Business Law (Chapter 3)

What is the primary purpose of contract law?

• To force people to keep all their promises

• To determine which agreements are worth enforcing

• To limit the types of agreements people can make

• To ensure all contracts are written

Which of the following is NOT one of the seven key elements of a contract?

• Offer

• Consideration

• Negotiation

• Capacity

In a valid contract, "consideration" refers to:

• The fairness of the agreement

• The willingness of the parties to sign the contract

• The legal language used in the contract

• The exchange of something of value between parties

A contract where both parties make a promise is known as a:

• Bilateral contract

• Unilateral contract

• Void contract

• Implied contract

Which of the following is an example of an executory contract?

• A customer pays cash for a sandwich at a deli

• A landlord and tenant have completed their lease agreement

• A company and an employee agree to a one-year employment contract, but the job has not yet started

• A contract is declared void due to illegal terms

What does an unenforceable agreement mean?

• It is a contract that satisfies all legal requirements

• It is a contract where neither party can enforce the agreement

• The parties intend to form a valid bargain, but a legal rule prevents its enforcement

• One party has the option to terminate the contract

Which type of contract is created when the words and conduct of the parties indicate an agreement, even if it is not explicitly stated?

• Express contract

• Implied contract

• Void contract

• Bilateral contract

What is a key feature of an "at-will" employment agreement?

• Employees are guaranteed long-term job security

• Employers can fire employees only for specific reasons

• Employees can quit and employers can terminate employment at any time, for almost any reason

• Contracts must be in writing for the employment to be legal

What is the main purpose of the Uniform Commercial Code (UCC)?

• To regulate international trade agreements

• To standardize contract laws across states

• To make all contracts legally binding

• To limit the ability of businesses to make contracts

Under the UCC, which type of contract does Article 2 primarily govern?

• Employment contracts

• Real estate contracts

• Service contracts

• Sale of goods contracts