Question 1

A party to a contract who has no reason to know that the contract is illegal can often obtain restitution on a partially executed contract.

Accepted Answer

A) True 
 B)False

Question 2

If an illegal contract is executory, either party can enforce it.

Accepted Answer

A) True 
 B)False

Question 3

At Mattress Store, Nate signs a contract to buy bedroom furniture. The contract sets a schedule of $500 monthly payments, subject to a late fee of 15 percent. Nate finds the language of the contract difficult to understand. This is most likely

Accepted Answer

A)  an exculpatory contract. 
B)  procedural unconscionability. 
C)  substantive unconscionability. 
D)  an enforceable contract. 
A)  an exculpatory contract. 
B)  procedural unconscionability. 
C)  substantive unconscionability. 
D)  an enforceable contract.

Question 4

The contracts entered into by a minor are voidable at the option of that minor.

Accepted Answer

A) True 
 B)False

Question 5

The general rule is that no party to an illegal contract can sue for breach.

Accepted Answer

A) True 
 B)False

Question 6

A landlord can avoid liability for injuries that occur on rental property by including an exculpatory clause in the lease.

Accepted Answer

A) True 
 B)False

Question 7

If a person was sufficiently intoxicated to lack mental capacity, his or her contracts are void.

Accepted Answer

A) True 
 B)False

Question 8

A contract clause that releases an employer from liability for any injury to an employee, no matter who is at fault, is generally enforceable.

Accepted Answer

A) True 
 B)False

Question 9

Lazlo and Mac bet illegally on the outcome of a sporting event. Before the event is held, Lazlo changes his mind about the wager. Lazlo can

Accepted Answer

A)  not withdraw from the deal without Mac's consent. 
B)  not withdraw from the deal under any circumstances. 
C)  withdraw from the deal. 
D)  not withdraw from the deal without paying Mac's expenses. 
A)  not withdraw from the deal without Mac's consent. 
B)  not withdraw from the deal under any circumstances. 
C)  withdraw from the deal. 
D)  not withdraw from the deal without paying Mac's expenses.

Question 10

Generally, any party to an illegal contract can recover for performance rendered.

Accepted Answer

A) True 
 B)False

Question 11

Adam agrees in writing to pay Bob to damage Adam's car, which is fully insured. Bob damages the car, but Adam's insurer refuses to pay for the damage. In Adam and Bob's suit against each other for breach of contract, the court is most likely to

Accepted Answer

A)  enforce the contract. 
B)  allow Adam to recover. 
C)  allow Bob to recover. 
D)  none of the choices. 
A)  enforce the contract. 
B)  allow Adam to recover. 
C)  allow Bob to recover. 
D)  none of the choices.

Question 12

Quint enters into a contract to buy a quarter horse from Rancho Mirage. Quint can disaffirm the contract

Accepted Answer

A)  only by words. 
B)  only by conduct. 
C)  by words or conduct. 
D)  none of the choices. 
A)  only by words. 
B)  only by conduct. 
C)  by words or conduct. 
D)  none of the choices.

Exam 13: Capacity and Legality

A party to a contract who has no reason to know that the contract is illegal can often obtain restitution on a partially executed contract.

If an illegal contract is executory, either party can enforce it.

At Mattress Store, Nate signs a contract to buy bedroom furniture. The contract sets a schedule of $500 monthly payments, subject to a late fee of 15 percent. Nate finds the language of the contract difficult to understand. This is most likely

The contracts entered into by a minor are voidable at the option of that minor.

The general rule is that no party to an illegal contract can sue for breach.

A landlord can avoid liability for injuries that occur on rental property by including an exculpatory clause in the lease.

If a person was sufficiently intoxicated to lack mental capacity, his or her contracts are void.

A contract clause that releases an employer from liability for any injury to an employee, no matter who is at fault, is generally enforceable.

Lazlo and Mac bet illegally on the outcome of a sporting event. Before the event is held, Lazlo changes his mind about the wager. Lazlo can

Generally, any party to an illegal contract can recover for performance rendered.

Adam agrees in writing to pay Bob to damage Adam's car, which is fully insured. Bob damages the car, but Adam's insurer refuses to pay for the damage. In Adam and Bob's suit against each other for breach of contract, the court is most likely to

Quint enters into a contract to buy a quarter horse from Rancho Mirage. Quint can disaffirm the contract

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