Question 1

Licensing statutes enacted to protect the public are called in loco parentis statutes.

Accepted Answer

A) True 
 B)False

Question 2

A person who is aware that a hired contractor is unlicensed but allows the contractor to continue working is in all cases barred under equitable principles from raising a claim regarding the lack of licensure to avoid payment.

Accepted Answer

A) True 
 B)False

Question 3

Ratification relates back to the inception of the contract.

Accepted Answer

A) True 
 B)False

Question 4

A contract with an illegal object is ________.

Accepted Answer

A)  conditionally enforceable 
B)  voidable by the person disadvantaged in the contractual relationship 
C)  voidable by either party 
D)  enforceable at the discretion of the presiding trial court judge 
E)  void 
A)  conditionally enforceable 
B)  voidable by the person disadvantaged in the contractual relationship 
C)  voidable by either party 
D)  enforceable at the discretion of the presiding trial court judge 
E)  void

Question 5

In general,who can avoid a contract that involves one adult party and one minor party?

Accepted Answer

A)  the adult 
B)  the minor 
C)  neither the adult nor the minor 
D)  the adult or the minor. 
E)  A disaffirmance can occur only if both the adult and the minor agree to disaffirm the contract. 
A)  the adult 
B)  the minor 
C)  neither the adult nor the minor 
D)  the adult or the minor. 
E)  A disaffirmance can occur only if both the adult and the minor agree to disaffirm the contract.

Question 6

An exculpatory clause is also called a(n)________ clause.

Accepted Answer

A)  release of liability 
B)  quantum meruit 
C)  esse quam videri 
D)  tort reform 
E)  public policy 
A)  release of liability 
B)  quantum meruit 
C)  esse quam videri 
D)  tort reform 
E)  public policy

Question 7

A minor's ratification of a contract will be binding on the minor if it is made:

Accepted Answer

A)  at any time before or after entering into the original contract. 
B)  at any time after the original contract has been formed. 
C)  at any time and contains a clear statement of the minor's intent to be bound. 
D)  at any time when the minor understands the terms and implications of the contract. 
E)  at any time after the minor has reached the age of majority. 
A)  at any time before or after entering into the original contract. 
B)  at any time after the original contract has been formed. 
C)  at any time and contains a clear statement of the minor's intent to be bound. 
D)  at any time when the minor understands the terms and implications of the contract. 
E)  at any time after the minor has reached the age of majority.

Question 8

Most adhesion contracts are lawful even though there is a disparity in the power of contracting.

Accepted Answer

A) True 
 B)False

Question 9

Minors are obligated to pay for the ________ for which they contract.

Accepted Answer

A)  necessaries 
B)  services 
C)  personal property 
D)  intellectual property 
E)  real property 
A)  necessaries 
B)  services 
C)  personal property 
D)  intellectual property 
E)  real property

Question 10

Should a parent or guardian's agreement to an exculpatory clause on behalf of a minor be binding on the minor? Examples might be a parent signing such a clause on behalf of the minor for a school field trip (thus the parent is not present and the exculpatory agreement is signed prior to the undertaking of the activity)and when an entire family undertakes an activity together such as skiing,snowmobiling or white water rafting.What ethical issues are involved here?

Accepted Answer

On one hand,given that guardians and par

Question 11

Because ignorance of the law is not an excuse,a court will never order a remedy in favor of a party who was unaware that a contract was illegal.

Accepted Answer

A) True 
 B)False

Question 12

What are the two general bases on which a contract can be considered to be illegal?

Accepted Answer

A)  violation of a statute and contrary to public policy 
B)  violation of a federal statute and violation of a state statute 
C)  violation of a criminal statute and violation of a civil statute 
D)  contrary to public policy and having a minor as a party 
E)  having a minor as a party and having an intoxicated person as a party 
A)  violation of a statute and contrary to public policy 
B)  violation of a federal statute and violation of a state statute 
C)  violation of a criminal statute and violation of a civil statute 
D)  contrary to public policy and having a minor as a party 
E)  having a minor as a party and having an intoxicated person as a party

Question 13

Contracts to commit criminal acts are voidable.

