Blaw Exam 3
b
A contract by which of the following is void? a. A fourteen-year-old girl. b. A thirty-six-year-old man under a court-ordered guardianship for mental incompetency. c. A thirty-year-old woman who, because of intoxication, is unable to understand the nature and consequences of signing the contract. d. A twenty-five-year-old woman who is unable to understand the nature and effect of signing a contract because of a mental illness.
d
A minor can avoid a contract to purchase a car if: a. the car has been destroyed. b. the car has been damaged. c. he grows tired of it. d. All of these are correct.
b
A minor may avoid or __________ a contract by any expression of an intention to repudiate the contract. a. ratify b. disaffirm c. incapacitate d. restitute
d
Alma enters into a contract while drinking a highly intoxicating beverage that causes memory loss. The resultant contract is: a. always void. b. always enforceable. c. always unenforceable. d. voidable if Alma can establish she was so intoxicated she didn't understand the nature and consequences of her actions and/or was unable to act in a reasonable m
b
Ann, a minor, disaffirmed her agreement to buy $127 worth of cosmetics from Facial Glo Company. She had used up all the eye shadows, lipsticks, and powders. The general rule is that she may: a. disaffirm, but she must pay the asking price of the cosmetics used. b. disaffirm, but she has to return the makeup that is not used up. c. not disaffirm without paying the value of used makeup. d. not disaffirm because she has used the goods.
c
Anna is 88 years old and under the legal guardianship of her daughter. One day Anna receives a telephone call from a health insurance salesman and purchases a $400-a-month Medigap insurance policy. a. This contract is valid. b. This contract is voidable. c. This contract is void. d. This contract is voidable only at the option of Anna.
No, because Barry does not have a writing signed by Champs Tee Shirts
Barry's Sport Shop calls Champs Tee Shirt Company to order 200 designer tee shirts at $2 per shirt. The next day, Barry decides he can easily sell 100 more. Before the order is filled, he calls to change the order to 300 tee shirts. Champs sends 200. Can Barry force Champs to send the additional 100? A.) No, because there is no consideration for the extra 100 shirts B.) No, because Barry does not have a writing signed by Champs Tee Shirts C.) Yes, because this is a subsequent modification of the original contract D.) Yes, because Champs Tee Shirts is a merchant within the meaning of Article 2 of the UCC
d
Bertha was an alcoholic, and one weekend while she was extremely intoxicated, her son took her to the store and had her purchase an expensive computer. If Bertha wishes to rethink this contract, Bertha: a. cannot ratify the contract it is void and without meaning. b. may return the computer, but cannot get her money back. c. may at any time keep the computer, but doesn't have to pay for it as the store should have known better than to do business with an intoxicated customer. d. must sober up and ratify the contract as a whole
c
Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress is too expensive and now wishes to cancel the order. a. Cheryl must pay $500 for the dress because the dress was specially ordered for Cheryl. b. Cheryl must pay $500 for the dress because clothing is classified as a necessity. c. Cheryl may disaffirm this executory contract. d. Cheryl must accept the dress and pay the reasonable value of the dress.
Chris can hold Wyandott to the order.
Chris receives a printed form in the mail from Wyandott Heating indicating that he has placed a telephone order for a $600 heater. He doesn't recall placing the order. Which of the following is correct? A.) Wyandott can hold Chris to the order. B.) Chris can hold Wyandott to the order. C.) Neither party is bound, because there is no signed writing. D.) Chris is bound if he makes no objection within 10 days.
a
Courts allow a minor a certain amount of time to disaffirm a contract when he turns 18 years of age. That time period is: a. a reasonable period of time after reaching the age of majority. b. 30 days from learning of his or her right to disaffirm. c. Ten days from his 18th birthday. d. one year from the date of the agreement.
a
Donald, a minor, makes a contract with Albert, an adult, to buy a computer. One week later, Donald has his eighteenth birthday and shortly thereafter tells Albert he will pick up the computer next week. a. Donald has expressly ratified the contract. b. The contract must be renegotiated, because Donald was a minor when it was made. c. Donald can change his mind and avoid the contract, because it was made when he was a minor. d. The contract is void ab initio, because Donald was a minor at the time it was made.
All of the above.
Most states have statutes requiring which of the following contracts to be evidenced by a writing to be enforceable? A.) Contracts to make wills. B.) Contracts for the sale of securities. C.) Contracts for the sale of personal property for more than $5,000. D.) Contracts creating certain types of security interests. E.) All of the above.
receive a "clear and conspicuous" statement informing them of their right to withdraw consent to receiving electronic records.
