Show Terms in this set (56)Verified questions
finance The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31, 2016: Apr. 13. Wrote off account of Dean Sheppard, $\$ 8,450$. May 15. Received $\$ 500$ as partial payment on the $\$ 7,100$ account of Dan Pyle. Wrote off the remaining balance as uncollectible. July 27. Received $\$ 8,450$ from Dean Sheppard, whose account had been written off on April 13. Reinstated the account and recorded the cash receipt. Dec. 31. Wrote off the following accounts as uncollectible (record as one journal entry): $$ \begin{array}{lr}\text { Paul Chapman } & \$ 2,225 \\ \text { Duane DeRosa } & 3,550 \\ \text { Teresa Galloway } & 4,770 \\ \text { Ernie Klatt } & 1,275 \\ \text { Marty Richey } & 1,690\end{array} $$ 31. If necessary, record the year-end adjusting entry for uncollectible accounts. c. How much higher (lower) would Shipway Company's net income have been under the direct write-off method than under the allowance method? Verified answer Geometry Co. manufactures microchips for electrical products. Jojoba monopolizes the supply of gallium arsenide, which is used heavily in the manufacturing of microchips. Because of this monopoly and the demand for microchips, Geometry enters into a long-standing agreement with Jojoba for 20 years. For the first couple of years, due to the huge demand for the microchips, Geometry insisted on timely delivery of the raw material. However, once the demand slumped, Geometry asserted economic duress to avoid the contract. Will Geometry be successful? A. Yes, because Geometry was forced to enter the contract due to Jojoba's monopoly over the supply of the raw material. The consent was not free. B. No, because the facts prove that Jojoba had not caused any undue duress. C. Yes, because there was economic duress and thus the contract is voidable at Geometry & Co.'s discretion. D. No, because Geometry has already taken benefits under the contract for two years. 1. executed contract - has fully performed 2. executory contract - not fully performed 3. express contract - all terms expressly stated either orally or in writing. 4. implied-in-fact contract-terms not expressly stated, inferred from the parties' acts/conduct 5. quasi or implied-at-law contract - (not contract) a fiction created by law to allow the enforcement of a contractual remedy where justice alone warrants such a remedy 6. unilateral contract - offeror promises something in return for the offeree's performance & indicates that this performance is the way acceptance is to be made 7. bilateral contract - formed by a mutual exchange of legally binding promises
Terms in this set (63)true true or false: An otherwise valid contract may be unenforceable if the parties have not genuinely agreed to its terms A A party who demonstrates that he did not truly agree to the terms of a contract does NOT have one of the following choices: A. Sue under the statute of limitations avoided, fact, material 1. Contract law allows a contract to be _________ on the basis of mistake 2. Only a mistake of _______ makes a contract voidable 3. The mistake must involve some _______ fact bilateral mistake A mistake made by both parties. If both parties are mistaken about a material fact, such as the identity of the subject matter, either party can avoid the contract. If the mistake relates to the value or quality of the subject matter, either party can enforce the contract unilateral mistake A mistake made by only one of the parties. The mistaken party is bound by the contract, unless the other party knows or should've known of the mistake, or the mistake is an inadvertent mathematical error in addition, subtraction, or the like that is committed without gross negligence A Alicia offers to sell a purebred cat for $200. Neither Alicia nor the buyer discusses the cat's ancestry, but the buyer believes that it comes from a championship line and agrees to the price. Upon discovering that the cat is only worth $50, can the buyer rescind the contract based on her mistake? A. Probably not, because the buyer made a mistake about the cat's value, not a mistake about a material fact either, enforce, rescinded 1. When both parties are mistaken about a material fact, _______ party can avoid the contract 2. In a bilateral mistake situation, if the mistake relates to the value or the quality of the subject matter, either party can ______ the contract. 3. If the parties to a contract attach material different meanings to a term, a court may allow the contract to be ________ because there has been no true "meeting of the minds" false (the agreement only establishes a value at a moment in time. Each party is considered to have assumed the risk that the value will change in the future or prove to be different what she thought. Without this rule, any party who did not received what she considered a fair bargain could argue mistake) true or false: When parties form a contract, their agreement establishes the value of the object of their transaction, not only for the moment, but for several years in the future
