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Exam 7: Contracts.

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Question 31

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__________ of a contract occurs when one party knows ahead of time that the other party will __________.

A) Anticipatory repudiation, breach the contract
B) Anticipatory repudiation, perform the contract
C) Mutual performance repudiation, breach the contract
D) Conditional performance, breach the contract

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Question 32

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Which of the following is NOT one of the basic elements for formation of a valid contract?

A) Consideration
B) Promissory estoppel
C) An offer and acceptance
D) A legal purpose

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Question 33

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When entering into contracts with companies in other nations,a manager should understand whether that company's laws are based civil codes,rather than on case-by-case common law.

A promise that neither confers any benefit on the promisee nor subjects the promisor to any detriment is an illusory promise

Fact Pattern 7-1 Prudence offered to sell her car to Danny for $3,000. Danny was not sure what to do, so he asked Prudence if she would hold the offer open for him for one week for $50. Prudence said sure, and the parties signed a contract to the effect that Prudence would hold the car. A few hours later, Bobby unexpectedly offered Prudence $3,500 for the car, and Prudence sold it to him on the spot. Danny decided to buy the car, but when he came by to pick it up the next day, it was gone. Prudence gave Danny his $50 back telling him that was her only obligation and that if he had any complaints, he could take it up with Bobby. Danny found a similar car the next week for $3,500 and purchased it. -Refer to Fact Pattern 7-1.Did Danny have any type of contract with Prudence,and if so what type?

Reliance damages are awarded in addition to expectation damages.

If the promisee entered into the contract in order to discharge a duty he or she owed the third party,then the third party is a(n) __________ beneficiary.

Consideration can be either a promise to do a certain act or the performance of the act itself.

Many states have professional licensing statutes which provide that if a party to a contract does not have a required license,the other party must still pay and can sue in court for damages.

Under traditional common law,the acceptance must be the __________ of the offer.

Which of the following is a type of conditional promise?

To which of the following does the statute of frauds apply?

Mutuality of obligation applies only to bilateral contracts.

Fact Pattern 7-2 Hester offers to sell her house to Frank for $250,000. Frank says that he would like to think about it, and Hester says that is fine. The next day, Martha, Hester's friend, says that she will give Hester $240,000 for the house. Hester really likes Martha more than Frank and signs a contract to sell the house to Martha. Later that day Hester sees Frank walking up her driveway. She immediately opens the window and yells "I revoke the offer on the house" before Frank says anything. Frank replies that he accepts the offer and expects to purchase the home. Frank tells Hester that while he has not yet taken steps to sell his own home or get a loan, he feels confident that there will be no problem with those matters and he is a ready, willing, and able buyer. -Refer to Fact Pattern 7-2.Which of the following is true regarding the offer to Frank assuming Hester's revocation was ineffective?

Conditions __________ occur when the mutual duties of performance are to take place simultaneously.

Courts enforce liquidated damages as a form of a penalty.

Which of the following is true regarding acceptance?

A third party beneficiary is someone who is not:

As a birthday gift,Ben's uncle promised Ben that he would pay Ben's business school tuition for the next semester.In reliance on that promise,Ben quit his part time job at a fast food restaurant.When the tuition bill became due,Ben's uncle told Ben that he was sorry but that he would not be able to pay the tuition because he just built a new swimming pool at his house,and funds were running short.Ben asks you if there is any basis upon which he could win in litigation against his uncle.Which of the following would be the best advice?

A minor may ratify a contract after reaching the age of majority.