Business Law- Chapter 12 Flashcards

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1
Q

Minor

A

A person who has not reached the age of majority.

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2
Q

Infancy Doctrine

A

A doctrine that allows minors to disaffirm (cancel) most contracts they have entered into with adults.

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3
Q

Disaffirmance

A

The act of a minor to rescind a contract under the infancy doctrine. Disaffirmance may be done orally, in writing, or by the minor’s conduct.

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4
Q

Minor’s Duty of Restoration

A

A rule which states that a minor is obligated only to return the goods or property he or she has received from the adult in the condition it is in at the time of disaffirmation.

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5
Q

Competent Party’s Duty of Restitution

A

A rule which states that if a minor has transferred money, property, or other valuables to the competent party before disaffirming the contract, that party must place the minor in status quo.

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6
Q

Rarification

A

The act of a minor after the minor has reached the age of majority by which he or she accepts a contract entered into when she was a minor.

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7
Q

Emancipation

A

The act or process of a minorvoluntarily leaving home and living apart from his or her parents.

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8
Q

Necessaries of Life

A

Food, clothing, shelter, medical care, and other items considered necessary to the maintenance of life. Minors must pay the resonable value of necessaries of life for which they contract.

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9
Q

Legal Insanity

A

A state of contractual incapacity, as determined by law.

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10
Q

Adjudged Insane

A

Declared legally insane by a proper court or administrative agency. A contract entered into by a person adjudged insane is void.

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11
Q

Insane but not Adjudged Insane

A

Being insane but not having been adjudged insane by a court or an administrative agenct. A contract entered into by such person is generally voidable. Some states hold that such a contract is void.

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12
Q

Intoxicated Person

A

A person who is under contractual incapacity becuase of ingestion of alcohol or drugs to the point of incompetence.

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13
Q

Illegal contract

A

A contract that has an illegal object.

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14
Q

Usury law

A

A law that sets an upper limit on the interest rate that can be charged on certain types of loans.

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15
Q

Gambling Statutes

A

Statutes that make certain forms of gambling illegal.

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16
Q

Effect of illegality

A

A doctrine which states that the courts will refuse to enforce or rescind an illegal contract and will leave the parties where it finds them.

17
Q

in pari delicito

A

A situation in which both parties are equally at fault in an illegal contract.

18
Q

Contract Contrary to Public Policy

A

A contract that has a negative impact on society or that interferes with the public’s safety and welfare.

19
Q

Immoral Contract

A

A contract whose objective is the commission of an act that society considers immoral.

20
Q

Contract in Restraint of Trade

A

A contract that unreasonably restrains trade.

21
Q

Licensing Statute

A

A statute that requires a person or business to obtain a license from the government prior to engaging in a specified occupation or activity.

22
Q

Regulatory Statute

A

A licensing statute enacted to protect the public.

23
Q

Revenue-raising Statute

A

A licensing statute with the primary purpose of raising revenue for the government.

24
Q

Exculpatory Clause

A

A contractual provision that relieves one (or both) of the parties to a contract from tort liability for ordinary negligence.

25
Q

Covenant not to Compete

A

A contract which provides that a seller of a business or an employee will not engage in a similar business or occupation within a specified time following the sale of the business or termination of employment.

26
Q

Unconscionable Contract

A

A contract that courts refuse to enforce in part or at all becuase it is so oppressive or manifestly unfair as to be unjust.