Question 1

A promise to refrain from competing in business with another is considered to be unconscionable.

Accepted Answer

A) True 
 B)False

Question 2

To disaffirm a contract is to deny its existence.

Accepted Answer

A) True 
 B)False

Question 3

A contract clause that releases an employer from liability for any injury to an employee, no matter who is at fault, is generally enforceable.

Accepted Answer

A) True 
 B)False

Question 4

The general rule is that any party to an illegal contract can recover for performance rendered.

Accepted Answer

A) True 
 B)False

Question 5

Twig is fifteen. In most states, for contractual purposes, Twig would be considered a minor until she is

Accepted Answer

A)  sixteen.
B)  seventeen.
C)  eighteen.
D)  twenty-one.E) None of the above
F) A) and D)

Question 6

Horse racing, video poker games, and charity-sponsored bingo are

Accepted Answer

A)  forms of gambling not allowed or regulated by any state.
B)  forms of gambling allowed and regulated by many states.
C)  forms of gambling allowed and regulated by all states.
D)  not forms of gambling.E) B) and C)
F) None of the above

Question 7

Fagin and Gretel agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gretel can

Accepted Answer

A)  enforce the agreement.
B)  obtain damages in the amount of her partner's share of the illegal profits.
C)  obtain damages in the amount of her own share of the illegal profits.
D)  none of the choices.E) A) and D)
F) All of the above D

Question 8

The performance of a contract cannot be rendered illegal by a statute after the parties have already entered into the contract.

Accepted Answer

A) True 
 B)False

Question 9

Any contract entered into with an unlicensed party is enforceable.

Accepted Answer

A) True 
 B)False

Question 10

Bern, a minor, signs a contract to buy a Caterwauler jet boat from Dahl, an adult. Dahl

Accepted Answer

A)  can avoid the contract without Bern's consent.
B)  cannot avoid the contract.
C)  can avoid as much of the contract as Bern elects to avoid.
D)  must obtain Bern's consent to avoid the contract.E) A) and B)
F) B) and C)

Question 11

Restraints of trade interfere with free competition.

Accepted Answer

A) True 
 B)False

Question 12

If intoxication is purely voluntary, the intoxicated person's contracts are not voidable.

Accepted Answer

A) True 
 B)False

Question 13

Intoxicated, Obo enters a contract for the sale of his business, Precision Parts, to Quad for less than its market value. This contract is voidable if, at the time,

Accepted Answer

A)  Obo's intoxication was purely voluntary.
B)  Quad fraudulently induced Obo to become intoxicated.
C)  Quad was also intoxicated.
D)  Obo understood the legal consequences.E) A) and B)
F) B) and C)

Question 14

Game Corporation hires Hale, a minor, to create new customized game software for certain clients. Hale signs a contract that requires her to work for Game for eighteen months. Before beginning work, however, Hale tells Game that she will not create new software for Game and that she is going to work for Imagine Inc., a Game competitor. Is Game's contract with Hale enforceable? Why or why not?

Accepted Answer

The contract is not enforceable. Hale is a minor, so any contract that she enters is voidable by her. In other words, Hale had the option to disaffirm the contract. 
A contract entered into by a minor can be disaffirmed at any time during minority, or for a reasonable time after the minor comes of age. Hale's announcement that she would not be bound by the contract was sufficient to disaffirm it. 
Hale had not received anything under the contract with Game, so there is nothing to return under a duty of restitution. Also, there is no significance to Hale's agreeing to work for Imagine, Game's competitor.

Question 15

Accepting and giving legal force to an obligation that previously was not enforceable is

Accepted Answer

A)  disaffirmance.
B)  emancipation.
C)  ratification.
D)  illegal.E) B) and C)
F) A) and D)

Question 16

Opal is a minor. In at least some states, Opal can enter into a legally binding contract when she

Accepted Answer

A)  reaches the age of majority.
B)  gets married.
C)  is emancipated from her parents.
D)  all of the choices.E) A) and B)
F) A) and C) D

Question 17

Generally neither party to an illegal contract can sue for breach.

Accepted Answer

A) True 
 B)False

Question 18

Bianca, a minor, enters into a contract to buy two all-season passes from Chalet Ski Park. The contract will be made enforceable if Bianca

Accepted Answer

A)  ratifies it.
B)  disaffirms it.
C)  nullifies it.
D)  voids it.E) A) and B)
F) A) and C)

Question 19

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients. This deal is

Accepted Answer

A)  enforceable.
B)  void.
C)  voidable at the option of either party.
D)  voidable at the option of the party having less bargaining power.E) All of the above
F) B) and C)

Question 20

A court usually will enforce a covenant not to compete provided its restrictions are reasonable.

