Question 1

Business agreements are most often challenged as contrary to public policy because

Accepted Answer

A) they may be in restraint of trade. 
B) the agreement may be intended to defraud others. 
C) one party may be more powerful than the other. 
D) one party may have been coerced into signing the agreement. 
E) the agreement may be contrary to statute. 
A) they may be in restraint of trade. 
B) the agreement may be intended to defraud others. 
C) one party may be more powerful than the other. 
D) one party may have been coerced into signing the agreement. 
E) the agreement may be contrary to statute.

Question 2

A minor's immunity from liability

Accepted Answer

A) is limited to contracts. 
B) is determined by statute. 
C) is dependent on the age of the minor. 
D) extends to contracts and torts. 
E) extends to purchases and sale of real estate. 
A) is limited to contracts. 
B) is determined by statute. 
C) is dependent on the age of the minor. 
D) extends to contracts and torts. 
E) extends to purchases and sale of real estate.

Question 3

Explain the role of legality in the formation of a contract.

Accepted Answer

A contract must be legal,that is,it must

Question 4

Diminished capacity for minors is not treated in the same way as it is for drunken or insane persons.Explain.

Accepted Answer

Minors can establish diminished capacity

Question 5

What is meant by the term contractual capacity?

Accepted Answer

Contractual capacity

Question 6

John is a member of a social club that does a great deal of charity work.Harry was once a member of the social club,but after an argument at one of the club meetings,Harry had his membership taken away.This made Harry very angry,and to get back at the club,Harry began to distribute flyers that told lies about the club's charity work and which caused people not to want to make any donations to the charities that the club sponsored.The club now wants to sue Harry for defamation.In this situation

Accepted Answer

A) the club is not a legal person in law and cannot sue Harry. 
B) the club is just like a labour union and will be able to sue Harry. 
C) the club is not a legal person in law,but it will still be able to sue Harry. 
D) the club is just like a corporation and will be able to sue Harry. 
E) none of the above 
A) the club is not a legal person in law and cannot sue Harry. 
B) the club is just like a labour union and will be able to sue Harry. 
C) the club is not a legal person in law,but it will still be able to sue Harry. 
D) the club is just like a corporation and will be able to sue Harry. 
E) none of the above

Question 7

Mary,a prostitute,enters into a contract with a man to provide sexual services in return for an agreed-on amount of money.In this situation

Accepted Answer

A) no remedy is available to Mary if the man does not pay her. 
B) no remedy is available to the man if he pays the money and Mary refuses to provide her services. 
C) the contract is illegal and therefore unenforceable. 
D) there is a contract between Mary and the man. 
E) all of the above 
A) no remedy is available to Mary if the man does not pay her. 
B) no remedy is available to the man if he pays the money and Mary refuses to provide her services. 
C) the contract is illegal and therefore unenforceable. 
D) there is a contract between Mary and the man. 
E) all of the above

Question 8

A minor may repudiate all contracts entered into by her with the EXCEPTION of

Accepted Answer

A) contracts for necessaries. 
B) contracts entered into under duress. 
C) contracts that are beneficial to the minor. 
D) contracts pertaining to real estate. 
E) contracts entered into with relatives. 
A) contracts for necessaries. 
B) contracts entered into under duress. 
C) contracts that are beneficial to the minor. 
D) contracts pertaining to real estate. 
E) contracts entered into with relatives.

Question 9

Why is a court more likely to accept as reasonable certain restraints on an employee who is in possession of certain trade secrets of his or her employer?

Accepted Answer

Agreements between employer and employee

Question 10

Explain,with the use of examples,the concept of legal capacity.

Accepted Answer

Legal capacity means competence to bind

Question 11

What must a minor do if he or she wishes to avoid liability under a contract?

Accepted Answer

The minor must promp

Question 12

Although there has been an offer and acceptance and consideration,and the parties intended to enter into a contract,a court will set aside a contract as void because of

Accepted Answer

A) the social standing of one of the parties. 
B) the lack of capacity of one of the parties. 
C) the wealth of one of the parties. 
D) the signature on the contract being unclear. 
E) the impecuniosity of one of the parties. 
A) the social standing of one of the parties. 
B) the lack of capacity of one of the parties. 
C) the wealth of one of the parties. 
D) the signature on the contract being unclear. 
E) the impecuniosity of one of the parties.

