Contracts Test Bank Chapter 5

Chapter 5: Contracts

Multiple Choice

1. The ability of a corporation to enter into contracts is limited by __________.

a. its powers as contained in or inferred from its articles of incorporation

b. approval requirements

c. ratification

d. agents

2. A contractor who agrees to undertake work without being under the direct control or direction of another and is personally responsible for his or her negligent acts is a/an __________.

a. agent

b. independent contractor

c. employee

d. supervisor

3. Ordinarily, substantial performance by one party to a contract will obligate the other parties __________.

a. to perform their obligations under the contract

b. not to perform their obligations under the contract

c. to void the contract

d. to invalidate the contract

4. A mistake in law __________.

a. is required in order to successfully execute a contract

b. is an obligatory element of a contract

c. is a necessary element of a contract

d. can result in a nonbinding contract

5. When a party to a contract has breached the contract and refuses to or cannot perform, the general rule is that the law will attempt to __________.

a. creates separate agreements for the parties to a the contract

b. require specific performance of the contract

c. create a new contract

d. make the contract non-binding

6. A policy that temporarily denies new appointments to a medical staff is __________.

a. moratorium

b. restraint of trade

c. exclusive contract

d. reduced market approach

7. A __________ occurs when there is a violation of one or more of the terms of the contract.

a. completed contract

b. valid contract

c. breach of contract

d. executed contract

8. Medical staff membership that admits only physicians with academic appointments is a/an __________.

a. open staff

b. closed staff

c. full staff privileges

d. temporary privileges

9. A contract with a firm of anesthesiologists that requires that all anesthesia services for a hospital’s patients be performed by that firm is a/an __________.

a. open-ended contract

b. closed contract

c. exclusive contract

d. inclusive contract

10. The federal agency responsible for monitoring the marketplace and enforcing antitrust laws is the ___________.

a. National Labor Relations Board

b. Food and Drug Administration

c. National Practitioner Data Bank

d. Federal Trade Commission

11. A contract serves to provide one or more parties with a legal remedy to __________.

a. require the parties to a contract not perform its legal obligations pursuant to the terms of the contract

b. require that all oral agreements to a written contract have more validity then the written contract

c. require the parties to perform its legal obligations pursuant to the terms of the contract.

d. prevent compliance with the contractual obligations under the contract

12. A contract that is inferred by law is a/an __________.

a. implied contract

b. illegal contract

c. preferred contract

d. written contract

13. If a contract is to be considered valid, an offer must be __________.

a. assumed

b. tacit

c. communicated

d. inferred

14. Acceptance of a contract requires a meeting of the __________.

a. attorneys for the both parties to a contract

b. minds

c. defendants

d. plaintiffs

15. The federal contract that provides that every contract in the form of a trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states is illegal is the __________.

a. Federal Statute Act

b. Commonwealth Antitrust Act

c. Fair Labor Standards Act

d. Sherman Antitrust Act

16. An __________ is a promise by one party to do (or not to do) something if the other party agrees to do (or not do) something.

a. offer

b. denial

c. implied contract

d. consideration

17. A special kind of agreement, either written or oral, that involves legally binding obligations between two or more parties is a __________.

a. nondiscriminatory

b. moratorium

c. communication

d. contract

18. An agreement between an employee and employer that specifies the terms of a contract is __________.

a. an oral agreement

b. completed contract

c. unenforceable contract

d. employment contract

19. The ever-increasing number of alternative healthcare delivery systems has resulted in a __________.

a. closed market for hospital nurses

b. wide range of employment opportunities for physicians

c. wide range of competitive schemes between an employer and employee that are questionable from an antitrust standpoint

d. failure to admit qualified physicians to medical staff membership

20. Contracts, particularly those in writing, serve to minimize misunderstandings and offer a means for parties to __________.

a. be inconsistent in an agreement

b. resolve disputes

c. solve personal financial issues

d. institute disputes

21. Normally the adequacy or inadequacy of consideration will not affect the __________.

a. review of a contract

b. purpose of a contract

c. formation of a contract

d. value of an agreement

22. It is always the desire of all parties to a contract to reduce it to __________.

a. a verbal agreement

b. writing

c. an oral understanding

d. negotiation

23. An agent is one who has the power to construct for and bind another person, who is known as the __________.

a. plaintiff

b. ostensible agent

c. executor

d. principal

24. A valid contract requires __________.

a. meeting of the minds

b. an offer, consideration, and acceptance

c. an offer, consideration, and retraction

d. an offer and acceptance

25. A handbook is not generally considered a contract due to a __________.

a. mistake fact

b. consideration

c. disclaimer

d. article of agreement

26. A contract used primarily to hedge against the risk up potential loss is a/an __________ contract.

a. employment

b. insurance

c. medical

d. specified

27. A remedy for non-–performance of a contract generally includes a request for __________.

a. specified performance and monetary damages

b. redrafting the contract

c. nullification of the contract

d. dissolution

28. The law will enforce contracts only when they are executed between persons who are __________.

a. incompetent to contract

b. without legal capacity to contract

c. without mental capacity to contract

d. who are competent to contract

29. Each party to a contract must give up something of value in exchange for something of value, this is known as __________.

a. meeting of the minds

b. offer

c. consideration

d. communication

30. An agent who is believed to be a third person acting on behalf of the principal is referred to as __________.

a. ostensible agent

b. principal agent

c. partnership

d. solely owned corporation