Ch 12

Chapter 12—NATURE AND CLASSES OF CONTRACTS: CONTRACTING
ON THE INTERNET
TRUE/FALSE
1. Quasi contracts are contracts.
ANS: F

MSC: AACSB Analytic

2. A contract is essentially an agreement that creates an obligation.
ANS: T

MSC: AACSB Analytic

3. Because transfer of value is essential to a valid contract, contracts cannot apply to the performance of personal services.
ANS: F

MSC: AACSB Analytic

4. Every contract has only two parties.
ANS: F

MSC: AACSB Analytic

5. A promisor makes a promise to a promisee.
ANS: T

MSC: AACSB Analytic

6. Only the parties who signed the original contract can have rights with respect to that contract.
ANS: F

MSC: AACSB Analytic

7. A reward offered to the public for the return of lost property is not considered an offer.
ANS: F

MSC: AACSB Analytic

8. An offer may be made only to a specific person.
ANS: F

MSC: AACSB Analytic

9. An offerer makes an offer to an offeree.
ANS: T

MSC: AACSB Analytic

10. Negotiable instruments are examples of formal contracts.
ANS: T

MSC: AACSB Analytic

11. Contracts for amounts more than $1 million must be made under seal or they are not binding.
ANS: F

MSC: AACSB Analytic

12. A contract is described as a contract of record when the accountant of one of the parties has made an entry of the contract in the business record of that party.

ANS: F

MSC: AACSB Analytic

13. A recognizance is an agreement by which one party admits or recognizes that a specified sum of money is owed to another party.
ANS: F

MSC: AACSB Analytic

14. An express contract is one in which the agreement is shown by acts and conduct of the parties.
ANS: F

MSC: AACSB Analytic

15. Implied-in-fact contracts and implied-in-law contracts are essentially the same.
ANS: F

MSC: AACSB Analytic

16. The effect of an implied contract is not the same as the effect of an express contract.
ANS: F

MSC: AACSB Analytic

17. A voidable contract is