Business law class When is there an exception for the use of parol evidence? Whe

Question

Business law class

When is there an exception for the use of parol evidence?

When it is used to add terms to the contract

When one person is very outgoing and talkative

When it explains ambiguities in the contract

When it contradicts the clear terms of the contract

2 points   

QUESTION 2

The statute of frauds covers the sale of real estate.

True

False

2 points   

QUESTION 3

Courts do not take "good faith of the parties" into account when dealing with approval of an independent third party such as an architect or engineer.

True

False

2 points   

QUESTION 4

In general, an employee who has been fired and who wants to sue for breach of contract need not do anything to limit or mitigate his damages, such as looking for another job. This requirement would unfairly benefit the employer who has wrongfully breached the contract.

True

False

2 points   

QUESTION 5

In which of the following situations has the implied covenant of good faith and and fair dealing been applied by the courts?

contracts for the sale of real property

employments contracts

This concept applys to all contracts and includes all of the above

insurance contracts

2 points   

QUESTION 6

The statute of frauds makes oral contracts that are covered by its provisions:

Void

Negligence per se

Unenforceable

Illegal

2 points   

QUESTION 7

The statute of frauds says that contracts induced by fraud are voidable at the option of the defrauded party.

True

False

2 points   

QUESTION 8

Smith and Benson make an oral contract for the sale of some land at a price of $500,000. After paying Smith $400,000 of the purchase price, Benson takes possession of the land and starts to build a house. He advices Benson he will pay the balance in 30 days. Smith decides he does not want to wait and sues to evict Benson from the land arguing the agreement is unenforceable under the statute of frauds. Which of the following is true?

Smith is correct, becuase it is less than one year from the making of the contract.

Smith is incorrect, because Benson paid part of the purchase price and took possession and started to build his house.

Smith is correct, because the contract is for an amount greater than $500 and must be in writing.

Smith is correct because Benson graduated from KU.

2 points   

QUESTION 9

X contracts to build a building for Y, thinking that he will make a profit on the deal. Later, X discovers that she has miscalculated and that the job will not be profitable. In this situation, X is NOT excused from performing on the contract because of commercial impractibility.

True

False

2 points   

QUESTION 10

A party may excuse the occurrence of a condition and thereby bind herself contractually to the contract by waiving the condition.

True

False

2 points   

QUESTION 11

Once an assignment is complete, the assignee can assign the contract rights to another assignee as long as the terms are not changed.

True

False

2 points   

QUESTION 12

Which of the following is the effect of a valid delegation of duties?

It discharges the delegator from any further liability

None of the above

It is an automatic breach

It doesn't have any effect

2 points   

QUESTION 13

The assignor impliedly warrants to the assignee that the obligor (the person who owns the money) has the capacity to contract.

True

False

2 points   

QUESTION 14

Which of the following is always necessary for there to be a valid assignment?

None of the above are always necessary

consideration

a writing

a filing with a local court

2 points   

QUESTION 15

In general, ambiguities in a written agreement are resolved against the party who drafted the agreement.

True

False

2 points   

QUESTION 16

In order for an assignment to be valid, the assignee should notify the obligor of the assignment, although failure to notify does not invalidate the assignment.

True

False

2 points   

QUESTION 17

X and Y make an oral contract whereby X agrees to sell Y 480 widgets (goods) at a price of $480. Later, the parties want to modify the contract so that the price would become $520. This modification:

must be oral because the first contract was oral

must be in writing

Is unenforceable because the first contract is unenforceable.

Cannot be made in a bar

2 points   

QUESTION 18

In order for an assignment to be valid, the assignee must give some consideration to the assignor.

True

False

2 points   

QUESTION 19

Most states have passed statutes prohibiting or regulating a wage earner's assignment of future wages.

True

False

2 points   

QUESTION 20

Specific performance is most likely to be awarded after breach of a contract

for the sale of a computer especially a MAC

for the sale of wheat

in the sale of land

to paint someone's portrait

2 points   

QUESTION 21

D wants to borrow $1000 from C. C wants some additional security other than just D's agreement to repay. D gets E to agree to pay D's debt in the event D does not pay it (defaults). This agreement:

Is covered by the statute of frauds because it is for an amount exceeding $500

Is not covered by the statute of frauds because it isn't fair for C to ask for added security.

Is covered by the statute of frauds becuse it is a collateral contract.

Is not covered by the statute of frauds because E is not the executor or administrator of an estate.

