Lynn’s attorney advises Lynn to resolve a case using med-arb. If Lynn and the defendant agree to use med-arb, this means
A. all issues will be decided by an arbitrator.
B. the case won’t have an outcome unless Lynn and the defendant both agree.
C. Lynn is risking that some issues in the case will be decided by an arbitrator.
D. the case involves medical malpractice.
Karen sues Ted, claiming that under an interpretation of law given in a previously decided case, Karen should win. If so, on which of the following concepts is Karen relying?
A. Stare decisis
C. Devolution doctrine
D. Judicial review
060470RR – Contracts, Part 1
1. Jackie tells a group of friends that she plans to sell her home. Meg asks how much Jackie hopes to get for the house, and Jackie replies, “$50,000.” Meg says, “I accept your offer. I’ll purchase your house for
$50,000.” No contract exists because
A. the offer isn’t properly communicated.
B. Jackie doesn’t seriously intend to enter a contract.
C. the terms of the offer aren’t reasonably certain.
D. Jackie’s statements are merely preliminary negotiations.
2. On the Internet, Sara came across a software package she wanted to download. To download the
Software, she had to read a disclaimer and click an “I Agree” button. Sara didn’t bother to read the contents of the “Agreement and Warranties” disclaimer, but she clicked “I Agree.” The software caused her computer to crash. Sara filed suit against the company that ran the website, and the company’s defense is that the “Agreement and Warranties” disclaimer to which Sara agreed disclaimed any responsibility for such occurrences. The most likely result is that Sara will
A. lose her lawsuit because the disclaimer will be enforced.
B. win her lawsuit because she didn’t the read disclaimer.
C. win her lawsuit because disclaimers aren’t enforceable.
D. lose her lawsuit because she didn’t read the disclaimer, which isn’t enforceable.
3. Candice hires Otto to work as a tax preparer in Candice’s tax return business. The employment contract
restricts the ability of Otto to set up a competing business or engage in tax preparation services if Otto
leaves Candice’s employ. Otto discovers he likes this kind of work and wants to set up his own tax return
business. He asks you whether the restrictions in his contract with Candice will be enforceable. You should
tell him that
A. any restriction regarding employment is unenforceable as against public policy.
B. any restriction regarding employment will be enforceable as long as there was adequate consideration.
C. restrictive covenants regarding future employment will be enforceable if the value of the consideration given for the covenant equals the value of the income loss that would be caused by enforcing the agreement.
D. restrictive covenants regarding future employment will be enforceable if they’re reasonable.
4. Larry thinks the necklace owned by Samantha is worth a million dollars. Larry offers a million dollars to
Samantha for the necklace, and she accepts. Later, Larry has the necklace appraised and learns it’s worth
only $10,000. Which of the following is true?
A. Larry can have the contract set aside on grounds of capacity.
B. Samantha has the right to rescind the contract and have the necklace returned.
C. Larry can’t have the contract set aside on grounds of mistake.
D. Larry can have the contract set aside on grounds of mistake.
5. Lance e-mails Fred, offering to buy his motorcycle for $750. Fred replies, agreeing. Later, Fred declines to honor the agreement, claiming that e-mail agreements aren’t enforceable. In both the initial e-mail and the reply Lance and Fred typed their names. Which of the following is true?
A. There’s no contract because the e-mails weren’t witnessed.
B. There’s no contract because e-mail agreements aren’t enforceable.
C. The e-mails constitute a contract if Lance and Fred have agreed that electronic signatures can be used to create the agreement.
D. There’s no contract because contracts must have hand-written signatures to be enforceable.
6. Tom is selling his motorcycle to Carl. Tom tells Carl that the motorcycle runs perfectly, though he knows that the motorcycle leaks oil. Carl purchases the motorcycle and discovers the problem. Which of the following is true?
A. Tom committed active fraud.
B. Tom hasn’t committed fraud.
C. Tom committed passive fraud.
D. Tom committed fraud in the inception.
7. Tyler offers to dance naked on Main Street if Corey will mow Tyler’s yard. Corey mows Tyler’s yard.
Which of the following statements is not potential grounds for setting aside the contract?
