Chapter 22 & 23 - Contracts & Warranties - Practice 1

All of the following are examples of contracts that must be in written form EXCEPT:

• Sale of houses

• Sale of goods of $500 or more

• A loan to a friend for $200

• Sale of land

Which of the following statements is TRUE regarding oral/written contracts?

• The law favors written contracts

• The law favors oral (verbal) contracts

• Oral (verbal) contracts never hold up in court

• Written contracts are only good if witnessed by 2 people

Danny is suing James for $1,000 that he loaned to him with a written agreement that James would pay him back within 6 months. During the trial, James’ defense was that him and Danny had agreed verbally before the written contract that it was a “gift.” James even had his girlfriend agree that she heard the verbal agreement. In this case, how would the judge likely rule? 

• The judge will rule out the verbal agreement because the written contract is direct evidence of it being a “loan”

• The judge will rule out the written agreement because the verbal agreement was made first

• The judge will not honor either of the agreements because the two men’s stories do not match up

• The judge will split the cost between the two men, so James would only have to pay $500

Which of the following is an example of consideration?

• money

• the agreement to have another birthday party

• a worthless piece of trash

• for a lifeguard to promise a swimmer to rescue him if he gets in trouble

If Gene was intoxicated when he signed a contract, the contract is

• not enforceable

• enforceable

• enforceable only if the other party to the contract did not know that Gene was intoxicated

• not enforceable unless the other party to the contract knew Gene was intoxicated.

What is a valid acceptance to a contract?

• The person orally agrees to pay the offered price

• The person says that she will think about it overnight.

• The person asks for a lower price

• The person states that she is able to pay the offered price.

Aidan sells some stolen CDs for Roger. Aiden knows the CDs are stolen. Aiden refuses to give the money to Roger. Roger can

• Sue Aidan for the money

• enforce the contract with Aidan and get his money.

• cannot enforce the contract because the contract is unconscionable.

• cannot enforce the contract because the contract is illegal.

John, a homeowner, answers the telephone and listens to a solicitor make a five-minute sales pitch for Weed Gardening Services. John responds, “No, thank you,” and hangs up. Two days later, John returns home from work to find a crew gardening in his yard and a bill for $200 sitting on the porch. When John tells the Weed representative that he never asked for this service, Weed responds by saying, “It looks much better, doesn’t it? You got the service, now pay for it.” John agrees that the work was of good quality, but refuses to pay for it. He is later served with a summons to appear in magistrate court because of this dispute.

• For Weed Gardening Services, because Weed performed good quality services for John.

• For John, because he did not accept Weed's offer.

Mike puts an ad in the newspaper stating that he wants to sell his truck for $500. James goes to Mike’s home and tells him that he is interested in buying the truck. After looking at it, James hands Mike $500 in cash, which Mike puts in his pocket. Just then, Steve drives up and tells Mike that he’ll give him $600 for the truck. Mike hands James back his $500 and sells the truck to Steve. James sues Mike for breach of contract.

• For Mike, because there was no offer and acceptance.

• For Mike, because he gave the money back to James

• For James, because once Mike accepted the money, the deal was closed.

• For Mike, because he didn’t specifically say why he was taking the money.

Typically, in order for a contract to be enforceable it has to be in writing for all transactions valued over how much?

• $1000

• $100

• $500

• $5000