1. ABC Contractors begins building an office building for XYZ Corp., in accordance with their contract with each other. One month later, ABC tells XYZ that ABC will need $2 million more to complete the job, because ordinary business expenses have increased. XYZ, anxious to get the building finished, agrees, but later sues ABC for the $2 million over the original contract price. The additional $2 million term in the contract is
A. unenforceable, due to the preexisting duty rule.
B. enforceable, because of unforeseen difficulties.
C. unenforceable, because $2 million extra is unconscionable
D. enforceable, because the parties agreed, and the court will not interfere with their contract
2. Among the elements necessary to prove fraud are the following:
A. intent to deceive
B. justifiable reliance by the innocent party
C. a false statement made by the defrauding party to the innocent party
D. all of the above
3. Amanda and Brent sign a contract in which Amanda agrees to install double-paned windows in Brent’s home, for $2,500. One month later, Amanda and Brent agree that Brent will pay the $2,500 directly to Amanda’s supplier, instead. Under these circumstances, Amanda’s supplier is
A. a delegee
B. an intended beneficiary
C. an assignee
D. an incidental beneficiary
4. A court has determined that Jack is mentally incompetent, and has appointed a legal guardian for him. After the guardian is appointed, but not while Jack is with the guardian, Jack sees a home in which he would like to live, and signs a rental agreement to begin occupancy two weeks later. Jack’s rental agreement is
A. voidable only if Jack does not understand the legal consequences of entering into the contract.
B. void.
C. valid if the landlord can prove that Jack was having a lucid interval when he signed the rental agreement.
D. valid.