BUS 140 | Chapter 10 & 11 | Exam (60/80)

Celebrity Shelly Dunkle, wishing to spend a few undisturbed days by herself, checks into a resort hotel. She reserves a suite under the name of Barbi and stamps the initials B.I. into the hotel register. She also orders room service and signs all hotel bills with those same initials. Which of the following statements is true?

Because the initials B.I. constitute Shelly's legal signature, she is legally obligated to pay for the cost of the suite as well as for other bills that she signs using those initials.

Ron, aged 17 years and 4 months, purchases a car from Slim's Auto Sales for $2,000. However, Ron returns the car to Slim Auto Sales telling them he does not feel this is the right car for him and that he wants his money back. At the time of disaffirmance Ron was 18 and 1 month. Age 18 is considered an adult in his jurisdiction. Will this disaffirmance be enforceable in the court of law?

???

Which of the following is a rule recognized by the Restatement of Contracts?

A person's contractual obligations may be voidable if that person suffers from a mental impairment that prevents him or her from acting in a reasonable manner.

When Julie, aged 27, took flu medication and became very light-headed and confused, Alice, taking advantage of the situation persuaded Julie to sell her $1,000 Rolex watch to her for $100. Julie later realizes what Alice did and decides to take legal action. Which of the following is true as per contract laws?

Alice should return the watch and Julie should return the $100.

Which of the following is true about the legality of an agreement?

An agreement is not divisible if the legal part of a contract can be removed from the illegal part without changing the nature of the contract.

Which of the following contracts are not voidable by minors at their option?

Contracts with banks for educational loans

Donna entered into an oral contract with Ava to purchase a house from Ava, with $500 per month payments for the next 10 years. Donna moved into the house, remodeled it, and did extensive repairs. At the end of 10 years, Ava refused to convey title to the house to Donna and produced evidence at the resulting trial that the fair market rental value for the house averaged $800 per month over the 10-year period. Which of the following is true according to the Statute of Frauds?

Donna can claim ownership since she remodeled the house relying on the oral contract.

Vega appoints Ancel, a real estate broker, to negotiate the sale of her home. Which legal rule requires that this agreement be written?

Equal dignities rule

A notary is not authorized to read the document when providing acknowledgment of a signature.

False

Charles only has a photocopy of his written contract with Jenny, and not the original. The photocopy is not acceptable evidence in a trial concerning the contract.

False

It is necessary for written agreements to always be signed by both parties.

False

Most oral contracts are invalid.

False

Sean gives an oral promise to Oscar to sell his old house. Oscar, relying on Sean's promise, puts on a new roof and paints it. Oscar cannot enforce this oral contract.

False

Which of the following statements about the Fair and Accurate Credit Transactions Act is true?

It is an amendment to the Fair Credit Rating Act.

Henry orally contracts with Faith to write special accounting software that usually takes three years to complete. What is the legal status of this agreement?

It is unenforceable since the contract is not written and signed.

Which of the following is true of the Statute of Frauds?

It states that certain types of contracts have to be in writing to be enforceable.

Lizzie works as an entertainment journalist. Her editor tells her that she has to produce a story defaming a television celebrity if she wants to retain her job. Once Lizzie has produced the article and publishes it in the newspaper she works for, her editor fires her. Lizzie wants to bring a lawsuit against the editor for firing her. Which of the following is true of this case?

Lizzie can bring forth a lawsuit as her contract with the editor contained all five elements.

Maria, aged 16, from a wealthy family, purchases designer jeans on credit for $300. The true fair market value for the jeans is $75. Which of the following is true of this case?

Maria can disaffirm the purchase

Uncle Rodrick was deeply in debt when he died. His niece Evangeline became the administrator of his estate. She orally promised Rodrick's creditors that she would personally pay his debts if they would not publicize the fact that Rodrick died in debt. When Evangeline was unable to pay the debts, the creditors sued her. Will the creditors be legally able to collect from Evangeline?

