Exam 14: Capacity and Legality

Service Corporation markets its service to less educated consumers. In considering the unconscionability of a Service contract, a court will likely consider all of the following except

Shannon signs a contract with Tevin, an unlicensed contractor, to build a deck and gazebo at the rear of her house. This contract is enforceable by

In an employment contract, a covenant not to compete is unenforceable.​

A contract between Kim and Larry to lease residential property contains an exculpatory clause. This clause is

Contracts in restraint of trade are contrary to the public policy that favors competition in the economy.

Games Galore Corporation hires Haley, a minor, to create new customized game software for certain clients. Haley signs a contract that requires her to work for Games Galore for eighteen months. Before beginning work, however, Haley tells Games Galore that she will not create new software for Games Galore and that she is going to work for Ideal Worldcraft, Inc., a Games Galore competitor. Is Games Galore's contract with Haley enforceable? Why or why not?

All states require that members of certain professions obtain licenses allowing them to practice.

A covenant not to compete is enforceable only if it is reasonable in duration and geographic area.

Emma, a minor, buys a water bottle, a set of weights, and a treadmill from Fitness Warehouse. Later, Emma disaffirms the deal. If the goods are still in her possession or control, she can keep

Every state has a statute that sets the maximum rate of interest for different types of transactions.

Statutes often specify what is prohibited in contracts.

Research Data Corporation sells access to its database of scientific research to users for a certain price per month. Research Data files a suit against its user Tom when, in violation of their contract, he stops making payments. Tom claims that the deal is unconscionable. The court will most likely consider

Contractual capacity includes the financial ability to pay for the benefits of a contract.

Countrywide Trucking Inc. contracts with Dewey to transport crated goods to a certain destination for $5,000. Countrywide delivers the crates, but Dewey does not pay. Countrywide learns that the crates contained stolen goods. Countrywide can recover from Dewey

Food is a "necessary."

Intoxicated and not aware of the consequences, Grady agrees to a two-year phone service contract with Horizon, Inc., at more than the average market price. This contract is

Jake and Kline make an illegal contract that unjustly enriches Jake at the expense of Kline. A court will

A covenant not to compete is enforceable only if it is necessary to restrain trade.

Betty sells her Clothes Shop to Diane. In the sale agreement, there is a covenant not to compete that prohibits Betty from opening another clothing store within a certain distance. If a court concludes that this restriction is unreasonable, it will most likely

Executed contracts are presumed ratified.