Question 1

Utilities include whatever is reasonably needed to maintain a minor's standard of living, such as food, clothing, shelter, and medical services.

Accepted Answer

A) True 
 B)False

Question 2

A contract to do something that is prohibited by statutory law is void from the outset.

Accepted Answer

A) True 
 B)False

Question 3

To disaffirm a contract is to deny its existence.

Accepted Answer

A) True 
 B)False

Question 4

Fagin and Gretel agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gretel can

Accepted Answer

A)  enforce the agreement. 
B)  obtain damages in the amount of her partner's share of the illegal profits. 
C)  obtain damages in the amount of her own share of the illegal profits. 
D)  none of the choices. 
A)  enforce the agreement. 
B)  obtain damages in the amount of her partner's share of the illegal profits. 
C)  obtain damages in the amount of her own share of the illegal profits. 
D)  none of the choices.

Question 5

Games Corporation hires Haley, a minor, to create new customized game software for certain clients. Haley signs a contract that requires her to work for Games for eighteen months. Before beginning work, however, Haley tells Games that she will not create new software for Games and that she is going to work for Imagine Inc., a Games competitor. Is Games' contract with Haley enforceable? Why or why not?

Accepted Answer

The contract is not enforceable. Haley i

Question 6

A contract entered into by an intoxicated person can be voidable.

Accepted Answer

A) True 
 B)False

Question 7

Contracts entered into by mentally incompetent persons may be disaffirmed.

Accepted Answer

A) True 
 B)False

Question 8

Reed agrees to sell his Sports Equipment store to Taylor. As part of the sale, Reed promises not to open a similar, competing store anywhere. This promise is most likely

Accepted Answer

A)  invalid because it is part of a sale of an ongoing business. 
B)  invalid because of the unreasonable terms of area and time. 
C)  valid because it is part of a sale of an ongoing business. 
D)  valid if both parties are justifiably ignorant of the facts. 
A)  invalid because it is part of a sale of an ongoing business. 
B)  invalid because of the unreasonable terms of area and time. 
C)  valid because it is part of a sale of an ongoing business. 
D)  valid if both parties are justifiably ignorant of the facts.

Question 9

A contract provision that deprives one party of the benefits of the agreement may seem unfair but a court is not likely to consider it unconscionable.

Accepted Answer

A) True 
 B)False

Question 10

A minor can disaffirm a contract at any time but remains legally obligated to perform it.

Accepted Answer

A) True 
 B)False

Question 11

If intoxication is purely voluntary, the intoxicated person's contracts are not voidable.

Accepted Answer

A) True 
 B)False

Question 12

A court usually will enforce a covenant not to compete provided its restrictions are reasonable.

Accepted Answer

A) True 
 B)False

Question 13

Among the requirements for a valid contract, courts generally presume the existence of

Accepted Answer

A)  none of the choices. 
B)  minority. 
C)  mental incompetence. 
D)  contractual capacity. 
A)  none of the choices. 
B)  minority. 
C)  mental incompetence. 
D)  contractual capacity.

Question 14

Ben, a minor, signs a contract to buy a Call-U phone from Dallas, an adult sales representative. Dallas

Accepted Answer

A)  can avoid the contract without Ben's consent. 
B)  cannot avoid the contract. 
C)  can avoid as much of the contract as Ben elects to avoid. 
D)  must obtain Ben's consent to avoid the contract. 
A)  can avoid the contract without Ben's consent. 
B)  cannot avoid the contract. 
C)  can avoid as much of the contract as Ben elects to avoid. 
D)  must obtain Ben's consent to avoid the contract.

Question 15

A contract that calls for an action contrary to public policy is illegal but not unenforceable.

