Question 1

Most states provide that contracts entered into by certain intoxicated persons are void.

Accepted Answer

A) True 
 B)False

Question 2

Usury laws are concerned with:

Accepted Answer

A)  taxes paid. 
B)  interest charged. 
C)  uses of the labor force. 
D)  contract purposes. 
E)  gambling. 
A)  taxes paid. 
B)  interest charged. 
C)  uses of the labor force. 
D)  contract purposes. 
E)  gambling.

Question 3

If a court finds that a contract clause is unconscionable,it may limit the applicability of the unconscionable clause so as to avoid an unconscionable result.

Accepted Answer

A) True 
 B)False

Question 4

Generally,unlicensed persons cannot recover payments for services that a regulatory statute requires a licensed person to provide.

Accepted Answer

A) True 
 B)False

Question 5

Minors are liable for the contract price of any necessaries of life for which they contract.

Accepted Answer

A) True 
 B)False

Question 6

A group of graduate students was at a local nightclub listening to a band on a Saturday night.This band was new to the area,although it had been together for a couple of years in Seattle before moving to this town.As the students had more to drink,the music sounded increasingly better.At the band's last break,two of these students each purchased a CD.Although he was so drunk that he should not have been driving,Bob was aware of his actions and said that he wanted it because he thought the music sounded fantastic.Peter was so intoxicated that he could barely get his money out,and shortly after getting the CD tried to take a bite out of it,thinking that it was a cookie.Several days later each listens to the CD and thinks that it sounds horrible.Can Bob and Peter get a refund for their purchases?

Accepted Answer

Assuming the state allows avoidance of a

Question 7

To disaffirm a contract,a minor must act before reaching the age of majority.

Accepted Answer

A) True 
 B)False

Question 8

Lisa has been a dentist in Smalltown for several years.She is now ready to retire and she sells her practice to Angie.As part of the sales agreement,Lisa agrees not to practice dentistry within 20 miles of Smalltown for a period of two years.After one year,Lisa is bored so she opens up a dental practice in her home.This practice is very small and Lisa wants to keep it that way.Angie sues on the noncompete agreement.What is the most likely result?

Accepted Answer

A)  This agreement is fully enforceable. 
B)  This agreement is not enforceable, because agreements in restraint of trade are never enforceable. 
C)  This agreement is not enforceable, because it is not ancillary to an employment agreement. 
D)  This agreement is not enforceable, because it is unreasonable as to area. 
E)  This agreement is not enforceable, because it is unreasonable as to time. 
A)  This agreement is fully enforceable. 
B)  This agreement is not enforceable, because agreements in restraint of trade are never enforceable. 
C)  This agreement is not enforceable, because it is not ancillary to an employment agreement. 
D)  This agreement is not enforceable, because it is unreasonable as to area. 
E)  This agreement is not enforceable, because it is unreasonable as to time.

Question 9

In order for someone to avoid a contract on the grounds of intoxication,the level of intoxication must have been:

Accepted Answer

A)  at or above the legal limit to operate a motor vehicle. 
B)  only high enough that he or she was able to notice it. 
C)  at least as high as that of the other party. 
D)  so great that he or she did not comprehend the nature of the agreement he was entering into. 
E)  so great that no reasonable person would have comprehended the nature of the agreement entered into. 
A)  at or above the legal limit to operate a motor vehicle. 
B)  only high enough that he or she was able to notice it. 
C)  at least as high as that of the other party. 
D)  so great that he or she did not comprehend the nature of the agreement he was entering into. 
E)  so great that no reasonable person would have comprehended the nature of the agreement entered into.

Question 10

Emancipation occurs when a minor:

Accepted Answer

A)  is forced out of the house by the parents. 
B)  is intelligent enough to understand contractual matters as well as a reasonable adult. 
C)  consults with an attorney before entering into a contract. 
D)  operates a business enterprise. 
E)  voluntarily leaves home and lives apart from his or her parents. 
A)  is forced out of the house by the parents. 
B)  is intelligent enough to understand contractual matters as well as a reasonable adult. 
C)  consults with an attorney before entering into a contract. 
D)  operates a business enterprise. 
E)  voluntarily leaves home and lives apart from his or her parents.

Question 11

Courtney,a minor,goes to a hospital following an accident.Because of the need to treat her immediately,they treat her without her signing any forms.Is Courtney liable for her medical treatment?

Accepted Answer

A)  Courtney will be required to pay for the value of the treatment she received. 
B)  Courtney does not have to pay because the hospital never got her consent to pay in writing. 
C)  Courtney does not have to pay because the hospital has an unfair bargaining position over her and this would be an adhesion contract. 
D)  Courtney does not have to pay because as a minor she may disaffirm the contract prior to reaching the legal age. 
E)  Courtney will be required to pay for tests, drugs and materials used but not for the doctors services. 
A)  Courtney will be required to pay for the value of the treatment she received. 
B)  Courtney does not have to pay because the hospital never got her consent to pay in writing. 
C)  Courtney does not have to pay because the hospital has an unfair bargaining position over her and this would be an adhesion contract. 
D)  Courtney does not have to pay because as a minor she may disaffirm the contract prior to reaching the legal age. 
E)  Courtney will be required to pay for tests, drugs and materials used but not for the doctors services.

