Question 1

Depending on the size of the print on the back of the contract, which of the following could Tevis possibly use as a defense?

Accepted Answer

A)   Substantive unconscionability
B)   Unclear drafting
C)   Procedural unconscionability
D)   Outrageous wording
E)   Adhesion conscionabilityF) A) and E)
G) A) and B)

Question 2

Which of the following is the majority rule regarding a minor's misrepresentation of his or her age?

Accepted Answer

A)   That if a competent party relies on a misrepresentation in good faith, the minor gives up the right to disaffirm the agreement.
B)   That the minor must restore the competent party to that party's precontractual position before obtaining the disaffirmance.
C)   That the minor may disaffirm but that the competent party has the right to sue the minor in tort and recover damages for fraud.
D)   That misrepresentation does not affect the minor's right to disaffirm the contract.
E)   That misrepresentation results in the minor receiving a return of only half the consideration he or she supplied.F) A) and E)
G) B) and E)

Question 3

Classify contracts with persons with limited mental capabilities.

Accepted Answer

Contracts of a person with limited menta...

Question 4

In Lopez v. Kmart Corporation, the case in the text regarding disaffirmance, did the court find the minor plaintiff's disaffirmance of an employment contract to be reasonable?

Accepted Answer

A)   Yes, because the disaffirmance occurred within one month of reaching the age of majority.
B)   Yes, because the disaffirmance occurred within six months of reaching the age of majority.
C)   The court did not find the disaffirmance to be reasonable.
D)   No, because the plaintiff could have disaffirmed the contract when he was under the age of majority but chose not to do so.
E)   Yes, because the type of contract at issue was an arbitration agreement.F) All of the above
G) C) and D)

Question 5

Disaffirmance laws have been found to reflect a policy of discouraging adults from contracting with minors.

Accepted Answer

A) True 
 B)False

Question 6

[Zaltar Zeb] Zeb suffers from delusions that he is from the planet Zaltar. Zeb's contract with DigiTV, his digital television service provider, has expired. After comparing his past payments to the potential savings from satellite television provider SatTV, Zeb decides to sign a two-year contract with SatTV. After six months with SatTV, Zeb realizes he paid less with DigiTV and he now wants to be released from his contract with SatTV.
-If a court has declared Zeb insane and his sister is appointed guardian, which of the following statements would be true?

Accepted Answer

A)   Zeb's sister has the sole legal capacity to enter into contracts on Zeb's behalf and any contract Zeb enters into is void.
B)   Zeb's sister may enter into contracts on Zeb's behalf, but only with Zeb's affirmance.
C)   Both Zeb and his sister have capacity to enter into contracts, however, any contract Zeb enters into may be disaffirmed by Zeb.
D)   Zeb may enter into contracts, but they may be disaffirmed by his sister.
E)   Zeb may enter into contracts, but they are voidable by his sister.F) C) and D)
G) A) and E)

Question 7

[Beauty Shop Woes] When Giuseppe hired Ines to work in his beauty shop as a hair stylist, she entered into an agreement with Giuseppe whereby if she left his employment she would not work for another beauty shop within 50 miles for 2 years. Giuseppe trained Ines in a number of new techniques. After nine months, Ines was offered a great job down the street at a new beauty shop. She quit Giuseppe's shop and a number of customers followed her down the street to her new job. Giuseppe claimed that she had signed a contract and had no right to go to work at the new shop. Ines disagreed and told Giuseppe that no judge in the country would enforce such an agreement. Ines then told Giuseppe that she was more worried about a customer who was threatening to sue her because her hair turned green after Ines worked on it. Ines said that she knew that the customer's hair was damaged; but that she told the customer that odd results could result from a dye attempt and had the customer sign a contract that released Ines from all liability and that she would not sue. The customer, however, sued anyway.
-Which is the correct term for the agreement Giuseppe and Ines entered?

Accepted Answer

A)   A competition agreement
B)   A prohibited competition agreement
C)   A covenant not to misappropriate
D)   A policy agreement
E)   A covenant not to competeF) A) and C)
G) None of the above

Question 8

Quinton is in desperate need for a new refrigerator but does not have good credit. Hulio indicates that he will sell Quinton a refrigerator, but Quinton will have to make weekly payments at 18% interest and, if he misses one payment, Hulio has the right to repossess the refrigerator. Hulio tells Quinton that those are the final terms and Quinton has 10 minutes to decide whether he wants to take the contract terms or find someone else to contract with. This is an example of a[n] ________.

Accepted Answer

A)   procedurally unconscionable contract
B)   expressly oppressive contract
C)   outrageously invalid contract
D)   adhesion contract
E)   enforceable agreementF) C) and D)
G) A) and C)

Question 9

Payton gets a job as a salesman for a pharmaceutical company. He agrees that if he leaves his employment, he will not work for another pharmaceutical company for a period of two years. That type of agreement is called a[n] ________.

Accepted Answer

A)   Covenant not to compete
B)   Necessary covenant
C)   Employment completion agreement
D)   Covenant of good faith agreement
E)   Covenant of favored employmentF) C) and E)
G) D) and E)

Question 10

In pari delicto is the term for when both parties are equally responsible for an illegal agreement.

