Question 1

Licensing statutes enacted to raise money for the government are called extractive statutes.

Accepted Answer

A) True 
 B)False

Question 2

If a person is insane but not adjudged insane,any contract entered into by such person is void.

Accepted Answer

A) True 
 B)False

Question 3

A(n)________ clause is a contractual provision that relieves one or both parties to a contract from tort liability.

Accepted Answer

A)  culpability 
B)  inculpatory 
C)  exculpatory 
D)  divestiture 
E)  exclusionary 
A)  culpability 
B)  inculpatory 
C)  exculpatory 
D)  divestiture 
E)  exclusionary

Question 4

The infancy doctrine is based on public policy considerations.

Accepted Answer

A) True 
 B)False

Question 5

Common law defines minors as ________.

Accepted Answer

A)  males and females under the age of 18 
B)  females under the age of 18 and males under the age of 21 
C)  males under the age of 18 and females under the age of 21 
D)  males and females under the age of 21 
E)  males and females under the age of 25. 
A)  males and females under the age of 18 
B)  females under the age of 18 and males under the age of 21 
C)  males under the age of 18 and females under the age of 21 
D)  males and females under the age of 21 
E)  males and females under the age of 25.

Question 6

Under the laws of most states today,when a minor enters into a contract with an adult,what effect is there on the situation if the minor has falsely misrepresented that the minor is an adult?

Accepted Answer

A)  The minor loses all right to disaffirm the contract. 
B)  The minor's right to disaffirm will end immediately upon the minor reaching the age of majority. 
C)  The minor will be obligated to pay the fair market value for items purchased. 
D)  The minor must place the adult in status quo. 
E)  The minor owes nothing and is not required to return the goods because a minor is not held responsible for misrepresentations. 
A)  The minor loses all right to disaffirm the contract. 
B)  The minor's right to disaffirm will end immediately upon the minor reaching the age of majority. 
C)  The minor will be obligated to pay the fair market value for items purchased. 
D)  The minor must place the adult in status quo. 
E)  The minor owes nothing and is not required to return the goods because a minor is not held responsible for misrepresentations.

Question 7

A shop owner who pays $5,000 "protection money" to a mobster so that his store will not be burned down by the mobster can recover the $5,000.

Accepted Answer

A) True 
 B)False

Question 8

To protect minors,the law recognizes the ________ doctrine,which gives minors the right to ________ most contracts they have entered into with adults.

Accepted Answer

A)  child protection; disaffirm 
B)  child protection; renunciation 
C)  infancy; disaffirm 
D)  infancy; renunction 
E)  infancy; void 
A)  child protection; disaffirm 
B)  child protection; renunciation 
C)  infancy; disaffirm 
D)  infancy; renunction 
E)  infancy; void

Question 9

In order to be enforceable,a covenant not to compete must be reasonable in each of the following aspects except:

Accepted Answer

A)  the length of time the restriction is in effect. 
B)  the scope of the restriction. 
C)  the amount paid to the one who gives up the right to compete. 
D)  the geographic area of the restriction. 
E)  Covenants not to compete are generally unenforceable, since they are prima facie unreasonable. 
A)  the length of time the restriction is in effect. 
B)  the scope of the restriction. 
C)  the amount paid to the one who gives up the right to compete. 
D)  the geographic area of the restriction. 
E)  Covenants not to compete are generally unenforceable, since they are prima facie unreasonable.

Question 10

What is the consequence of purchasing insurance in a situation where one does not have an insurable interest?

Accepted Answer

A)  This will be considered a violation of state blue laws, making the contract unenforceable. 
B)  Due to the freedom to contract, the contract will be enforceable in the absence of fraud or other wrongdoing. 
C)  The insurance contract will be considered an illegal gambling contract. 
D)  The policy holder will have a reasonable period of time to obtain an insurable interest. 
E)  There is no consequence, and the policy will be enforced. 
A)  This will be considered a violation of state blue laws, making the contract unenforceable. 
B)  Due to the freedom to contract, the contract will be enforceable in the absence of fraud or other wrongdoing. 
C)  The insurance contract will be considered an illegal gambling contract. 
D)  The policy holder will have a reasonable period of time to obtain an insurable interest. 
E)  There is no consequence, and the policy will be enforced.

Question 11

Intoxication always makes a contract either void or voidable,depending on the level of intoxication.

Accepted Answer

A) True 
 B)False

Question 12

For purposes of determining the enforceability of contracts,licensing statutes can be divided into what two general categories?

Accepted Answer

A)  professional and non-professional 
B)  actual and quasi 
C)  permanent and temporary 
D)  revenue-raising and regulatory 
E)  mandatory and optional 
A)  professional and non-professional 
B)  actual and quasi 
C)  permanent and temporary 
D)  revenue-raising and regulatory 
E)  mandatory and optional

Question 13

The seller's recovery for providing a minor the necessaries of life is based on the legal doctrine of contract.

Accepted Answer

A) True 
 B)False

Question 14

A minor's duty of restoration upon disaffirmance of a contract is generally a lesser duty than restitution.