2 points   

QUESTION 22

A construction company contracts to build a retirement community on land owned by Smith. Jones, an adjoining landowner, expects the value of his land to increase greatly one the retirement community is built. Then, the construction company breaches the contract to build the retirement community. In this case:

Jones can recover against the construction company as an intended beneficiary of its contract with Smith

Jones can recover against Smith because it was a party to the contract with the construction company

Jones cannot recover because he is an incidental beneficiary.

Why would anyone want a retirement community to go into their neighborhood?

2 points   

QUESTION 23

A novation may relieve a party of the duty to perform under the terms of the contract.

True

False

2 points   

QUESTION 24

A failure to give substantial performance where substantial performance is required in the contract is normally a material breach of the contract.

True

False

2 points   

QUESTION 25

In order to satisfy the writing requirement of the statute of frauds, both of the parties to the contract must sign the writing.

True

False

2 points   

QUESTION 26

Once a party validly delegates a duty to the delegate (assignee), that party is relieved of any obligation to perfomr the duty.

True

False

2 points   

QUESTION 27

Which of the following is covered by the statute of frauds?

A contract involving marriage with a minor

A $300 contract for the sale of pencils

A unilateral contract that cannot be performed in ten years

A real estate contract

2 points   

QUESTION 28

Which of the following generally is not recoverable in a contract suit?

consequential damages

icidental damages

punitive damages

nominal damages

2 points   

QUESTION 29

The statute of frauds applies to any contract where the amount of the contract exceeds $500.

True

False

2 points   

QUESTION 30

Specific performance is almost never awarded in contracts for the sale of land that have been breached.

True

False

2 points   

QUESTION 31

A donee beneficiary of a contract can recover under that contract.

True

False

2 points   

QUESTION 32

Article 2 of the UCC does not have a parol evidence rule.

True

False

2 points   

QUESTION 33

Construction contracts typically are subject to a strict performance standard.

True

False

2 points   

QUESTION 34

Which of the following rights is most likely to be assignable?

A contract to receive 500 baseball caps

Future wages

A contract to build a house for the assignor

A contract to sign at a concert

2 points   

QUESTION 35

In general, parties who sue for breach of contract cannot recover damages whose amount is purely speculative or guess work.

True

False

2 points   

QUESTION 36

An incidental beneficiary of a contract cannot recover under that contract.

True

False

2 points   

QUESTION 37

The statute of frauds covers all contracts that cannot be performed within one year under their terms.

True

False

2 points   

QUESTION 38

In order to satisfy the statute of frauds, the parties' writing must:

Be signed by the party to be charged (the person using the statute of frauds as a defense) or her agent.

Be kept in a safe deposit box

Be signed by both parties

Be notarized

2 points   

QUESTION 39

All contractual conditions must be express, because the contract must express the parties intent with specificity.

True

False

2 points   

QUESTION 40

X contracts with Y to produce an ad for a 4th of July "freedom fundraising party". Y does not produce and deliver the ad until July 6th. In this case, Y's breach of the contract in not a material breach unless the contract clearly stated that time is of the essence.

True

False

A.

When it is used to add terms to the contract

B.

When one person is very outgoing and talkative

C.

When it explains ambiguities in the contract

D.

When it contradicts the clear terms of the contract

Explanation / Answer

1. Parol is the verbal expression or words. Parol evidence refers to the external evidences or unrelated evidences like written or oral agreements that are not a part of the written document. The parol evidence rule prohibits the parties to change the meaning of the written contract through the use of prior declarations that may be oral or written.

The exception to the use of parol evidence is "D" i.e. when it contradicts the clear terms of the contract. If the clear terms of the contract are contradicted and it is shown that the contract was entered under a mistake or a fraud or duress or under undue influence then the exception will come into play.

2. The answer is "TRUE". Statute of frauds is a law that is used as defense when there is a breach of a contract lawsuit. As per this statute certain type of contracts are required to be in writing and signed by both the parties. It can relate to contracts for sale of goods exceeding $500, contracts for transfer for interest in land, contracts in consideration of marriage etc. Hence this statute, covers, among several other things, the sale of real estate as well.

3. The principle or the covenant of good faith means that there is an assumption that the parties to a contract will complete the contract in good faith and will demonstrate virtues like honesty and integrity will completing the contract and ensuring that right of the other party is not compromised with or damaged.

Now, the answer is "FALSE". This is because contracts with independent third parties like an engineer will also be based on the presumption of good faith. The third parties is not expected to unreasonably delay or deny or withhold any terms or approval that is required for the contract.

4. The answer is "FALSE". This is because the employer has already breached the contract in a wrongful manner. Whether the employee mitigates his damage or not will not change the position that the employer had breached the contract.

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