Accepted Answer

A) True 
 B)False

Question 11

Lillian is a minor from an upper-income family. Which of the following is least likely to be considered a "necessary" for her due to her social status?

Accepted Answer

A)   Rent.
B)   Psychologist
C)   Monthly credit card bill for electricity.
D)   Credit card bill for monthly gym membership.
E)   Winter boots.F) C) and D)
G) B) and C)

Question 12

Maurice is purchasing a bowling alley called Stay in Your Lane from Vlad. The two sign a covenant not to compete prohibiting Vlad from opening a bowling alley within 25 miles of Stay in Your Lane for one year. Assuming that the covenant was drafted properly, is it likely to be enforced, and why or why not? Also, discuss arguments for and against covenants not to compete in the sale of a business.

Accepted Answer

The covenant is likely to be enforced be...

Question 13

When Phillip and Cynthia entered into their contract, the contract was legal under state statute. However, their state passed a new statute making the subject matter of their contract illegal. This makes their contract ________.

Accepted Answer

A)   discharged
B)   still enforceable
C)   executed
D)   void because it is illegal
E)   exemptF) B) and D)
G) None of the above

Question 14

Which of the following occurs when a person reaches the age of majority and states, either orally or in writing, that he or she intends to be bound by the contract entered into as a minor?

Accepted Answer

A)   Implied ratification
B)   Express ratification
C)   Express novation
D)   Implied novation
E)   Express ratification if the statement is in writing but nothing if the statement is only oralF) A) and D)
G) C) and D)

Question 15

What is usury? What are the two legal exceptions discussed in the text whereby usury statutes will not be applied?

Accepted Answer

Usury occurs when a party gives a loan a...

Question 16

[Amazing Fabrics] Amazing Fabrics, owned by Peri, has provided top-quality draperies, tablecloths and other linens to many of Chicago's high-end hotels for decades. Peri has an employment contract with his top designer, Calvin, which states that, if Calvin leaves Amazing Fabrics, he is prohibited from working for any competitor and that the clause remains effective even if the business is sold to new owners. Peri decides to sell his business to Lisette and retire. The contract for the sale of the business includes a clause that Peri shall not open a business that competes with Amazing Fabrics anywhere in the Chicago metropolitan area for two years. A year after signing the contract, Peri realizes he is bored in his retirement and opens Fine Fabrics, which provides tablecloths and other linens to Chicago area restaurants and hotels. Peri calls Calvin and persuades him to leave Amazing Fabrics and work for Peri. Many of Lisette's customers prefer to work with Calvin and move their business to Peri's new company. Lisette wants to sue both Peri and Calvin for breach of contract.
-What would likely be the outcome of Lisette's breach of contract claim against Peri?

Accepted Answer

A)   Peri would likely be successful because covenants not to compete in conjunction with the sale of a business are generally not enforceable.
B)   Peri would likely be successful because, although covenants not to compete in conjunction with the sale of a business are generally enforceable, Lisette's contract was unreasonable in that it would have restricted Peri from opening any business.
C)   Peri would likely be successful because covenants not to compete in employment contracts are generally enforceable and Lisette's contract was for a reasonable length of time and a reasonable location.
D)   Lisette would likely be successful because covenants not to compete in conjunction with the sale of a business are generally enforceable and Lisette's contract was for a reasonable length of time and a reasonable location.
E)   Lisette would likely be successful because covenants not to compete in employment contracts are generally enforceable and Lisette's contract was for a reasonable length of time and a reasonable location.F) C) and D)
G) A) and B)

Question 17

Which of the following involves overly harsh or lopsided substance in an agreement?

Accepted Answer

A)   Substantive unconscionability.
B)   Adhesion conscionability.
C)   Procedural unconscionability.
D)   Exculpatory clauses.
E)   An in pari delicto agreement.F) B) and C)
G) C) and D)

Question 18

Which statement applies in the dispute between Rose and Sal's Car Savings, considering that she waited to turn 18 before attempting to disaffirm the contract?

Accepted Answer

A)   So long as, after reaching the age of majority, Rose did not state orally or in writing that she intended to be bound by the contract, then she did not commit an express ratification.
B)   Rose was required to expressly ratify the contract before she could be bound to it.
C)   An implied ratification occurs when parents agree to accept the debt entered into by a minor.
D)   If Rose caused any damage whatsoever to the car, she was said to have impliedly ratified the contract.
E)   Rose was required to expressly ratify the contract before she could be bound to it so long as no damage was done; but if she did any damage to the car, as a matter of law, she is said to have impliedly ratified it.F) A) and E)
G) A) and D)

Question 19

Once a young person reaches the age of majority and ratifies a contract made as a minor, he or she has a reasonable period of time to void the contract.

Accepted Answer

A) True 
 B)False

Question 20

In regard to the rule used in determining the obligations of a minor on disaffirmance of a contract, discuss both the traditional rule and also the modification of the rule applied in a number of states today, set forth which of the rules you support, and why.

Accepted Answer

Traditionally, most states simply requir...