true true or false: When an innocent party is fraudulently induced to enter into a contract, the contract can be avoided because that party has not voluntarily consented to its terms C (A party who has been fraudulently induced into a contract may rescind, or cancel, the contract. The party also may enforce the contract and seek damages for any injuries resulting from the fraud) When a party is fraudulently induced into a contract, that party can A. impose an adhesion contract A (intent to improve one's bargaining position is an element of undue influence) Which is NOT an element of fraud? A. intent to improve one's bargaining position A Misrepresentations of a material fact can be made by A. words or actions C (The three elements of fraudulent misrepresentation are present. Beatrice made a misrepresentation about the bird's legal status. She intended to deceive Claudia and Claudia justifiably relied on Beatrice's statement) Beatrice sells Claudia an exotic bird that Beatrice knows is on the endangered species list, but tells Claudia that it isn't. When the federal gvt confiscates the bird and fines her, Claudia sues Beatrice for A. undue influence true true or false: A contract entered into under excessive or undue influence lacks voluntary consent and is therefore voidable C Which of the following classes of individuals are usually NOT susceptible to undue influence? A. Those under the care of physicians true true or false: Duress is both a defense to the enforcement of a contract and a ground for the rescission of a contract assignment, delegation 1. ___________: the act of transferring all or part of one's rights arising under a contract 2. _____________: the transfer of a contractual duty to a third party. The party delegating the duty (the delegator) to the third party (the delegatee) is still obliged to perform on the contract should the delegatee fail to perform false (financial institutions, including banks, often assign to a third party their rights to collect mortgage payments. Following the assignment, the homebuyers are notified that they must make their future payments not to the original financial institution that loaned them the funds, but to a third party) true or false: When you take out a mortgage loan to buy a house, the financial institution from which you obtained the mortgage will always be the place to where you send your mortgage checks third party beneficiary, intended beneficiary 1. ___________: One for whose benefit a promise is made in a contract but who is not a party to a contract 2. ____________: A third party for whose benefit a contract is formed; an __________ can sue the promisor if such a contract is breached true true or false: in most contracts, promises of performance are not expressly conditioned or qualified; instead, they are absolute promises discharge __________: A termination of an obligation. In contract law, ______ occurs when the parties have fully performed their contractual obligations or when events, conduct of the parties, or operation of the law releases the parties from performance condition A possible future event, the occurrence or nonoccurence of which will trigger the performance of a legal obligation or terminate an existing obligation under a contract performance under contract law, the fulfillment of one's duties arising under a contract with another B The most common way to terminate contractual duties is by A. novation C The duty to perform under a contract A. must always be absolute tender, anticipatory repudiation, breach of contract 1. _________: An unconditional offer to perform an obligation by a person who is ready, willing, and able to do so 2. ________: an assertion or action by a party indicating that she will not perform an obligation that the party contractually obligated to perform at a future time 3. _____________: The failure, without legal excuse, of a promisor to perform the obligations of a contract B The two basic types of performance are A. future and past C Most contracts require that all aspects be completed as expressly stated in the contract. Any deviation from strict performance breaches the contract and ________ the other party's obligations to perform A. minimizes intentional, breach, omission, remedied, benefits Choose: remedied, benefits, breach, omission, intentional The Requirements for Performance to Qualify as Substantial Performance: 2. The performance must not vary greatly from the performance promised in the contract. An _______, variance, or defect in performance is considered minor if it can easily be _________ by compensation (monetary damages) 3. The performance must substantially create the same ________ as those promised in the contract C (Often companies that build houses have to substitute brands of building materials. This substitution was considered substantial, so the contract was upheld under the doctrine of substantial performance. Sometimes, though, discounts are given if the substituted building materials are of lesser quality) Power Construction builds a new house for Sonja. In the contract, all the windows must be made by Pella. Power, unable to find all the Pella windows needed, installs comparable windows from a competing window company. If Sonja refuses to pay Power, a court might decide that: A. Sonja is not required to pay Power because performance deviated from the contract A Some contracts specify that the contract need to be performed to the satisfaction of another. The "other" is typically a(n): A.
