Chapter 11 LENB

______ occurs when a party gives a loan at an interest rate exceeding the legal maximum.

Usury

In terms 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

Today, in all but three states, a minor is someone under the age of _______.

18

Section ______ of the Uniform Commercial Code addresses the enforcement of an unconscionable contract.

2-302

Which of the following is not a commonly recognized exception to a minor's right to disaffirm a contract?

A contract for personal training.

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

A contract, irrespective of its legality, is enforceable

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

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

Which of the following is an accurate statement regarding a minor's right to disaffirm a contract?

A minor has the right to disaffirm a contract until a reasonable time after reaching the age of majority.

Which of the following is 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 form a mental deficiency that prevents her from understanding the transaction.

Which of the following is an accurate statement regarding adhesion contracts?

Adhesion contracts are sometimes rescinded on the grounds of unconscionability.

The states most notable for casino gambling include all but which of the following?

Alaska

Which of the following is an inaccurate statement regarding Sabbath laws?

An executed contract created on Sunday can be rescinded.

Which of the following is an accurate statement regarding parental liability for the contracts of their children?

As a general rule, parents are not liable for the contracts of entered into by their minor children.

________ refers to an agreement in which parties pay consideration for the chance to obtain money or property.

Gambling

Which of the following is an accurate statement regarding gambling?

Gambling is illegal in the vast majority of states.

Which of the following is a correct statement regarding the enforcement of a contract with a person who not lawfully licensed?

In a "no license, no contract" state, no agreement with an unlicensed professional is enforceable.

Which of the following is an accurate statement regarding parental liability for the torts of their minor children?

In most states, parents are not liable for the torts of their minor children.

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 affect of intoxication on contractual capacity.

Which of the following is an accurate statement regarding an unenforceable agreement?

No remedy is available for such an agreement.

Which of the following is an accurate statement regarding parental liability for the necessaries of their children?

Parents have a legal duty to provide their children with the basic necessities of life.

_________ unconscionability derives from the process of making a contract.

Procedural

________ laws are also known as blue laws.

Sabbath

In terms of a covenant not to compete involving the sale of an ongoing business, "ongoing" means all but which of the following?

The business is being merged but retains it identity.

Which of the following is not a possible legal outcome when a usurious loan is made?

The court will declare the usurious loan void, and award the debtor an equity interest in the subject lending institution.

According to the majority of jurisdictions, which of the following is an accurate statement regarding a minor's right to disaffirm a contract when the consideration he or she received has been damaged or destroyed?

The minor can disaffirm the contract and the other party has no recourse.

Which of the following is an accurate statement regarding the legality requirement of contract enforcement?

To be enforceable, a contract must both have a legal exchange as its subject and be able to be performed legally.

Which of the following is not a recognized exception to Sabbath laws?

a contract for the sale of alcohol

Which of the following is a recognized exception to the usury law?

a loan to a corporation

Which of the following is not a commonly recognized exception to a minor's right to disaffirm a contract?

a spa membership 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 a(n) ________ contract.

adhesion

A contract in restraint of trade is also known as a(n) ________ agreement.

anticompetitive

A person who has the legal ______ 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.

capacity

_______ typically occurs when the minor moves out of the parents' house and begins supporting himself or herself.

emancipation

An ________ 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.

exculpatory

A(n) ratification occurs when, after reaching the age of majority, a person states that he or she intends to be bound by a contract.

express

The public policy argument in favor of supporting restrictions with the sale of a business involves the _______ of the sale.

fairness

Which of the following is not a necessary?

high speed internet

An agreement to commit a crime or tort is _______.

illegal and unenforceable

When both parties are equally responsible for an illegal agreement, the parties are said to be _______.

in pari delicto

contractual ______ is some sort of mental illness or physical defect that prevents a natural person from being able to enter into a legally binding contract.

incapacity

Which of the following is a typical example of an enforceable covenant not to compete?

noncompetition in employment

A contract in restraint of trade violates public ______.

policy

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

policy

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

protection of government autonomy

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 ________ the contract.

ratified

An implied acceptance of a contract occurs when a former minor takes some action after reaching the age of majority that is consistent with an intent to _______ a contract.

ratify

Public policy focuses on what is in the best interest of _______.

society

______ unconscionability involves overly harsh or lopsided substance in an agreement.

substantive

Heavily one-sided agreements are known as _____ agreements.

unconscionable

Generally, when an agreement is illegal, a court will label the contract ______.

void

A minor's contract is _______.

voidable