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1. A _____ is a legally enforceable promise or set of promises.
A contract is a legally enforceable promise or set of promises.

2. An _____ is a mutual acceptance of the contract's contents by both sides.
An agreement is a mutual acceptance of the contract's contents by both sides.

3. One way an offer can terminate is when the offeree responds to the offer with an offer of his own. This is called a _____.
One way an offer can terminate is when the offeree responds to the offer with an offer of his own. This is called a counteroffer.

4. The _____ theory of contracts can help determine whether or not both parties have agreed to a contract.
The objective theory of contracts can help determine whether or not both parties have agreed to a contract.

5. The two main ways of determining the existence of consideration in a contract are legal detriment and the _____.
The two main ways of determining the existence of consideration in a contract are legal detriment and the Peppercorn Theory of Consideration.

6. The Uniform Commercial Code:
(a) supercedes the common law with respect to some, but not all, commercial transactions.
(b) supercedes the common law with respect to all commercial transactions.
(c) is used as a guide in many states, but does not have the force of law.
(d) has made it difficult to conduct business in more than one state at a time.

7. Common law refers to:
(a) statutes enacted by a legislature.
(b) the general rules of conduct followed within a community.
(c) court interpretations of administrative regulations.
(d) law determined by judges in the course of trials and appeals.

8. Business law protects business people from:
(a) theft and fraud.
(b) defamation.
(c) breached contracts.
(d) all of the above.

9. Contract law can deal with disagreements between which of the following?
(a) two business partners
(b) store owner and customer
(c) real estate agent and home buyer
(d) all of the above

10. Which of these is NOT a way an offer can be terminated?
(a) revocation
(b) insanity
(c) rejection
(d) reversal


11. The National Dog Rag, a weekly newspaper, receives a hot tip that Cassandra Bridgewater, a well-known movie star, is a fugitive from justice and the main suspect in a twenty-five-year-old murder case. The tip comes in late on a Friday, too late for Monday's edition, so the Rag runs the story the following Monday. The story turns out to be false. If Bridgewater sues the Rag for libel, she will probably:
(a) lose because the Rag has a First Amendment right to publish whatever stories it sees fit.
(b) lose because she is a public figure.
(c) win because the Rag had a week to investigate the claim and could have discovered that it was false.
(d) win because tabloid journalism is inherently unreliable.

12. Samuel decides to cut down a large tree in his backyard. He cuts the trunk halfway through with a chain saw and takes a break for lunch. While he is eating, the tree falls into David's yard and destroys the deck David spent eight years building out of molding clay. Samuel is probably:
(a) not liable for negligence, because he didn't know which way the tree would fall.
(b) not liable for negligence, because only property was damaged.
(c) liable for negligence, because a reasonable person would have made sure the tree would not cause any damage when it fell.
(d) liable for negligence, because only professionals should cut down trees.

13. Ylena lived in a small apartment building in a big city. When the lock on the front door of her building broke, Ylena informed the landlord and expressed concern for the security of her belongings. The landlord failed to repair the door.

Several weeks later, as Ylena was returning home from work, she was assaulted by an intruder hiding in the hallway. Ylena brought a negligence action against the landlord for compensation for her personal injuries. Ylena will probably:

(a) win, because her injuries were a foreseeable result of the landlord's failure to repair the lock.
(b) win, because the landlord took a deliberate act in failing to repair the lock.
(c) lose, because she didn't tell the landlord she was concerned about her safety.
(d) lose, because the landlord cannot be held responsible for the crimes of third parties.

14. Scott, a college student, went skiing for the first time last winter. There were several signs at the chair lift instructing riders to face forward at all times. At the top of the mountain, the chair lift malfunctioned due to faulty maintenance. Most riders disembarked safely, but Scott, who had been fooling around and was facing backward at the time of the malfunction, was injured.

Scott sued the slope operator for negligence. In a state that uses the contributory negligence standard, Scott will probably:

(a) win, because his injuries were due to faulty maintenance of the chair lift.
(b) win, but only recover that percentage of his injuries attributable to the ski slope's negligence.
(c) lose, because by failing to face forward, he was partly responsible for his own injuries.
(d) lose, because he should have taken skiing lessons first.

15. A traveling salesman named Rafael stopped at a small motel on a winter's night. When he checked in, the clerk suggested that he take a room in the main building. The clerk explained that the evening's snowfall had not yet been cleared and the path to the building across the courtyard was very slippery. Rafael insisted on a room in the far building and said he would be careful on the path.

While taking his luggage to his room, Rafael slipped on the path and was injured. Rafael sued the motel for negligence in failing to clear the path. Rafael will:

(a) win, because the motel should have kept the path clear at all times, for the safety of their guests.
(b) win, because the clerk, knowing that the path was slippery, should have accompanied Rafael to ensure his safety.
(c) lose, because snow is a natural condition in the winter.
(d) lose, because Rafael knowingly assumed the risk of falling on a path he had been told was slippery.

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