blaw exam 4

Procedural unconscionability refers to

-the unconscionability that derives from the process of making a contract. -The absence of an opportunity for a person to read over a contract fully and ask any questions before they are required to sign is an example of

adhesion contract

A contract created by a party to an agreement that is presented to the other party on a take-it-or-leave-it basis is an

Which of the following is an incorrect statement regarding the enforceability of a covenant not to compete in an employment agreement?

A covenant not to compete in an employment contract is not enforceable.

unconscionable agreements

A covenant not to compete in employment contracts is legal in most states. There are times when agreements are so one-sided, or heavy-handed against one party, that courts will not make the harmed, innocent person fulfill his or her contractual duties. These heavily one-sided agreements are known as

recognized exceptions to the general rule that an illegal agreement is void.

A member of a specific, protected class is involved in an agreement that contradicts a statute intended to protect the specific class and a contract involving one party's justifiable ignorance of facts are a

Which of the following is not an accurate statement regarding the contractual capacity of a mentally incapacitated person?

A person has full capacity to enter into a contract if she suffers from a mental deficiency that prevents her from understanding the transaction

concealment

A seller removes 20,000 miles from a car odometer before selling the car to a buyer.

duress

Any unlawful threat exercised on a person whereby the person is forced to enter into an agreement is

Shawn offers to sell Molly his skis for $300. Molly responds, "I'll look at them in the morning, and if I like them, I'll pay you."

At this point, Molly has made an illusory promise.

basis for rescission

Fraud by any party as part of a contract

Which of the following is not an accurate statement regarding the contractual capacity of an intoxicated person?

Most states follow the Uniform Contracts Code, which addresses the effect of intoxication on contractual capacity

a valid contract between the parties

The courts insist that there must be a meeting of the minds

Suppose that someone offers a reward for the capture of a suspected criminal and a police officer arrests the suspect

The officer is not entitled to the reward since he was already obligated as part of his public duty to apprehend the suspect.

Legal assent is absent when

a legal mistake occurs

Generally, in most states

a minor allowed to disaffirm a school club membership contract According to the majority of jurisdictions, a minor can disaffirm a contract when the consideration he or she received has been damaged or destroyed and the other party has no recourse.

Today, in all but three states,

a minor is someone under the age of 18.

According to the majority rule

a minor's misrepresentation of age does not affect the minor's right to disaffirm the contract.

A court will not void a contract for

a mutual mistake of both parties

A minor has the right to disaffirm a contract until

a reasonable time after reaching the age of majority

A covenant not to compete is also known as

a restrictive covenant

accord and satisfaction is

an arrangement between contracting parties whereby one of the parties substitutes a different performance for his or her original duty under the contract.

No remedy is available for

an unenforceable agreement

A contract in restraint of trade is also known as

anticompetitive agreement

A disaffirmance by a minor of a contract must occur

before or within a reasonable period of time of the age of majority.

When legal assent to a contract is present

both parties to a contract are assumed to have freedom to enter into the contract.

Public policy involves

both the government's concern for its citizens and the beliefs people hold regarding the proper subject of business transactions

Technically, a minor can disaffirm a contract for necessaries

but the minor is liable for the reasonable value of the necessaries.

For a promise to be enforced by the courts, there must be

consideration.

court seldom

considers adequacy of consideration.

Once ratified

contract is no longer voidable

Adhesion contracts usually do not allow for

debate regarding the agreement

A court does not determine whether you made a

good bargain

If a person who has reached the age of majority legally affirms a contract made as a minor

he or she is said to have ratified the contract.

In the context of contract law, an innocent misrepresentation

is a false statement about a fact material to an agreement that the person who made the statement believed to be true

Past consideration

is not valid consideration for contract enforcement.

Emancipation

is when a minor's parents or legal guardians give up their right to exercise legal control over the minor. It typically occurs when a minor moves out of his or her parents' house and begins supporting himself or herself

If the mistake was so serious that the contract is unconscionable

it would permit a court to invalidate a contract on grounds of unilateral mistake.

Scienter

means knowledge

A creditor's promise to accept less than owed for a liquidated debt is

not binding.

The performance of a duty a person is already legally obligated to do is

not good consideration for a present contract.

The performance of an existing contractual duty is

not good consideration. Extra work is consideration on a promise for additional money as a basis for a contract.

An exception to the rule regarding liquidated debt

occurs when the debtor offers different performance.

unilateral contract

one party's consideration is the promise, and the other party's consideration is the act.

Gambling is an agreement in which

parties pay consideration for a chance to obtain money or property

One exception to the contract rule requiring consideration is

promissory estoppel.

Which of the following is not a main purpose of licensing statutes?

protection of government autonomy

Nondisclosure

refers to the failure to provide pertinent information about a projected contract.

Unilateral and mutual are the two types of mistakes

related to contract formation and enforcement

Undue influence assumes

that the persuasive efforts of the dominant person must have interfered with the ability of the weaker person to make his or her own decision.

One of the oldest limitations on capacity is

the ability of minors to enter into only voidable contracts.

bilateral contract

the consideration for each promise is a return promise, promise for a promise

The patently unfair nature of an exculpatory clause is closely tied to

the idea of unconscionable contracts.

