Question 1

Among the requirements for a valid contract, courts generally presume the existence of

Accepted Answer

A) none of the choices. 
B) minority. 
C) mental incompetence. 
D) contractual capacity. 
A) none of the choices. 
B) minority. 
C) mental incompetence. 
D) contractual capacity.

Question 2

A minor can enter into any contract an adult can, without exception.

Accepted Answer

A) True 
 B)False

Question 3

A contract that calls for an action contrary to public policy is illegal but not unenforceable.

Accepted Answer

A) True 
 B)False

Question 4

Owen, the owner of Parts Company, pays Quint to obtain a competitor's design patent. Quint keeps the money but does not deliver. Owen can

Accepted Answer

A) none of the choices. 
B) recover from Quint. 
C) enforce the contract with Quint. 
D) recover from the competitor. 
A) none of the choices. 
B) recover from Quint. 
C) enforce the contract with Quint. 
D) recover from the competitor.

Question 5

In determining procedural unconscionability, a court is most likely to consider whether

Accepted Answer

A) none of the choices. 
B) any provision left one party without a remedy for nonperformance. 
C) any provision deprived one party of the benefits of the agreement. 
D) the buyer had an opportunity to ask questions about the contract. 
A) none of the choices. 
B) any provision left one party without a remedy for nonperformance. 
C) any provision deprived one party of the benefits of the agreement. 
D) the buyer had an opportunity to ask questions about the contract.

Question 6

Through fraudulent means, Duke induces Emma to sign a contract to invest with him the profits from her business. When Emma learns the truth, she may

Accepted Answer

A) withdraw from the deal. 
B) recover what she invested. 
C) enforce the contract. 
D) any of the choices. 
A) withdraw from the deal. 
B) recover what she invested. 
C) enforce the contract. 
D) any of the choices.

Question 7

A contract to do something that is prohibited by statutory law is void from the outset.

Accepted Answer

A) True 
 B)False

Question 8

Foy, a minor, misrepresents his age when entering into a contract to buy a car from Gas Hogs Inc. Foy takes possession of the car, but makes no payments on the contract and tries to disaffirm it. Most likely, Gas Hogs can recover

Accepted Answer

A) an amount equal to the wholesale value of the car. 
B) the car, but not any of the balance due on the contract. 
C) the balance due on the contract. 
D) nothing. 
A) an amount equal to the wholesale value of the car. 
B) the car, but not any of the balance due on the contract. 
C) the balance due on the contract. 
D) nothing.

Question 9

Von, a minor, wants to return a set of skis that he bought from Winter Sports. He used-and wrecked-the skis. In a state in which a duty of restitution is imposed, Von most likely

Accepted Answer

A) can return the skis "as is" and avoid further liability. 
B) is not required to return the skis due to his or her minority. 
C) must return the skis and pay for the damage. 
D) cannot return the skis unless they can be fully restored. 
A) can return the skis "as is" and avoid further liability. 
B) is not required to return the skis due to his or her minority. 
C) must return the skis and pay for the damage. 
D) cannot return the skis unless they can be fully restored.

Question 10

Evelyn is a minor. As a minor, she

Accepted Answer

A) is not usually legally bound by a contract. 
B) has the right to avoid liability under a valid contract. 
C) has the capacity to enter into a valid contract. 
D) all of the choices. 
A) is not usually legally bound by a contract. 
B) has the right to avoid liability under a valid contract. 
C) has the capacity to enter into a valid contract. 
D) all of the choices.

Question 11

Intoxicated, Hans enters a contract for the sale of ten acres of timberland to Ira for less than its market value. Later, Hans seeks to cancel the deal. In determining whether Hans can avoid his duties under the contract, a court is most likely to look at

Accepted Answer

A) only Hans's intoxicated mental state. 
B) only factors other than the Hans's intoxicated mental state. 
C) Hans's intoxicated mental state and other factors. 
D) none of the choices. 
A) only Hans's intoxicated mental state. 
B) only factors other than the Hans's intoxicated mental state. 
C) Hans's intoxicated mental state and other factors. 
D) none of the choices.

Question 12

The lack of a license in certain occupations bars the enforcement of work-related contracts.

Accepted Answer

A) True 
 B)False

Question 13

Les, a minor, enters into a contract to buy a dirt bike from Motocross LLC. Les can ordinarily disaffirm the contract

Accepted Answer

A) in a timely manner. 
B) at any time during minority. 
C) for a reasonable time after coming of age. 
D) all of the choices. 
A) in a timely manner. 
B) at any time during minority. 
C) for a reasonable time after coming of age. 
D) all of the choices.

