AAU BUS 230 Module 3 Quiz: Principles of Business Law I (2014)

Assessment Module 3 Check Your Understanding Question Points1. An executory contract is one that has not been fully performed by one or all of the parties.a. Trueb. False2. 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. Trueb. False6. 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. Trueb. False9. 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. Trueb. False14. 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. Trueb. False17. 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. Trueb. False20. Forbearance is a promise to do something you are not legally required to do.a. Trueb. False