51) The theory of business social responsibility that holds that a business has a duty to generally do good for society is: a. moral maximum. b. corporate citizenship. c. moral minimum. d. stakeholder interest. e. maximizing profits. 52) Mary finds a wallet in the library that is filled with case. She would like to keep the money but decides to turn it in to the lost-and-found office because if it were her wallet, she would like the person who found it to do the same. Mary reached her decision in accordance with: a. Rawl’s social justice theory. b. the categorical imperative. c. Kantian ethics. d. utilitarianism. e. moral maximum. 53) Which of the following is not needed in all cases in order to have a valid contract? a. A signed written document. b. An agreement. c. A legal object. d. Consideration. e. Contractual capacity. 54) How has the government role in contract regulation changed since the founding of the United States? a. There is less federal, but more state involvement today than in the past. b. There is less state and federal government involvement today than in the past. c. There is greater state and federal government involvement today than in the past. d. There is less state, but more federal involvement today than in the past. e. There is approximately the same degree of state and federal government involvement today as in the past. 55) Which of the following are two terms for the same concept or situation? a. Implied-in-fact contract and quasi-contract. b. Implied-in-law contract and quasi-contract. c. Unilateral contract and informal contract. d. Formal contract and implied-in-law contract. e. Implied-in-law contract and implied-in-fact contract. 56) The United Nations Convention on Contracts for the International Sale of Goods provides rules that govern: a. the enforcement of contracts. b. the formation of contracts. c. the performance of contracts. d. all of the above. e. none of the above. 57) Which of the following is not a formal contract? a. Negotiable instrument. b. Recognizance. c. Contract under seal. d. Letter of credit. e. New car purchase contract. 58) A contract can be formed: a. as a result of preliminary negotiations. b. by an offer made in jest. c. resulting from an expression of opinion. d. by an offer made in anger. e. in none of the above situations. 59) What is necessary in order for an offer to be effectively communicated? a. The offeree must learn of the offer, but this knowledge can come from any source. b. The offeror must communicate the offer to at least one offeree, at which point the offer will be considered to be communicated to anyone who later learns of the offer by any means. c. The offer must be communicated by either the offeror or the offeror’s agent to the offeree. d. The offeror must personally communicate the offer to the offeree. e. So long as the offer is in writing, any party who learns of the offer’s terms can accept it..

1. 51) The theory of business social responsibility that holds that a
business has a
duty to generally do good for society is:
a. moral maximum.
b. corporate citizenship.
c. moral minimum.
d. stakeholder interest.
e. maximizing profits.
52) Mary finds a wallet in the library that is filled with case.
She would like to
keep the money but decides to turn it in to the lost-and-found
office because
if it were her wallet, she would like the person who found it to
do the same.
Mary reached her decision in accordance with:
a. Rawl’s social justice theory.
b. the categorical imperative.
c. Kantian ethics.
d. utilitarianism.

2. e. moral maximum.
53) Which of the following is not needed in all cases in order to
have a valid contract?
a. A signed written document.
b. An agreement.
c. A legal object.
d. Consideration.
e. Contractual capacity.
54) How has the government role in contract regulation changed
since the founding of the United States?
a. There is less federal, but more state involvement today than
in the past.
b. There is less state and federal government involvement today
than in the
past.
c. There is greater state and federal government involvement
today than in the
past.
d. There is less state, but more federal involvement today than
in the past.
e. There is approximately the same degree of state and federal
government involvement today as in the past.

3. 55) Which of the following are two terms for the same concept
or situation?
a. Implied-in-fact contract and quasi-contract.
b. Implied-in-law contract and quasi-contract.
c. Unilateral contract and informal contract.
d. Formal contract and implied-in-law contract.
e. Implied-in-law contract and implied-in-fact contract.
56) The United Nations Convention on Contracts for the
International Sale of
Goods provides rules that govern:
a. the enforcement of contracts.
b. the formation of contracts.
c. the performance of contracts.
d. all of the above.
e. none of the above.
57) Which of the following is not a formal contract?
a. Negotiable instrument.
b. Recognizance.
c. Contract under seal.

