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Interactive Quiz for Modern-1e, Chapter 8

Chapter 8 – Nature and Classification

1. One of the main purposes of contract law is:

a. to ensure that one party does not threaten another.

b. to ensure that certain promises made among private parties are enforced.

c. to discourage harms against society.

d. to discourage misuse of the environment.

Answers:

a. Incorrect. A main purpose of contract law is not to control or reduce threats.

b. Correct. Contract law gives parties a way to enforce certain promises that others make to them.

c. Incorrect. This is the purpose of criminal law.

d. Incorrect. This is the main purpose of environmental law, not contract law.

2. In order to determine a party’s intent in a contract case, a court will apply:

a. the subjective theory of contracts.

b. the alternate-party theory of contracts.

c. the consideration theory of contracts.

d. the objective theory of contracts.

Answers:

a. Incorrect. Courts are concerned not with a party’s personal, or subjective intent, but rather with the objective facts of the case.

b. Incorrect. There is no alternate-party theory of contracts.

c. Incorrect. There is no consideration theory of contracts.

d. Correct. In contract disputes, a court will determine a contract party’s intent by looking at the outward, objective facts, as they would be interpreted by a reasonable person.

3. Which of the following IS NOT a basic element of a valid contract?

a. Integrity.

b. Agreement.

c. Consideration.

d. Contractual capacity.

Answers:

a. Correct. Integrity is not a basic element of a valid contract.

b. Incorrect. Agreement is a basic element of a valid contract.

c. Incorrect. There must be a bargained-for item or promise that is exchanged to have a valid contract. This is a basic element of a contract.

d. Incorrect. Parties to a contract must have the legal capacity to enter into a contract. This is a basic element of a contract.

4. A quasi contract may be defined as:

a. a true contract.

b. an actual contract.

c. a fictional contract.

d. an implied-in-time contract.

Answers:

a. Incorrect. A true contract is a contract, not a quasi contract.

b. Incorrect. An actual contract is a contract, not a quasi contract.

c. Correct. A quasi contract is not an actual contract; rather, it is a legal fiction created in order to avoid some unfairness or injustice.

d. Incorrect. There are no “implied-in-time” contracts.

5. A formal contract requires which of the following?

a. It must be signed by the president.

b. It must be deposited in the county courthouse.

c. It must be in a special form or be created using a special method.

d. It need only be signed by the offeror.

Answers:

a. Incorrect. The president does not need to sign formal contracts.

b. Incorrect. Formal contracts do not need to be deposited in the county courthouse.

c. Correct. Formal contracts must take a special form or be created according to a special method. Examples include negotiable instruments and letters of credit.

d. Incorrect. A formal contract requires the signatures of both parties.

6. An example of a void contract would be:

a. a contract formed for an illegal purpose.

b. a contract entered into by a minor without his or her parents’ consent.

c. a contract for the sale of alcohol to a competent adult.

d. a contract for the sale of land to a competent adult.

Answers:

a. Correct. If the purpose of a contract is illegal, the contract will generally be deemed void.

b. Incorrect. Contracts entered into by minors (those under the age of eighteen, usually) are not void contracts, although they may be voidable at the option of the minor.

c. Incorrect. A contract for the sale of alcohol to a competent adult is valid.

d. Incorrect. A contract for the sale of land to a competent adult is valid.

7. If the terms of a contract are clear and unambiguous, a court may not consider extrinsic evidence (any evidence not contained in the contract itself) when interpreting the document. This is known as:

a. the mailbox rule.

b. the single letter rule.

c. the plain meaning rule.

d. the rule against perpetuities.

Answers:

a. Incorrect. The mailbox rule is concerned with the validity of an acceptance.

b. Incorrect. There is no “single-letter rule.”

c. Correct. The plain meaning rule excludes extrinsic evidence from consideration when the contract terms are clear and unambiguous.

d. Incorrect. The rule against perpetuities has to do with real estate.

8. Under the doctrine of quasi contract, a plaintiff may recover in quantum meruit, a Latin phrase that means:

a. “as much as he deserves.”

b. “treble damages.”

c. “only a token sum.”

d. “nihilius”—nothing at all.

Answers:

a. Correct. Plaintiffs who bring a quasi-contractual claim may recover according to the principle of quantum meruit, a Latin phrase that means “as much as he deserves.”

b. Incorrect. This is not what the phrase in quantum meruit means.

c. Incorrect. This is not what the phrase in quantum meruit means.

d. Incorrect. This is not what the phrase in quantum meruit means.

9. Which of the following IS NOT a requirement of a valid contract?

a. Both parties must be consenting adults.

b. There must be an agreement (offer and acceptance)

c. There must be consideration.

d. The contract must be formed for a legal purpose.

Answers:

a. Correct. Both parties to the contract need not be consenting adults. Minors (those under the age of eighteen, usually) may form valid contracts.

b. Incorrect. There must be an offer and an acceptance (agreement) for a valid contract to be formed.

c. Incorrect. Consideration is required for a valid contract to be formed.

d. Incorrect. A valid contract must be formed for a legal purpose.

10. If a court is required to interpret an ambiguous contractual term, which of the following is the court NOT likely to do?

a. Interpret a word or term according to its ordinary, commonly accepted meaning.

b. Interpret language according to what the parties CLAIM their intent was.

c. Give greater consider to handwritten or typewritten terms over preprinted words.

d. Interpret the contract as a whole, with regard to the general intent of the document.

Answers:

a. Incorrect. Courts will attempt to apply the common meaning of a word except when a technical meaning is clearly intended by the parties.

b. Correct. Courts will not attempt to clarify ambiguous terms by referring to the subjective intent of the contracting parties.

c. Incorrect. Courts do give handwritten or typewritten terms precedence over preprinted words.

d. Incorrect. Courts will consider the contract’s general intent when deciding how specific clauses should be interpreted.

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