Question 1

An unlicensed contractor who performs services is entitled to payment for his services even if the licensing statute in question is regulatory in nature.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is NOT one of the needed elements of an unconscionable contract?

Accepted Answer

A)  parties possessing severely unequal bargaining power 
B)  the dominant party's unreasonable use of that bargaining power to obtain oppressive or manifestly unfair terms 
C)  an unreasonably short period of time for the oppressed party to perform 
D)  no reasonable alternative for the oppressed party 
A)  parties possessing severely unequal bargaining power 
B)  the dominant party's unreasonable use of that bargaining power to obtain oppressive or manifestly unfair terms 
C)  an unreasonably short period of time for the oppressed party to perform 
D)  no reasonable alternative for the oppressed party

Question 3

Which of the following statements is true regarding contracts made without legal capacity?

Accepted Answer

A)  The contracts of people who have been adjudicated insane are voidable. 
B)  The duties of restoration and restitution are affected by the type of incapacity suffered. 
C)  The contracts of people who are minors,insane,or intoxicated are treated the same. 
D)  The contracts of people who are insane,but not adjudicated insane,are void. 
E)  People who lack capacity due to adjudicated insanity are not even liable for necessaries of life. 
A)  The contracts of people who have been adjudicated insane are voidable. 
B)  The duties of restoration and restitution are affected by the type of incapacity suffered. 
C)  The contracts of people who are minors,insane,or intoxicated are treated the same. 
D)  The contracts of people who are insane,but not adjudicated insane,are void. 
E)  People who lack capacity due to adjudicated insanity are not even liable for necessaries of life.

Question 4

Generally,the courts will not enforce illegal contracts,but there are some exceptions.Which of the following would be exceptions where the courts would enforce the contract or allow some recovery?

Accepted Answer

A)  An innocent party is excusably ignorant of the fact of illegality. 
B)  A person who enters into an illegal contract later withdraws before the illegal act is done. 
C)  A person who used duress to get the other party to sign the contract attempts to enforce the contract. 
D)  A and C only are true. 
E)  A and B only are true. 
A)  An innocent party is excusably ignorant of the fact of illegality. 
B)  A person who enters into an illegal contract later withdraws before the illegal act is done. 
C)  A person who used duress to get the other party to sign the contract attempts to enforce the contract. 
D)  A and C only are true. 
E)  A and B only are true.

Question 5

Generally speaking,a minor must return goods or property he or she has received from the adult in the condition it is in at the time of disaffirmance.

Accepted Answer

A) True 
 B)False

Question 6

Under the infancy doctrine,a minor can disaffirm a contract by his actions.

Accepted Answer

A) True 
 B)False

Question 7

Mike,who is 16 years old,buys a motorcycle from Cycle Sellers,Inc.Assume that Mike pays $5,000 and that the fair value of the motorcycle at the time of purchase is $4,500.Which of the following is true?

Accepted Answer

A)  This is an illegal contract because Mike is a minor. 
B)  This contract is void because Mike is a minor. 
C)  Even if Mike signs a statement as part of the contract that states,"I agree not to disaffirm this contract," Mike may nonetheless disaffirm when he is 17 years old. 
D)  There was probably undue influence involved with this contract since Mike is a minor and the price charged was greater than the fair market value. 
E)  If a court decides that the motorcycle is a necessary,Mike will be obligated to pay the $5,000. 
A)  This is an illegal contract because Mike is a minor. 
B)  This contract is void because Mike is a minor. 
C)  Even if Mike signs a statement as part of the contract that states,"I agree not to disaffirm this contract," Mike may nonetheless disaffirm when he is 17 years old. 
D)  There was probably undue influence involved with this contract since Mike is a minor and the price charged was greater than the fair market value. 
E)  If a court decides that the motorcycle is a necessary,Mike will be obligated to pay the $5,000.

Question 8

John hires Jane to steal a particular type of car for him.Jane demands $2,000 payment in advance,which John pays.Jane does not deliver the stolen car at the appointed time.John sues Jane.Which of the following is most likely?

Accepted Answer

A)  The courts will order Jane to return the $2,000. 
B)  The courts will order Jane to deliver a car like she promised to steal for John. 
C)  The courts will order Jane to pay John back the $2,000. 
D)  John has his choice of either B or C. 
E)  The courts will not do anything. 
A)  The courts will order Jane to return the $2,000. 
B)  The courts will order Jane to deliver a car like she promised to steal for John. 
C)  The courts will order Jane to pay John back the $2,000. 
D)  John has his choice of either B or C. 
E)  The courts will not do anything.

Question 9

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 10

Where a contract calls for action that violates a statute,in a breach of contract case the court will:

Accepted Answer

A)  impose the appropriate criminal penalty 
B)  ignore the contract and leave the parties where they are 
C)  order both parties to return any consideration received 
D)  order payment so that the parties to the illegal contract share any losses equally 
E)  order the parties to change the terms of the contract such that it becomes legal 
A)  impose the appropriate criminal penalty 
B)  ignore the contract and leave the parties where they are 
C)  order both parties to return any consideration received 
D)  order payment so that the parties to the illegal contract share any losses equally 
E)  order the parties to change the terms of the contract such that it becomes legal

Question 11

Usury laws are concerned with:

Accepted Answer

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

Question 12

All states allow gambling contracts to be enforced in the courts.