4. d. Letter of credit.
e. New car purchase contract.
58) A contract can be formed:
a. as a result of preliminary negotiations.
b. by an offer made in jest.
c. resulting from an expression of opinion.
d. by an offer made in anger.
e. in none of the above situations.
59) What is necessary in order for an offer to be effectively
communicated?
a. The offeree must learn of the offer, but this knowledge can
come from any
source.
b. The offeror must communicate the offer to at least one
offeree, at which point
the offer will be considered to be communicated to anyone who
later learns of
the offer by any means.
c. The offer must be communicated by either the offeror or the
offeror’s agent to

5. the offeree.
d. The offeror must personally communicate the offer to the
offeree.
e. So long as the offer is in writing, any party who learns of the
offer’s terms can
accept it.
60) The requirement that the terms of the acceptance be the
exact same as those
of the offer is the:
a. promissory estoppel doctrine.
b. mirror image rule.
c. identical terms rule.
d. counteroffer equals rejection rule.
e. doctrine against offer modifications.
61) Which of the following is true regarding acceptance of an
offer?
a. Generally, an offeree must accept an offer by an authorized
means of communication.
b. The common law recognizes certain implied means of
communication.
c. The offer can stipulate that acceptance must be by a specified
means of communication (e.g., registered mail).

6. d. Most offers do not expressly specify the means of
communication required for
acceptance.
e. All the above.
62) Charlie is a contractor contacted by Hilda to discuss
repairing termite dam-
age to Hilda’s home. The damage is so extensive that Charlie
doubts the
home can be saved. Hilda begs Charlie to try to repair the home.
Charlie
tells Hilda that he will do the best he can but cannot promise
that the he will
be successful. He will charge Hilda $60 per hour whether or not
he succeeds. Hilda agrees to
these terms. Which of the following is true in this situation?
a. If Charlie encounters unforeseen difficulties Hilda will not be
obligated to pay
him.
b. The doctrine of promissory estoppel will allow Hilda to
recover from Charlie if
he fails to repair the damage.
c. This is a requirements contract because it states what each

7. party is required
to do.
d. This is an illusory promise because Charlie is not obligated
to repair the dam-
age.
e. This is a best efforts contract properly supported by
consideration on both
sides.
63) When after reaching the age of majority a minor legally
indicates that the
minor intends to be bound by the terms of a contract entered
into as a minor,
the action is known as:
a. ratification.
b. restoration.
c. reinstitution.
d. reaffirmation.
e. restitution.
64) What is the effect on contract obligations of a person who is
insane much of
the time but who also has periodic lucid intervals of sanity?

8. a. In order to avoid a contract, this person must not be in a lucid
interval when
making the decision to avoid a contract.
b. All contracts entered into by such a person are void
regardless of when they
were entered into.
c. Contracts entered into during a lucid interval cannot be
avoided.
d. All contracts entered into by this person will be voidable
regardless of when
they were entered into.
e. A person who has lucid intervals can avoid contracts only
after being adjudicated insane.
65) In order for someone to avoid a contract on the grounds of
intoxication, the
level of intoxication must have been:
a. so great that he didn’t comprehend the nature of the
agreement he was entering into.
b. only high enough that he was able to notice it.
c. so great that no reasonable person would have comprehended
the nature of
the agreement entered into.

9. d. at or above the legal limit to operate a motor vehicle.
e. at least as high as that of the other party.
66) What is an exculpatory clause in a contract?
a. A clause that prevents one party from competing with the
other party for a set
period of time.
b. A clause that releases a party from liability for that party’s
negligence.
c. A clause that sets the penalties for a breach of the contract.
d. A clause that negates a minor’s ability to disaffirm a
contract.
e. A clause that says that an innocent party is entitled to extra
damages to punish a breaching party.
67) What is an unconscionable contract?
a. A contract where a strong party to a contract misused its
power to create
unfair contract terms.
b. Any contract involving a minor or intoxicated person.
c. A contract that was entered into with both parties being fully
aware of its il-
legality.

