Business Law Department Exam

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Indicate whether the sentence or statement is true or false.

__F___ The Offeror Is The Party With The Power To Decide Whether To Create A Contract. __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. __T___ The communication of an offer can be made by the offeror or the offeror's agent. __T___ Generally, advertisements, catalogs, price lists, etc. are not treated as offers. __F___ A counteroffer is treated as both a revocation and a new offer. _T____ Consideration can consist of giving up a legal right. __T___ A promise to act or to refrain from doing an act can serve as consideration. __F___ The mirror image rule permits the offeree's acceptance of a contract to vary from the offer. _F____ A person who delegates his contractual duties is fully relieved of any further duty to perform under that contract. _T___ When both parties to a contract are minors, either or both of them may avoid the contract. _F____ A parent or parents who sign a contract on behalf of their minor child may disaffirm the contract just as their child may. ___F__ A party who makes a mistake about the value of the object of a contract is normally permitted to avoid the contract. ___T__ A plaintiff must prove that he suffered actual injury to recover damages for fraud. ___F__ A party to a contract may delegate his rights arising from the contract to another person. ___T__ The nonbreaching party normally may not recover punitive damages in a breach of contract claim. ___F__ Expenses, such as those incurred to obtain performance from a source other than the original contracting party, are called consequential damages. ___T__ An express contract may be either written or oral.

___F__ An incidental beneficiary can directly sue the maker of a contract in the case of breach. ___T__ The mirror image rule requires that the acceptance exactly match the offer. ___T__ Giving up a legal right to do something is enough to legally qualify as consideration. ___F__ A quasi contract is another name for an oral contract. ___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. ___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. ___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. ___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. ___F__ Generally, an offer is effective as soon as it is dispatched. ___T----- An offer must be communicated to the offeree or his agent in order for the offer to be effective. ___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. ___T__ Generally, a contract exists when an offer has been accepted. ___T__ If the offer specifies it MUST be accepted by letter, a telegram will not be a valid means of acceptance. ___F__ If an offer states that it MUST be received by a certain date, receipt is presumed in those situations when acceptance is mailed. ___T__ The party to whom an offer is made is an offeree.

__T___ A counteroffer operates as a rejection of the original offer. ___T__ Contracts have a number of legally essential elements, among which are an agreement and consideration. __F___ The law enforces all promises, therefore, all promises are contracts. __F___ On July 12th, 2008, Louis offers to employ Teresa as head chef in...
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