Question 1

A person who has alternative periods of sanity and insanity can enter into contracts ________.

Accepted Answer

A) when he or she is in a state of sanity 
B) when there is a legal guardian appointed by the court for that person 
C) once he or she has been adjudged to be insane 
D) only once he or she has been adjudged to be legally insane 
A) when he or she is in a state of sanity 
B) when there is a legal guardian appointed by the court for that person 
C) once he or she has been adjudged to be insane 
D) only once he or she has been adjudged to be legally insane

Question 2

Which of the following is an example of a contract contrary to statutes by its very existence?

Accepted Answer

A) a usurious loan contract 
B) a contract between two minors 
C) a contract where one party is insane but not adjudged insane 
D) a contract of adhesion 
A) a usurious loan contract 
B) a contract between two minors 
C) a contract where one party is insane but not adjudged insane 
D) a contract of adhesion

Question 3

________ is a licensing statute with the primary purpose of increasing earnings for the government.

Accepted Answer

A) Usury statute 
B) Ratification statute 
C) Regulatory licensing statute 
D) Revenue raising statute 
A) Usury statute 
B) Ratification statute 
C) Regulatory licensing statute 
D) Revenue raising statute

Question 4

The infancy doctrine gives adults the right to disaffirm contracts entered with minors.

Accepted Answer

A) True 
 B)False

Question 5

The parental duty of support is terminated if a minor becomes emancipated.

Accepted Answer

A) True 
 B)False

Question 6

________ is the act of a minor to rescind a contract under the infancy doctrine,either orally,in writing,or by the minor's conduct.

Accepted Answer

A) Ratification 
B) Disaffirmance 
C) Sanction 
D) Adherence 
A) Ratification 
B) Disaffirmance 
C) Sanction 
D) Adherence

Question 7

Intoxicated persons are liable in quasi-contract to pay the reasonable value for necessaries they receive.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following groups is legally deprived from directly entering into contracts?

Accepted Answer

A) minors 
B) persons adjudged insane 
C) persons with alternating states of sanity and insanity 
D) intoxicated persons 
A) minors 
B) persons adjudged insane 
C) persons with alternating states of sanity and insanity 
D) intoxicated persons

Question 9

Describe the infancy doctrine with reference to legal contracts.

Accepted Answer

Minors do not always have the maturity,e

Question 10

Which of the following elements has to be proved for a contract to be deemed unconscionable?

Accepted Answer

A) that the weaker party did not enter the contract under duress 
B) that the parties had equal bargaining power 
C) that the dominant party justly used its bargaining power 
D) that the adhering party had no reasonable alternative 
A) that the weaker party did not enter the contract under duress 
B) that the parties had equal bargaining power 
C) that the dominant party justly used its bargaining power 
D) that the adhering party had no reasonable alternative

Question 11

What are gambling statutes?

Accepted Answer

All states either prohibit or regulate g

Question 12

According to the regulatory licensing statute,________.

Accepted Answer

A) unlicensed persons can recover payment for services 
B) only licensed persons can recover payment for services 
C) persons breaching a revenue-raising statute cannot recover payment for services 
D) all government-licensed persons have to pay an annual fee to renew their licenses 
A) unlicensed persons can recover payment for services 
B) only licensed persons can recover payment for services 
C) persons breaching a revenue-raising statute cannot recover payment for services 
D) all government-licensed persons have to pay an annual fee to renew their licenses

Question 13

________ is a rule that states that a minor is obligated only to return the 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) Duty of restoration 
B) Duty of restitution 
C) Infancy doctrine 
D) Emancipation doctrine 
A) Duty of restoration 
B) Duty of restitution 
C) Infancy doctrine 
D) Emancipation doctrine

Question 14

If a minor does not disaffirm a contract upon reaching the age of majority,the contract is considered as ratified.

Accepted Answer

A) True 
 B)False

Question 15

The ________ is a legal principle that allows minors to cancel most contracts they have entered into with adults.

