The Legal Environment of Business: Quiz 2 (2014 Fall D Term 6)

The Legal Environment of Business: A Managerial Approach: Theory to PracticeMelvin, 2nd ed.Quiz 2 (2014 Fall D Term 6) 1.Which of the following is not required for promissory estoppel to apply? The promise made must be reasonable.The promise made must be relied on by the promisee to the promisee’s detriment.The promisor must suffer an injustice if the promise isn’t enforced.The promisor must know that the promisee is likely to rely on the promise.2.Bud calls Lou and says, “I’ll sell you my car for a thousand bucks, interested?” Lou says, “I’ll look it up on the Internet. If the Blue Book price is close, I’ll pay you $1,000 in the morning.” At sunrise Lou shows up with $1000.Bud must sell him the car because Lou accepted the evening before when he promised to look up the car’s value. Bud must sell him the car because he cannot revoke his offer after Lou accepted.Bud does not have to sell the car because his promise was unclear.Bud does not have to sell the car because the payment is based on past consideration.3.After an offer is made, the offeror may revoke that offer at any time, even if the offeree has not been given a reasonable period of time to decide whether or not to accept. TrueFalse4.With regard to the court, adequacy of consideration means:the consideration exchanged must be exactly equal in value.the consideration exchanged must be reasonably close in value.the court will adjust the consideration if the value exchanged is unfair. the court doesn’t care about value as long as the mutual assent is valid.5.In Stevens v. Publicis, S.A., the courts addressed the statute of frauds issue of what constitutes a writing in today’s cyber world and determined that:technology aside, a writing must contain an original signature to create a true contract.since e-mail could be written by anyone, an e-mail must be followed by a document with an original signature. an e-mail with the sender’s typed signature shows an intent to authenticate the contents and satisfies statute of frauds requirements.the statute of frauds requires that certain contracts be in writing to be enforceable but does not address or concern itself with signatures.6.Duress must be based on a physical threat and not an economic one.True False7.The term option contract refers to the choices that one has when entering into a contract.True False8.An option contract is a contract that gives one of the parties a choice of consideration to accept.True False9.Beth has a contract with Annie in which Annie is to deliver 1,000 hand-decorated beverage holders in 60 days. When Beth calls the Psychic Hotline for her weekly reading, the psychic informs her that she has entered into a contract and the other party will not perform all the conditions and specifications in accordance with the agreement. Beth may sue for an anticipatory repudiation.True False10.Which of the following is classified as an equitable remedy?consequential damages reformationrestitutionliquidated damages11.Alan has accepted a new job. Which of the following is not a contract condition related to that job?Medical and dental benefits will start after Alan has worked for six months.Alan will receive a bonus provided that he obtains six new clients within 30 days. Alan’s salary will be $1,000 a week.Alan cannot begin work unless he passes a drug and alcohol screening.12.When a party successfully sues for an equitable remedy for a breach of contract, that party does not receive a monetary award. TrueFalse13.A rescission of a contract may occur when either party chooses to end the agreement.True False14.An assignment may be of current and/or future rights.True False15.Mel is under contract with a textbook publisher to write an instructor’s manual to accompany a new textbook. The contract states that the instructor’s manual is to be completed by August 1. On July 1, the publisher calls Mel and asks for an update. Mel states that he’s working hard and making progress. He then states that the August 1 deadline is “doable but it’s going to be tough.” Based on Mel’s statement, the textbook publisher may claim an anticipatory repudiation and find another author to complete the project.True False16.When a party breaches a contract, the nonbreaching party always has the option of seeking legal or equitable remedies.True False17.If a party has been delivered nonconforming goods and has rejected them and is then forced to cover in order to maintain business operations, the party may sue the seller for the difference in price plus consequential damages. TrueFalse18.Shovels R Us sends a purchase order to Acme Snow Shovel Inc., for 500 shovels to be delivered by September 30, 2014, in time for the winter season. Acme returns an acknowledgment form indicating that the shovels will be delivered on March 1, 2015. The acknowledgment letter forms a valid contract.True False19.Johnson Builders is selling a newly built home to Sheila. JRK Realtors is handling the transaction. This sale is covered under Article 2 of the UCC.True False20.The mirror image rule is not enforced under UCC standards. TrueFalse21.Acme Rocket Company is shipping 500 toy rockets by boat to Rockets R Us. Acme is located in Miami, and Rockets R Us is located in Boston. If goods are shipped FOB Miami: Rockets R Us bears the risk of loss if the boat sinks on its way to Boston.Rockets R Us bears the risk of loss once the shipment arrives in Boston.Acme bears the risk of loss if the boat sinks on its way to Boston.Acme bears the risk of loss until the goods are accepted by Rockets R Us.22.The United Nations Convention on Contracts for the International Sale of Goods does not recognize a formal writing requirement similar to the UCC statute of frauds requirement. TrueFalse23.While the common law recognizes commercial impracticability as a means to terminate a contract, the UCC rejects and does not recognize commercial impracticability.True False24.Your cousin, who is a CPA, calls you and says that a client paid him in diamonds and he’s selling them. If you purchase one of those diamonds, at the time of the sale your cousin would be considered a merchant of those diamonds.True False