Question 1

A covenant not to compete is never enforceable.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)   valid but may be disaffirmed.
B)   valid but may not be disaffirmed.
C)   void as a matter of law.
D)   void unless it is also signed by Ed, the manager of Dine & Drink.E) B) and D)
F) A) and B)

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)   the geographic area of the relevant market.
B)   the parties' relative bargaining power.
C)   the quality of related products in the general market.
D)   the relation of this deal to those of other customers.E) A) and C)
F) A) and B)

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

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?

Accepted Answer

Airway cannot avoid liability for the de...

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A)   does not change the fact that Phil is bound by the contract.
B)   does not yet exist because Olga is still a minor.
C)   gives Phil, an adult, the right to disaffirm the contract.
D)   is not valid because a computer is a "necessary."E) A) and B)
F) B) and C)

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)   Clio appeared intoxicated to Evan.
B)   Clio disaffirms the contract after becoming sober.
C)   Clio was so intoxicated as to have no memory of the deal.
D)   Evan fraudulently induced Clio to become intoxicated.E) B) and C)
F) A) and D)

Question 14

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

Accepted Answer

A)   the amount of her bet and the amount of Jock's bet.
B)   the amount of her bet minus Len's expenses.
C)   the amount of her bet only.
D)   nothing.E) A) and D)
F) A) and B)

Question 15

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

Accepted Answer

A)   invalid because it is part of a sale of an ongoing business.
B)   invalid because of the unreasonable terms of area and time.
C)   valid because it is part of a sale of an ongoing business.
D)   valid because Jon and Lacy apparently have the capacity to contract.E) A) and D)
F) All of the above

Question 16

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

Accepted Answer

A)   elects not to avoid the contract.
B)   is a minor.
C)   is a minor, intoxicated, or mentally incompetent.
D)   is intoxicated or men?tally incompetent.E) None of the above
F) B) and C)

Question 17

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

Accepted Answer

A)   National Insurance only.
B)   National Insurance or Opal.
C)   no one.
D)   Opal only.E) None of the above
F) B) and C)

Question 18

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

Accepted Answer

A)   disaffirm the lease because her parents can be held liable for it.
B)   disaffirm the lease without liability.
C)   not disaffirm the lease because an apartment is a "necessary."
D)   not disaffirm the lease if she intended to live on her own.E) None of the above
F) All of the above

Question 19

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

Accepted Answer

A)   liable to OK and must sell it a car of comparable value.
B)   liable to OK and must sell it her car.
C)   not liable to OK because she is a minor.
D)   not liable to OK because the sale of the car disaffirmed their deal.E) C) and D)
F) A) and B)

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 13: Capacity and Legality

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

Correct Answer
verified

A covenant not to compete is never enforceable.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
Airway cannot avoid liability for the de...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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.

Correct Answer
verified

Exam 13: Capacity and Legality

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

Correct AnswerverifiedShow Answer

A covenant not to compete is never enforceable.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedAirway cannot avoid liability for the de...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Airway cannot avoid liability for the de...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified