Cengage Advantage Books Law For Business 18th Edition By John – Test Bank

CHAPTER 11—WRITTEN CONTRACTS

MULTIPLE CHOICE

1. Which of the following is true of contracts?
a. All contracts need to be written in order to be enforceable.
b. An oral contract can be ascertained whereas a written contact cannot be ascertained.
c. Written evidence, composed in clear language, is more reliable than oral
d. All contracts of importance must be in oral form.

ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Reasons for Written Contracts KEY: Bloom’s: Knowledge

2. Which of the following is true of the Statute of Frauds?
a. It is a law requiring certain contracts to be oral.
b. It applies only to executory contracts.
c. It does not require agreements concerning land to be in writing.
d. It requires agreements that involve taking the responsibility for the debts of another to be orally made.

ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Statute of Frauds KEY: Bloom’s: Knowledge

3. Which of the following types of agreements according to the Statute of Frauds need to be in writing?.
a. An agreement to sell goods for $499 or less
b. An agreement that does not involve taking responsibility for the debts of another
c. An agreement in which the terms can be performed within one year from the time it is made
d. An agreement containing a promise in consideration of marriage

ANS: D PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-1 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Statute of Frauds KEY: Bloom’s: Application

4. Default refers to:
a. a breach of any contractual obligation.
b. an oral testimony to perform an obligation.
c. a written rule that may not be modified.
d. an obligation to pay money.

ANS: A PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-1 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Statute of Frauds KEY: Bloom’s: Knowledge

5. When a party sues to enforce an alleged contract, the Statute of Frauds requires that:
a. the contract be evidenced by signatures on paper and not electronic signatures.
b. the contract be evidenced by a writing signed by a maximum of one party.
c. there be a note in writing signed by the party against whom the claim for breach of contract is made.
d. the note required by the Statute of Frauds must set forth all the material terms of the transaction in case of the sale of goods.

ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-2 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Note or Memorandum KEY: Bloom’s: Comprehension

6. Which of the following is a requirement made by the Statute of Frauds when a party sues to enforce an alleged contract?
a. A memorandum must be made at the time the contract is executed.
b. Any person who signs the memorandum must sign with the intention of being bound.
c. The contract must contain more essential terms of the contract than the memorandum.
d. A memorandum must be in existence at the time suit is brought.

ANS: D PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-2 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Note or Memorandum KEY: Bloom’s: Comprehension

7. Parol evidence refers to:
a. a written memorandum.
b. spoken words.
c. a writ of certiorari.
d. a default.

ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-2 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Parol Evidence Rule KEY: Bloom’s: Knowledge

8. Which of the following is true of the parol evidence rule?
a. It allows a written contract to be modified by oral testimony if there is evidence of fraud.
b. It assumes that an oral contract represents the complete agreement.
c. It rules out oral testimony as a way to edit a written contract in any situation.
d. It involves making modifications to an oral testimony if there is proof of accident or error.

ANS: A PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-2 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Parol Evidence Rule KEY: Bloom’s: Knowledge

TRUE/FALSE

9. An advantage that written contracts have over an oral contracts is that they can be ascertained.

ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Reasons for Written Contracts KEY: Bloom’s: Knowledge

10. According to the Statute of Frauds, an agreement of an executor to pay the debts of the estate from the executor’s personal funds, needs to be an oral contract.

ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Statute of Frauds KEY: Bloom’s: Knowledge

11. A lease of real property for less than one year must be in writing in order to be binding.

ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Statute of Frauds KEY: Bloom’s: Knowledge