reasonable person A In the case of a material breach of contract, A. the non breaching party has the right to sue for damages resulting from the breach mutual rescision, accord, novation 1. __________: An agreement between the parties to cancel their contract, releasing the parties from further obligations under the contract. The object of this new agreement is to restore the parties to the positions they would have occupied had not the contract been formed 2. __________: An agreement to replace unperformed obligations with substitute obligations (e.g. substitute transfer of a car instead of payment of cash) 3. __________: The substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated. Typically, there is a substitution of a new person who is responsible for the contract and the removal of an original party's rights and duties under the contract A, D, E Choose the three requirements for Mutual Rescission to take place A. offer previous, agreement, extinguishing, new Choose: agreement, extinguishing, previous, new The Requirements for a Novation: impossibility of performance, frustration of purpose, commercial impracticability Choose: frustration of purpose, commercial impracticability, impossibility of performance 1. ___________: A doctrine under which a party to a contract is relieved of her duty to perform when performance becomes impossible or totally impractical (through no fault of either party) 2. ___________: A court-created doctrine under which a party to a contract will be relieved of her duty to perform when the objective purpose for performance no longer exists (due to reasons beyond that party's control) 3. ____________: A Doctrine under which a seller may be excused from performing a contract when (1) a contingency occurs, (2) the contingency's occurrence makes performance impractical, and (3) the nonoccurence of the contingency was a basic assumption on which the contract was made C Which of the following is NOT a type of discharge by operation of law? A. statute of limitations A, D Choose the two possible contract provisions that limit remedies A. exculpatory clauses B A knowing relinquishment (ceasing) of a legal right is called a A. statute of limitations C Which of the following is NOT present when the courts order reformation of a contract? A. Mutual mistake false (Specific performance will not be granted unless the parties legal remedies aka monetary damages is inadequate. Ergo, contracts for the sale of goods rarely qualify for specific performance because the legal remedy is ordinarily adequate in such situations given that substantially identical goods can be bought or sold in the market) true or false: Contracts for the sale of goods usually qualify for specific performance inadequate, equitable Sometimes monetary damages are ____________ for a breach of contract. In these situations, the non breaching party may ask the court for a(n) __________ remedy specific performance, reformation, restitution Choose: restitution, reformation, specific performance 1.________: an equitable remedy requiring the breaching party to perform as promised under the contract 2. ___________: A court-ordered correction of a written contract so that it reflects the true intentions of the parties 3. __________: An equitable remedy under which a person is restored to her original position prior to loss or injury, or placed in the position she would have been in had the breach not occurred liquidated damages, penalty, mitigation of damages Choose: mitigation of damages, penalty, liquidated damages 1. ____________: An amount, stipulated in the contract, that the parties to a contract believe to be a reasonable estimation of the damages that will occur in the event of a breach 2. _________: A sum inserted into a contract, not as a measure of compensation for its breach but rather as punishment for a default 3. __________: A rule requiring a plaintiff to have done whatever was reasonable to minimize the damages caused by the defendant D (Lucio is entitled to the difference between the contract price and the market price at the time of the breach) Kipp agrees to sell Lucio 500 copies of a book for $3.50 each. Kipp does not deliver the books. At the time of the breach, the books are available at $4.50 each. Lucio's compensatory damages are A. $750 compensatory damages, nominal damages, incidental damages, consequential damages Choose: incidental damages, nominal damages, compensatory damages, consequential damages 1. _________: A money award equivalent to the actual value of injuries or damages sustained by the aggrieved party 2. ________: A small monetary award (often $1) granted to a plaintiff when no actual damage was suffered or when the plaintiff is unable to show such loss with sufficient certainty 3. ___________: expenses that are caused directly by a breach of contract, such as those incurred to obtain performance by another source 4. _____________: Special damages that compensate for a loss that is not direct or immediate (for example, lost profits). The special damages must have been reasonably foreseeable at the time the breech or injury occurred in order for the plaintiff to collect them. A Brian wants to buy a mare that he can breed to help develop a horse operation. Larson offers to sell Brian a horse that Larson believes is healthy and should make a good broodmare when it is older. After two years, the horse still has not foaled. The vet tells Larson that the mare is incapable of breeding. If Brian sues to rescind the contract with Larson, it is A. likely that the court will allow the rescission based on a mistake of fact D AJ agrees to buy Harry's truck so he can pull his trailer. Both AJ and Harry believe that the truck is big enough to do the job. After they complete the deal, AJ finds that the truck is not strong enough to handle the trailer. The contract between Harry and AJ can be rescinded because of A. a unilateral mistake C Sam, a famous artist, has a contract with Alex to paint his portrait for $6000. Sam is