Exam 16: Capacity and Legality

Correct Answer
verified

In regard to the rule used in determining the obligations of a minor on disaffirmance of a contract, discuss both the traditional rule and also the modification of the rule applied in a number of states today, set forth which of the rules you support, and why.

Correct Answer
verified
Traditionally, most states simply requir...
View Answer

When Phillip and Cynthia entered into their contract, the contract was legal under state statute. However, their state passed a new statute making the subject matter of their contract illegal. This makes their contract ________.

Correct Answer
verified

Which of the following involves overly harsh or lopsided substance in an agreement?

Correct Answer
verified

Classify contracts with persons with limited mental capabilities.

Correct Answer
verified
Contracts of a person with limited menta...
View Answer

Correct Answer
verified

Disaffirmance laws have been found to reflect a policy of discouraging adults from contracting with minors.

Correct Answer
verified

Which of the following occurs when a person reaches the age of majority and states, either orally or in writing, that he or she intends to be bound by the contract entered into as a minor?

Correct Answer
verified

What is usury? What are the two legal exceptions discussed in the text whereby usury statutes will not be applied?

Correct Answer
verified
Usury occurs when a party gives a loan a...
View Answer

Depending on the size of the print on the back of the contract, which of the following could Tevis possibly use as a defense?

Correct Answer
verified

Once a young person reaches the age of majority and ratifies a contract made as a minor, he or she has a reasonable period of time to void the contract.

Correct Answer
verified

In pari delicto is the term for when both parties are equally responsible for an illegal agreement.

Correct Answer
verified

Which of the following is the majority rule regarding a minor's misrepresentation of his or her age?

Correct Answer
verified

Which statement applies in the dispute between Rose and Sal's Car Savings, considering that she waited to turn 18 before attempting to disaffirm the contract?

Correct Answer
verified

Payton gets a job as a salesman for a pharmaceutical company. He agrees that if he leaves his employment, he will not work for another pharmaceutical company for a period of two years. That type of agreement is called a[n] ________.

Correct Answer
verified

Correct Answer
verified

Lillian is a minor from an upper-income family. Which of the following is least likely to be considered a "necessary" for her due to her social status?

Correct Answer
verified

In Lopez v. Kmart Corporation, the case in the text regarding disaffirmance, did the court find the minor plaintiff's disaffirmance of an employment contract to be reasonable?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The covenant is likely to be enforced be...
View Answer

Exam 16: Capacity and Legality

Correct AnswerverifiedShow Answer

In regard to the rule used in determining the obligations of a minor on disaffirmance of a contract, discuss both the traditional rule and also the modification of the rule applied in a number of states today, set forth which of the rules you support, and why.

Correct AnswerverifiedTraditionally, most states simply requir...View AnswerShow Answer

When Phillip and Cynthia entered into their contract, the contract was legal under state statute. However, their state passed a new statute making the subject matter of their contract illegal. This makes their contract ________.

Correct AnswerverifiedShow Answer

Which of the following involves overly harsh or lopsided substance in an agreement?

Correct AnswerverifiedShow Answer

Classify contracts with persons with limited mental capabilities.

Correct AnswerverifiedContracts of a person with limited menta...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Disaffirmance laws have been found to reflect a policy of discouraging adults from contracting with minors.

Correct AnswerverifiedShow Answer

Which of the following occurs when a person reaches the age of majority and states, either orally or in writing, that he or she intends to be bound by the contract entered into as a minor?

Correct AnswerverifiedShow Answer

What is usury? What are the two legal exceptions discussed in the text whereby usury statutes will not be applied?

Correct AnswerverifiedUsury occurs when a party gives a loan a...View AnswerShow Answer

Depending on the size of the print on the back of the contract, which of the following could Tevis possibly use as a defense?

Correct AnswerverifiedShow Answer

Once a young person reaches the age of majority and ratifies a contract made as a minor, he or she has a reasonable period of time to void the contract.

Correct AnswerverifiedShow Answer

In pari delicto is the term for when both parties are equally responsible for an illegal agreement.

Correct AnswerverifiedShow Answer

Which of the following is the majority rule regarding a minor's misrepresentation of his or her age?

Correct AnswerverifiedShow Answer

Which statement applies in the dispute between Rose and Sal's Car Savings, considering that she waited to turn 18 before attempting to disaffirm the contract?

Correct AnswerverifiedShow Answer

Payton gets a job as a salesman for a pharmaceutical company. He agrees that if he leaves his employment, he will not work for another pharmaceutical company for a period of two years. That type of agreement is called a[n] ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Lillian is a minor from an upper-income family. Which of the following is least likely to be considered a "necessary" for her due to her social status?

Correct AnswerverifiedShow Answer

In Lopez v. Kmart Corporation, the case in the text regarding disaffirmance, did the court find the minor plaintiff's disaffirmance of an employment contract to be reasonable?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe covenant is likely to be enforced be...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified
Traditionally, most states simply requir...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Contracts of a person with limited menta...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Usury occurs when a party gives a loan a...
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
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Correct Answer
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Correct Answer
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Correct Answer
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The covenant is likely to be enforced be...
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