Accepted Answer

A) duty of restoration 
B) duty of restitution 
C) contract of adhesion 
D) infancy doctrine 
A) duty of restoration 
B) duty of restitution 
C) contract of adhesion 
D) infancy doctrine

Question 16

What is the minor's duty of restoration in a disaffirmed contract?

Accepted Answer

Generally,a minor is obligated only to r

Question 17

How is the doctrine of unconscionability related to public policy?

Accepted Answer

A) The doctrine of unconscionability is based on public policy. 
B) All contracts contrary to public policy are considered unconscionable. 
C) Both are used to save a contracting party from a bad bargain. 
D) Both are very distinctly defined by law. 
A) The doctrine of unconscionability is based on public policy. 
B) All contracts contrary to public policy are considered unconscionable. 
C) Both are used to save a contracting party from a bad bargain. 
D) Both are very distinctly defined by law.

Question 18

Which of the following is true of a minor's duty toward a contract for necessaries of life?

Accepted Answer

A) Minors need to reach the age of majority to enter into contracts for necessaries of life. 
B) Minors are exempt from paying for contracts for necessaries of life. 
C) Minors must pay the reasonable value of necessaries of life for which they contract. 
D) Parents are liable to provide necessaries of life to their minor children if they become emancipated. 
A) Minors need to reach the age of majority to enter into contracts for necessaries of life. 
B) Minors are exempt from paying for contracts for necessaries of life. 
C) Minors must pay the reasonable value of necessaries of life for which they contract. 
D) Parents are liable to provide necessaries of life to their minor children if they become emancipated.

Question 19

An exculpatory clause that results from superior bargaining power is usually found to be void.

Accepted Answer

A) True 
 B)False

Question 20

The state of Transas has set a maximum interest rate of 12 percent on loans.Matt borrows $10,000 from Tony to pay off a gambling debt.Both are residents of Transas.They sign a contract,which states that Matt would have to pay $1,500 as interest in one year to pay off the loan.Later,Matt gets to know about the state usury limit and sues Tony.What is the nature of the contract between Matt and Tony?

Accepted Answer

A) It is illegal as it violates gambling statutes. 
B) It is legal as both parties were competent when the contract was signed. 
C) The contract is void as it violates usury laws. 
D) The contract is void as it is a contract to commit a crime. 
A) It is illegal as it violates gambling statutes. 
B) It is legal as both parties were competent when the contract was signed. 
C) The contract is void as it violates usury laws. 
D) The contract is void as it is a contract to commit a crime.

Exam 12: Capacity and Legality

A person who has alternative periods of sanity and insanity can enter into contracts ________.

Which of the following is an example of a contract contrary to statutes by its very existence?

________ is a licensing statute with the primary purpose of increasing earnings for the government.

The infancy doctrine gives adults the right to disaffirm contracts entered with minors.

The parental duty of support is terminated if a minor becomes emancipated.

________ is the act of a minor to rescind a contract under the infancy doctrine,either orally,in writing,or by the minor's conduct.

Intoxicated persons are liable in quasi-contract to pay the reasonable value for necessaries they receive.

Which of the following groups is legally deprived from directly entering into contracts?

Describe the infancy doctrine with reference to legal contracts.

Which of the following elements has to be proved for a contract to be deemed unconscionable?

What are gambling statutes?

According to the regulatory licensing statute,________.

________ is a rule that states that a minor is obligated only to return the goods or property he or she has received from the adult in the condition it is in at the time of disaffirmance.

If a minor does not disaffirm a contract upon reaching the age of majority,the contract is considered as ratified.

The ________ is a legal principle that allows minors to cancel most contracts they have entered into with adults.

What is the minor's duty of restoration in a disaffirmed contract?

How is the doctrine of unconscionability related to public policy?

Which of the following is true of a minor's duty toward a contract for necessaries of life?

An exculpatory clause that results from superior bargaining power is usually found to be void.

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