Question 12

Parents are liable for their children's contracts for necessaries of life if they have not adequately provided such items.

Accepted Answer

A) True 
 B)False

Question 13

A party can avoid a contract on the basis of insanity if that party has significantly lower intelligence than the other party.

Accepted Answer

A) True 
 B)False

Question 14

In most states,if a contract is disaffirmed due to intoxication,both parties must be returned to the status quo.

Accepted Answer

A) True 
 B)False

Question 15

The infancy doctrine gives minors the right to disaffirm most contracts they have entered into with adults.

Accepted Answer

A) True 
 B)False

Question 16

In order to be enforceable,a covenant not to compete must be ancillary to a legitimate employment contract or contract for the sale of a business.

Accepted Answer

A) True 
 B)False

Question 17

How does the law determine what amounts to a necessary of life in a contract involving a minor?

Accepted Answer

A)  State statutes designate which items are necessaries of life. 
B)  It will depend on whether the contract terms identify them as necessaries of life. 
C)  The courts will rely on public policy. 
D)  It will depend on the particular minor's lifestyle, station in life, and other circumstances. 
E)  It depends on whether the minor has sufficient funds with which to pay for the goods. 
A)  State statutes designate which items are necessaries of life. 
B)  It will depend on whether the contract terms identify them as necessaries of life. 
C)  The courts will rely on public policy. 
D)  It will depend on the particular minor's lifestyle, station in life, and other circumstances. 
E)  It depends on whether the minor has sufficient funds with which to pay for the goods.

Question 18

If a minor does not disaffirm a contract either during the period of minority or within a reasonable time after reaching the age of majority,the contract is considered ________.

Accepted Answer

A)  codified 
B)  sanctified 
C)  rectified 
D)  ratified 
E)  confirmed 
A)  codified 
B)  sanctified 
C)  rectified 
D)  ratified 
E)  confirmed

Question 19

The seller's recovery for necessaries of life sold to a minor is based on the equitable doctrine of quasi-contract.

Accepted Answer

A) True 
 B)False

Question 20

When a party does not have a legally-required license to practice her profession,can a party who enters into this contract avoid payment to the professional under the contract?

Accepted Answer

A)  no, the contractual obligation is unaffected by the lack of the required license 
B)  no if the licensing requirement is designed to raise revenue, but yes if it is designed to protect the public from unqualified practitioners of the profession 
C)  yes if the licensing requirement is designed to raise revenue, but no if it is designed to protect the public from unqualified practitioners of the profession 
D)  yes, regardless of the purpose of the licensing statute 
E)  yes, in any circumstance where the client was unaware that the professional was lacking the required license 
A)  no, the contractual obligation is unaffected by the lack of the required license 
B)  no if the licensing requirement is designed to raise revenue, but yes if it is designed to protect the public from unqualified practitioners of the profession 
C)  yes if the licensing requirement is designed to raise revenue, but no if it is designed to protect the public from unqualified practitioners of the profession 
D)  yes, regardless of the purpose of the licensing statute 
E)  yes, in any circumstance where the client was unaware that the professional was lacking the required license

Exam 11: Capacity and Legality

Most states provide that contracts entered into by certain intoxicated persons are void.

Usury laws are concerned with:

If a court finds that a contract clause is unconscionable,it may limit the applicability of the unconscionable clause so as to avoid an unconscionable result.

Generally,unlicensed persons cannot recover payments for services that a regulatory statute requires a licensed person to provide.

Minors are liable for the contract price of any necessaries of life for which they contract.

To disaffirm a contract,a minor must act before reaching the age of majority.

In order for someone to avoid a contract on the grounds of intoxication,the level of intoxication must have been:

Emancipation occurs when a minor:

Courtney,a minor,goes to a hospital following an accident.Because of the need to treat her immediately,they treat her without her signing any forms.Is Courtney liable for her medical treatment?

Parents are liable for their children's contracts for necessaries of life if they have not adequately provided such items.

A party can avoid a contract on the basis of insanity if that party has significantly lower intelligence than the other party.

In most states,if a contract is disaffirmed due to intoxication,both parties must be returned to the status quo.

The infancy doctrine gives minors the right to disaffirm most contracts they have entered into with adults.

In order to be enforceable,a covenant not to compete must be ancillary to a legitimate employment contract or contract for the sale of a business.

How does the law determine what amounts to a necessary of life in a contract involving a minor?

If a minor does not disaffirm a contract either during the period of minority or within a reasonable time after reaching the age of majority,the contract is considered ________.

The seller's recovery for necessaries of life sold to a minor is based on the equitable doctrine of quasi-contract.

When a party does not have a legally-required license to practice her profession,can a party who enters into this contract avoid payment to the professional under the contract?

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