LOMA 311 Module 2 Practice Exam: Contract Law and Agency, Exams of Law

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LOMA 311 Module 2 Practice Exam

The Bayview Corporation, located in State A, entered into a contract with the Decatur Company, located in State B. Bayview and Decatur began writing the contract in State A, but completed it and signed it in State B. Neither party chose a jurisdiction to govern the contract. State A and State B both adhere to the center of gravity rule, which governs conflicts of law. This information shows that the contract most likely will be governed by: - ANSWER whatever state has the highest interest in the contract.

Contracts can be formal or informal, unilateral or bilateral. Geranium Corporation and Meadow Leasing Company signed a deal in which Geranium agreed to rent office space from Meadow for a monthly rate. The contract is enforceable since Geranium and Meadow complied with the agreement's substance rather than its form. Regarding the sorts of contracts, it is correct to remark that the contract between Geranium and Meadow is both an informal contract and a bilateral contract.

One sort of contract is the aleatory contract. By definition, an aleatory contract is one in which one party offers something of value to another party in exchange for a conditional promise.

Andy Howard has been pronounced mentally incompetent by a court, and his mother, Madeline Howard, has been permitted by the court to care for him and manage his property and affairs. Andy entered into a contract for things that were not necessary without Ms. Howard's permission. Select the answer choice that correctly identifies whether Andy Howard or Madeline Howard is the ward in this case and whether the contract into which Andy engaged is legally binding. ANSWER Ward: Andy Howard

Is the Contract Enforceable? No

Jeff Whitcomb told a neighbor, Kay Andre, that he had concert tickets to sell. Ms. Andre stated that she would purchase concert tickets for $75.00. This information shows that Ms. Andre made (an offer / counteroffer) to Mr. Whitcomb, and she is the (offeror/offeree) in this case. - Respond to an offer/offeror.

The statements below describe a typical contract offer. Choose the answer choice that contains the proper statement. - ANSWER An offer to contract is terminated if the offeree rejects it in whole or in part.

One general concept of contract law in the United States and many other jurisdictions is that parties have the freedom to contract with whomever they choose and on whatever legal conditions they like. ANSWER Freedom of contract is a legal notion.

By definition, what a promisor wants for and receives in exchange for his contractual promise is known as ANSWER consideration.

Moore Miliam, a 15-year-old United States resident, signed a contract for products that are not considered necessities. Regarding the validity of his contract, it is true to remark that the contract most likely is voidable by Moore at any time before he achieves the age of majority and within a reasonable time after the attainment of the age of majority.

The following assertions pertain to the contractual capability of insurance firms. Three statements are true, while one is untrue. Choose the answer choice that contains the FALSE statement. - ANSWER Life insurance firms have the authority to enter into life insurance contracts, but not to enter into other sorts of contracts.

When Cindy Sack applied for a life insurance policy from Azalea Insurance Company, she made a significant misstatement. Azalea published the policy with a standard two-year contestability term. A year later, Azalea uncovered the material misstatement. Regarding the legitimacy of this insurance contract, it is right to remark that the contract most likely is voidable by Azalea, regardless of whether the misrepresentation was done with the belief that it was truthful.

The following statements describe typical agency agreements. Three statements are true, one is untrue. Choose the answer choice that contains the FALSE statement. - ANSWER In most agency agreements, an agent has the ability to make an oath on behalf of a principal.

The legal significance of a contract entered into by an agent on behalf of a principle is determined in part by contractual ability. Select the correct answer that indicates if an agent and a principle are normally required to have contractual capacity in order for a contract entered into by the agent to be legal and binding on the principal. - ANSWER Agent: Not required.

Principal: Required.

One fiduciary obligation expected of an agent is to perform his or her agency duties with appropriate care, skill, and diligence. This fiduciary obligation is defined as the duty of - ANSWER competence.

The following sentences characterize Gable Company agents. Choose the answer that accurately describes an individual who is not violating the fiduciary obligation of loyalty and good faith. - ANSWER Jane Cobb had a financial stake in a transaction involving Gable. Ms. Cobb fully disclosed all pertinent facts concerning her interest to Gable, who allowed her to act on her own behalf in the transaction.