In an unliquidated debt

the parties either dispute the fact that any money is owed or agree that some money is owed but dispute the amount.

When an innocent misrepresentation occurs

the person who made the false statement had no knowledge of the falsity of the claim. This means the person lacked scienter.

To enter into a valid and enforceable agreement for services

the services that require a license must be active by one party to the agreement.

A promise to do something you are already legally obligated to do is not

valid consideration

In general, a unilateral mistake does not

void a contract

A minor's contract is

voidable

Public policy focuses on

what is in the best interest of society

Intent to deceive is present

when the party making the false statement in an agreement claims or implies that he or she has personal knowledge of the accuracy of the assertion

Suppose a pool contractor agrees to build a pool for a homeowner by June 1. In May, the contractor informs the homeowner that he will not be able to complete the project by June 1 unless the homeowner pays him an additional $5,000 to hire more workers. Under objection, the homeowner agrees. What is an accurate statement regarding the homeowner's obligation to pay the contractor the additional $5,000?

The homeowner is not legally obligated to pay the $5,000 since the contractor had a preexisting contractual duty to complete the pool by June 1.

When there is a unilateral mistake in a contract

courts are hesitant to interfere with the contract when one of the parties has a correct understanding of the material facts of the agreement.

Generally, when an agreement is deemed illegal

courts will label the contract void.

Following an according

if the party making the promise fails to pay the agreed amount the other party may sue for full amount owed under original contract

Substantive unconscionability

involves overly harsh or lopsided substance in an agreement.

Suppose a debtor owes a credit card company $3,000. The debtor calls the company and tells its representative she cannot afford to pay the $3,000 but that she is willing to transfer ownership of her car to the company in full settlement of the $3,000 debt. The credit card company agrees, accepts title to the car, sells the car, and recovers $2,000 from the sale. What is an accurate statement regarding the right of the credit card company to recover the remaining $1,000 from the debtor?

the company cannot recover the $1,000 since the "different performance" exception to the partial payment of a liquidated debt rule applies.

A contract in restraint of trade

violates public policy

In the context of contract law, a mistake

is an erroneous belief about the facts of a contract at the time the contract is concluded.

Substantive Unconscionability

An agreement in which one party has little to no legal recourse

Suppose a debtor owes a credit card company $3,000. She calls the company and tells its representative that she cannot afford to repay the $3,000 but that she can pay $2,000. The credit card company agrees to accept the $2,000 as payment in full. What is an accurate statement regarding whether the credit card company has the right to recover the remaining $1,000 from the debtor?

The credit card company can recover the remaining $1,000 since a creditor's promise to accept less than owed for a liquidated debt is not binding.

A person who has the legal capacity to contract is one who

has the mental ability to understand his or her rights and obligations under a contract and therefore will presumably be able to understand how to comply with the terms of the agreement.

In the context of contract law, concealment

involves the active hiding of the truth about a material fact in a contract.

In the context of contract law, a fraudulent misrepresentation

is a false representation of a material fact that is consciously false and is intended to mislead the other party.

A negligent misrepresentation

is a false statement of material fact made by a party who thinks it is true but who would have known the truth about the fact had he or she used reasonable care to discover or reveal it.

An exculpatory clause

is a statement releasing one of the parties to an agreement from all liability, regardless of who is at fault or what the injury suffered is.

Fraudulent misrepresentation

is intentional misrepresentation

illusory promise

is not a promise at all.

Which of the following is an incorrect statement regarding an agreement to commit a crime or tort?

· A contract, irrespective of its legality, is enforceable.

Which of the following conditions would not permit a court to invalidate a contract on the grounds of unilateral mistake?

· One party entered into the contract as a result of sales talk, or "puffery."

All but which of the following circumstances would trigger a successful request for contract rescission on grounds of duress?

· One party realizes after the contract is formed that the agreement is a "bad bargain." · One party is mistaken about a material fact pertaining to the contract.

Which of the following is not a requirement for an accord and satisfaction to be enforceable?

· The creditor refuses to accept as full payment less than the creditor claims is owed. · The debt is liquidated. · The parties seek prior judicial approval of the accord and satisfaction.

Which of the following is not a condition for promissory estoppel to occur?

· The promisor is under a moral or prior contractual obligation to make the promise.

For a mutual mistake to interfere with legal consent, it must involve all but which of the following?

· a buyer who relied on the seller's sales talk (also known as "puffery") · a contract for the sale of goods transaction that provided ambiguous bargaining power

Which of the following is not one of the elements required for a finding of fraudulent misrepresentation in a contract?

· a preexisting commercial relationship between the parties in the agreement · a false statement about a fact that is unimportant to the contract

Which of the following is not an example of consideration?

· a promise to perform an already-existing contract obligation

Which of the following is not a major obstacle to genuine assent in contracts?

· consideration

In the context of contractual capacity, which of the following is not a type of mental capacity a person suffering from a mental illness or deficiency might have?

· constructive legal capacity

In the context of a contract for a necessary, which of the following is not a necessary?

· high-speed Internet