Question 1

A contract that is void from the outset can be enforced in some circumstances.

Accepted Answer

A) True 
 B)False

Question 2

Morris threatens physical harm to force Barb to contract to pay him for protecting her store-Barb's Baubles-against vandalism and destruction. Barb may​

Accepted Answer

A) rescind the contract or refuse to comply with its terms. 
B) do nothing once she has agreed to pay. 
C) recover from her insurer for the cost. 
D) recover from the local police for their failure to protect her store.

Question 3

Rosalind, a seventeen-year-old, signs a contract to sell her car to Street Fleet Used Cars. The next day, Rosalind tells Street Fleet that she's decided not to sell the car. Rosalind is liable to Street Fleet for​

Accepted Answer

A) the cost of a car of comparable value. 
B) the value of her performance under the contract. 
C) the amount of its profit on the deal. 
D) nothing.

Question 4

A contract that exculpates one party for negligence or other wrongdoing will often be viewed as unconscionable.

Accepted Answer

A) True 
 B)False

Question 5

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.

Question 6

A contract entered into by a minor is voidable at the option of either of the contracting parties.

Accepted Answer

A) True 
 B)False

Question 7

Misrepresentation of law ordinarily entitles a party to relief from a contract.

Accepted Answer

A) True 
 B)False

Question 8

All contracts between adults and minors are void.

Accepted Answer

A) True 
 B)False

Question 9

An innocent party can rescind a fraudulent contract and be restored to his or her original position.

Accepted Answer

A) True 
 B)False

Question 10

William obtains a loan from a bank at 4.5 percent interest. The state where he obtains the loan has a usury statute that limits interest rates to a 3.5 percent maximum. William's contract with the bank is​

Accepted Answer

A) enforceable only if William does not attempt to disaffirm it. 
B) enforceable only if the bank does not attempt to disaffirm it. 
C) enforceable only if both William and the bank knew of the statute when the contract was signed. 
D) not enforceable.

Question 11

​Fletcher signs a contract to buy a new electric guitar and amplifier just before reaching the age of majority. After reaching the age of majority, Fletcher does not take possession or make payments. With respect to the contract, most courts would hold that this is

Accepted Answer

A) disaffirmance. 
B) emancipation. 
C) ratification. 
D) rescission.

Question 12

Drake enters into a contract with Eve, who claims to have access to a stock-trading algorithm that will multiply an investment many times over. When the results do not match this promise, Drake learns that Eve does not have access to any unique software and files a suit against her, alleging fraud. Proof of an injury is required to​

Accepted Answer

A) recover damages. 
B) rescind the contract. 
C) undo Eve's influence. 
D) punish the defendant.

Exam 9: Capacity, Legality, and Enforceability

A contract that is void from the outset can be enforced in some circumstances.

Morris threatens physical harm to force Barb to contract to pay him for protecting her store-Barb's Baubles-against vandalism and destruction. Barb may​

Rosalind, a seventeen-year-old, signs a contract to sell her car to Street Fleet Used Cars. The next day, Rosalind tells Street Fleet that she's decided not to sell the car. Rosalind is liable to Street Fleet for​

A contract that exculpates one party for negligence or other wrongdoing will often be viewed as unconscionable.

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​

A contract entered into by a minor is voidable at the option of either of the contracting parties.

Misrepresentation of law ordinarily entitles a party to relief from a contract.

All contracts between adults and minors are void.

An innocent party can rescind a fraudulent contract and be restored to his or her original position.

William obtains a loan from a bank at 4.5 percent interest. The state where he obtains the loan has a usury statute that limits interest rates to a 3.5 percent maximum. William's contract with the bank is​

​Fletcher signs a contract to buy a new electric guitar and amplifier just before reaching the age of majority. After reaching the age of majority, Fletcher does not take possession or make payments. With respect to the contract, most courts would hold that this is

Morris threatens physical harm to force Barb to contract to pay him for protecting her store-Barb's Baubles-against vandalism and destruction. Barb may

Rosalind, a seventeen-year-old, signs a contract to sell her car to Street Fleet Used Cars. The next day, Rosalind tells Street Fleet that she's decided not to sell the car. Rosalind is liable to Street Fleet for

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

William obtains a loan from a bank at 4.5 percent interest. The state where he obtains the loan has a usury statute that limits interest rates to a 3.5 percent maximum. William's contract with the bank is

Fletcher signs a contract to buy a new electric guitar and amplifier just before reaching the age of majority. After reaching the age of majority, Fletcher does not take possession or make payments. With respect to the contract, most courts would hold that this is