BL260 Contracts Test 3 F 17 True/False Mark your scantron answer sheet (A) for true or (B) for false. 1. 2. 3. 7. 8 Under the objective theory of contracts, the intention to enter into a contract is judged by the all observable relevant outward, objective facts as interpreted by a reasonable person. An action may be legal but not ethical. It is never necessary for contracts to contain reasonably certain and denite terms. A judge Will not challenge the adequacy of consideration; where parties have freely, knowingly and voluntarily bargained for the consideration the court will treat it as adequately valuable to them and uphold the bargain as made by them When a buyer refuses to accept and pay for goods; thereby breaching his contract. Then the seller can demand as damages the difference between the contract price which he would have received less the price he was paid when he resold the goods. Thus the market price is subtracted from the contract price, and the seller's reasonable expectations are met. COntractual damages are designed to compensate a non-breaching party for the loss of the bargain and thus that party's reasonable expectations will be satised. Punitive damages are often awarded m breach of contract actions. Punitive damages may be awarded in a case where an insurance company has been shown to have acted 1n bad faith and wrongfully denied benets to the insured. 9. As a general rule, contracts involving the acquisition of an interest in land must be proven with a writing to be 10. ll. 12. 13. 14. 15. l6. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. enforceable in a court of law. A unilateral offer is accepted by the Offeree doing the act requested by the offeror. It is not necessary to prove a contract to sell land by a writing when both parties admit in court that they entered into a contract. Consideration must be a bargained for legal benet for both of the parties to the contract. A contract exists and can be enforced even where one side's alleged consideration was a past unbargained for act that benetted the other party. The parole evidence rule reqmes a promise made in consideration of marriage be proven by a writing. A tailor who does not have a writing proving the existence of a contract for a tailored made suit, can avoid dismissal of the case under the exception to the statute of auds for specially made goods. Partnership agreements are not in general required to be in writing by the statute of frauds, however they would be required to be in writing if a party by agreeing to become a partner acquires an interest in land. Under the common law mailbox rule, an acceptance is only effective when received The mailbox rule 1S not the rule 1n international agreements. A contract in which one of the parties is to receive an illegal good (such as cocaine) is unenforceable and void. Virtue ethics places an emphasis on development of good character and habits. Aristotle held that virtue is often a matter of degree; that is Virtue is the mid-point between two vices that are extremes. (1' hat Courage is mid way between foolhardiness and cowardice.) Everyone who advocates a utilitarian approach agrees that the good to be sought is pleasure. John Stuart Mill would view a prosperous and happy slave state as being ethically good if 1t created more happiness than misery on average for most people. That 1s; if it created the most happiness for the most people. ' Kant believed that a good motive was more important than a good outcome. Kant believed that there were no exceptions to our duty to tell the truth and never lie All utilitarians would agree that a rise in Gross Domestic Product would always fulll the need for ethical management of the economy. Specic Performance 1S available to buyers of houses, because each one has a unique location (address)