Quiz #12

Contracts must use formal terminology such as "whereas" and "heretofore" in order to be legal.

• true

• false

When a provision to a contract is accidentally unclear, it is called

•   vagueness.

•   a scrivener's error.

• ambiguity.

•   a typo.

Emily runs a children’s clothing boutique that takes in local homemade items on a consignment basis. Her standard form contract indicates that Emily has the right to put items on sale without prior approval, but does not specify what effect the sale has on the consignor’s payment percentage. Her intent is to keep the same profit she would have had without the sale. She is using ambiguity in her contract to increase her sales and profit.

• true

• False

Two parties are debating whether or not to put their contract into writing. In making their determination, which of the following factors would normally NOT be considered?

•   whether or not the agreement falls within the Statute of Frauds.

•   the complexity of the agreement.

• the length of time covered by the agreement.

• the relationship between the two parties.

An agreement should definitely be in writing if you do not have an ongoing relationship with the other party.

• True

•   False

A severability provision

•   rescinds the entire contract upon request of the party who drafted it. 

• transfers benefits under a contract to another person.

• asks the court to delete the offending clause and enforce the rest of the contract.

• transfers the obligations of a contract to another party.

The legal term for a promise in a contract is “provision.”

•   True

• False

In the case of scrivener’s errors, a court will usually

• reform the contract if it is clear that the mistake is not what the parties intended

•   instruct the parties to rewrite the contract without the errors.

•   enforce the contract as written.

•   throw out the contract completely.

If the subject of the contract includes issues that may be controversial or "touchy," it is best to

•   keep lawyers out of the negotiation, so relationships are not strained.

• deal with them up front before the relationship becomes strained.

• deal with them one at a time, as the problems arise.

• state your position up front and stand firm when the other party objects.

An honest effort to meet both the spirit and letter of the contract is termed

•   reasonable circumstances.

•   sole discretion.

•   honest representation.

• good faith.