A. Illegality of consideration
B. Inadequacy of consideration
C. Lack of serious intent to contract
D. All of the above are potential grounds for setting aside the contract
8. Delivery of unordered merchandize is considered
A. a contract to purchase unless the recipient contacts the sender to reject the merchandize.
B. performance of a contract.
C. an offer to sell.
D. a contract to purchase if the items aren’t returned.
9. Ty and Cher were discussing a business venture over dinner. Cher had several glasses of wine and
became visibly intoxicated. Ty and Cher continued to discuss the venture and formed a contract in which
Ty received 80% of the profits resulting from the venture and Cher received 20%, even though Cher
agreed to invest the majority of the money. Ty agreed to contribute his expertise and services to the
venture. The next morning, Cher realized her terrible mistake. Cher’s best chance to avoid the contract with Ty is to say that
A. the contract is unconscionable.
B. Ty doesn’t have the expertise and services required for the venture.
C. she was drunk at the time the contract was formed.
D. the contract is fraudulent.
10. Angela, age 14, contracts to purchase medicine from the pharmacy. She and the pharmacist both know
that she needs this medicine to live and that it’s not being provided to her by anyone else. Which of the
following is true?
A. The contract can be avoided by Angela on grounds of duress.
B. The pharmacist can enforce the contract.
C. The contract is against public policy.
D. Angela can avoid the contract on grounds of lack of capacity.
11. Juan thinks he would like to purchase Tara’s house, but doesn’t know whether he will be able to save
enough money for a down payment on a loan. Juan agrees to give Tara $5,000 for the option to purchase
her house for $150,000 sometime within the next five years. Juan and Tara reduce their agreement to
writing, sign it, and Juan gives Tara $5,000. Two years later, Juan wins the lottery and now is financially
able to purchase Tara’s house. However, that same day Juan receives a letter from Tara revoking her offer
to sell for $50,000. Which of the following is true?
A. Juan can’t complain because he failed to accept Tara’s offer before it was revoked.
B. Tara’s revocation isn’t effective.
C. Tara’s revocation is effective as long as she refunds the $5,000.
D. Tara’s revocation is effective.
12. Eric, a 17-year-old, signs a contract with the armed services to enlist. Later, Eric changes his mind and
wants out of the contract. Can he void the contract based on incapacity to contract?
C. In some states
D. Yes, after he turns 18
13. Madison enters into a contract with a DVD club to purchase four DVDs during the coming year. The
agreement provided that she would receive an advertisement listing the main selections, which would be
sent to her automatically, unless she sent a reply to stop the shipment. The DVD club sent the first month’s
advertisement and Madison did nothing. When Madison later received the main selection for that month
she complained that she hadn’t accepted it. Must Madison pay for it?
A. No, because her silence in this case didn’t constitute acceptance.
B. No, because Madison didn’t specifically order the goods.
C. Yes, because the price is fair.
D. Yes, because her silence in this case constituted acceptance.
14. Ken threatens to tell everyone that Bob is a child molester unless Bob agrees to enter into a contract
with Ken. Bob agrees and signs the contract. If Bob later challenges the contract, what are the best grounds for doing so?
C. Emotional duress
D. Economic distress
15. Patty visits Big Grocery store and sees a table with bananas on it. Patty picks up a bunch of bananas,
walks to checkout, and hands them to the cashier. This is
A. an express contract.
B. no contract.
C. an implied-in-fact contract.
D. an implied-in-law contract.
16. Dave is declared insane and committed to an asylum. Dave escapes and goes to a car dealership, where
he enters into a contract with Larry to buy a sports car. Which of the following statements is true?
A. Because Dave is legally insane, the contract is void.
B. Only Larry can void the contract.
C. Only Dave can void the contract.
D. To void the contract, Dave must prove he is insane.
17. Josh runs over Barbara’s dog. Barbara promises not to sue Josh if he pays her $200. Josh pays $200.
Then Barbara sues, claiming an agreement not to sue doesn’t constitute consideration. Which of the
following is true?