Question 14

A minor can disaffirm a contract at any time but remains legally obligated to perform it.

Accepted Answer

A) True 
 B)False

Question 15

Intoxicated, Efron enters a contract for the sale of his business, Freight Dispatch, to Gretel for less than its market value. This contract is enforceable if, at the time,

Accepted Answer

A) Efron's intoxication was purely voluntary. 
B) Gretel fraudulently induced Efron to become intoxicated. 
C) Gretel was also intoxicated. 
D) Efron understood the legal consequences. 
A) Efron's intoxication was purely voluntary. 
B) Gretel fraudulently induced Efron to become intoxicated. 
C) Gretel was also intoxicated. 
D) Efron understood the legal consequences.

Question 16

A lender who makes a loan at an interest rate above the lawful maximum commits usury.

Accepted Answer

A) True 
 B)False

Question 17

If a person was sufficiently intoxicated to lack mental capacity, his or her contracts are void.

Accepted Answer

A) True 
 B)False

Question 18

Best Products Inc. hires Cole to develop and implement an e-commerce strategy for marketing Best's products. Cole signs a contract that includes a clause prohibiting him from competing with Best during and after the employment. Before the strategy is implemented, Cole resigns from Best's employ and opens a business to compete with Best. In Best's suit against Cole, to determine whether Cole may compete with Best, what is the most important factor the court should consider?

Accepted Answer

In determining whether Cole may compete

Question 19

Contracts in restraint of trade always violate one or more federal or state statutes.

Accepted Answer

A) True 
 B)False

Question 20

Jac enters into a contract with Knut, an unlicensed contractor. This contract may be enforceable if

Accepted Answer

A) the statute's purpose is to protect the public from unauthorized practitioners. 
B) the lack of a license in Knut's occupation bars the enforcement of work-related contracts. 
C) the statute expressly affirms the barring of a contract's enforceability. 
D) the statute does not expressly affirm the barring of a contract's enforceability. 
A) the statute's purpose is to protect the public from unauthorized practitioners. 
B) the lack of a license in Knut's occupation bars the enforcement of work-related contracts. 
C) the statute expressly affirms the barring of a contract's enforceability. 
D) the statute does not expressly affirm the barring of a contract's enforceability.

Exam 14: Capacity and Legality

Among the requirements for a valid contract, courts generally presume the existence of

A minor can enter into any contract an adult can, without exception.

A contract that calls for an action contrary to public policy is illegal but not unenforceable.

Owen, the owner of Parts Company, pays Quint to obtain a competitor's design patent. Quint keeps the money but does not deliver. Owen can

In determining procedural unconscionability, a court is most likely to consider whether

Through fraudulent means, Duke induces Emma to sign a contract to invest with him the profits from her business. When Emma learns the truth, she may

A contract to do something that is prohibited by statutory law is void from the outset.

Foy, a minor, misrepresents his age when entering into a contract to buy a car from Gas Hogs Inc. Foy takes possession of the car, but makes no payments on the contract and tries to disaffirm it. Most likely, Gas Hogs can recover

Von, a minor, wants to return a set of skis that he bought from Winter Sports. He used-and wrecked-the skis. In a state in which a duty of restitution is imposed, Von most likely

Evelyn is a minor. As a minor, she

Intoxicated, Hans enters a contract for the sale of ten acres of timberland to Ira for less than its market value. Later, Hans seeks to cancel the deal. In determining whether Hans can avoid his duties under the contract, a court is most likely to look at

The lack of a license in certain occupations bars the enforcement of work-related contracts.

Les, a minor, enters into a contract to buy a dirt bike from Motocross LLC. Les can ordinarily disaffirm the contract

A minor can disaffirm a contract at any time but remains legally obligated to perform it.

Intoxicated, Efron enters a contract for the sale of his business, Freight Dispatch, to Gretel for less than its market value. This contract is enforceable if, at the time,

A lender who makes a loan at an interest rate above the lawful maximum commits usury.

If a person was sufficiently intoxicated to lack mental capacity, his or her contracts are void.

Contracts in restraint of trade always violate one or more federal or state statutes.

Jac enters into a contract with Knut, an unlicensed contractor. This contract may be enforceable if

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