Accepted Answer

A) True 
 B)False

Question 15

A minor can expressly disaffirm a contract orally,in writing,or through his or her conduct.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not true?

Accepted Answer

A)  A minor can still disaffirm a contract for a reasonable time after reaching majority. 
B)  In most states a minor who misrepresents his or her age has no duty to place the competent party in status quo if the minor disaffirms the contract. 
C)  A minor must pay the agreed price on a contract for necessaries. 
D)  What constitutes a necessary varies over time and can differ from state to state. 
E)  A minor does not have to wait until reaching majority to disaffirm a contract. 
A)  A minor can still disaffirm a contract for a reasonable time after reaching majority. 
B)  In most states a minor who misrepresents his or her age has no duty to place the competent party in status quo if the minor disaffirms the contract. 
C)  A minor must pay the agreed price on a contract for necessaries. 
D)  What constitutes a necessary varies over time and can differ from state to state. 
E)  A minor does not have to wait until reaching majority to disaffirm a contract.

Question 17

Emancipation occurs when a minor involuntarily leaves home and lives apart from his or her parents.

Accepted Answer

A) True 
 B)False

Question 18

State usury laws set a lower limit on the annual interest rate that can be charged on certain types of loans.

Accepted Answer

A) True 
 B)False

Question 19

Under the infancy doctrine,a contract involving a minor and an adult can be avoided by either party.

Accepted Answer

A) True 
 B)False

Question 20

A seller's recovery for providing a minor with the necessaries of life is based on the ________ doctrine of ________.

Accepted Answer

A)  legal; contract 
B)  equitable; quasi-contract 
C)  legal; quasi-contract 
D)  equitable; contract 
E)  legal; quantum meruit 
A)  legal; contract 
B)  equitable; quasi-contract 
C)  legal; quasi-contract 
D)  equitable; contract 
E)  legal; quantum meruit

Exam 11: Capacity and Legality

Licensing statutes enacted to raise money for the government are called extractive statutes.

If a person is insane but not adjudged insane,any contract entered into by such person is void.

A(n)________ clause is a contractual provision that relieves one or both parties to a contract from tort liability.

The infancy doctrine is based on public policy considerations.

Common law defines minors as ________.

Under the laws of most states today,when a minor enters into a contract with an adult,what effect is there on the situation if the minor has falsely misrepresented that the minor is an adult?

A shop owner who pays $5,000 "protection money" to a mobster so that his store will not be burned down by the mobster can recover the $5,000.

To protect minors,the law recognizes the ________ doctrine,which gives minors the right to ________ most contracts they have entered into with adults.

In order to be enforceable,a covenant not to compete must be reasonable in each of the following aspects except:

What is the consequence of purchasing insurance in a situation where one does not have an insurable interest?

Intoxication always makes a contract either void or voidable,depending on the level of intoxication.

For purposes of determining the enforceability of contracts,licensing statutes can be divided into what two general categories?

The seller's recovery for providing a minor the necessaries of life is based on the legal doctrine of contract.

A minor's duty of restoration upon disaffirmance of a contract is generally a lesser duty than restitution.

A minor can expressly disaffirm a contract orally,in writing,or through his or her conduct.

Which of the following is not true?

Emancipation occurs when a minor involuntarily leaves home and lives apart from his or her parents.

State usury laws set a lower limit on the annual interest rate that can be charged on certain types of loans.

Under the infancy doctrine,a contract involving a minor and an adult can be avoided by either party.

A seller's recovery for providing a minor with the necessaries of life is based on the ________ doctrine of ________.

Legal Heritage and the Information Age

Constitutional Law for Business and E-Commerce

Courts and Jurisdiction

Judicial, Alternative, Administrative, and E-Dispute Resolution

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

Agreement and Consideration

Genuineness of Assent and Statute of Frauds

Third-Party Rights and Discharge

Breach of Contract and Remedies

Digital Law and E-Commerce

Formation of Sales, Lease, and E-Contracts

Performance of Sales, Leases and E-Contracts

Remedies for Breach of Sales and Lease Contracts

Warranties and Product Liability

Creation and Transfer of Negotiable Instruments

Holder in Due Course and Liability of Parties

Banking System, E-Money, and Financial Reform

Credit and Secured Transactions

Bankruptcy and Reorganization

Agency Law

Small Business, Entrepreneurship, and Partnerships

Corporate Formation and Financing

Corporate Governance and Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Company and Limited Liability Partnership

Franchise and Special Forms of Business

Investor Protection,E-Securities Transactions,and Wall Street Reform

Antitrust Law

Consumer Safety, Consumer Financial Protection, and Environmental Protection

Labor, Worker Protection, Employment, and Immigration Law

Equal Opportunity in Employment

Personal Property, Bailment, and Insurance

Real Property, Landlord-Tenant Law, and Land Use Regulation

Family Law, Wills, and Trusts

Accountants' Liability

International and World Trade Law

Filters

To protect minors,the law recognizes the doctrine,which gives minors the right to most contracts they have entered into with adults.

A seller's recovery for providing a minor with the necessaries of life is based on the doctrine of .