ALLIED BUS230 MODULE 3 check your understanding

Question Points
1. An
executory contract is one that has not been fully performed by one or all of
the parties.
a. True
b. False

2. The
contracts of mentally ill persons not judged insane by the courts are:
a. void.
b. able to be
disaffirmed during a period of normalcy.
c. binding on the
person’s guardian.
d. all of the
choices apply.

3 Of the
following, the one that does not terminate an offer is:
a. a counteroffer.
b. acceptance.
c. the serious
illness of the offeror.
d. impossibility.

4. An
intoxicated person may avoid a contract on becoming sober:
a. only if the other
party had reason to know that the person was drunk and did not understand the
consequences of the transaction.
b. under any
circumstances.
c. only if he or she
was slightly intoxicated.
d. only if the
contract is one for necessaries.
5. Usury
laws protect borrowers from paying excessively high interest rates.
a. True
b. False
6. Brown
offered to sell Wilson an air conditioner for $300. When Wilson said he needed
time to think about the offer, Brown said that he would keep the offer open for
five days. Which of the following statements is correct?
a. Brown may not
withdraw the offer until the end of the fifth day.
b. Brown may
withdraw the offer at any time before acceptance is made.
c. Brown’s agreement
to keep the offer open created an option to purchase the air conditioner.
d. Brown may not
withdraw his offer without Wilson’s consent.
7. Minors
are liable for the reasonable value of necessaries:
a. actually furnished.
b. that they agreed
to purchase.
c. that their
parents agree to pay for.
d. as determined by
the merchant who sold the necessaries to the minor.
8. An offer
may be revoked even if it has been accepted.
a. True
b. False
9. Courts
sometimes apply the doctrine of promissory estoppel to enforce a promise. This
doctrine:
a. is grossly
unfair.
b. requires
consideration to be applicable.
c. sometimes allows
enforcement of a promise even when an offeree gives no consideration for an
offeror’s promise.
d. is a popular
legal remedy.
10. A check is
an example of a:
a. contract implied
in law.
b. contract implied
in fact.
c. quasi contract.
d. formal contract.

11. Jennings
found and returned Martin’s lost wallet. Martin promised to give Jennings a
reward the next day after he cashed a check. Martin is not legally bound to pay
a reward as he promised, because the consideration for the promise was:
a. past.
b. present.
c. future.
d. not legal.
12. Knebel’s
parents promised her $3,000 if she would not marry before age twenty-one.
Knebel agreed. This agreement is:
a. void.
b. valid.
c. unenforceable.
d. illegal.
13. Contracts
made by minors are void.
a. True
b. False
14. A good
example of a modern statute law is:
a. common law.
b. the Uniform
Commercial Code (UCC)
c. the Uniform Quasi
Contract Code (UQCC)
d. judge-made law.
15. An
agreement is illegal and void if it violates:
a. state usury
statutes.
b. state licensing
statutes.
c. state criminal
statutes.
d. all of the
choices apply.
16. A minor
may ratify an agreement while still a minor.
a. True
b. False
17. A contract
implied in law is known as a(n):
a. quasi contract.
b. express contract.
c. voidable
contract.
d. unilateral
contract.
18. A
counteroffer:
a. has no legal
effect.
b. is a valid
acceptance.
c. does not reverse
the relationship of the parties.
d. is a rejection of
the original offer.
19. A contract
is a mere promise between two or more persons who have the capacity to
contract.
a. True
b. False
20. Forbearance
is a promise to do something you are not legally required to do.
a. True
b. Falsea