Business Law - Chapter 14 Quiz

Borrowers often give a lender an interest in real property as security for the repayment of a loan. This action must be done through the use of a written mortgage or​ _____.

• quitclaim deed
• fee simple absolute
• writ of replevin
• deed of trust

According to the Statute of​ Frauds, an​ _____ contract that cannot be performed by its own terms within​ _____ of its formation must be in writing.

• ​executed; six months
• ​executory; one year
• ​executed; three months
• ​executory; thirty days
• ​executory; six months

Which of the following is an INCORRECT statement regarding the Statute of​ Frauds?

• There are several equity exceptions to the Statute of Frauds.
• The Statute of Frauds is usually raised by one party as a defense to the enforcement of the contract by the other party.
• If an oral contract that should have been in writing under the Statute of Frauds is already​ executed, neither party can seek to rescind the contract on the grounds of noncompliance with the Statute of Frauds.
• ​Generally, an executory contract that is not in writing even though the Statute of Frauds requires it to be is nevertheless enforceable by either​ party, provided the plaintiff introduces sufficient evidence to demonstrate that the contract exists.
• ​Generally, contracts listed in the Statute of Frauds must be in writing to be enforceable.

Suppose Edward enters into an oral contract to sell his house to Lana for​ $400,000, with the closing of the transaction to be in 30 days. At the time of​ closing, Edward signs the deed to the property to​ Lana, and Lana pays Edward the​ $400,000 purchase price. Will either Edward or Lana be able to effectively raise the Statute of Frauds to rescind their​ contract?

• ​No, the Statute of Frauds does not apply to contracts for the sale of real estate.
• ​Yes, provided that either Edward or Lana rescinds the contract within three business days after the closing.
• ​Yes, Edward can rescind the​ contract, but Lana cannot.
• ​Yes, according to the Statute of​ Frauds, contracts for the sale of real estate must be in writing in order to be enforceable.
• ​No, the oral contract has already been executed.

Logan tells Annika that he will sell her his car for​ $5,000. When Annika tries to give Logan a check for​ $5,000, he says he no longer wants to sell her the car. This is​ _______.

• a modification of contract
• not a contract
• a​ "main purpose" exception
• an​ agent's contract
• breach of contract

The​ _____ establishes Statutes of Fraud for contracts for the sales and leases of goods.

• Uniform Commercial Code
• League of Nations
• Interstate Commerce Code
• Uniform Contracts Code
• United Nations

Suppose Echo enters into an oral contract to sell James her used car for​ $10,000, with the delivery date to be May When May 1 comes and James tenders​ $10,000 to​ Echo, Echo refuses to sell her car to James. Which of the following is a correct statement regarding the enforceability of the oral contract between Echo and​ James?

• The contract will not be enforced against Echo because the Uniform Contracts Code requires that contracts for the sale of goods valued at​ $5,000 or more must be in writing to be enforceable.
• The contract will be enforced against​ Echo, provided that James can introduce evidence sufficient to establish that the oral contract existed.
• The contract will be enforced against​ Echo, since the Uniform Commercial Code is decidedly​ pro-consumer.
• The contract will not be enforced against Echo because the Interstate Commerce Code requires that contracts for the sale of goods valued at​ $10,000 or more must be in writing to be enforceable.
• The contract will not be enforced against Echo because it was an oral contract for the sale of goods costing​ $500 or more.

Jamie tells Renata that he will sell her his car for​ $600. Renata agrees and then decides not to pay. She​ does, however, tell Jamie she will pay​ $400 and Jamie agrees. The latter is​ _______.

• not a contract
• a valid contract
• breach of contract
• an​ agent's contract
• a​ "main purpose" exception

Emilio enters into a verbal agreement with the local BMW dealership to lease a BMW X3 for​ $499 per month for 60 months. Which of the following statements is​ true?

• The lease agreement is valid under the Statute of Frauds.
• The lease agreement must contain a merger clause to be enforceable.
• The lease agreement must be in writing to be enforceable.
• This transaction is subject to Section​ 2-201(1) of the UCC.
• The lease agreement can be enforced by Emilio.

Which of the following is an INCORRECT statement regarding the doctrine of part​ performance?

• If a purchaser of real estate has made valuable improvements to the​ property, a court may recognize the doctrine of part performance.
• If an oral contract for the sale of land or transfer of other interests in real property has been partially​ performed, it is always possible to return the parties to their status quo.
• The doctrine of part performance is an equitable doctrine.
• The doctrine of part performance allows the court to order an oral contract for the sale of land or transfer of other interests in real property to be specifically performed if performance is necessary to avoid injustice.
• If a purchaser of real estate has paid part of the purchase price and taken possession of the​ property, a court may recognize the doctrine of part performance.