Accepted Answer

A) True 
 B)False

Exam 14: Capacity and Legality

A promise to refrain from competing in business with another is considered to be unconscionable.

Correct Answer
verified

To disaffirm a contract is to deny its existence.

Correct Answer
verified

A contract clause that releases an employer from liability for any injury to an employee, no matter who is at fault, is generally enforceable.

Correct Answer
verified

The general rule is that any party to an illegal contract can recover for performance rendered.

Correct Answer
verified

Twig is fifteen. In most states, for contractual purposes, Twig would be considered a minor until she is

Correct Answer
verified

Horse racing, video poker games, and charity-sponsored bingo are

Correct Answer
verified

Fagin and Gretel agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gretel can

Correct Answer
verified
D

The performance of a contract cannot be rendered illegal by a statute after the parties have already entered into the contract.

Correct Answer
verified

Any contract entered into with an unlicensed party is enforceable.

Correct Answer
verified

Bern, a minor, signs a contract to buy a Caterwauler jet boat from Dahl, an adult. Dahl

Correct Answer
verified

Restraints of trade interfere with free competition.

Correct Answer
verified

If intoxication is purely voluntary, the intoxicated person's contracts are not voidable.

Correct Answer
verified

Intoxicated, Obo enters a contract for the sale of his business, Precision Parts, to Quad for less than its market value. This contract is voidable if, at the time,

Correct Answer
verified

Accepting and giving legal force to an obligation that previously was not enforceable is

Correct Answer
verified

Opal is a minor. In at least some states, Opal can enter into a legally binding contract when she

Correct Answer
verified
D

Generally neither party to an illegal contract can sue for breach.

Correct Answer
verified

Bianca, a minor, enters into a contract to buy two all-season passes from Chalet Ski Park. The contract will be made enforceable if Bianca

Correct Answer
verified

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients. This deal is

Correct Answer
verified

A court usually will enforce a covenant not to compete provided its restrictions are reasonable.

Correct Answer
verified

Exam 14: Capacity and Legality

A promise to refrain from competing in business with another is considered to be unconscionable.

Correct AnswerverifiedShow Answer

To disaffirm a contract is to deny its existence.

Correct AnswerverifiedShow Answer

A contract clause that releases an employer from liability for any injury to an employee, no matter who is at fault, is generally enforceable.

Correct AnswerverifiedShow Answer

The general rule is that any party to an illegal contract can recover for performance rendered.

Correct AnswerverifiedShow Answer

Twig is fifteen. In most states, for contractual purposes, Twig would be considered a minor until she is

Correct AnswerverifiedShow Answer

Horse racing, video poker games, and charity-sponsored bingo are

Correct AnswerverifiedShow Answer

Fagin and Gretel agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gretel can

Correct AnswerverifiedD

The performance of a contract cannot be rendered illegal by a statute after the parties have already entered into the contract.

Correct AnswerverifiedShow Answer

Any contract entered into with an unlicensed party is enforceable.

Correct AnswerverifiedShow Answer

Bern, a minor, signs a contract to buy a Caterwauler jet boat from Dahl, an adult. Dahl

Correct AnswerverifiedShow Answer

Restraints of trade interfere with free competition.

Correct AnswerverifiedShow Answer

If intoxication is purely voluntary, the intoxicated person's contracts are not voidable.

Correct AnswerverifiedShow Answer

Intoxicated, Obo enters a contract for the sale of his business, Precision Parts, to Quad for less than its market value. This contract is voidable if, at the time,

Correct AnswerverifiedShow Answer

Accepting and giving legal force to an obligation that previously was not enforceable is

Correct AnswerverifiedShow Answer

Opal is a minor. In at least some states, Opal can enter into a legally binding contract when she

Correct AnswerverifiedD

Generally neither party to an illegal contract can sue for breach.

Correct AnswerverifiedShow Answer

Bianca, a minor, enters into a contract to buy two all-season passes from Chalet Ski Park. The contract will be made enforceable if Bianca

Correct AnswerverifiedShow Answer

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients. This deal is

Correct AnswerverifiedShow Answer

A court usually will enforce a covenant not to compete provided its restrictions are reasonable.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified