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Business Ethics 2016 - QUIZ & ANSWERS (10) - Performance and Breach of Contracts

Business Ethics 2016

BUSINESS ETHICS 2016

Case study guides and test bank and answer keys (2016)

The Legal Environment of Business and Online Commerce, 8e (Cheeseman)

 

 

The Legal Environment of Business and Online Commerce, 8e (Cheeseman)

Chapter 10   Performance and Breach of Contracts

 

1) Which of the following is true of a unilateral mistake?

  1. A) Only one mistake or ambiguity is present in the subject matter of entire contract.
  2. B) Out of several contracts drafted simultaneously between two parties, one has a mistake in its subject matter that does not concern the other contracts.
  3. C) Only one party is mistaken about a material fact regarding the subject matter of a contract.
  4. D) A single mistake about a material fact in the subject matter of a contract appears several times in the contract.

Answer:  C

Diff: 2

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

2) Heather chooses to buy a scarf from Macy's and reads the price on the tag as $50. She uses her credit card to pay for the scarf, but only after the purchase does she notice that the price tag actually says $500. This is an instance of a(n) ________.

  1. A) bilateral mistake
  2. B) mutual mistake of value
  3. C) innocent misrepresentation
  4. D) unilateral mistake

Answer:  D

Diff: 2

Skill:  Factual Application

LO:  10.1 Explain genuineness of assent.

AACSB:  Application of knowledge

Classification:  Application

 

3) A contract involving mutual mistake of value is ________.

  1. A) rescindable
  2. B) ambiguous
  3. C) enforceable
  4. D) void

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

4) A(n) ________ is an event that occurs when one person consciously decides to induce another person to rely and act on a misrepresentation.

  1. A) fraudulent misrepresentation
  2. B) unilateral mistake
  3. C) bilateral mistake
  4. D) erroneous misrepresentation

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

5) In order to prove fraud, which of these elements must be shown?

  1. A) The innocent party knew the wrongdoer.
  2. B) The innocent party detected the misrepresentation prior to the contract's formation.
  3. C) The wrongdoer assumed a false identity.
  4. D) The innocent party justifiably relied on the wrongdoer's misrepresentation.

Answer:  D

Diff: 2

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

6) ________ is a situation in which one party threatens to do a wrongful act unless the other party enters into a contract.

  1. A) Scienter
  2. B) Duress
  3. C) Battery
  4. D) Assault

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

 

7) Which of the following scenarios makes Tim liable for undue influence?

  1. A) He uses a false identity, borrows $10,000 from Kelly, and disappears with the money.
  2. B) He threatens to kill Carlos if Carlos does not sign a contract that transfers all his property to Tim.
  3. C) He takes advantage of his grandmother's illness and persuades her to sign a will, leaving all of her property to him.
  4. D) He threatens to bring a lawsuit against Carlos if Carlos does not make him a partner in his firm.

Answer:  C

Diff: 3

Skill:  Factual Application

LO:  10.1 Explain genuineness of assent.

AACSB:  Application of knowledge

Classification:  Application

 

8) A unilateral mistake is a mistake in which only one party is mistaken about a material fact regarding the subject matter of a contract.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

9) A material fact is a fact that is irrelevant to the subject matter of a contract but pertains to the conduct of the parties.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

10) An ambiguity in a contract may constitute a mutual mistake of a material fact.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

 

11) A contract cannot be rescinded if there has been a mutual mistake.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

12) A unilateral mistake occurs if both parties know the object of the contract but are mistaken as to its value.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

13) Intentional misrepresentation is considered fraud.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

14) To be actionable as fraud, the misrepresentation must be the sole factor in inducing the innocent party to enter into the contract.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

15) The term scienter refers to the knowledge that a representation is false or that it was made without sufficient knowledge of the truth.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

 

16) A misrepresentation is considered fraud even if it is made without the intent to deceive another party.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

17) The measure of damages awarded to an innocent party for fraud is the difference between the value of the property as represented and the actual value of the property.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

18) Duress is a situation in which one party threatens to do a wrongful act unless the other party enters into a contract.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

19) Duress only occurs when a threat involves physical harm.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

20) Duress occurs when one person takes advantage of another person's mental, emotional, or physical weakness and unduly persuades that person to enter into a contract.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

 

21) In a(n) ________ mistake, only one party is mistaken about a material fact regarding the subject matter of the contract.

