Simple Contracts Answers

Why is understanding the terms of a contract important for both parties involved?

If it is completely impossible to put a contract in writing, which of the following would be the best substitute?

The following statement is from a contract between a homeowner and the Homeowners' Association (HOA) for his neighborhood. "Overnight parking on community streets is prohibited. For the purpose of this contract, 'overnight' will be defined as the hours between 11:00 p.m. and 4:00 a.m. The HOA will monitor overnight parking not less than once every calendar week with nightly patrols by community security. "In the event a car is found parked on community streets overnight and that ownership of the offending car can accurately be verified as a community homeowner, the homeowner will receive one (1) written warning asking him or her to correct the situation. A second and third infraction by the same homeowner, whether or not it is with the same car, will result in a monetary fine as permitted by CC&R guidelines and HOA bylaws. Further infractions (past 3) will result in monetary fines in addition to the towing of the car at the homeowner's expense."According the contract, which of the following is not a responsibility of the HOA?a.monitor overnight parking at least once a weekb.give a written warning for the first infraction of overnight parkingc.give a written warning for the second infraction of overnight parkingd.tow the car of a homeowner who has parked in the street overnight five nights in a row

A written contract is not legally binding until _____.

Bob and Suzie are both signing a contract where Bob agrees to remove a beehive and Suzie agrees to pay Bob $120.00. What is the consideration in this example?

In forming a contract, the “meeting of the minds” is _____.

Janice needs a tree stump removed from her back yard. She has agreed to hire a local handyman named Steve to do the work. Janice wants Steve to completely remove the stump and any major root systems that may still exist, all for the price of $300. Steve offered to the job based on an hourly rate of $40.00 per hour. He estimated that the job would take between seven and eight hours for a rough estimate of $300.00. He wants to be sure that he gets paid more for his time if the job happens to take longer than expected. He also wants Janice to pay for the rental of any equipment he might need to accomplish the job in the time quoted.After the two discuss what was needed on each side, Janice writes up the following contract and asked Steve to sign. “ I, Janice Stevenson, agree to pay Steve Jacobsen $300.00 for the complete removal of one tree stump and related root system from my back yard. (signed) Janice Stevenson” Which of the following is not a change Steve should make to the contract before he signs it?

Cindy is buying a car from Robert for $4,500. Robert has agreed to accept a down payment of $500 and 16 consecutive monthly payments of $250 from Cindy to pay the car off. In agreement, Cindy writes up the following contract: “I agree to pay Robert a down payment of $500 in addition to 16 payments of $225 in exchange for this car.” Robert does not sign the contract, saying there are mistakes Cindy should correct. Which of the following is not a correction Cindy should make??

Below is an excerpt from the home loan contract Kyle signed with his bank. “The sum of the principal of the loan and all applicable interest will be divided into 360 monthly payments according to the amortization schedule. The Buyer shall make each monthly payment by the first day of the month it is due. A payment not received by the first day of the month it is due will be considered delinquent. A payment not received by the fifteenth day of the month it is due will be subject to a late charge of $75.00. If a payment is not received by the last day of the month it is due, the Buyer and transaction shall be reported to the appropriate credit agencies. In the event of delinquency, the Buyer may divide any payment not received into not more than three equal installments to be included on the next consecutive monthly payments. Notification of the Buyer’s intent to do so must be made by written letter or phone call to the phone number and address listed below within one business week of delinquency.” Due to some changes at his job and the resulting loss of income, Kyle will not be able to make his monthly payment by the first of the month. He does expect to be able to make it by the 9th of the month. According to the contract, what does Kyle need to do?

Verbal contracts are generally discouraged because _____.

The paragraph below comes from the rental agreement Susan signed when she opened her account at Super Video. "All rentals are due back by midnight of the due date as printed on the transaction receipt. Any rental not received by midnight on the day it is due is subject to a late charge of $1.50 for each day it is late. Any rental not returned by the fifth day after the due date will be transferred to a sale. The Customer will then be required to pay the purchase price of the item in addition to five (5) days of late fees. The Customer will not be required to return the product once the total balance is paid." As of today, Susan's movie is currently five days late. She knows that if she doesn't get the movie back tonight, she will be charged $9.99, the purchase price of the movie, plus five days' worth of late fees. A round trip cab ride to the video store will cost about $10. Which of the following statements is true?

The following section is a statement from the rental agreement Tim signed when he rented his car this past weekend.“Upon checkout, the fuel level of the vehicle will be determined by turning the vehicle on and visually inspecting the fuel gauge. The approximate fuel level will be recorded on the Check-Out sheet and verified with initials by the vehicle Renter. One copy of the Check-Out sheet will be given to the customer. Another copy will be kept with the on-site records of the vehicle. The rented vehicle must be returned with a minimum fuel level the same as that indicated on the Check-Out sheet. A vehicle returned with a fuel level less than the approximate level indicated on the Check-Out sheet will be completely refueled with on-site pumps. The price of the fuel used to refuel the vehicle will be added to the Renter’s total charge at a cost of $4.50 per gallon plus a $5.00 re-fueling charge.”As a part of the check-out process, it is customary for a car rental agency to look over the car with the customer and fill out the Check-Out sheet together. As Tim was walking around the car looking for damages that he didn’t want to be held responsible for, the agency representative turned on the car, took note of the fuel level, and indicated it on the Check-Out sheet. Since Tim didn’t have any questions, the clerk handed him the keys and a copy of the Check-Out sheet and wished him well.Which action invalidates the contract Tim signed with the rental agency?