Accepted Answer

A) True 
 B)False

Question 16

The state of New York enacts a usury statute. With respect to different types of transactions, including ordinary loans, the purpose of the statute is to

Accepted Answer

A)  set a maximum rate of interest. 
B)  regulate certain forms of gambling. 
C)  specify clauses that must be included in certain contracts. 
D)  prohibit certain contracts based on their subject matter. 
A)  set a maximum rate of interest. 
B)  regulate certain forms of gambling. 
C)  specify clauses that must be included in certain contracts. 
D)  prohibit certain contracts based on their subject matter.

Question 17

Best Products, Inc., hires Cole to develop and implement an e-commerce strategy for marketing Best's products. Cole signs a contract that includes a clause prohibiting him from competing with Best during and after the employment. Before the strategy is implemented, Cole resigns from Best's employ and opens a business to compete with Best. In Best's suit against Cole, to determine whether Cole may compete with Best, what is the most important factor the court should consider?

Accepted Answer

In determining whether Cole may compete

Question 18

Darien, a minor, wants to disaffirm a contract that he entered into with Echo, a cell service company. The law in Darien's state, as in all states, permits minors to disaffirm

Accepted Answer

A)  fully executed contracts only. 
B)  executory contracts only. 
C)  executory and fully executed contracts. 
D)  none of the choices. 
A)  fully executed contracts only. 
B)  executory contracts only. 
C)  executory and fully executed contracts. 
D)  none of the choices.

Question 19

Van, a minor, wants to return a set of skis that he bought from Winter Sports. He used-and wrecked-the skis. In a state in which a duty of restitution is imposed, Van most likely

Accepted Answer

A)  can return the skis "as is" and avoid further liability. 
B)  is not required to return the skis due to his or her minority. 
C)  must return the skis and pay for the damage. 
D)  cannot return the skis unless they can be fully restored. 
A)  can return the skis "as is" and avoid further liability. 
B)  is not required to return the skis due to his or her minority. 
C)  must return the skis and pay for the damage. 
D)  cannot return the skis unless they can be fully restored.

Question 20

A lease between Mia and Niles for residential property contains an exculpatory clause. This clause is most likely

Accepted Answer

A)  enforceable as a matter of public policy. 
B)  enforceable if either party is in a business important to the public. 
C)  enforceable if an event occurs to which the clause applies. 
D)  unenforceable. 
A)  enforceable as a matter of public policy. 
B)  enforceable if either party is in a business important to the public. 
C)  enforceable if an event occurs to which the clause applies. 
D)  unenforceable.

Exam 13: Capacity and Legality

Utilities include whatever is reasonably needed to maintain a minor's standard of living, such as food, clothing, shelter, and medical services.

A contract to do something that is prohibited by statutory law is void from the outset.

To disaffirm a contract is to deny its existence.

Fagin and Gretel agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gretel can

A contract entered into by an intoxicated person can be voidable.

Contracts entered into by mentally incompetent persons may be disaffirmed.

Reed agrees to sell his Sports Equipment store to Taylor. As part of the sale, Reed promises not to open a similar, competing store anywhere. This promise is most likely

A contract provision that deprives one party of the benefits of the agreement may seem unfair but a court is not likely to consider it unconscionable.

A minor can disaffirm a contract at any time but remains legally obligated to perform it.

If intoxication is purely voluntary, the intoxicated person's contracts are not voidable.

A court usually will enforce a covenant not to compete provided its restrictions are reasonable.

Among the requirements for a valid contract, courts generally presume the existence of

Ben, a minor, signs a contract to buy a Call-U phone from Dallas, an adult sales representative. Dallas

A contract that calls for an action contrary to public policy is illegal but not unenforceable.

The state of New York enacts a usury statute. With respect to different types of transactions, including ordinary loans, the purpose of the statute is to

Darien, a minor, wants to disaffirm a contract that he entered into with Echo, a cell service company. The law in Darien's state, as in all states, permits minors to disaffirm

Van, a minor, wants to return a set of skis that he bought from Winter Sports. He used-and wrecked-the skis. In a state in which a duty of restitution is imposed, Van most likely

A lease between Mia and Niles for residential property contains an exculpatory clause. This clause is most likely

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