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25.  Seasonal Selections, Inc. sends a copy of its catalog to William along with a personalized computer-generated letter inviting him to purchase any two items in the catalog at the advertized price.  Has Seasonal Selections made an offer?

                A.  Yes, the letter is an offer.

                B.  It is an offer only if William is already a customer.

                C.  The catalog and letter are an offer, because there is no room to negotiate a price.

                D.  Seasonal has not made an offer. 


26.  Moral obligations do not form an enforceable contract because what element is missing?.

A.  Agreement.

B.  Consideration.

C.  Contractual capacity.

D.  Lawful object. 


27.  Artist Annie works and displays her paintings in a local gallery.  Millionaire Marty sees her work and is particularly interested in a seascape painting.  Annie says she will sell it for $50,000.  Marty tells her he really likes the painting; however, he will only buy it if the price is $45,000.  Which of the following is correct?

A.  Marty’s counteroffer terminates Annie’s offer of $50,000.

B.  If Annie agrees to Marty’s offer, she will be bound by a contract to sell the painting for $45,000.

C.  If Annie rejects the offer, Marty cannot then agree to the $50,000 price and bind Annie.

D.  All of the above.


28.   Under this rule, the offeree must accept the terms made by the offeror.

A.  Mirror image rule.

B.  Proper dispatch rule.

C.  Mailbox rule.

D.  Acceptance upon dispatch rule.


29.   Edward Employee has organized birthday parties for all the other employees in his office for 10 years.  One day, Brenda Boss tells Edward he has done such a great job, she is going to pay him an extra $200 this month.  However, when Edward gets his check, it is the same amount it has always been.  Which of the following is correct? 

A.  Brenda’s promise is unenforceable because it is based on past consideration.

B.  Brenda’s promise is unenforceable because it is based on an illusory promise.

C.  Brenda’s promise is enforceable because Edward performed a service for the company and deserves to

      be paid.

D.  None of the above.


30.   If a contract is a complete and final statement of the parties’ agreement, any prior or contemporaneous oral or written statements that alter, contradict, or are in addition to the terms of the contract are inadmissible in court regarding a dispute over the contract based on which one of the following legal concepts?

A.  The integration clause.

B.  The rule for international contracts.

C.  The rule against perpetuities.

D.  The parol evidence rule.


31.   If you are the nonbreaching party, you must still do this to avoid or reduce damages caused by a breach of contract.

A.  Mitigation.

B.  Nominal damages.

C.  Recission.

D.  Restitution.


32.  The standard which a jury must use to weigh the evidence in a contract case is referred to as

A.  The subjective standard of proof.

B.  The statute of frauds.

C.  The writ of mandamus.

D.      The objective theory of contracts.


33.          Prior to signing a written agreement for hotel accommodations that provided for no refunds, the hotel manager        stated     to the guest, “We will give refunds if you have a good reason.”  Assuming that there was no fraud on the          part         of the hotel:

            A.  The guest can introduce evidence of the oral statement to prove her entitlement to a refund.

            B.   The oral statement will take precedence over the terms of the written agreement.

C.   The oral statement will be ignored by the court.

D.   The contract is against public policy because of its mixture of oral and written terms.


34.          You go to the Cosmic Runners Supply Store, where the sales person shows you some shoes and says, “In a race,       these shoes pick up the cosmic energy from the runners around you and channel it into your own legs.  This     causes everyone with these shoes to run twice as fast as in normal shoes.”  In your next race, you do only slightly              better than usual and sue for fraud.  What will happen?

A.       You would lose because the statement did not contain any factual assertion.

B.       You would lose because your reliance was not justified.

C.      You would win if most runners do not go twice as fast is the cosmic shoes.

D.      Proving only that the salesperson intended to deceive you is enough to win your fraud case.


35.            Joe contracts with Woodworker to build a custom built-in walnut desk for $1,800, which Joe pays in advance.           Woodworker gets the job 75% done and stops working.  Joe shops around, and finds someone who finishes the          job for $800.  How much could Joe recover from Woodworker in a breach of contract suit?