10. d. Any contract that is contrary to public policy.
e. Any contract where the terms greatly favor one party.
68) In Wells Fargo Credit Corporation v. Martin, what was the
result when a paralegal misread
her instructions and bid lower on some foreclosed property than
she was supposed to bid, and
someone else bought the property at auction?
a. The paralegal was allowed to bid again for her company.
b. The paralegal was allowed to take title to the land only if she
matched the bid
of the highest bidder.
c. The paralegal was allowed to bid again only because she
presented proof by a
disinterested witness of her unilateral mistake.
d. The auction was voided and conducted again because of the
unilateral mistake of the paralegal.
e. The person who made the highest bid, not the paralegal, was
allowed to keep
the land.
69) What is the significance of requiring that a
misrepresentation relate to a “material fact” in connection with
a fraud in the inducement case?

11. a. The misstatement must have been a significant factor in the
plaintiff’s decision to enter into the contract, and cannot relate
to an opinion or prediction.
b. The misstatement must not involve an issue of law.
c. The misstatement can relate to any fact before or after the
contract was
formed.
d. The misstatement must have been a correct statement at some
point in the
past.
e. The misstatement must relate to the substance that the item is
made of.
70) Which of the following best describes duress?
a. A situation where one party has lied to the other to lead them
to enter into a
contract.
b. A situation where a trust relationship has been violated in
forming a contract.
c. A situation where, after the contract was negotiated,
circumstances have
changed so that one of the parties is in a desperate circumstance
and cannot

12. reasonably perform.
d. A situation where a party has improperly given the other
party no alternative
but to enter into a contract.
e. A situation in which fraud has been committed by a third
party to the con-
tract.
71) What does “incorporation by reference” do in the context of
contract law?
a. Nothing as far as the Statute of Frauds is concerned because
incorporation
cannot be used to satisfy the Statute of Frauds.
b. It has no legal significance.
c. It makes separate writings part of a contract’s terms.
d. It makes the Statute of Frauds inapplicable to the contract.
e. It identifies the parties to a contract.
72) Jack and Jill were discussing business over lunch when they
agreed on the
sale of some goods. Because neither of them had any paper with
them, Jack
wrote the following on a napkin: “Jill agrees to purchase from
Jack, 1,000

13. widgets to be delivered on July 1, 2001, at a cost of $10,000,
payable on
delivery.” Jill signed the napkin, although Jack did not sign it.
Jack delivered the widgets per the
contract, but Jill refuses to pay for them. If Jack sues Jill for the
price of the goods, the most
likely result is:
a. Jack will win because the writing is sufficient under the
Statute of Frauds.
b. Jack will win because the Statute of Frauds does not apply to
this situation.
c. Jill will win because Jack did not sign the contract.
d. Jill will win because there was no reasonable basis for her to
believe there as
an enforceable contract.
e. Jill will win because this writing is not sufficient under the
Statute of Frauds.
73) When the government enters into a contract on behalf of a
taxpayer, the
taxpayer is usually what kind of beneficiary?
a. Incidental.
b. Creditor.

14. c. Donee.
d. Conditional.
e. Covenanted.
74) What is the significance of a contract clause stating that
“time is of the
essence?”
a. It means that performance by the stated time is an express
condition.
b. It means that the contract is ineffective if the time for
performance is not
expressly stated.
c. It puts a duty on the parties to a contract to perform as soon
as possible.
d. It creates a legal goal for the parties.
e. It means that if performance of the contract is completed
within a short time
of the stated time, it will be considered performed at essentially
the proper
time.
75) John entered into a contract with Barb to restore Barb’s
antique Ford for

15. $9,000. Because John owes his younger brother a large sum of
money, John
assigned, prior to notifying Barb of the assignment, his right to
receive pay-
ment to his brother. John began the restoration, but quickly
stopped working
on the car. Because of this, Barb retrieved the car from John.
Almost no
restoration work had been performed. Which of the following is
true in this
situation?
a. John’s assignment of his right to payment without Barb’s
consent was improp-
er and discharged John’s duties under the contract.
b. John’s brother does not have a right to collect the $9,000
from Barb.
c. Because of the assignment, John’s brother was responsible
for John’s performance.
d. As a result of the assignment, John’s brother is entitled to
payment despite
the fact that John did not perform the restoration.
e. Barb is obligated to allow John’s brother to complete the
restoration if he so

16. desires.