Answer:  unilateral

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

22) A(n) ________ exists if both parties know the object of the contract but are mistaken as to its value.

Answer:  mutual mistake of value

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

23) Intentional misrepresentation is commonly referred to as ________.

Answer:  fraud

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

24) ________ refers to the knowledge that a representation is false.

Answer:  Scienter

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

25) ________ refers to a situation in which a party threatens to do a wrongful act unless another party enters into a contract.

Answer:  Duress

Diff: 1

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

26) What is intentional misrepresentation and what are the elements required to prove fraud?

Answer:  A misrepresentation occurs when an assertion is made that is not in accord with the facts. An intentional misrepresentation occurs when one person consciously decides to induce another person to rely and act on a misrepresentation. Intentional misrepresentation is commonly referred to as fraudulent misrepresentation, or fraud. When fraudulent misrepresentation is used to induce another to enter into a contract, the innocent party's assent to the contract is not genuine, and the contract is voidable by the innocent party. The innocent party can either rescind the contract and obtain restitution or enforce the contract and sue for contract damages.

To prove fraud, the following elements must be shown:

  1. The wrongdoer made a false representation of material fact.
  2. The wrongdoer intended to deceive the innocent party.
  3. The innocent party justifiably relied on the misrepresentation.
  4. The innocent party was injured.

Diff: 2

Skill:  Legal Concepts

LO:  10.1 Explain genuineness of assent.

AACSB:  Analytical thinking

Classification:  Concept

 

27) Which of the following is considered real property?

  1. A) a fixture permanently affixed to a building
  2. B) fifty-one percent partnership in a firm
  3. C) a car
  4. D) diamond jewelry

Answer:  A

Diff: 2

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

28) The doctrine of ________ allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid injustice.

  1. A) part performance
  2. B) undue performance
  3. C) equitable performance
  4. D) promissory estoppel

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

29) Which of the following contracts is required to be in writing in most states?

  1. A) contracts for the sale of goods priced at $100
  2. B) contracts for the lease of goods with payments of $500
  3. C) promises to transfer an ownership interest in real property
  4. D) handshake deals

Answer:  C

Diff: 2

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

30) Jonas enters into an oral contract with Chelsea to lease his house to her for $100,000. Chelsea pays him $100,000 and moves in. A month later, Jonas learns that his state requires contracts for the lease of goods with payments of $1,000 or more to be in writing. Which of the following options does either party have?

  1. A) Jonas can evict Chelsea as the contract does not comply with the Statute of Frauds and is hence void.
  2. B) The contract cannot be rescinded by either party as it has already been executed.
  3. C) Chelsea can rescind the contract on the grounds of noncompliance with the Statute of Frauds.
  4. D) Jonas can rescind the contract on the grounds of noncompliance with the Statute of Frauds.

Answer:  B

Diff: 3

Skill:  Factual Application

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Application of knowledge

Classification:  Application

 

31) Which of the following does Section 2A-201(1) of the Uniform Commercial Code state?

  1. A) All lease contracts must be in writing.
  2. B) Lease contracts requiring payments of $1,000 or more must be in writing.
  3. C) All sales contracts must be in writing.
  4. D) Sales contracts requiring payments of $500 or more must be in writing.

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

32) The ________ states that if a written 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 written contract are inadmissible in court regarding a dispute over the contract.

  1. A) main purpose exception
  2. B) leading object exception
  3. C) parol evidence rule
  4. D) equal dignity rule

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

33) A party who owes a duty of performance under a contract is called the ________.

  1. A) obligor
  2. B) assignor
  3. C) assignee
  4. D) obligee

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

34) Kimlon Informatics is owed $5,000 from a client for its services. The recovery period is 100 days, but Kimlon needs the money immediately. It sells the right of collecting money from its client to Quikcollect, a collection agency. Here, Kimlon Informatics is the ________.

  1. A) obligor
  2. B) obligee
  3. C) subassignee
  4. D) assignee

Answer:  B

Diff: 2

Skill:  Factual Application

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Application of knowledge

Classification:  Application

 

 

35) A(n) ________ is a third party who is not in privity of contract but who has rights under the contract and can enforce the contract against the promisor.

