Chapter 14 Book set

Question 1

The contracts entered into by a minor are voidable at the option of that minor.

Answer 1

True

Question 2

The lack of a license in certain occupations bars the enforcement of work-related contracts.

Answer 2

True

Question 3

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

Answer 3

eighteen

Question 4

A contract to do something that is prohibited by statutory law is illegal but not void from the outset

Answer 4

False

Question 5

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

Answer 5

False

Question 6

The purpose of the right to disaffirm a contract is to

Answer 6

protect minors.

Question 7

If a person was sufficiently intoxicated to lack mental capacity, his or her contracts are void.

Answer 7

False

Question 8

Quest enters into a contract to buy a thoroughbred from Rancho Mesa. Quest can disaffirm the contract

Answer 8

by words or conduct

Question 9

A party may have the capacity to enter into a valid contract and the right to avoid liability under it.

Answer 9

True

Question 10

A lender who makes a loan at an interest rate above the lawful maximum commits usury.

Answer 10

True

Question 11

A contract to do something that is prohibited by statutory law is void from the outset.

Answer 11

True

Question 12

Foy, a minor, misrepresents his age when entering into a contract to buy a car from Gas Hogs Inc. Foy takes possession of the car, but makes no payments on the contract and tries to disaffirm it. Most likely, Gas Hogs can recover

Answer 12

the balance due on the contract

Question 13

Contracts in restraint of trade always violate one or more federal or state statutes.

Answer 13

False

Question 14

Any contract entered into with an unlicensed party is enforceable

Answer 14

False

Question 15

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

Answer 15

ratification

Question 16

A landlord can avoid liability for injuries that occur on rental property by including an exculpatory clause in the lease.

Answer 16

False

Question 17

Intoxicated, Efron enters a contract for the sale of his business, Freight Dispatch, to Gretel for less than its market value. This contract is enforceable if, at the time,

Answer 17

Efron understood the legal consequences

Question 18

A minor can enter into any contract an adult can, without exception.

Answer 18

False

Question 19

Contracts entered into by mentally incompetent persons are not valid under any circumstances.

Answer 19

False

Question 20

Restraints of trade interfere with free competition.

Answer 20

True

Question 21

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

Answer 21

True

Question 22

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

Answer 22

False

Question 23

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

Answer 23

False

Question 24

Generally, any party to an illegal contract can recover for performance rendered.

Answer 24

False

Question 25

All persons can make legally binding contracts in all situations.

Answer 25

False

Question 26

A party to a contract who has no reason to know that the contract is illegal can often obtain restitution on a partially executed contract.

Answer 26

True

Question 27

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

Answer 27

reaches the age of majority
gets married
is emancipated from her parents

Question 28

Among the requirements for a valid contract, courts generally presume the existence of

Answer 28

contractual capacity.

Question 29

Dari, a minor, wants to disaffirm a contract that she entered into with Echo, a cell service company. The law in Dari’s state, as in all states, permits minors to disaffirm

Answer 29

executory and fully executed contracts

Question 30

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

Answer 30

False

Question 31

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

Answer 31

True

Question 32

To disaffirm a contract is to deny its existence.

Answer 32

False

Question 33

A minor can ratify a contract and thus make it enforceable.

Answer 33

True

Question 34

A contract provision that deprives one party of the benefits of the agreement may seem unfair but a court is not likely to consider it unconscionable.

Answer 34

False

Question 35

The general rule is that no party to an illegal contract can sue for breach.

Answer 35

True

Question 36

A contract entered into by an intoxicated person can be voidable.

Answer 36

True

Question 37

A minor can disaffirm a contract at any time but remains legally obligated to perform it.

Answer 37

False

Question 38

An unconscionable contract is one in which the terms of the agreement are oppressive, unscrupulous, or grossly unfair.

Answer 38

True

Question 39

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

Answer 39

ratifies it.

Question 40

Goods and services that are reasonably needed to maintain a minor’s standard of living, such as food, clothing, shelter, and medical services, are known as utilities.

Answer 40

False

Question 41

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

Answer 41

False

Question 42

Deb is a minor. She can enter into any contract an adult can, provided

Answer 42

the contract is not one prohibited by law for minors

Question 43

Von, a minor, wants to return a set of skis that he bought from Winter Sports. He used—and wrecked—the skis. In a state in which a duty of restitution is imposed, Von most likely

Answer 43

must return the skis and pay for the damage

Question 44

A contract that calls for an action contrary to public policy is illegal but not unenforceable.

Answer 44

False

Question 45

When a covenant not to compete is unreasonable in its essential terms, a court will refuse to reform the covenant.

Answer 45

False

Question 46

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

Answer 46

False

Question 47

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

Answer 47

cannot avoid the contract

Question 48

Evelyn is a minor. As a minor, she

Answer 48

has the capacity to enter into a valid contract.
has the right to avoid liability under a valid contract.
is not usually legally bound by a contract.

Question 49

Les, a minor, enters into a contract to buy a dirt bike from Motocross LLC. Les can ordinarily disaffirm the contract

Answer 49

at any time during minority.
in a timely manner.
for a reasonable time after coming of age.

Question 50

Contracts entered into by mentally incompetent persons may be disaffirmed.

Answer 50

True