Multiple Choice
Identify the choice that best completes the statement or answers the question.
____ 1. Sal assures Tom that she will deliver a truckload of hay to his cattle ranch. A person’s declaration to
do a certain act is part of the definition of
a. a prediction
b. an expetation
c. a promise [Answer]
d. a moral obligation
____ 2. A letter-of-credit agreement between Rural Feed Corporation and Soybean Farms, Inc., requires
Rural Feed’s bank to pay Soybean Farms on receipt of invoices. This letter of credit is
a. a formal contract [Answer]
b. an implied contract
c. no contract
d. a quasi contract
____ 3. Signe offers to sell Thomas her textbook but conditions the sale on Thomas accepting the offer by March 1.
Signe may revoke the offer
a. before Thomas accepts the offer. [Answer]
b. before March 1, whether or not Thomas has accepted the offer.
c. only after March 1.
d. only after Thomas accepts the offer.
____ 4. Yvon tells Zack, “I would be willing to sell you one of my fishing rods” This is
a. not a valid offer because the terms are not definite [Answer]
b. not a valid offer because Zack did not respond.
c. a valid offer.
d. not a valid offer because Yvon did not state an intent.

____ 5. Business Properties, Inc. (BPI), offers to sell a warehouse to Corporate Investments. Corporate says that it
will pay BPI $100 to hold the offer open for three business days. This
a. makes the offer irrevocable for three days if BPI accepts [Answer]
b. creates an illegal contract by adding a clause to BPI’s offer.
c. voids BPI’s offer by extending the time term.
d. negates BPI’s offer by changing the price term.
____ 6. Canada and the United States are signatories of the Berne Convention. Doug, a citizen of Canada, publishes a
book first in Canada and then in the United States. Doug’s copyright must be recognized by
a. Canada and the United States only.
b. all of the signatories of the Berne Convention [Answer]
c. Canada only.
d. none of the choices.
____ 7. When Heste’s car breaks down, she asks Insta-Tow, Inc., to tow it to Jerry’s Repair Shop. There is no
discussion of a price and Hester and Insta-Tow do not sign any documents. Later, Insta-Tow sends Hester a
bill. With repsect to Hester’s obligation to pay the bill, this is
a. an express contract.
b. an implied contract [Answer]
c. a quasi contract.
d. no contract.
____ 8. Venture Capital Corporation loans Wally $15,000 to start a new business. Wally does not pay, but Venture
fails to sue within the time prescribed by the applicable statute of limitations. Wally’s promise to pay the debt
even though recovery is barred
a. is unenforceable regardless of any consideration.
b. needs new consideration.
c. needs legally sufficient and adequate consideration.
d. needs no consideration [Answer]
____ 9. Grant offers to sell his Honda Civic for $10,000 to Ivy. Referring to the prices for similar Hondas, Ivy says,
“I’ll pay no more than $5,000.” Grant says, “Forget it.” Grant’s offer was terminated by
a. Honda.
b. Grant.
c. Ivy [Answer]
d. no oneGrant’s offer is still open.
____ 10. Cherry is injured in an accident caused by Bronco. Bronco agrees to pay Cherry $2,500 if she agrees to
release him from further liability. Cherry agrees. If Cherry’s damages ultimately exceed $2,500, she can
a. not collect the balance from Bronco [Answer]
b. collect the balance from Bronco in a breach-of-contract suit.
c. collect the balance from Bronco on the ground of unforeseen events.
d. collect the balance from Bronco in a tort suit.
____ 11. Barrett filed a suit against City Moving Service for breach of contract, based on what Barrett claims was City
Moving’s offer. For a court to determine if a contract has been breached, under the common law, the offer
must include terms that are
a. exactly precise.
b. reasonably definite [Answer]
c. vague or uncertain.
d. unequivocally approximate

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