Question 1

An illegal contract is valid if the parties to it were unaware of the illegality.

Accepted Answer

A) True 
 B)False

Question 2

All contracts between adults and minors are void.

Accepted Answer

A) True 
 B)False

Question 3

A lender who makes a loan at a rate above the lawful maximum commits usury.

Accepted Answer

A) True 
 B)False

Question 4

An adult may avoid any contract with a minor.

Accepted Answer

A) True 
 B)False

Question 5

When both parties to a contract are minors, neither of them may disaf?firm the contract.

Accepted Answer

A) True 
 B)False

Question 6

Elmo, a minor, misrepresents his age to be twenty-one and contracts to buy a car from Fine New Autos. Ordinarily, Elmo can disaffirm the contract

Accepted Answer

A)  only if he can prove that Fine New Autos did not know his true age. 
B)  only if he can prove that Fine New Autos knew his true age. 
C)  under any circumstances. 
D)  under no circumstances. 
A)  only if he can prove that Fine New Autos did not know his true age. 
B)  only if he can prove that Fine New Autos knew his true age. 
C)  under any circumstances. 
D)  under no circumstances.

Question 7

A minor may disaffirm a contract for necessaries and thereby avoid li?abil?ity for the reasonable value of the goods.

Accepted Answer

A) True 
 B)False

Question 8

Mica, a minor, signs a contract to pay Natural 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 9

A contract that exculpates one party for negligence or other wrongdoing will not usually be viewed as unconscionable.

Accepted Answer

A) True 
 B)False

Question 10

Through fraudulent means, Fred induces Gail to sign a contract to in?vest with him the profits from High Styles, her clothing store. When Gail learns the truth, she may

Accepted Answer

A)  do nothing with respect to the contract. 
B)  enforce the contract or recover the payment. 
C)  only enforce the contract. 
D)  only recover the payment. 
A)  do nothing with respect to the contract. 
B)  enforce the contract or recover the payment. 
C)  only enforce the contract. 
D)  only recover the payment.

Question 11

Adhesion contracts are often held to be contrary to public policy.

Accepted Answer

A) True 
 B)False

Question 12

Curt, a doctor, renders medical care to Dora, a minor. According to the reasoning of the court in Case 13.1, Yale Diagnostic Radiology v. Estate of Harun, a contract between Curt and Dora is

Accepted Answer

A)  express. 
B)  implied in fact. 
C)  implied in law. 
D)  non-existent. 
A)  express. 
B)  implied in fact. 
C)  implied in law. 
D)  non-existent.

Question 13

Delia enters into, and fails to disaffirm soon after reaching the age of ma?jority, a contract with Electronics Stores, Inc. (ESI). Later Delia attempts to disaffirm the contract. ESI files a suit against her. The court will most likely consider the contract ratified if it is

Accepted Answer

A)  executed. 
B)  executory. 
C)  executed or executory. 
D)  neither executed nor executory. 
A)  executed. 
B)  executory. 
C)  executed or executory. 
D)  neither executed nor executory.

Question 14

A person who enters into a contract when he or she is intoxicated can void the contract if the terms are obviously favorable to the other party.

Accepted Answer

A) True 
 B)False

Question 15

On Tad's eighteenth birthday, he decides that he no longer wants to keep a car he bought from U-Pick Autos, Inc., when he was seventeen. His right to disaffirm the deal will depend on

Accepted Answer

A)  the car's condition when Tad bought it. 
B)  the car's current condition. 
C)  whether Tad acts within a reasonable period of time. 
D)  whether U-Pick has the right to disaffirm. 
A)  the car's condition when Tad bought it. 
B)  the car's current condition. 
C)  whether Tad acts within a reasonable period of time. 
D)  whether U-Pick has the right to disaffirm.

Question 16

Parents are ordinarily liable for the contracts made by their minor chil?dren, whether or not the children acted on their own.

Accepted Answer

A) True 
 B)False

Question 17

A minor may disaffirm a contract only if the subject matter is illegal.

