dealings (P E) - (ANSWER)court looks at how parties in question have transacted in the past
and interpreted similar terms
Usage of trade - (ANSWER)how do others involved in the trade in question interpret terms such as those
in dispute
Consent - (ANSWER)parties cannot enter into an agreement if they have not consented to the terms of
the agreement because they were mistaken, tricked or threatened
*Mistakes - (ANSWER)• mistake of law is not an excuse
• mistake of value
- courts generally don't care about this type of mistake
• mistake of fact
- bilateral mistakes
• both parties mistaken
• cannot have a meeting of the minds
, ACCT 215 EXAM 3 IOWA STATE QUESTIONS WITH COMPLETE SOLUTIONS.
*Bilateral Mistakes - (ANSWER)Both parties are mistaken
*Unilateral Mistake - (ANSWER)• only one party makes a mistake
- must be material
- courts not interested in unilateral mistakes
• 2 Exceptions**
- one party knows/ should have known the other party is mistaken
- mathematical or bookkeeping errors
*Aydin Corp vs. US - (ANSWER)• NAVALEX solicited orders for radio sets
• Aydin submits a bid for $158,800 per radio
• plaintiff learns of competitor's higher bid
• plaintiff claims unilateral mistake in calculating bid
• court states the plaintiff appears to have made an error in judgement not calculation per se
- no relief for errors of judgement
*Fraudulent Misrepresentation - (ANSWER)• No mutual assent when fraudulent misrepresentation has
occurred.
- puffing up a product or service not fraud
• Test:
- Misrepresentation of a material fact
• material: makes a difference in the decision making process
- Must be an intent to deceive
• scienter: intent by the defendant to tell deceiving lie
- the innocent party must rely on misrepresentation
Types of Misrepresentations - (ANSWER)• Misrepresentation of law
- don't generally care as parties should be informed of the law
• Misrepresentation by silence