Accepted Answer

A) True 
 B)False

Question 14

A non-compete agreement will not be found to violate public policy so long as it meets the required tests for reasonableness.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not a basis on which a court could order a remedy in connection with an illegal contract?

Accepted Answer

A)  a party was justifiably ignorant of the law 
B)  a party entered into the illegal contract because of fraud 
C)  after the contract was formed one of the parties attempted to prevent the performance of the illegal act 
D)  one party would lose more than the other if the court took no action 
E)  one party is less at fault than the other party for entering into the illegal contract 
A)  a party was justifiably ignorant of the law 
B)  a party entered into the illegal contract because of fraud 
C)  after the contract was formed one of the parties attempted to prevent the performance of the illegal act 
D)  one party would lose more than the other if the court took no action 
E)  one party is less at fault than the other party for entering into the illegal contract

Question 16

When a minor voluntarily leaves home and live apart from his/her parents,this is called:

Accepted Answer

A)  emaciation. 
B)  restoration. 
C)  emancipation. 
D)  affirmation. 
E)  ratification. 
A)  emaciation. 
B)  restoration. 
C)  emancipation. 
D)  affirmation. 
E)  ratification.

Question 17

To be relieved of his or her duties under a contract,a person must have been legally insane at the time of entering into the contract.

Accepted Answer

A) True 
 B)False

Question 18

Ratification must be expressed by written words.

Accepted Answer

A) True 
 B)False

Question 19

All contracts entered into by minors are void.

Accepted Answer

A) True 
 B)False

Question 20

A party who wants to avoid a contract on the basis of unconscionability must prove all of the following except:

Accepted Answer

A)  the parties possessed severely unequal bargaining power. 
B)  the weaker party was fraudulently misled into entering the contract. 
C)  the dominant party unfairly used its unequal bargaining power to obtain oppressive or unfair contract terms. 
D)  the weaker party had no reasonable alternative. 
E)  Unconscionability is not a reasonable basis, either legally or equitably, for avoiding a contract obligation. 
A)  the parties possessed severely unequal bargaining power. 
B)  the weaker party was fraudulently misled into entering the contract. 
C)  the dominant party unfairly used its unequal bargaining power to obtain oppressive or unfair contract terms. 
D)  the weaker party had no reasonable alternative. 
E)  Unconscionability is not a reasonable basis, either legally or equitably, for avoiding a contract obligation.

Exam 11: Capacity and Legality

Licensing statutes enacted to protect the public are called in loco parentis statutes.

A person who is aware that a hired contractor is unlicensed but allows the contractor to continue working is in all cases barred under equitable principles from raising a claim regarding the lack of licensure to avoid payment.

Ratification relates back to the inception of the contract.

A contract with an illegal object is ________.

In general,who can avoid a contract that involves one adult party and one minor party?

An exculpatory clause is also called a(n)________ clause.

A minor's ratification of a contract will be binding on the minor if it is made:

Most adhesion contracts are lawful even though there is a disparity in the power of contracting.

Minors are obligated to pay for the ________ for which they contract.

Because ignorance of the law is not an excuse,a court will never order a remedy in favor of a party who was unaware that a contract was illegal.

What are the two general bases on which a contract can be considered to be illegal?

Contracts to commit criminal acts are voidable.

A non-compete agreement will not be found to violate public policy so long as it meets the required tests for reasonableness.

Which of the following is not a basis on which a court could order a remedy in connection with an illegal contract?

When a minor voluntarily leaves home and live apart from his/her parents,this is called:

To be relieved of his or her duties under a contract,a person must have been legally insane at the time of entering into the contract.

Ratification must be expressed by written words.

All contracts entered into by minors are void.

A party who wants to avoid a contract on the basis of unconscionability must prove all of the following except:

Legal Heritage and the Information Age

Constitutional Law for Business and E-Commerce

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Torts and Strict Liability

Criminal Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Ethics and Social Responsibility of Business

Nature of Traditional and E-Contracts

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Genuineness of Assent and Statute of Frauds

Third-Party Rights and Discharge

Breach of Contract and Remedies

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Formation of Sales, Lease, and E-Contracts

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Creation and Transfer of Negotiable Instruments

Holder in Due Course and Liability of Parties

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Credit and Secured Transactions

Bankruptcy and Reorganization

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