A. Agreement not to sue isn’t consideration.
B. Agreement not to sue is consideration only if it approximates what a court would have awarded.
C. Agreement not to sue is consideration.
D. Such contracts violate public policy and therefore are unenforceable.
18. Natalie contracts with Paula to paint her house for $100. Paula pays Natalie, but Natalie has yet to
paint. This contract is
A. executory as to Paula’s duty.
B. executory as to Natalie’s duty.
19. Carrie decides to offer Shelley the opportunity to purchase her motorcycle for just $500. Carrie told
Jim, a mutual friend of Shelley and her, that she intended to make the offer. Later, Carrie changes her
mind. Shelley approaches Carrie and says she accepts the offer. No contract was formed most likely
A. Carrie never communicated the offer to Shelley.
B. the terms of the offer weren’t definite enough to form a contract.
C. Carrie didn’t possess a serious, objective intention.
D. Jim was acting as an agent for Shelley without telling Carrie.
20. Daisy contracts with Mike that in exchange for $50 Daisy won’t whistle for a week. This contract is
A. not enforceable due to lack of consideration.
B. unenforceable due to fraud.
D. enforceable only if Daisy is a musician who whistles for a living and would suffer significant income loss by not whistling for a week.
060471 – Contracts, Part 2
1. Tom and Zeke enter into a contract for Tom to paint Zeke’s house for $1,000 by August 5th. Tom
paints half of the house on August 6th, then demands pay. Which of the following is false?
A. Tom may not be in breach if the contract doesn’t make time of the essence.
B. Zeke may have to pay if payment is a condition precedent to the duty to paint.
C. The contract doesn’t violate the statute of frauds.
D. Tom’s duties are discharged under the doctrine of substantial performance.
2. Under the _______ rule, courts generally accept into evidence only the original of a writing, not a copy.
A. equal dignities
B. standard construction
C. parol evidence
D. best evidence
3. Kevin, a world-renowned violinist, agrees to play at the reception for Jay’s wedding. Something comes
up at the last minute, and Kevin delegates his duty to perform to Susan, a mediocre but professional
violinist. This delegation is
B. permissible if Susan performs well.
C. permissible if Kevin also assigns to Susan the right to be paid for playing.
4. Paul enters into a contract with Harry. Paul agrees to put a new roof on Harry’s house, and Harry agrees
to pay Paul $5,000. Paul is late on a payment to Sam’s Supply House and tells Sam’s Supply House that he
will pay when he receives money from Harry. Sam’s Supply House has heard this from Paul before and
didn’t receive money. To ensure Paul pays his payment from the money Harry pays him, Sam’s Supply
A. require an accord and satisfaction be entered into.
B. tell Harry that Paul is indebted to Sam’s Supply House, which automatically makes them a creditor beneficiary entitled to the payment.
C. have Paul assign his interests under the contract with Harry to Sam’s Supply House.
D. have Harry assign his interests under the contract with Paul to Sam’s Supply House.
5. James leases an apartment to Kyle for $900 per month rent. The written lease contains no prohibition
against assignment, nor does it expressly permit assignment. Kyle assigns his rights to Harley without any
consideration. James finds out and objects. The assignment is
A. invalid because the lease didn’t expressly permit assignment.
B. valid because the written lease didn’t prohibit it.
C. valid because there’s no consideration for the assignment.
D. invalid because James didn’t consent to the assignment.
6. Collin purchases a house, using a loan from Big Bank. As a condition of the loan, Big Bank requires that
Collin purchase life insurance payable to Big Bank, to the extent of the outstanding mortgage, if Collin dies
before fully paying the mortgage. Big Bank is
A. both a creditor beneficiary and a donee beneficiary.
B. an incidental beneficiary but not a donee beneficiary.
C. an intended beneficiary but not a donee beneficiary.
D. a creditor beneficiary but not a donee beneficiary.
7. Horatio agrees to paint Stella’s house for $1,000. Horatio fails to paint, and Stella hires Winston to paint the house for $1,000. Stella sues Horatio for breach of contract. Stella likely will receive __________ damages.