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Contracts - Oral, Written and Guaranty

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Please help me with the following questions.

Thank you,


1. The Statute of Frauds requires that certain types of contracts:
(a) be in writing in order for the parties to avoid criminal penalties.
(b) be in writing in order to be enforceable.
(c) be recorded in land records.
(d) have two or more attorneys present at the signing of a written contract.

2. Assuming the existence of a complete and final written contract, the parol evidence rule would prohibit the use of evidence of:
(a) prior or contemporaneous oral statements that alter, contradict, or add to the terms of the contract.
(b) prior or contemporaneous oral statements that explain ambiguities in the contract.
(c) subsequent written statements that modify the contract.
(d) performance of the contract by one or both of the parties.

3. Two adults enter into an oral contract for the sale and purchase of some land. All material facts were disclosed by the seller to the buyer. Which is true?
(a) This contract is void because land is not tangible personal property.
(b) This contract is unenforceable because of the Statute of Frauds.
(c) Because the parties are adults, it is certain that there is no problem with capacity.
(d) This is a unilateral contract if only one party transfers land.

4. John, president and sole shareholder of Photo, Inc. Photo, Inc. wishes to borrow money, but to do so, the bank requires John to orally guarantee to repay the loan if Photo, Inc. cannot. John's guaranty to repay is:
(a) enforceable, because in general, guaranty contracts do not need to be in writing
(b) unenforceable, because in general, guaranty contracts need to be in writing
(c) enforceable, because the main purpose of the loan and the guarantee was to benefit John
(d) unenforceable, because a loan guaranty is contrary to public policy

5. Lyle offers to sell Eddie his car for $1,000, and Eddie promptly accepts the offer. Eddie shows up a day later with the money, but Lyle refuses to deliver the car. Can Eddie enforce the contract?
(a) Yes; it is a valid oral contract.
(b) No, because the agreement was not in writing.
(c) No, because Lyle can terminate the contract before accepting the money.
(d) No, because Eddie did not give a concurrent acceptance.

6. A person's obligation under a contract is discharged by performance. "Performance" means:
(a) doing exactly what the contract says, in all cases
(b) "substantial performance" in all cases
(c) "perfect tender" when you're talking about a contract for sale of goods, "substantial performance" for other contracts
(d) commencement of performance

7. The award of non-monetary damages, such as specific performance and injunction, is governed by principles of:
(a) express conditions
(b) engagement
(c) estoppel
(d) equity

8. Jack is considering suing for breach of contract. He is convinced that the breach was deliberate, and wants to recover consequential as well as punitive damages. His best chance of winning these additional damages is if he:
(a) can show that the subject matter of the contract was unique.
(b) was a minor at the time the contract was entered into.
(c) can prove that the breach of contract was accompanied by the commission of a tort.
(d) none of the above

9. Acme Publishing Co. is planning a new printing of one of its books. When Acme's paper supplier breaches its contract to supply the paper needed for this book, the president of Acme figures that it will cost Acme $20,000 more to buy the paper elsewhere, and that if it doesn't do so, Acme will lose $100,000 of expected profit from the book. Which of the following statements is most correct?
(a) Acme has no obligation to buy the paper elsewhere, and if it sues the breaching paper supplier it will be awarded consequential damages of $100,000.
(b) Acme has no obligation to buy the paper elsewhere unless it is less expensive.
(c) Acme should not buy the paper elsewhere because it is not commercially reasonable to do so.
(d) Acme has an obligation to mitigate damages, which in this case means buying the paper elsewhere and suing for $20,000 compensatory damages.

10. Pam Patient enters into an agreement with Surgical Associates to get a face-lift, but only if it can be performed by Dr. Tuck, the star doctor in the group. If Dr. Tuck dies before the scheduled surgery:
(a) Pam is entitled to damages, equal to the difference between the contract price and the value of the surgery done by a lesser doctor.
(b) Pam is entitled to damages equal to the excess amount she has to pay to get a star doctor at another medical practice.
(c) The obligation of Surgical Associates is discharged by impossibility of performing under the contract.
(d) Pam must mitigate damages by using one of the lesser doctors.

11. The Uniform Commercial Code article 2 governs contracts involving
(a) performance of services
(b) sales of real estate
(c) sales of real estate combined with performance of services
(d) sales of goods, that is, tangible personal property

12. UCC article two creates more stringent rules for merchants than existed at common law. A merchant is someone:
(a) who deals in the type of goods being sold
(b) who, by occupation, holds himself out as having special knowledge or skill related to the goods being sold
(c) either (a) or (b)
(d) none of the above

13. One of the areas where UCC article 2 creates greater obligations for merchants is:
(a) a merchant may not withdraw a "written firm offer," which is an offer stated to be irrevocable, for the period of time stated in the offer, up to three months.
(b) a merchant may not separately state a delivery charge for goods purchased.
(c) a merchant must provide insurance for shipped goods.
(d) none of the above

14. Under Uniform Commercial Code article 2 which of the following agreements needs to be in writing to be enforceable?
(a) a sale of goods for delivery
(b) a sale of goods accompanied by a service
(c) a sale of goods for $500 or more
(d) an employment contract

15. The contract rules contained in the 1980 Vienna Convention on Contracts for International Sale of Goods (CISG) will take priority over UCC article 2:
(a) where there is a contract between businesses in two different countries
(b) when both of the countries of the parties to the contract have ratified CISG
(c) unless the parties have agreed to have UCC article 2 apply
(d) all of the above

16. In a Chapter 11 Reorganization of a business, which of the following may happen?
(a) renegotiation of union contracts
(b) changes in management of the business
(c) liquidation of business divisions
(d) all of the above