  1. A) third-party contractor
  2. B) assignor
  3. C) sub-assignor
  4. D) intended third-party beneficiary

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

36) Which of the following phrases explains the term covenant?

  1. A) an unconditional promise to perform
  2. B) a breach of contract
  3. C) mutual rescission of a contract
  4. D) successive assignments of a right

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

37) Which of the following is true of covenants and conditions?

  1. A) A covenant is a conditional promise to perform.
  2. B) A conditional promise becomes a covenant if the condition is met.
  3. C) A contract cannot contain conditions that excuse performance.
  4. D) A party cannot sue the other party for breach of a covenant.

Answer:  B

Diff: 2

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

 

38) ________ refers to a condition that requires the occurrence of an event before a party is obligated to perform a duty under a contract.

  1. A) Condition precedent
  2. B) Condition subsequent
  3. C) Concurrent condition
  4. D) Implied condition

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

39) KnockKnock, Inc. is a manufacturer of stainless steel locks which are well known for their durability. The company contacts a new supplier and forms a supply contract. The contract states that KnockKnock, Inc. will only purchase steel from the supplier if the material supplied is high grade Type 102 stainless steel. This is an instance of a ________.

  1. A) condition subsequent
  2. B) concurrent condition
  3. C) covenant
  4. D) condition precedent

Answer:  D

Diff: 2

Skill:  Factual Application

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Application of knowledge

Classification:  Application

40) ________ refers to a condition whose occurrence or nonoccurrence of a specific event automatically excuses the performance of an existing contractual duty to perform.

  1. A) Condition precedent
  2. B) Condition subsequent
  3. C) Concurrent condition
  4. D) Implied condition

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

 

41) James hires Franco for a painting job. Their contract explicitly states that Franco's employment can be terminated if he is employed by another party during the contract period. Two weeks into the job, James finds out that Franco is also working for a painting agency two blocks away and terminates his employment. This is an instance of a(n) ________.

  1. A) condition precedent
  2. B) condition subsequent
  3. C) concurrent condition
  4. D) implied condition

Answer:  B

Diff: 3

Skill:  Factual Application

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Application of knowledge

Classification:  Application

 

42) Which of the following is true of discharge by agreement?

  1. A) A partially executed contract cannot be rescinded.
  2. B) Mutual rescission requires parties to enter into a second agreement that expressly terminates the first one.
  3. C) A party is allowed to rescind a contract without the consent of the other party.
  4. D) Unilateral rescission is not regarded as a breach of contract.

Answer:  B

Diff: 2

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

43) Which of the following refers to an agreement that substitutes a new party for one of the original contracting parties and relieves the existing party of liability on the contract?

  1. A) novation
  2. B) substituted contract
  3. C) mutual rescission
  4. D) accord

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

 

44) Lionel Richmond is a soccer player who has a six-year contract with the Christshire United soccer team. Two years into the contract, he is involved in an accident which results in the complete amputation of his right leg. On what basis is Richmond discharged from further performance of the contract?

  1. A) novation
  2. B) substituted contract
  3. C) accord and satisfaction
  4. D) discharge by impossibility of performance

Answer:  D

Diff: 2

Skill:  Factual Application

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Application of knowledge

Classification:  Application

 

45) A clause in a contract in which the parties specify certain events that will excuse nonperformance is known as a(n) ________.

  1. A) approval clause
  2. B) express condition
  3. C) force majeure clause
  4. D) implied-in-fact condition

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

46) Which of the following statements is true of a breach of contract?

  1. A) Strict performance by a party discharges that party's obligations under the contract.
  2. B) Inferior performance constitutes a minor breach of contract.
  3. C) Substantial performance constitutes a material breach.
  4. D) The most common remedy for a breach of contract is an award of equitable remedies.

Answer:  A

Diff: 2

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

 

47) Which of the following terms refers to an unconditional and absolute offer by a contracting party to perform his or her obligations under a contract?