Question 13

What are the legal consequences of the ratification of a contract by a minor who attains the age of majority?

Accepted Answer

When a minor who attains the a

Question 14

Where a contract contains a restrictive covenant,that is,a covenant in restraint of trade,the totality of the contract is invalid.

Accepted Answer

A) True 
 B)False

Question 15

Capacity to contract means

Accepted Answer

A) the ability to make an offer or accept an offer. 
B) the competence to enter into a legally binding contract. 
C) the ability to pay damages in the event of a breach of contract. 
D) the ability to make a promise. 
E) the ability to comprehend the terms of a contract. 
A) the ability to make an offer or accept an offer. 
B) the competence to enter into a legally binding contract. 
C) the ability to pay damages in the event of a breach of contract. 
D) the ability to make a promise. 
E) the ability to comprehend the terms of a contract.

Question 16

Legal capacity simply refers to the ability of a party to enter into a contract.

Accepted Answer

A) True 
 B)False

Question 17

Courts presume that a transaction is legal unless a defendant produces evidence to show that it is not.

Accepted Answer

A) True 
 B)False

Question 18

Why is a court more likely to accept as reasonable certain restraints on an employee who is in possession of certain trade secrets of his or her employer?

Accepted Answer

Agreements between employer and employee

Question 19

Jack is 13 years old and a young musical legend.Jack enters into negotiations with a studio pertaining to a starring role in a series of movies.Prior to the negotiations,and as a condition to entering into the negotiations,Jack and the studios enter into an agreement under which the studio agrees to buy Jack a limousine for his personal use.The studio buys the limousine.A few months later Jack repudiates the contract and his chauffeur has an accident with the limousine.Which of the following is TRUE?

Accepted Answer

A) Jack may sell the limousine and then pay the proceeds to the studio. 
B) Jack will have to return the limousine in the state it is in. 
C) The studio can sue Jack for breach of contract. 
D) Jack may keep the limousine but has to pay for it. 
E) Jack will have to repair the limousine and then return it. 
A) Jack may sell the limousine and then pay the proceeds to the studio. 
B) Jack will have to return the limousine in the state it is in. 
C) The studio can sue Jack for breach of contract. 
D) Jack may keep the limousine but has to pay for it. 
E) Jack will have to repair the limousine and then return it.

Question 20

Like a corporation,a social club has legal standing to commence and maintain an action at law.

Accepted Answer

A) True 
 B)False

Exam 8: Formation of a Contract: Capacity to Contract and Legality of Object

Business agreements are most often challenged as contrary to public policy because

A minor's immunity from liability

Explain the role of legality in the formation of a contract.

Diminished capacity for minors is not treated in the same way as it is for drunken or insane persons.Explain.

What is meant by the term contractual capacity?

Mary,a prostitute,enters into a contract with a man to provide sexual services in return for an agreed-on amount of money.In this situation

A minor may repudiate all contracts entered into by her with the EXCEPTION of

Why is a court more likely to accept as reasonable certain restraints on an employee who is in possession of certain trade secrets of his or her employer?

Explain,with the use of examples,the concept of legal capacity.

What must a minor do if he or she wishes to avoid liability under a contract?

Although there has been an offer and acceptance and consideration,and the parties intended to enter into a contract,a court will set aside a contract as void because of

What are the legal consequences of the ratification of a contract by a minor who attains the age of majority?

Where a contract contains a restrictive covenant,that is,a covenant in restraint of trade,the totality of the contract is invalid.

Capacity to contract means

Legal capacity simply refers to the ability of a party to enter into a contract.

Courts presume that a transaction is legal unless a defendant produces evidence to show that it is not.

Why is a court more likely to accept as reasonable certain restraints on an employee who is in possession of certain trade secrets of his or her employer?

Like a corporation,a social club has legal standing to commence and maintain an action at law.

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Breach of Contract and Its Remedies

Sale of Goods and Consumer Contracts

Bailment and Leasing

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

Creditors Rights

International Business Transactions

Electronic Commerce

Privacy

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