17. In a bankruptcy, the representative of the bankrupt estate is known as the:
(a) supervisor
(b) creditor
(c) arbitrator
(d) trustee

18. What is an exemption under the bankruptcy laws?
(a) a debt that does not need to be paid
(b) a debt that is not forgiven
(c) a particular type of asset that is not required to be used toward satisfaction of debts
(d) an administrative expense that does not need to be paid

19. Which of the following is true about exemptions for an individual in a Chapter 7 Liquidation bankruptcy?
(a) The federal statutory exemptions apply in all cases.
(b) Exemptions are always determined by state law.
(c) If a state has enacted its own list of bankruptcy exemptions, a debtor may elect to use this in its entirety, but may not pick and choose exemptions from both the federal and the state lists of exemptions.
(d) A debtor may choose some exemptions from the federal list of bankruptcy exemptions and some exemptions for the state list, in order to maximize the value of assets protected.

20. If a debtor is an individual who wants to keep all her non-exempt assets, has a steady income, and believes she can pay off most of her debts, the best bankruptcy plan for her would probably be:
(a) Chapter 7 Liquidation
(b) Chapter 9 Adjustment of Debts of a Municipality
(c) Chapter 11 Reorganization
(d) Chapter 13 Adjustment of Debts of an Individual with Regular Income

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Please see below for answers to compare with your results - GOOD LUCK!

1. (b) Be in writing in order to be enforceable.

2. (a) Prior or contemporaneous oral statements that alter, contradict, or add to the terms of the contract.

3. (b) This contract is unenforceable because of the Statute of Frauds.

4. (b) Unenforceable, because in general, guaranty contracts need to be in writing

5. (b) No, because the agreement was not in writing.
(KEY: Car price is over $500 and no facts to indicate any writing, so Statute of Frauds applies)

6. (c) "Perfect tender" when you're talking about a contract for sale of goods, "substantial performance" for other contracts
(KEY: "Perfect tender" is UCC rule; "substantial performance" is ...

See Also This Related BrainMass Solution

Page v. Gulf Coast Motors

CASE 14.2 Guaranty Contract:Page v. Gulf Coast Motors
903 So.2d 148, Web 2004 Ala. Civ. App. Lexis 982 (2004) Court of Civil Appeal of Alabama

"A promise to pay the debt of another is barred by the Statute of Frauds unless it is in writing."
- Judge Murdock


Glenn A. Page (Glenn) had a long-term friendship with Jerry Sellers, an owner of Gulf Coast Motors. Glenn began borrowing money from Gulf Coast Motors on a recurring basis during a two-year period. The loan process was informal: Gulf Coast Motors set up a ledger account and recorded each loan made to Glenn, and Glenn would sign the ledger "I agree to pay Jerry Sellers as above." At various times, Glenn would make small payments toward his account, but he would thereafter borrow more money. At the times the loans were made, Glenn was not working and had no assets in his own name. There was no evidence as to what Glenn used the loan proceeds for, but evidence showed that he had a gambling problem.

Sellers testified that toward the end of the two-year period of making loans to Glenn, he telephoned Mary R. Page, Glenn's wife, and Mary orally guaranteed to repay Glenn's loans. Mary had significant assets of her own. Mary denied that she had promised to pay any of Glenn's debt, and she denied that Sellers had asked her to pay Glenn's debt. Gulf Coast Motors sued Glenn and Mary to recover payment for the unpaid loans. The trial court entered judgment in the amount of $23,020 in favor of Gulf Coast Motors. Mary appealed.


Was Mary's alleged oral promise to guarantee her husband's debts an enforceable guaranty contract?

Language of the Court:

A promise to pay the debt of another is barred by the Statute of Frauds unless it is in writing. It is not disputed that Mary did not sign a note, guaranty, or any other writing promising to pay any part of Glenn's debts. Therefore, if the purported agreement to pay Glenn's debt is within the Statute of Frauds, Mary is not liable even if the trial court found Seller's testimony to be credible. Mary's alleged oral promises are not enforceable under the Statute of Frauds. We conclude that Mary's alleged promises to guaranty or repay Glenn's debts were within the Statute of Frauds and, therefore, were not enforceable.


The court of civil appeals held that Mary's alleged oral promises to guarantee her husband's debts were not in writing, as required by the Statute of Frauds. The court remanded the case to the trial court to enter judgment in Mary's favor.

Case Questions

Critical Legal Thinking: What is a guaranty contract? Explain.

Business Ethics: Did Glenn act ethically in this case? Would Mary have acted unethically if she had actually orally guaranteed to repay her husband's debts and then raised the Statute of Frauds to prevent enforcement of the oral promises?

Contemporary Business: Are guaranty contracts often used in business? Can you think of a situation in which a guaranty contract would be required?


Read and understand the case. Show your Analysis and Reasoning and make it clear you understand the material. Be sure to use the concepts of the course to show your reasoning. Summarize the situation. Dedicate at least one heading to each following outline topic:

Parties [Identify the plaintiff and the defendant and tell something about them.]
Facts [Summarize those facts critical to the outcome of the case.]
Procedure [Who brought the appeal? What was the outcome in the lower court(s)?]
Issue [Note the central question or questions on which the case turns.]
Holding [How did the court resolve the issue(s)? Who won?]
Reasoning [Explain the logic that supported the court's decision.]
Case Questions [Be sure to address and thoroughly answer each and every case question and each part of each question.]
Conclusion [This should summarize the key aspects of the decision and also your recommendations on the court's ruling.]

Include citations on the slides and a reference page with your sources. Use APA style citations and references.
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