  1. A) injunction
  2. B) writ of garnishment
  3. C) tender of performance
  4. D) writ of attachment

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

48) Poole Contractors makes a contract with Delta Resources to pay $50,000 for the supply of 500 truckloads of sand within a week. Delta Resources delivers the sand in two days after the contract was made. Poole Contractors pays the $50,000 promised in the contract. This is an instance of ________.

  1. A) substantial performance
  2. B) a material breach
  3. C) a minor breach
  4. D) strict performance

Answer:  D

Diff: 2

Skill:  Factual Application

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Application of knowledge

Classification:  Application

 

49) A(n) ________ breach of a contract occurs when a party renders inferior performance of his or her contractual obligations.

  1. A) material
  2. B) minor
  3. C) anticipatory
  4. D) defensive

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

 

50) Trees, crops, minerals, and timber are not considered real property and are thus barred from being included in contracts involving interests in real property.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

51) The doctrine of part performance allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if performance is necessary to avoid injustice.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

52) According to the equal dignity rule, agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

53) The one-year rule states that an executory contract that cannot be performed by its own terms within one year of its formation must be in writing.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

 

54) Complete performance occurs when a party to a contract renders performance exactly as required by the contract.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

55) If the modification of a lease contract increases the lease payment to $1,000 or more, the modification has to be in writing to be enforceable.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

56) In terms of compliance with the Statute of Frauds and the Uniform Commercial Code, the signature of the person who is enforcing the contract is required.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

57) The parol evidence rule stipulates that the contract is a complete integration and the exclusive expression of the parties' agreement.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

58) A covenant is an unconditional promise to perform.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

59) A force majeure clause usually excuses nonperformance caused by natural disasters such as floods, tornadoes, and earthquakes.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

60) An agreement whereby the parties agree to accept something different in satisfaction of the original contract is called a restitution.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

61) Substantial performance of a contract constitutes a material breach.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

 

62) The ________ is an equitable doctrine that allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid injustice.

Answer:  doctrine of part performance

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

63) The ________ states that agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable.

Answer:  equal dignity rule

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

64) A(n) ________ refers to a promise in which one person agrees to answer for the debts or duties of another person.

Answer:  guaranty contract

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

65) ________ of the Uniform Commercial Code (UCC) is the basic Statute of Frauds provision for sales contracts.

Answer:  Section 2-201(1)

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

 

66) A(n) ________ is a clause in a contract which stipulates that the contract is a complete integration and the exclusive expression of the parties' agreement.

Answer:  merger clause/integration clause

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

67) The term ________ refers to any oral or written words outside the four corners of a written contract.

Answer:  parol evidence

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

68) An obligee who transfers a right is known as a(n) ________.

Answer:  assignor

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

69) A(n) ________ is a party who is unintentionally benefited by other people's contracts.

Answer:  incidental beneficiary

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

70) A(n) ________ is an unconditional promise to perform.

Answer:  covenant

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

71) ________ is an action to undo a contract.

Answer:  Rescission

Diff: 1

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

72) Explain the creation and working of guaranty contracts.

Answer:  A guaranty contract occurs when one person agrees to answer for the debts or duties of another person. Guaranty contracts are required to be in writing under the Statute of Frauds. In a guaranty situation, there are at least three parties and two contracts. The first contract, which is known as the original contract, or primary contract, is between the debtor and the creditor. It does not have to be in writing (unless another provision of the Statute of Frauds requires it to be). The second contract, called the guaranty contract, is between the person who agrees to pay the debt if the primary debtor does not (i.e., the guarantor) and the original creditor. The guarantor's liability is secondary because it does not arise unless the party primarily liable fails to perform.

Diff: 2

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

 

73) Distinguish between conditions and covenants.

Answer:  A covenant is an unconditional promise to perform. Nonperformance of a covenant is a breach of contract that gives the other party the right to sue.

The majority of provisions in contracts are covenants. A conditional promise (or qualified promise) is not as definite as a covenant. The promisor's duty to perform or not perform arises only if the condition does or does not occur. It becomes a covenant if the condition is met. Generally, contract language such as if, on condition that, provided that, when after, and as soon as indicates a condition. A single contract may contain numerous conditions that trigger or excuse performance. Two types of conditions are:

  1. Condition precedent. If a contract requires the occurrence (or nonoccurrence) of an event before a party is obligated to perform a contractual duty, this is a condition precedent. The happening (or non-happening) of the event triggers the contract or duty of performance. If the event does not occur, no duty to perform the contract arises because there is a failure of condition.
  2. Condition subsequent. A condition subsequent exists when there is a condition in a contract that provides that the occurrence or nonoccurrence of a specific event automatically excuses the performance of an existing duty to perform. That is, failure to meet the condition subsequent relieves the other party from obligation under the contract.

