Exam 13: Capacity and Legality

Most courts are usually very concerned about the fairness of contracts.

Jon agrees to sell his K9 Sports Equipment store to Lacy. As part of the sale, Jon promises never to open a similar, competing store anywhere. Jon's promise is most likely

A blue law is a state statute that prohibits loans at an interest above the "blue line."

Chris, a minor, signs a contract to buy alcoholic beverages for Dine & Drink, his parents' restaurant. The contract is

A minor who affirmatively misrepresents himself or herself to be an adult will not be able to disaffirm a contract in most states.

A severable contract is unenforceable as a violation of public policy.

National Insurance Company violates a state statute when selling an insur?ance policy to Opal. The policy may be enforced by

Intoxicated, Clio agrees to sell her restaurant, Diners Café, to Evan for half of its real market value. This deal is most likely void if

Nina, a seventeen-year-old, signs a contract to sell her car to OK Used Cars. Nina receives a better offer the next day from Perfect Pre-owned Cars, Inc., and accepts the new offer. Nina is

Jock and Kyla decide to wager, in violation of a state statute, on the out?come of a football game. They each deposit money with Len, who agrees to pay the winner of the bet. Before the game begins, Kyla tells Len that she changed her mind about the bet. Kyla can recover

Don enters into a contract with Edie, who does not have contractual ca?pacity. The law will permit Don to enforce the contract only if Edie

A person who enters into a contract when he or she is intoxicated can void the contract if he or she did not comprehend the legal consequences.

A contract is unenforceable if there is a statute that prohibits the action promised by the contract.

U-Can-Own-It Corporation sells appliances to less educated consumers, including Viv, on installment plans. U-Can-Own-It files a suit against Viv when she stops making payments. Viv claims that the deal is unconscionable. The court will most likely consider

Airway International, Inc., is a commercial passenger airline. Airway includes on its tickets a clause that states the airline is not liable for any injury to, or the death of, any passenger caused by its, or its employees', negligence. An Airway flight from Boston to New York crashes into Long Island sound, resulting in the deaths of all passengers. The cause of the ac?cident is found to be due to Airway's negligence. Based on the clause on its tickets, can Airway avoid liability?

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

Olga, a minor, signs a contract to buy a computer from Phil, the owner of Quality Computer Store. Olga's right to disaffirm the contract

Jill, a minor, is living at home with her parents, but signs a lease with a land?lord to rent an apartment. Jill can

If an illegal contract is executory, either party can enforce it.

A covenant not to compete is never enforceable.