busy and wants to delegate her duty to do the painting to Patty, her top student. If Alex objects, the court likely will: A. honor the delegation only if the delegation was in writing A Rick agrees to buy 20 acres of land from Tina. Three weeks before the deal is to close, Rick calls Tina and says "the deal is off." In this situation, Rick's actions constitute A. anticipatory repudiation of the contract C (an event that must occur before performance under the contract becomes due) Antonio owns property on which a gas station once stood. Josh agrees to buy the land so that he can build an office on it. They include language in the contract making the purchase contingent on a determination that there are no environmental problems with the property. The contingency represents: A. an implied condition A Johanna agrees to buy Jessie's land so that she can build a golf course. They write a contract, and Jessie transfers the deed to Johanna. Johanna pays Jessie the entire purchase price. Johanna and Jessie have discharged their contract by A. performance A Jim contracted with United Technologies to instal 5,000 feet of Rocketfish Cat network cable in his office building. United installed 5,000 feet of Dynex Cat network cable instead. When Jim sued for breach of contract, the court found that United's actions constituted A. substantial performance C Nico and Oscar form a contract under which Oscar is to perform gardening services for Nico for one year. For six months, Oscar performs the services, and Nico pays him. Nico's mother, Madison, becomes ill and is unable to care for her garden. The three agree that Oscar will no longer care for Nico's garden but instead will care for Madison's garden for the remainder of the year. The new contract: A. is a reformation A If a person who has signed a contract to provide a service dies before the service can be performed, the A. buyer is out of luck, because the contract is discharged by objective impossibility A (Commercial Impracticability: an event that happens that makes performance of a contractual duty excessively burdensome, difficult, or extremely expensive, for the party committed to such a performance) David has a contract with Leland to build his house at a fixed price, but an unexpected hurricane causes a lumber shortage throughout the US, and Leland is unable to build the house. The court may excuse Leland from performing the contract based on the doctrine of A. commercial impracticability A Marc agrees to sell Diana 500 copies of a book for $3.50 a book. Marc breaches the contract by not delivery the books. At the time of the breach, the books are available from the publisher for $4.50 each. Diana's damages are A. $500 C Alison contracts with Jackson to have him remodel the kitchen of her home. Alison changes her mind and breaches the contract before Jackson can begin work. As a remedy for the breach, Jackson can seek A. the contract price plus interest D Lori contracts to buy coffee beans for her store from Mike. The contract price is $7.50 per pound of coffee. Mike breaches the contract and delivers no coffee. Lori's damages will likely be A. the amount of damages she seeks
D Velma contracts with Gordon, who agrees to build a stone retaining wall and French drain on her property. The wall and drain are necessary to prevent erosion of her land, which is falling into the creek on her property at a rapid rate. If Gordon breaches the contract by failing to get to work, Velma is under legal obligation to A. wait until Gordon is prepared to build the wall and drain B (restitution: the restoration of each party's assets; to make the party whole again like the contract never happened) Brandon contracts with Starcross to buy several of Starcross's dairy cows. Starcross delivers the cows, but Brandon doesn't pay for them. Starcross may be able to have their cows returned if they seek the remedy of A. specific performance A (reformation: the contract is rewritten to better express the intentions of the parties) Rhonda contracts with Darren to buy two horses. They agree that she will pay $2,000 for each horse. When they draw up the contract, the sales price is accidentally changed to read "$40,000" rather than "$4,000." They can seek the remedy of A. reformation C Kevin buys a new Volkswagen and signs a contract with Volkswagen saying that he will never sue the company for any personal injuries he may receive as a result of a faulty car. In exchange, Volkswagen reduces the price of the car by $6,500. This type of contract provision is A. a dormant commerce clause Students also viewedchapter 15 mistake, fraud, and voluntary consent24 terms Alix_Dona MindTap: Worksheet 13.2: Performance and Discharge15 terms haleyfj2000 Chpt 14 bus 325- Fraud and Mistakes76 terms Ava_Dawydiak fin 240 kaplowitz worksheet 15.2: fraudulent misre…20 terms
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What are the remedies for breach of contract quizlet?Damages are inadequate remedy for a breach of contract. Equitable remedies include rescission and restitution, specific performance, reformation. Is essentially an action to undo, or to terminate, a contract - to return the contracting parties to the positions they occupied prior to the transaction.
What is a unilateral contract quizlet?Unilateral Contracts. A contract wherein only one party makes a promise of future performance in exchange for the other party's actual rendering of performance, rather than a mere promise of future performance.
What is an example of a unilateral contract quizlet?A common example of a unilateral contract is with insurance contracts. The insurance company promises it will pay the insured person a specific amount of money in case a certain event happens. If the event doesn't happen, the company won't have to pay. It can be executory.
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What remedies are available in the case of a unilateral mistake in making a contract Quizlet
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