Diff: 2

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

74) Distinguish between minor breach and material breach.

Answer:  A minor breach occurs when a party renders substantial performance of his or her contractual duties. In other words, it occurs when a party to a contract renders performance that deviates slightly from complete performance. The nonbreaching party may try to convince the breaching party to elevate his or her performance to complete performance. If the breaching party does not correct the breach, the nonbreaching party can sue to recover damages. A material breach of a contract occurs when a party renders inferior performance of his or her contractual obligations that impairs or destroys the essence of the contract. Where there has been a material breach of contract, the non-breaching party may rescind the contract and seek restitution of any compensation paid under the contract to the breaching party. The non-breaching party is discharged from any further performance under the contract. Alternatively, the non-breaching party may treat the contract as being in effect and sue the breaching party to recover damages.

Diff: 2

Skill:  Legal Concepts

LO:  10.2 List and describe the contracts that must be in writing, according to the Statute of Frauds.

AACSB:  Analytical thinking

Classification:  Concept

 

75) Which of the following is true of monetary damages?

  1. A) Monetary damages are available only for material breaches of contract.
  2. B) Dollar damages are not monetary damages.
  3. C) Compensatory damages are not monetary damages.
  4. D) Consequential damages are monetary damages.

Answer:  D

Diff: 2

Skill:  Legal Concepts

LO:  10.4 Describe compensatory, consequential, and liquidated damages.

AACSB:  Analytical thinking

Classification:  Concept

 

76) Mary buys a new toaster for $500. The toaster's label bears a disclaimer stating that the manufacturer is not liable for consequential damages. One morning while Mary is using the toaster, it emits sparks and damages the electrical wiring in the kitchen. The electrician tells Mary that the toaster malfunctioned and that the cost of repairs in her kitchen would amount to $2,000. What amount of monetary damages can Mary likely recover from the manufacturer of the toaster?

  1. A) $500
  2. B) $2,500
  3. C) $2,000
  4. D) No monetary damages can be recovered.

Answer:  A

Diff: 3

Skill:  Factual Application

LO:  10.4 Describe compensatory, consequential, and liquidated damages.

AACSB:  Application of knowledge

Classification:  Application

 

77) As a part of a downsizing initiative, Richmond and Sons fired an employee before his employment contract lapsed. Is the employee responsible for mitigating damages? Explain.

Answer:  If a contract has been breached, the law places a duty on the innocent nonbreaching party to make reasonable efforts to mitigate the resulting damages. The extent of mitigation of damages required depends on the type of contract involved.

If an employer breaches an employment contract, the employee owes a duty to mitigate damages by trying to find substitute employment. The employee is only required to accept comparable employment. The courts consider such factors as compensation, rank, status, job description, and geographical location in determining the comparability of jobs.

Diff: 2

Skill:  Legal Concepts

LO:  10.4 Describe compensatory, consequential, and liquidated damages.

AACSB:  Analytical thinking

Classification:  Concept

 

 

78) An award of ________ orders the breaching party to perform the acts promised in a contract.

  1. A) reformation
  2. B) injunction
  3. C) restitution
  4. D) specific performance

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  10.5 Define the equitable remedies of specific performance, reformation, and injunction.

AACSB:  Analytical thinking

Classification:  Concept

 

79) ________ refers to an equitable doctrine that permits the court to rewrite a contract to express the parties' true intentions.

  1. A) Reformation
  2. B) Injunction
  3. C) Conjunction
  4. D) Garnishment

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  10.5 Define the equitable remedies of specific performance, reformation, and injunction.

AACSB:  Analytical thinking

Classification:  Concept

 

80) Kinetosphere Automation Inc. (K.A.) makes a mandatory employment contract with all its employees. The contract states that K.A.'s employees are not permitted to work for any other organization while they are employed by K.A. If K.A. finds an employee serving another company, it can approach the court to obtain a(n) ________ to prevent the employee from working in the other company.