A.      $0.

B.      $450.

C.      $800.

D.      $1,800.


36.  Jerry Lee was a professional singer.  He entered into a contract to sing at a concern sponsored by ABC Co. He also entered into a contract to sell his house to Mary.  Before either contract could be performed, Jerry dies.  Both ABC and Mary sue for breach.  What results?

                A. Jerry’s estate wins; both contracts are unenforceable because of Jerry’s death.

                B.  Both ABC and Mary win; both contracts are fully enforceable.

                C.  Mary wins, but ABC loses.

                D.  ABC wins, but Mary loses.


37.  Which of the following is not a general rule of contract interpretation?

                A.  Ordinary words are given their ordinary meaning.

                B.  Specific terms qualify or override general terms.

                C.  Handwritten terms prevail over printed terms.

                D.  Ambiguities in a contract are resolved in favor of the party who drafted the contract.


38.  The owner of a dance studio tells Rupert that if he takes just one dance lesson for $50, his life will change forever.  Rupert takes the lesson and his life remains the same.  The dance instructor’s statements could be described as:

                A.  Statements of fact.

                B.  Fraud in the inception.

                C.  Statements of opinion or sales talk.

                D.  Anticipatory repudiation.


39.  What is required in order for a court to issue an injunction?

                A.  Any breach of contract will justify an injunction.

                B.  Any breach of contract that causes injury to the other party will justify this remedy.

                C.  Any situation that entitles the award of specific performance.

                D.  Any situation that demonstrates mitigation of damages.

                E.  A showing that the party requesting the injunction would suffer irreparable injury without the injunction.


40.  When an employer breaches an employment contract, what obligation does the employee have in seeking substitute employment?

                A.  Because it was the employer who breached, the employee has no obligation to seek substitute employment.

                B.  The employee must accept any employment available with the same employer, but is not required to seek            employment with a different employer.

                C. The employee is obligated to accept any employment for which the employee is qualified.

                D.  The employee is obligated to accept substitute employment only if it is comparable employment.


41.  “Benefit of the bargain” is another way to refer to which type of damages?

(a)     Compensatory damages.

(b)     Punitive damages.

(c)     Reliance damages.

(d)     Liquidated damages.


42.  The provisions for cure and cover under Article 2 of the UCC:

                A.  Encourage the filing of lawsuits quickly when any breach occurs.

                B.  Promote buyers and sellers working together to resolve their differences in the event of any breach.

                C.  Have nothing to do with breach.

                D.  Relate only to sales of goods which have not been identified to the contract.


43.  The doctrine of caveat emptor means:

(a)     Let the seller beware.

(b)     Let the buyer beware.

(c)     Let the seller be liable for all damages.

(d)     That the legal remedy must be just and fair.


44.  Which of the following would be a breach of the implied warranty of merchantability?

(a)     A lawnmower that does not cut the grass.

(b)     A cherry pit in a cherry pie, if using the foreign substance test.

(c)     Gasoline designed for automobiles that a consumer uses in a kerosene stove, causing an explosion.

(d)     A stereo that has been stolen by the seller.


45.  The basic philosophy of the drafters of the Uniform Commercial Code reflects which of the following beliefs?

(a)     That since law professors were appointed to draft the Code, their legal theories and ideas of how business should be run were the only ones to consider.

(b)     That a common sense approach, incorporating the ways businessmen actually operate, was the best way to rewrite commercial law.

(c)     That reliance on the Code Merchant of England was the way to reform modern commercial law.

(d)     That it should be left up to each state to devise its own modern code, since each state is sovereign.


46.  The implied warranty of fitness for human consumption:

(a)     Applies to food purchased anywhere from a merchant.

(b)     Is applied using one of two tests to determine if the warranty has been breached.

(c)     Does not require a stated warranty.

(d)     Applies only to situations where a non-food item has caused the injury.


(e)     A, B, and C are all correct.

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