BUSLaw Chp12: Capacity and Legality

Covenant not to compete is also known as

non-compete clause

Licensing statues enacted to raise money for the government are called

revenue raising

Which of the following is true of a contract where one of the parties is insane but not adjudged insane? A. The contract is only voidable by the insane person B. The contract is voidable by the competent party C. Only the court appointed legal guardian to the the insane person can modify contracts D. the non-insane person must be placed in status quo if the insane person voids the contract

A. The contract is only voidable by the insane person

____ is the act of a minor after he or she has reached the age of majority, by which he or she accepts a contract entered into when he or she was a minor A. Exculpation B. Ratification C. Restitution D.Emancipation

B. Ratification

A(n) ___ is a contractual provision that relieves one or both of the parties to a contract from tort liability. A. contract of adhesion B. exculpatory clause C. duty of restitution D. fundamental breach

B. exculpatory clause

____ set an upper limit on the interest rate that can be changed on certain types of loans A. State usury laws B. Federal banking reforms C. Congressional committees D. Chambers of commerce

A. State usury laws

What is the doctrine of in pari delicto with reference to contracts? A. it is a situation in which bot parties are equally at fault in an illegal contract. B. it is a situation where one party has unknowingly signed a contract to commit crimes C. it is a special exemption right to circumvent usury laws D. it gives minors the right to disaffirm a contract

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

According to the regulatory licensing statute, ____ A. only licensed person can recover payment for services B. Unlicensed persons can recover payment for services C. persons breaching a revenue raising statue cannot recover payment fro services D. all government licensed persons have to pay an annual fee to renew their licenses

A. only licensed person can recover payment for services

Which of the following is true about a minor's right to disaffirm a contract? A. a minor must reach the age of majority to disaffirm a contract B. contracts that come under the necessaries of life can be disaffirmed by minors. C. A minor can disaffirm a contract any time prior to reaching the age of majority D. Minors are exempt form duty of restoration during the period of minority

C. A minor can disaffirm a contract any time prior to reaching the age of majority.

The act or process of a minor voluntarily leaving home and living apart from his or her parents is referred to as __ A. restitution B. restoration C. emancipation D. adhesion

C. emancipation

The ___ is a legal principle that allows minors to cancel most contracts they have entered into with adults A. duty of restoration B. duty of restitution C. infancy doctrine D. contract of adhesion

C. infancy dotrince

____ is a licensing statute with the primary purpose of increasing earnings for the government A. Usury statute B. Ratification statute C. Revenue raising statute D. Regulatory licensing statute

C.Revenue raising statue

___ are preprinted forms whose terms the consumer cannot negotiate and that they must sign in order to obtain a product or service

Contract of adhesion

_____ is a rule that 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 disaffirmance A. Emancipation doctrine B. Duty of restitution C. Infancy doctrine D. Duty of restoration

D. Duty of restoration

Which of the following is an example of a contract contrary to statutes by its very existence? A. a contract of adhesion B. a contract between two minors C. a contract where one party is insane but not adjudge insane D. a usurious loan contract

D. a usurious loan contract

If a minor ratifies a contract while still being a minor, ___ A. the minor has to hold the adult in status quo in case of disaffirmance B. the minor is bound by the terms of the contract C. the minor is exempt from the duty of restitution D. the contract can still be disaffirmed by the minor

D. the contract can still be disaffirmed by the minor

A(n) ___ is a contract that courts refuse to enforce in part or at all because it is so oppressive or manifestly unfair as to be unjust. A. quasi-contract B. contract of adhesion C. contract in restraint of trade D. unconscionable contract

D. unconscionable contract

____ 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 disaffirmance.

Duty of Restoration

____ is a situation in which both parties are equally at fault in an illegal contract

In pari delicto

To protect minors, the law recognizes the ___, which gives minors the right to disaffirm (or cancel) most contracts they have entered into with adults.

Infancy Doctrine

___ is a state of contractual incapacity, as determined by law

Legal Insanity

A ___ is a person who has not reached the ago of majority

Minor

____ is 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 he or she was a minor.

Ratification

___ licensing statute is a licensing statute enacted to protect the publice

Regulatory

____ is a contract that courts refuse to enforce in part of at all because it is so oppressive or manifestly unfair as to be unjust

Unconscionable contract

State ___ set an upper limit on the annual interest rate that can be charged on certain types of loans

Usury law

A person declared legally insane by a proper court or administrative agency is called

adjudged insane

The parental duty of support terminates if a minor becomes

emancipated

An ___ is a contractual provision that relieves one (or both) of the parties to a contract from tort liability

exculpatory clause