  1. A) restitution
  2. B) rescission
  3. C) injunction
  4. D) subjugation

Answer:  C

Diff: 2

Skill:  Factual Application

LO:  10.5 Define the equitable remedies of specific performance, reformation, and injunction.

AACSB:  Application of knowledge

Classification:  Application

 

------

Free Business Ethics Resources

1. See full list of videos: 

Link 1 - Youtube channel www.youtube.com/ecomftu2012

Link 2 - Youtube channel 

2. Free Business Ethics - 2016 Ebooks (free download)

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

 

3. Link to power point slides (Free Download)

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

LINK DOWNLOAD FREE PPT - LINK

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

LINK DOWNLOAD FREE PPT - LINK

Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

4. Test Bank - Free download

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

Link - Test bank - free download 

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

Link - Test bank - free download

 

For Test Bankz, Quiz Answers and Case study Guides, email to: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Good Luck and Success, Enjoy Your Study !

 

----------

 

       

 

Business Ethics 2016, Lecture, Video, Case Study Guides and Quiz, Test Bank, Free Download
------
Revel for Ethics and the Conduct of Business, 8th Edition, 2016, John R Boatright, Jeffery D. Smith
Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman
Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

------
1. Ethics in the World of Business
2. Ethical Decision Making
3. Ethical Theories
4. Whistle-Blowing
5. Business Information and Conflict of Interest
6. Privacy
7. Discrimination and Affirmative Action
8. Employment Rights
9. Health and Safety
10. Marketing and Advertising
11. Ethics in Finance
12. Corporate Social Responsibility
13. Governance, Accountability, and Compliance
14. International Business Ethics
------
Part I: Legal and Ethical Environment

1. Legal Heritage and the Digital Age
2. Ethics and Social Responsibility of Business
3. Courts, Jurisdiction, and Administrative Law
4. Judicial, Alternative, and E-Dispute Resolution

Part II: Constitution and Public Law
5. Constitutional Law for Business and E-Commerce
6. Torts and Strict Liability
7. Criminal Law and Cyber Crimes
8. Intellectual Property and Cyber Piracy

Part III: Contracts, Commercial Law, and E-Commerce
9. Formation and Requirements of Contracts
10. Performance and Breach of Contracts
11. Digital Law and E-Commerce
12. UCC Sales Contracts, Leases, and Warranties
13. Credit, Secured Transactions, and Bankruptcy

Part IV: Business Organizations, Corporate Governance, and Investor Protection
14. Small Business, General Partnerships, and Limited Partnerships
15. Limited Liability Companies, Limited Liability Partnerships, and Special Forms of Business
16. Corporations and Corporate Governance
17. Investor Protection and E-Securities Transactions

Part V: Agency, Employment, and Labor Law
18. Agency Law
19. Equal Opportunity in Employment
20. Employment Law and Worker Protection
21. Labor Law and Immigration Law

Part VI: Government Regulation
22. Antitrust Law and Unfair Trade Practices
23. Consumer Protection
24. Environmental Protection
25. Real Property and Land Use Regulation

Part VII: Global Environment
26. International and World Trade Law

Part VIII: Accounting Profession
27. Accountants’ Duties and Liability
------
PART ONE Basic Principles

Chapter 1 Ethics and Business
Introduction
1.1 The Nature of Business Ethics
ON THE EDGE: Was National Semiconductor Morally Responsible?
1.2 Ethical Issues in Business
ON THE EDGE: A Traditional Business
1.3 Moral Responsibility and Blame
ON THE EDGE: WorldCom’s Whistleblower
ON THE EDGE: Gun Manufacturers and Responsibility
CASES FOR DISCUSSION
Slavery in the Chocolate Industry
Aaron Beam and the HealthSouth Fraud

Chapter 2 Ethical Principles in Business
Introduction
2.1 Utilitarianism: Weighing Social Costs and Benefits
2.2 Rights and Duties
ON THE EDGE: Should Companies Dump Their Wastes In Poor Countries?
ON THE EDGE: Working for Eli Lilly & Company
ON THE EDGE: Conflict Diamonds
ON THE EDGE: ExxonMobil, Amerada Hess, and Marathon Oil in Equatorial Guinea
CASES FOR DISCUSSION
Traidos Bank and Roche’s Drug Trials in China