Accepted Answer

A) True 
 B)False

Question 13

The main purpose for making contracts involving minors voidable at the minor's option is:

Accepted Answer

A)  to protect the minor from unscrupulous adults 
B)  to reduce the amount of litigation in the courts 
C)  to support the policy of not enforcing gift promises. 
D)  to punish adults for entering into contracts with minors 
E)  to prevent minors from entering into contracts 
A)  to protect the minor from unscrupulous adults 
B)  to reduce the amount of litigation in the courts 
C)  to support the policy of not enforcing gift promises. 
D)  to punish adults for entering into contracts with minors 
E)  to prevent minors from entering into contracts

Question 14

Bob is 16 years old and recently purchased a car.His father also signed the contract.In May,Bob started a lawn care business,and purchased two lawn mowers,one each from two different stores.Bob used both of the lawn mowers for several months without any problems.Then he began having trouble with the mower he bought from store A.The store made repairs and the mower seems to be working properly,although he was without that mower for two weeks.Although he has had no trouble with the mower from store B,he recently learned that the price of $800 that he paid was $200 more than the mower was worth.It is now October and Bob has decided that he wants to disaffirm both of the contracts for the mowers.Discuss the cases.

Accepted Answer

Bob's ability to disaffirm is independen

Question 15

If a minor wishes to be bound to a contract after becoming an adult,she must:

Accepted Answer

A)  ratify the contract 
B)  disaffirm the contract 
C)  give back the goods or services received as a minor 
D)  bring an action to verify the contract 
A)  ratify the contract 
B)  disaffirm the contract 
C)  give back the goods or services received as a minor 
D)  bring an action to verify the contract

Question 16

When a person is adjudged insane,that person loses the ability to enter into contracts.

Accepted Answer

A) True 
 B)False

Question 17

A minor may not affirm one part of a contract and disaffirm another part.

Accepted Answer

A) True 
 B)False

Question 18

Someone who is not yet a licensed real estate agent can legally collect a fee for real estate services.

Accepted Answer

A) True 
 B)False

Question 19

A minor may still be obligated to pay for tools of trade and education.

Accepted Answer

A) True 
 B)False

Question 20

When the provider of a service provides that service without obtaining a required license,with which kind(s)of license(s)can the service provider collect her fee as provided in a contract?

Accepted Answer

A)  regulatory licenses only 
B)  revenue-raising licenses only 
C)  with either kind of license 
D)  with neither kind of license 
A)  regulatory licenses only 
B)  revenue-raising licenses only 
C)  with either kind of license 
D)  with neither kind of license

Exam 12: Capacity and Legality

An unlicensed contractor who performs services is entitled to payment for his services even if the licensing statute in question is regulatory in nature.

Which of the following is NOT one of the needed elements of an unconscionable contract?

Which of the following statements is true regarding contracts made without legal capacity?

Generally,the courts will not enforce illegal contracts,but there are some exceptions.Which of the following would be exceptions where the courts would enforce the contract or allow some recovery?

Generally speaking,a minor must return goods or property he or she has received from the adult in the condition it is in at the time of disaffirmance.

Under the infancy doctrine,a minor can disaffirm a contract by his actions.

Mike,who is 16 years old,buys a motorcycle from Cycle Sellers,Inc.Assume that Mike pays $5,000 and that the fair value of the motorcycle at the time of purchase is $4,500.Which of the following is true?

John hires Jane to steal a particular type of car for him.Jane demands $2,000 payment in advance,which John pays.Jane does not deliver the stolen car at the appointed time.John sues Jane.Which of the following is most likely?

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

Where a contract calls for action that violates a statute,in a breach of contract case the court will:

Usury laws are concerned with:

All states allow gambling contracts to be enforced in the courts.

The main purpose for making contracts involving minors voidable at the minor's option is:

If a minor wishes to be bound to a contract after becoming an adult,she must:

When a person is adjudged insane,that person loses the ability to enter into contracts.

A minor may not affirm one part of a contract and disaffirm another part.

Someone who is not yet a licensed real estate agent can legally collect a fee for real estate services.

A minor may still be obligated to pay for tools of trade and education.

When the provider of a service provides that service without obtaining a required license,with which kind(s)of license(s)can the service provider collect her fee as provided in a contract?

Legal Heritage and the Information Age

Court Systems and Jurisdiction

Judicial, Alternative, and Online Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Strict Liability and Product Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crimes

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Genuineness of Assent and Undue Influence

Statute of Frauds and Equitable Exceptions

Third-Party Rights and Discharge

Remedies for Breach of Traditional and E-Contracts

Internet Law and E-Commerce

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Sales and Lease Warranties

Creation of Negotiable Instruments

Transferability and Holder In Due Course

Liability,Defenses and Discharge

Checks, the Banking System, and E-Money

Creditor's and Debtor's Rights

Secured Transactions and Electronic Filing

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment,Worker Protection,and Immigration Laws

Labor Law and Collective Bargaining

Equal Opportunity in Employment

Small Businesses, Entrepreneurs, and General Partnerships

Limited Partnerships and Limited Liability Limited Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchises and Special Forms of Business

Investor Protection and Online Securities Transactions

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection and Global Warming

Antitrust Law and Unfair Trade Practices

Personal Property and Bailment

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Landlord Tenant Law and Land Use Regulation

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