The following statement is from the contract Peter signed with his Homeowner's Association (HOA). "Overnight parking on community streets is prohibited. For the purpose of this contract, 'overnight' will be defined as the hours between 11:00 p.m. and 4:00 a.m. The HOA will monitor overnight parking not less than once every calendar week with nightly patrols by community security. "In the event a car is found parked on community streets overnight and that ownership of the offending car can accurately be verified as a community homeowner, the homeowner will receive one (1) written warning asking him or her to correct the situation. A second and third infraction by the same homeowner, whether or not it is with the same car, will result in a monetary fine as permitted by CC&R guidelines and HOA bylaws. Further infractions (past 3) will result in monetary fines in addition to the towing of the car at the homeowner's expense."Because of the extremely low ground effects and body profile on his racing car, Peter is unable to drive his car off of the street and onto the driveway. He has parked on the street overnight for the past five weeks. He has received one written warning and one monetary fine from the HOA. What consequences should Peter expect after this week's security check?a.His car will be towed.b.He will receive another monetary fine.c.He will receive a monetary fine and his car will be towed.d.A "boot" will be place on his car to prevent him from driving it.

The following section is a statement from the rental agreement Tim signed when he rented his car this past weekend."Upon checkout, the fuel level of the vehicle will be determined by turning the vehicle on and visually inspecting the fuel gauge. The approximate fuel level will be recorded on the Check-Out sheet and verified with initials by the vehicle Renter. One copy of the Check-Out sheet will be given to the customer. Another copy will be kept with the on-site records of the vehicle. "The

Below is an excerpt from the home loan contract Kyle signed with his bank. “The sum of the principal of the loan and all applicable interest will be divided into 360 monthly payments according to the amortization schedule. The Buyer shall make each monthly payment by the first day of the month it is due. A payment not received by the first day of the month it is due will be considered delinquent. A payment not received by the fifteenth day of the month it is due will be subject to a late charge of $75.00. If a payment is not received by the last day of the month it is due, the Buyer and transaction shall be reported to the appropriate credit agencies. In the event of delinquency, the Buyer may divide any payment not received into not more than three equal installments to be included on the next consecutive monthly payments. Notification of the Buyer’s intent to do so must be made by written letter or phone call to the phone number and address listed below within one business week of delinquency.” Kyle failed to make his payment by the first of this month. Kyle’s monthly payment is currently $1,200. If Kyle decides to split the missing payment into two parts and pay it over the next two months, which of the following statements is false?

The following section is a statement from the rental agreement Tim signed when he rented his car this past weekend."Upon checkout, the fuel level of the vehicle will be determined by turning the vehicle on and visually inspecting the fuel gauge. The approximate fuel level will be recorded on the Check-Out sheet and verified with initials by the vehicle Renter. One copy of the Check-Out sheet will be given to the customer. Another copy will be kept with the on-site records of the vehicle. "The rented vehicle must be returned with a minimum fuel level the same as that indicated on the Check-Out sheet. A vehicle returned with a fuel level less than the approximate level indicated on the Check-Out sheet will be completely refueled with on-site pumps. The price of the fuel used to refuel the vehicle will be added to the Renter's total charge at a cost of $4.50 per gallon plus a $5.00 refueling charge."Tim forgot to refuel the vehicle when he returned it. His Check-Out sheet indicates that the vehicle had about 1/2 of a tank left. The tanks is now nearly empty.If it takes 11.75 gallons of gas to refuel the car Tim rented, how much extra should he expect to pay because he forgot to get gas?

Below is an excerpt from a home loan contract. “The sum of the principal of the loan and all applicable interest will be divided into 360 monthly payments according to the amortization schedule. The Buyer shall make each monthly payment by the first day of the month it is due. A payment not received by the first day of the month it is due will be considered delinquent. A payment not received by the fifteenth day of the month it is due will be subject to a late charge of $75.00. If a payment is not received by the last day of the month it is due, the Buyer and transaction shall be reported to the appropriate credit agencies. In the event of delinquency, the Buyer may divide any payment not received into not more than three equal installments to be included on the next consecutive monthly payments. Notification of the Buyer’s intent to do so must be made by written letter or phone call to the phone number and address listed below within one business week of delinquency.” According to the contract, which of the following is not a responsibility of the buyer?

The following section is a statement from the rental agreement Tim signed when he rented his car this past weekend."Upon checkout, the fuel level of the vehicle will be determined by turning the vehicle on and visually inspecting the fuel gauge. The approximate fuel level will be recorded on the Check-Out sheet and verified with initials by the vehicle Renter. One copy of the Check-Out sheet will be given to the customer. Another copy will be kept with the on-site records of the vehicle. "The rented vehicle must be returned with a minimum fuel level the same as that indicated on the Check-Out sheet. A vehicle returned with a fuel level less than the approximate level indicated on the Check-Out sheet will be completely refueled with on-site pumps. The price of the fuel used to refuel the vehicle will be added to the Renter's total charge at a cost of $4.50 per gallon plus a $5.00 refueling charge."Tim is running extremely late and has just 5 minutes to return his rental car to the agency. The fuel tank in the car is half empty. It was full when he picked it up. (The car has a 12-gallon fuel tank.) He doesn't think he can get gas and get to the agency to return the car in time. Returning the car a day late will result in an extra daily rental charge of $32.00 and refueling the car on his own will cost $2.59 per gallon at the local gas station. Which of the following statements is true?

In forming a contract, “consideration” is _____.

The paragraphs below come from the rental agreement signed by a customer when they set up an account at Super Video. “All rentals are due back by midnight of the due date as printed on the transaction receipt. Any rental not received by midnight on the day it is due is subject to a late charge of $1.50 for each day it is late. Any rental not returned by the fifth day after the due date will be transferred to a sale. The Customer will then be required to pay the purchase price of the item in addition to five (5) days of late fees. The Customer will not be required to return the product once the total balance is paid.”According the rental agreement, which of the following is not a responsibility of the customer?