No, since her promise was not written and signed.

Brandon, a recent law school graduate, says he will provide affordable legal services to anyone who needs help. Although his bar exam results are not out yet, Brandon is certain that he has passed. Legally, are his clients required to pay for his legal services before he has received his license?

No, since it is against the law for anyone without the required state license to offer legal advice.

Rocco breaks both his hands in a motorcycle accident. When he wants to make a contract with Iago, Rocco is physically unable to sign the contract due to his broken hands. What is best for Rocco and Iago to do?

Rocco may select someone to sign on his behalf.

When a minor indicates by a statement an intent to not live up to a contract, that minor is entitled to a return of everything given to the other party.

True

All lawn maintenance businesses must pay the state a $200 annual license fee with no other legal regulations. ABC Yards, Inc. fails to pay the license fee. Which of the following is true in case ABC Yards has failed to acquire a license because of the failure to pay the $200?

The lack of a license will not necessarily make a contract void.

After betting $4 million on the outcome of a professional baseball game, Jake wants to make sure that he does not lose his money. He enters an agreement with a team's starting pitcher. The pitcher agrees to throw "fat" home run balls to the other team's batters in exchange for $75,000 from Jake. The pitcher gives up 10 home runs in the first three innings and his team loses the game. Jake refuses to pay him the $75,000 they agreed upon in the contract. If the pitcher sues Jake for breach of contract, which of the following is most likely to be the court's ruling?

The parties are in pari delicto and will refuse to award the pitcher any damages.

Charlie orally promises Holly that he will marry her. He also states that if they ever get divorced, then he will transfer one-half of his assets to Holly. They marry and divorce within a year. Which of the following is true of Charlie's promise to Holly?

The promise is not legally enforceable since it was not written.

A person's contractual obligations may be voidable if that person suffers from a mental impairment that prevents him or her from acting in a reasonable manner.

True

Alice's attorney is preparing her will. Witnesses are required when Alice signs her will.

True

Carl is tall and looks like he is 21 years old. Carl lies about his age to purchase a home entertainment system for $1,000. In most states Carl may disaffirm his purchase.

True

Jennifer orally contracts to purchase a television for $450. This contract is legally unenforceable.

True

Melody transfers title of all of her assets to her cousin, Erin and then files for bankruptcy. The transfer of assets is a valid exercise of Melody's ownership rights.

True

Special statutes allow small loan companies, pawn shops, and other lending agencies that accept high-risk applicants for credit to charge a higher rate of interest.

True

Jeanie, a prosecutor, agrees with Martin not to prosecute Martin's son for drunk driving in exchange for Martin employing her in his law firm two years after the drunken driving charge is dismissed. This is a(n):

agreement to obstruct justice.

Under the ____, the courts generally accept into evidence only the original of a writing, not a copy.

best evidence rule

In some jurisdictions, minors who become _____ means that they cannot void a contract, despite their apparent minority.

emancipated

Rodney parks his car at Car Stack Parking Lot, Inc. On the back of the parking stub provided to Rodney, there is a statement typed in large letters: "NOT RESPONSIBLE FOR DAMAGE TO CARS." When Rodney returns, his car has been dented by the Car Stack attendant who was attempting to park more cars on the lot. According to law, the statement on the stub:

is not enforceable against Rodney, since it can be proved to violate public policy.

The willingness to abide by contractual obligations is:

ratification.

Gabriel applies for a home loan and, Mark signs the agreement promising to pay off the debt in case Gabriel fails to do so. In this case Mark is:

the cosigner.

The illegal practice of charging more than the amount of interest allowed by law is called:

usury.

According to the standard construction rule:

whenever an ambiguous term, clause, or line is found in a prewritten contract, that ambiguity is interpreted against the party who wrote the contract.

Eve, an experienced automotive engineer, signs an agreement with her employer, Environmental Auto Co., that she will never work in the auto industry after she leaves employment with Environmental. A court considering this agreement:

will declare it void, as geographical area is not specified.