Chapter 15: Prepare & Apply

Which of the following promises does have to be evidenced by a writing in order to be enforceable?

• Jack's agreement with Steve to sell his condominium for $150,000.

• Sarah's promise to work for Angie for ten months.

• Sam and Alicia decide to get married.

• Karen's agreement with Sandy to buy her sewing machine for $200.

Answer explanation

Jack's agreement with Steve to sell his condominium for $150,000 must be in writing to be enforceable under the Statute of Frauds, which requires written contracts for the sale of real estate.

Which of the following is not a collateral promise?

• A mother tells the gas station to extend $1,000 worth of credit to her son over the school year and says, "If he doesn't pay, I will."

• Brett promises Denny's bank that if Denny cannot pay his bills, Brett will.

• A father tells Best Computer to deliver a laptop to his son and says, "Send me the bill. I'll pay for it."

• All of these are correct.

Answer explanation

The correct choice is the father telling Best Computer to send the bill. This is not a collateral promise because it does not involve a third party's obligation; it's merely an agreement to pay for a service already rendered.

When the __________ of the promisor's promise to pay the debt of another is to benefit the promisor, the statute of frauds is not applicable.

• promisory estoppel

• probability

• main purpose

• parol evidence

Answer explanation

When the main purpose of the promisor's promise to pay the debt of another is to benefit the promisor, the statute of frauds does not apply. This principle allows for enforceability without written agreements in such cases.

When the parties express their contract in a writing that is intended to be the complete and final expression of their rights and duties, the __________ excludes prior oral or written negotiations or agreements of the parties?

• promissory estoppel rule

• parol evidence rule

• statute of frauds

• the possibility test

Answer explanation

The parol evidence rule excludes prior oral or written negotiations or agreements when the parties have a complete and final written contract, ensuring that only the written terms govern their rights and duties.

The customs and __________ or commercial activity to which the contract relates may be used to interpret the terms of a contract.

• course of dealing

• usage of trade

• course of performance

• extrinsic set of evidence

Answer explanation

The correct choice is 'usage of trade' as it refers to the established practices and norms in a particular industry that help interpret contract terms, making it relevant to the customs and commercial activity mentioned.

General contract provisions of a writing must:

• specify the parties to a contract.

• specify the subject matter and essential terms.

• be signed by the party to be charged or his agent.

• All of these are correct.

Answer explanation

General contract provisions must specify the parties, the subject matter, and essential terms, and be signed by the party to be charged or their agent. Therefore, the correct answer is 'All of these are correct.'

In determining the meaning of an ambiguous contract the court will:

• ignore the issue of who drafted the contract.

• treat the parties equally in terms of strict interpretation.

• interpret the contract strictly against the person who failed to draft it.

• interpret the contract strictly against the person who drafted it.

Answer explanation

In determining the meaning of an ambiguous contract, courts interpret it strictly against the person who drafted it. This principle discourages vague language and protects the other party from potential unfairness.

Parol evidence is admissible to show:

• fraud.

• duress.

• mistake.

• All of these are correct.

Answer explanation

Parol evidence is admissible to show fraud, duress, and mistake, as these factors can affect the validity of a contract. Therefore, the correct answer is 'All of these are correct.'

Contracts for the sale of goods priced (starting) at _____ or more must ordinarily be in writing under UCC Section 2-201.

• $50

• $500

• $1500

• $1,000

Answer explanation

Contracts for the sale of goods priced at $500 or more must be in writing under UCC Section 2-201. Therefore, the correct answer is $500.

Examples of an enforceable oral contract is/are:

• an oral promise by an executor to guarantee payment of a decedent's debt.

• an oral agreement to substitute the place of closing a land contract.

• an oral agreement to extend an employee's contract for six months to a total of two years.

• All of these are correct.

Answer explanation

An oral agreement to substitute the place of closing a land contract is enforceable under the Statute of Frauds, while the other options involve guarantees or extensions that typically require written contracts.