Question 1

Performance can constitute the consideration that creates a contractual obligation.

Accepted Answer

A) True 
 B)False  True

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

Under the doctrine of promissory estoppel, a promise will not be enforced unless it is supported by consideration.

Accepted Answer

A) True 
 B)False  False

Question 4

Mica, a minor, signs a contract to pay National Health Club a monthly fee for twenty-four months to use its facilities. Six months later, after reaching the age of majority, Mica continues to use the club. This act is

Accepted Answer

A)  ​a disaffirmance. 
B)  ​an emancipation. 
C)  ​a ratification. 
D)  ​a restitution. 
A)  ​a disaffirmance. 
B)  ​an emancipation. 
C)  ​a ratification. 
D)  ​a restitution.

Question 5

Odina signs a covenant not to compete with her employer, Penultimate Sales Corporation. A court decides that the covenant is overly restrictive. The court will likely

Accepted Answer

A)  ​enforce it as written so as not to undercut the freedom of contract. 
B)  ​enforce it but evaluate its effects over time. 
C)  ​reform its terms to prevent any undue burden. 
D)  ​refuse to enforce it unless Penultimate pays additional consideration. 
A)  ​enforce it as written so as not to undercut the freedom of contract. 
B)  ​enforce it but evaluate its effects over time. 
C)  ​reform its terms to prevent any undue burden. 
D)  ​refuse to enforce it unless Penultimate pays additional consideration.

Question 6

​Fact Pattern 12-1
Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay.
-Refer to Fact Pattern 12-1. If Teatro says it is asking for the extra $250,000 because ordinary business expenses have increased, the agreement is

Accepted Answer

A)  ​enforceable as the consideration is past. 
B)  ​enforceable because of unforeseen difficulties. 
C)  ​unenforceable as an illusory promise. 
D)  ​unenforceable due to the preexisting duty rule. 
A)  ​enforceable as the consideration is past. 
B)  ​enforceable because of unforeseen difficulties. 
C)  ​unenforceable as an illusory promise. 
D)  ​unenforceable due to the preexisting duty rule.

Question 7

Parents are always liable for the contracts made by their minorchildren.

Accepted Answer

A) True 
 B)False

Question 8

​Fact Pattern 12-1
Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay.
-Refer to Fact Pattern 11-4. If Teatro says it is asking for the extra $250,000 because it has encountered extraordinary unforeseen difficulties that will add considerable cost to the project, the agreement is

Accepted Answer

A)  ​enforceable as the consideration is past. 
B)  ​enforceable because of unforeseen difficulties. 
C)  ​unenforceable as an illusory promise. 
D)  ​unenforceable due to the preexisting duty rule. 
A)  ​enforceable as the consideration is past. 
B)  ​enforceable because of unforeseen difficulties. 
C)  ​unenforceable as an illusory promise. 
D)  ​unenforceable due to the preexisting duty rule.

Question 9

In contract law, "consideration" refers to the time that a party takes to evaluate a deal.

Accepted Answer

A) True 
 B)False

Question 10

Legally sufficient consideration is something of value in the eyes of the law.

Accepted Answer

A) True 
 B)False

Question 11

A covenant not to sue is against public policy.

Accepted Answer

A) True 
 B)False

Question 12

A promise by one party to pay another for refraining from an action that one has a legal right to undertake is enforceable.

Accepted Answer

A) True 
 B)False

Question 13

A promise to do what one already has a legal duty to do constitutes legally sufficient consideration.

Accepted Answer

A) True 
 B)False

Question 14

Chet, a minor, signs a contract with Porsha, an adult. The contract is voidable at the option of

Accepted Answer

A)  ​neither party. 
B)  ​Chet only. 
C)  ​either party. 
D)  ​Porsha only. 
A)  ​neither party. 
B)  ​Chet only. 
C)  ​either party. 
D)  ​Porsha only.

Question 15

In contract law, ratification is the act of accepting and giving legal force to an obligation that was previously not enforceable.

Accepted Answer

A) True 
 B)False

Question 16

On Victor's eighteenth birthday, he decides that he no longer wants to keep a fishing boat he bought from Water Craft, Inc., when he was seventeen. His right to disaffirm the deal will depend on

Accepted Answer

A)  ​why Victor no longer wants to keep the boat. 
B)  ​why Victor entered into the contract to buy the boat. 
C)  ​whether Victor acts within a reasonable period of time. 
D)  ​whether Water Craft has the right to disaffirm. 
A)  ​why Victor no longer wants to keep the boat. 
B)  ​why Victor entered into the contract to buy the boat. 
C)  ​whether Victor acts within a reasonable period of time. 
D)  ​whether Water Craft has the right to disaffirm.

Question 17

Valley Paragliders Association files a suit against Wing Designers, Inc., claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if

Accepted Answer

A) there is a large disparity in the amount of consideration exchanged. 
B) the consideration involves the performance of services. 
C) something of value passed between the parties. 
D) the consideration is worth less than $100. 
A) there is a large disparity in the amount of consideration exchanged. 
B) the consideration involves the performance of services. 
C) something of value passed between the parties. 
D) the consideration is worth less than $100.

Question 18

A contract entered into by an intoxicated person is never valid.

Accepted Answer

A) True 
 B)False

Question 19

Through fraudulent means, Finlay induces Ethel to sign a contract to in-vest with him the profits from her business. When Ethel learns the truth, she may

Accepted Answer

A)  ​only enforce the contract. 
B)  ​only recover what she invested with Finlay. 
C)  ​enforce the contract or recover what she invested with Finlay. 
D)  ​do nothing. 
A)  ​only enforce the contract. 
B)  ​only recover what she invested with Finlay. 
C)  ​enforce the contract or recover what she invested with Finlay. 
D)  ​do nothing.

Question 20

A covenant not to compete included in the sale of an ongoing business is unenforceable.

Accepted Answer

A) True 
 B)False

Exam 12: Consideration, Capacity, and Legality

Performance can constitute the consideration that creates a contractual obligation.

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

Under the doctrine of promissory estoppel, a promise will not be enforced unless it is supported by consideration.

Mica, a minor, signs a contract to pay National Health Club a monthly fee for twenty-four months to use its facilities. Six months later, after reaching the age of majority, Mica continues to use the club. This act is

Odina signs a covenant not to compete with her employer, Penultimate Sales Corporation. A court decides that the covenant is overly restrictive. The court will likely

Parents are always liable for the contracts made by their minorchildren.

In contract law, "consideration" refers to the time that a party takes to evaluate a deal.

Legally sufficient consideration is something of value in the eyes of the law.

A covenant not to sue is against public policy.

A promise by one party to pay another for refraining from an action that one has a legal right to undertake is enforceable.

A promise to do what one already has a legal duty to do constitutes legally sufficient consideration.

Chet, a minor, signs a contract with Porsha, an adult. The contract is voidable at the option of

In contract law, ratification is the act of accepting and giving legal force to an obligation that was previously not enforceable.

On Victor's eighteenth birthday, he decides that he no longer wants to keep a fishing boat he bought from Water Craft, Inc., when he was seventeen. His right to disaffirm the deal will depend on

Valley Paragliders Association files a suit against Wing Designers, Inc., claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if

A contract entered into by an intoxicated person is never valid.

Through fraudulent means, Finlay induces Ethel to sign a contract to in-vest with him the profits from her business. When Ethel learns the truth, she may

A covenant not to compete included in the sale of an ongoing business is unenforceable.

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