Question 1

Restitution is the legal avoidance, or setting aside, of a contractual obligation.

Accepted Answer

A) True 
 B)False  False

Question 2

Rosa, a seventeen-year-old, signs a contract to sell her car to Stan. Later, Rosa decides not to sell the car. Rosa is liable to Stan for

Accepted Answer

A)  the cost of a car of comparable value. 
B)  the value of her performance under the contract. 
C)  the amount of the buyer's profit on the deal. 
D)  nothing. 
A)  the cost of a car of comparable value. 
B)  the value of her performance under the contract. 
C)  the amount of the buyer's profit on the deal. 
D)  nothing. D

Question 3

Contracts entered into by mentally incompetent persons may be disaffirmed.

Accepted Answer

A) True 
 B)False  True

Question 4

If a person has been adjudged mentally incompetent by a court, any contract made by the party is void.

Accepted Answer

A) True 
 B)False

Question 5

Ruth, a minor, enters into a contract to work for Sales Call Center by misrepresenting her age to be twenty-one. In most states, Ruth can

Accepted Answer

A)  avoid liability under the contract. 
B)  refuse to perform any obligation under the contract. 
C)  disaffirm the contract. 
D)  all of the choices. 
A)  avoid liability under the contract. 
B)  refuse to perform any obligation under the contract. 
C)  disaffirm the contract. 
D)  all of the choices.

Question 6

A party may have the capacity to enter into a valid contract but also have the right to avoid liability under it.

Accepted Answer

A) True 
 B)False

Question 7

Parents are not liable for the contracts made by their minor children when the children are acting on their own.

Accepted Answer

A) True 
 B)False

Question 8

Steve relinquishes the right to his son Tanner's control, care, custody, and earnings. This act is

Accepted Answer

A)  disaffirmance. 
B)  emancipation. 
C)  ratification. 
D)  illegal. 
A)  disaffirmance. 
B)  emancipation. 
C)  ratification. 
D)  illegal.

Question 9

Intoxicated, Odell enters a contract for the sale of her business, Precision Machining, to Quentin for less than its market value. This contract is voidable if, at the time,

Accepted Answer

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

Question 10

A minor who disaffirms a contract for necessaries is no longer liable for the reasonable value of the goods.

Accepted Answer

A) True 
 B)False

Question 11

Businesses do not ordinarily require parents to sign any contract made with a minor.

Accepted Answer

A) True 
 B)False

Question 12

Gretchen is adjudged by a court to be mentally incompetent. Gretchen

Accepted Answer

A)  can enter into a valid contract and cannot avoid liability under it. 
B)  can enter into a valid contract but has the right to avoid liability under it. 
C)  cannot form a legally binding contract with another party. 
D)  is presumed to have contractual capacity. 
A)  can enter into a valid contract and cannot avoid liability under it. 
B)  can enter into a valid contract but has the right to avoid liability under it. 
C)  cannot form a legally binding contract with another party. 
D)  is presumed to have contractual capacity.

Question 13

Emma, a minor, seeks and engages in employment for Farmland Foods in the manner of an adult. In many states, the employment contract between Emma and Farmland would be

Accepted Answer

A)  entirely unenforceable. 
B)  fully enforceable. 
C)  readily voidable. 
D)  totally void. 
A)  entirely unenforceable. 
B)  fully enforceable. 
C)  readily voidable. 
D)  totally void.

Question 14

For a minor to disaffirm a contract, he or she must present the contract to a court.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

A minor can ordinarily disaffirm a contract at any time during minority but not after coming of age.

Accepted Answer

A) True 
 B)False

Question 17

An intoxicated person is liable for the reasonable value of any necessaries he or she receives.

Accepted Answer

A) True 
 B)False

Question 18

Cary, a minor, returns a digital music player that he bought from Discount City, which refunds the price. This exchange involves

Accepted Answer

A)  emancipation. 
B)  ratification. 
C)  restitution. 
D)  misrepresentation. 
A)  emancipation. 
B)  ratification. 
C)  restitution. 
D)  misrepresentation.

Question 19

Contractual capacity is the legal ability to enter into a contract.

Accepted Answer

A) True 
 B)False

Question 20

Floyd, a minor, misrepresents his age when entering into a contract to buy a car from Gas Hogs Inc. Floyd takes possession of the car, but makes no payments on the contract and attempts to disaffirm it. In a growing number of states, 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.

Exam 11: Capacity

Restitution is the legal avoidance, or setting aside, of a contractual obligation.

Rosa, a seventeen-year-old, signs a contract to sell her car to Stan. Later, Rosa decides not to sell the car. Rosa is liable to Stan for

Contracts entered into by mentally incompetent persons may be disaffirmed.

If a person has been adjudged mentally incompetent by a court, any contract made by the party is void.

Ruth, a minor, enters into a contract to work for Sales Call Center by misrepresenting her age to be twenty-one. In most states, Ruth can

A party may have the capacity to enter into a valid contract but also have the right to avoid liability under it.

Parents are not liable for the contracts made by their minor children when the children are acting on their own.

Steve relinquishes the right to his son Tanner's control, care, custody, and earnings. This act is

Intoxicated, Odell enters a contract for the sale of her business, Precision Machining, to Quentin for less than its market value. This contract is voidable if, at the time,

A minor who disaffirms a contract for necessaries is no longer liable for the reasonable value of the goods.

Businesses do not ordinarily require parents to sign any contract made with a minor.

Gretchen is adjudged by a court to be mentally incompetent. Gretchen

Emma, a minor, seeks and engages in employment for Farmland Foods in the manner of an adult. In many states, the employment contract between Emma and Farmland would be

For a minor to disaffirm a contract, he or she must present the contract to a court.

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

A minor can ordinarily disaffirm a contract at any time during minority but not after coming of age.

An intoxicated person is liable for the reasonable value of any necessaries he or she receives.

Cary, a minor, returns a digital music player that he bought from Discount City, which refunds the price. This exchange involves

Contractual capacity is the legal ability to enter into a contract.

Floyd, a minor, misrepresents his age when entering into a contract to buy a car from Gas Hogs Inc. Floyd takes possession of the car, but makes no payments on the contract and attempts to disaffirm it. In a growing number of states, Gas Hogs can recover

Introduction to the Law

Ethics in Business

The Courts and Our Legal System

Constitutional Law

Business Torts

Intellectual Property

Business Crimes

Introduction to Contracts

Offer and Acceptance

Consideration

The Legality of Agreements

Voluntary Consent

Written Contracts

Third Party Rights

Termination and Remedies

Introduction to Sales and Lease Contracts

Title and Risk of Loss

Performance and Breach

Warranties and Product Liability

Consumer Protection

The Essentials of Negotiability

Negotiable Instruments: Transfer and Liability

Banking in the Digital Age

Agency Relationships

Employment, Immigration, and Labor Law

Employment Discrimination

Types of Business Organizations

Formation and Ownership of a Corporation

Management of a Corporation

Combining and Dissolving a Corporation

Credit and Security

Mortgages

Bankruptcy

Insurance

Personal Property

Bailments

Real Property

Landlord and Tenant Law

Wills and Trusts

Administrative Law

Antitrust Law

International and Space Law

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