A principal is generally obligated to compensate or refund an agent for any losses incurred while fulfilling his or her obligations, so long as the loss was not caused by the agent's negligence or wrongdoing. The recompense or reimbursement of another person's loss is known as ANSWER indemnity.

Taisheng Li works as an agent for the Clubland Corporation. Mr. Li, acting within the boundaries of his actual power, signed a contract with the Eastside Company on Clubland's behalf. However, Mr. Li claimed to act on his own behalf and signed the contract in his own name. Mr. Li made no mention to Eastside of Clubland's role as the transaction's primary. Regarding categories of principals and their contractual liability, it is correct to argue that Clubland is the type of principal known as an undisclosed principal, and Eastside most likely can enforce the contract against Clubland.

When an agent enters into a contract on a principal's behalf without actual or apparent authority to bind the principle, the principal has the option of accepting the contract by ratifying the agent's unlawful activities. To ratify such a contract, the - ANSWER agent must have purported to act on behalf of the principal.

All of the individuals listed below worked for the Concept Finance Company and performed tortious conduct. The individuals who are most likely to subject Concept to vicarious liability for their torts are. - ANSWER Ms. Garcia alone (Olga Garcia, an employee of Concept, who performed a tortious act while operating within the scope of her job with Concept).

Most common law jurisdictions require a showing of the following element(s) to prove a breach of the warranty of authority: ANSWER A, B, and C.

The following statements illustrate scenarios in which one of the parties to an agency relationship canceled it. Choose the answer that best reflects a situation in which the side terminating the relationship did not have the legal authority to do so.

• ANSWER: Bert Gurskey and Sandy Liu signed a one-year agency arrangement. One month later, Mr. Gurskey called off the agreement. Mr. Gurseky and Ms. Liu had not broken any of their obligations at the time the agreement expired.

The lines below describe the customary formalities required in the United States to create a legal will. Choose the answer choice that contains the proper statement. - ANSWER In most cases, competent witnesses must sign a will in the presence of the testator.

Albert Tillman, a U.S. resident, died without a valid will. The probate court assigned Sidney Balleu to settle Mr. Tillman's estate. Select the proper answer that identifies whether Mr. Tillman died testate or interstate, as well as Ms. Balleau's involvement in Mr. Tillman's inheritance. - ANSWER Mr. Tillman: intestate

Ms. Balleu, Administrator

One true statement concerning copyrights in the United States is that - ANSWER copyright protection applies when a work is created.

Patents are normally issued for a term of 20 years from the date the patent application was submitted with the United States. The Patent and Trademark Office (USPTO)

The Jade Company, based in the United States, invented the brand "StoneCare" to identify and distinguish its jewelry cleaning product from others. Jade applied to register its trademark with the United States. Jade's application was eventually approved by the United States Patent and Trademark Office. Choose the answer that correctly indicates if StoneCare is a trademark or a service mark, as well as how long Jade's original registration of StoneCare will be valid. - ANSWER Type of Mark: trademark

Registration period: 10 years.

Article 2 of the Uniform Commercial Code (UCC) is most likely to regulate a contract for the sale of ANSWER office furniture.

Lydia Black wrote a personal check from her Castle Bank account. The check was made out to Amy Leung. Choose the option that correctly identifies the drawee and maker in this circumstance. - ANSWER Drawee: Castle

Maker: Ms. Black.

Certificates of deposit are one example of a negotiable instrument. A certificate of deposit can be appropriately defined as an instrument including a recognition by a bank that a sum of money has been received by the bank and a guarantee by the bank to reimburse the amount of money.

To be considered a negotiable instrument, an instrument must meet the following basic requirements:

Jasmine Decker wrote a check payable to the order of "David" and Nicole Wim. The check was written for $85, however the amount on the check indicated "seventy-five dollars." According to Article 3 of the UCC, the check is due for $75.00.

Daniel York received a check in the amount of $150 made payable to him. Mr. York endorsed the check with his signature and the notation "payable to the order of Natalia Henning." Mr. York then gave the check to Ms. Henning as payment for a debt that he owed her. Ms. Henning accepted the check in good faith and was unaware of any defenses or claims against its payment.

A. Mr. York endorsed the check with a limiting endorsement.

B. That Ms. Henning is a holder in due course - ANSWER B ONLY