Match the Following Terms with Their Definitions

Practice Exam

Matching Questions

Match the following terms with their definitions:

(6) A. Assignment of Rights
(4) B. Delegation of Duties
(5) C. Covenant
(2) D. Reciprocal Promises
(1) E. Conditional Promises
(3) F. Representations / 1 Promises that a party agrees to perform only if the other side has first done what it promised
2 Promises that are each enforceable independently
3 Statement of fact about the past or present
4 Transfer of obligations under a contract
5 Promise about what a party will do in the future
6 Transfer of benefits under a contract

True/False Questions

Circle true or false:

1. T F The same states must be named in the Choice of Law and Choice of Forum provisions.

2. T F For a modification to a contract to be valid, both parties must sign it.

3. T F A severability provision asks the court simply to delete the offending clause and enforce the rest of the contract.

4. T F A force majeure clause indicates who has the authority to write the first draft of the contract.

5. T F Unless the contract provides otherwise, both sides in a contract dispute pay their own legal fees.

Multiple-Choice Questions

1. Daniel and Annie signed a contract providing that Annie would sell craft beers to Daniel’s grocery stores at a price of $20 per case. During negotiations, Daniel and Annie agreed that the price would go up to $22 per case once he had bought 1,000 cases. This provision never made it into the contract. After the contract had been signed, Daniel agreed to a price of $23 per case once volume exceeded 1,000 cases. The contract had an integration provision but no modification clause. What price must Daniel pay for cases in excess of 1,000?

(a) $20

(b) $22

(d) The contract is void because the terms are unclear.

NOTE: Because there is an integration clause, the agreement to pay $22 is unenforceable. Because there is no modification clause, the subsequent oral agreement is enforceable.

2. A contract states (1) that Buzz Co. legally exists and (2) will provide 2,000 lbs. of wild salmon each week.

(a) Clause 1 is a covenant and Clause 2 is a representation.

(b) Clause 1 is a representation and Clause 2 is a covenant.

(d) Both clauses are covenants.

3. The following list provides reasons why a party would strongly consider putting a contract in writing. Which of these reasons is least important?

(a) The Statute of Frauds requires it.

(b) The deal is crucial to your life or the life of your business.

(d) The parties do not have an ongoing relationship.

(e) The parties reside in different jurisdictions.

4. Michael and Scarlett cannot agree on the price he will pay her to manage his hotels in the third year of their contract. They agree to a provision stating that the price will be “reasonable.” This provision is ______. Parties should never include such a provision in a contract unless ______.

(a) ambiguous/ they are sure they will be able to reach an agreement later.

(b) vague/ they are sure they will be able to reach an agreement later.

(d) vague/they would not mind if the other side’s interpretation prevails in litigation

5. Liesl purchased an insurance policy on her house. The policy stated that the insurance company was not liable for any damage to her house caused by vandalism or burglary. After Liesl’s house had been vacant for more than 30 days, an arsonist burned it down. Is the insurance company liable?

(a) No, because arson is a form of vandalism.

(b) Yes, because arson is not a form of vandalism.

(c) No, because the language is ambiguous and should be interpreted against the insurance company.

(d) Yes, because the language is vague and should be interpreted against Liesl.