Test 1 Question Bank

8509 Words Feb 8th, 2012 35 Pages
Business Law 265
Spring 2008
Exam #1, February 26, 2008

1. Jerry sent a letter containing an offer to sell his mountain bike to Bill for $300. This letter was sent on Oct. 1 and it was received on Oct. 4. On Oct. 5 Bill sent a letter to Jerry accepting the offer. But then Bill changed his mind; on Oct 6 Bill sent a message by personal messenger to Jerry, rejecting Jerry’s offer. The messenger delivered the rejection and it was received by Jerry on Oct. 7. The letter containing Bill’s acceptance was received on Oct. 8. Based on the above, has a contract been formed for the sale of the mountain bike?
No, because the rejection was received before the acceptance was received

2. Under the “golden rule” regarding assignments,
…show more content…
15. Generally speaking, the contract of a minor: Is voidable at the minor’s option. 16. In most states, where a minor wants to disaffirm a contract, but there is damage to the consideration he or she received, the minor: Can disaffirm, and does not need to place the adult in status quo.

17. Which of the following is correct about contracts entered into by insane persons? Contracts entered into by persons adjudicated insane are void, and those entered into by nonadjudicated insane persons are voidable.

18. In order for someone to avoid a contract on the grounds of intoxication, the level of intoxication must have been:
So great that he didn’t comprehend the nature of the agreement he was entering into. 19. Where a contract calls for action that violates a statute, in a breach of contract case the court will: b. Leave the parties where it finds them. 20. A minor, unable to live at home, contracts to rent an apartment for one year at $600 per month. After living there for three months, he disaffirms the contract. The reasonable value of that apartment was only $500 per month. Assuming no rent has been paid, the minor must pay: c. $1,500; the reasonable value for three months.

21. Mary, age 16, buys a car from Friendly Auto Dealers. She pays $1,500 for the car. It turns out that the car is really worth $2,500. Friendly wants to disaffirm the

More about Test 1 Question Bank

Open Document