PART TWO The Market and Business

Chapter 3 The Business System: Government, Markets, and International Trade
Introduction
3.1 Free Markets and Rights: John Locke
3.2 Free Markets and Utility: Adam Smith
3.3 Free Trade and Utility: David Ricardo
3.4 Marx and Justice: Criticizing Markets and Free Trade
ON THE EDGE: Commodification or How Free Should Free Markets Be?
ON THE EDGE: Marx’s Children
3.5 Conclusion: The Mixed Economy, the New Property, and the End of Marxism
ON THE EDGE: Napster’s Lost Revolution
ON THE EDGE: Brian’s Franchise
CASES FOR DISCUSSION
The GM Bailout Accolade versus Sega

Chapter 4 Ethics in the Marketplace
Introduction
4.1 Perfect Competition
4.2 Monopoly Competition
ON THE EDGE: Drug Company Monopolies and Profits
4.3 Oligopolistic Competition
4.4 Oligopolies and Public Policy
ON THE EDGE: Fixing the Computer Memory Market
ON THE EDGE: Oracle and Peoplesoft
CASES FOR DISCUSSION
Intel’s “Rebates” and Other Ways It “Helped” Customers
Archer Daniels Midland and the Friendly Competitors

PART THREE Business and Its External Exchanges: Ecology and Consumers

Chapter 5 Ethics and the Environment
Introduction
5.1 The Dimensions of Pollution and Resource Depletion
5.2 The Ethics of Pollution Control
5.3 The Ethics of Conserving Depletable Resources
ON THE EDGE: Ford’s Toxic Wastes
ON THE EDGE: The Auto Companies in China
ON THE EDGE: Exporting Poison
CASES FOR DISCUSSION
The Ok Tedi Copper Mine
Gas or Grouse?

Chapter 6 The Ethics of Consumer Production and Marketing
Introduction
6.1 Markets and Consumer Protection
6.2 The Contract View of Business Firm’s Duties to Consumers
6.3 The Due Care Theory
ON THE EDGE: The Tobacco Companies and Product Safety
6.4 The Social Costs View of the Manufacturer’s Duties
ON THE EDGE: Selling Personalized Genetics
6.5 Advertising Ethics
ON THE EDGE: Advertising Death to Kids?
ON THE EDGE: New Balance and the “Made in USA” Label
6.6 Consumer Privacy
CASES FOR DISCUSSION
Becton Dickinson and Needle Sticks
Reducing Debts at Credit Solutions of America

PART FOUR Business and Its Internal Constituencies

Chapter 7 The Ethics of Job Discrimination
Introduction
7.1 Job Discrimination: Its Nature
ON THE EDGE: Helping Patients at Plainfield Healthcare Center
7.2 Discrimination: Its Extent
7.3 DISCRIMINATION: UTILITY, RIGHTS, AND JUSTICE
7.4 Affirmative Action
ON THE EDGE: Driving for Old Dominion
ON THE EDGE: Peter Oiler and Winn-Dixie Stores
CASES FOR DISCUSSION
Should Kroger pay now for what a Ralphs’ Employee did in the Past
Wal-Mart’s Women

Chapter 8 Ethics and the Employee
Introduction
8.1 The Rational Organization
8.2 The Political Organization
8.3 The Caring Organization
ON THE EDGE: HP’s Secrets and Oracle’s New Hire
ON THE EDGE: Insider Trading or: What Are Friends For?
ON THE EDGE: Delivering Pizza
ON THE EDGE: Sergeant Quon’s Text Messages
ON THE EDGE: Employment at Will at Howmet Corporation?
CASES FOR DISCUSSION
Death at Massey Energy Company
Who Should Pay?
------
key words
Ethics,
Ethical Decision Making,
Ethical Theories,
Whistle-Blowing,
Conflict of Interest,
Privacy,
Discrimination, Affirmative Action,
Employment Rights,
Health and Safety,
Ethics in Finance,
Corporate Social Responsibility,
Governance, Accountability, Compliance,
International Business Ethics,

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