Accepted Answer

A) True 
 B)False

Question 18

Opie enters into a contract with Pia. Later, Opie is adjudged mentally incompetent and Quint is appointed Opie's guardian. Raye, Opie's daughter, attempts to void Opie's contract with Pia on the ground of Opie's incompetency. The contract is

Accepted Answer

A)  enforceable if Opie does not attempt to disaffirm it. 
B)  enforceable if Pia is also incompetent. 
C)  enforceable if Quint knew of the contract when he was appointed. 
D)  void. 
A)  enforceable if Opie does not attempt to disaffirm it. 
B)  enforceable if Pia is also incompetent. 
C)  enforceable if Quint knew of the contract when he was appointed. 
D)  void.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

A contract with an unlicensed professional is always enforceable.

Accepted Answer

A) True 
 B)False

Exam 13: Capacity and Legality

An illegal contract is valid if the parties to it were unaware of the illegality.

All contracts between adults and minors are void.

A lender who makes a loan at a rate above the lawful maximum commits usury.

An adult may avoid any contract with a minor.

When both parties to a contract are minors, neither of them may disaf?firm the contract.

Elmo, a minor, misrepresents his age to be twenty-one and contracts to buy a car from Fine New Autos. Ordinarily, Elmo can disaffirm the contract

A minor may disaffirm a contract for necessaries and thereby avoid li?abil?ity for the reasonable value of the goods.

Mica, a minor, signs a contract to pay Natural 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

A contract that exculpates one party for negligence or other wrongdoing will not usually be viewed as unconscionable.

Through fraudulent means, Fred induces Gail to sign a contract to in?vest with him the profits from High Styles, her clothing store. When Gail learns the truth, she may

Adhesion contracts are often held to be contrary to public policy.

Curt, a doctor, renders medical care to Dora, a minor. According to the reasoning of the court in Case 13.1, Yale Diagnostic Radiology v. Estate of Harun, a contract between Curt and Dora is

Delia enters into, and fails to disaffirm soon after reaching the age of ma?jority, a contract with Electronics Stores, Inc. (ESI). Later Delia attempts to disaffirm the contract. ESI files a suit against her. The court will most likely consider the contract ratified if it is

A person who enters into a contract when he or she is intoxicated can void the contract if the terms are obviously favorable to the other party.

On Tad's eighteenth birthday, he decides that he no longer wants to keep a car he bought from U-Pick Autos, Inc., when he was seventeen. His right to disaffirm the deal will depend on

Parents are ordinarily liable for the contracts made by their minor chil?dren, whether or not the children acted on their own.

A minor may disaffirm a contract only if the subject matter is illegal.

Opie enters into a contract with Pia. Later, Opie is adjudged mentally incompetent and Quint is appointed Opie's guardian. Raye, Opie's daughter, attempts to void Opie's contract with Pia on the ground of Opie's incompetency. The contract is

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

A contract with an unlicensed professional is always enforceable.

Introduction to Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Constitutional Authority to Regulate Business

The Statute of Fraudswriting Requirements

Ethics and Business Decision Making

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Internet Law

Criminal Law and Cyber Crimes

Nature and Terminology

Agreement

Consideration

Mistakes, Fraud, and Voluntary Consent

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

E-Contracts and E-Signatures

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

The Function Creation of Negotiable Instruments

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Checks, the Banking System, and E-Money

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Agency Formation and Duties

Liability to Third Parties and Termination

Employment and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

Partnerships and Limited Liability Partnerships

Limited Liability Companies Special Business Forms

Corporationsformation and Financing

Corporationsdirectors, Officers, Shareholders

Corporationsmerger, Consolidation, Termination

Corporationssecurities Law Corporate Governance

Law for Small Businesses

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

Personal Property and Bailments

Real Property and Landlord-Tenant Relationships

Insurance

Wills and Trusts

Professional Liaility and Accountability

International Law in a Global Economy

Legal and Ethical Issues in Business

Legal Issues

Contracts and Business Law

Contracts and Liability

Banking and Payment Systems

Loan Security and Repossession in Credit Transactions

Employment Law and Ethics

Legal Issues in Corporate Governance and Business Operations