E-Sign provides consumers must: A.) evidence their consent on paper to conducting transactions with electronic records after being informed of the types of hardware and software required. B.) receive a "clear and conspicuous" statement informing them of their right to withdraw consent to receiving electronic records. C.) receive a "clear and conspicuous" statement informing them of their right to have the record provided only in electronic form. D.) All of the above.
b
Every adult is presumed to have capacity unless: a. they cannot read and write. b. it is proven that capacity is lacking or there is status incapacity. c. they understand the full legal meaning of the contract being made. d. there was a clause of the contract they did not understand.
b
Fay, age 17, ordered a pair of skis on the installment plan. She paid $20 every month until she turned 18, the age of majority. The next day, she sold them to Sharon and disaffirmed the contract. What result? a. Fay is still liable since she had to disaffirm before her 18th birthday. b. Fay is still liable because selling the skis amounts to a ratification. c. Fay is not liable because she disaffirmed the contract. d. Fay is not liable because skis are not necessaries.
c
For the issue of capacity, a court will examine whether a party to the contract lacked contractual capacity when: a. the time set for performance of the contract. b. the time the value of the bargain becomes clear. c. the time the contract was made. d. the time the plaintiff expresses dissatisfaction with the contract terms.
Express terms
In determining the meaning of a contract under the UCC, which of the following will have first priority? A.) Course of performance B.) Course of dealing C.) Usage of trade D.) Express terms
c
In most states, whether the time within which a minor disaffirms a contract constitutes a reasonable time is determined by: a. state statute. b. the UCC. c. the facts and circumstances of the case. d. common law, without regard to the unique facts of the case at hand.
encourages and gives full effect to electronic contracts.
In states that have adopted it, the UETA:
b
In which of the following situations would a minor be unable to disaffirm a contract which he had made? a. Upon restoring the consideration received in a situation involving a fully executed contract b. Where the minor wishes to affirm part of a contract and disaffirm another part of the same contract c. During the time of his minority or for a reasonable time thereafter d. None of the above.
d
Mabel is 88 years old and under the court ordered legal guardianship of her daughter. One day Mabel receives a telephone call from a health insurance salesman and purchases a $400-a-month Medigap insurance policy. The contract is: a. unconscionable. b. valid. c. voidable. d. void.
d
Madeline, age 17, ordered a pair of diamond earrings on the installment plan. She paid $50 every month until she turned 18, the age of majority. The next day, she sold them to Samantha and disaffirmed the contract. What is the result? a. Samantha is still liable since she had to disaffirm before her 18th birthday. b. Samantha is not liable because earrings are not necessaries. c. Samantha is still liable because she used the earrings. d. Samantha is still liable because selling the earrings amounted to a ratification.
d
Mary is a person who experiences hallucinations and other psychotic episodes. She has been adjudicated incompetent and a guardian has been appointed to care for her. Any contracts from this point forward are: a. enforceable. b. voidable. c. valid. d. void.
d
Mary, age 17, sold Mark, age 22, the briefcase she got for graduation. Mark's father liked it and bought it from him. If Mary decides to disaffirm the contract, will Mark's father have to return the briefcase to her? a. Yes, the briefcase is not a necessary. b. Yes, if Mark's father still has it. c. No, her contract was with Mark and he cannot return goods he does not have. d. No, if Mark's father bought it without knowing that Mary was a minor.
Yes, because the job offer is for longer than one year from March 1
On March 1, Sara, a student, received a telephone call from ComputerChip, Inc. offering her a job for one year beginning on June 15, after completion of the school year. According to the personnel manager, she will have to move to California and be ready to start work at 8:00 a.m. on June 15. Should Sara ask for a letter confirming the telephone conversation if she accepts the offer immediately? A.) Yes, because the job offer is a collateral promise B.) Yes, because the job offer is covered by the parol evidence rule C.) Yes, because the job offer is for longer than one year from March 1 D.) No, because the job offer is for one year from June 15
b
On his 17th birthday, David makes a contract to purchase a moped. In a state in which the age of majority is 18, which of the following actions would be a ratification of the contract? a. One week before his 18th birthday, David telephones the seller and says, "I intend to keep my promise to you in our contract." b. Three days after his 18th birthday, David telephones the seller and says, "I intend to keep my promise to you in our contract." c. Before his birthday David behaves as though he intends to be bound by the contract, but two days after his 18th birthday, he calls the seller and says, "The deal's off." d. None of these answers are correct.
c
Once __________ a minor cannot avoid a contract. a. processed b. signed c. ratified d. voidable
b
One issue before the court in the First State Bank of Sinai v. Hyland case was: a. whether a person committed to alcoholism treatment is automatically incompetent. b. whether the contract between Hyland's father and the Bank was void due to alcohol-related incapacity. c. whether the note was discharged in Randy Hyland's bankruptcy. d. whether the bank knew that Mervin Hyland was incapacitated by liquor.
a
One issue before the court in the In Re The Score Board, Inc. case was: a. whether Kobe Bryant, by his actions, ratified a contract with Score Board after reaching the age of majority. b. whether the contract with Scoreboard supplied sufficient consideration for Bryant's autographs. c. whether the deal made for Bryant to sign autographs was a good opportunity. d. whether a person playing in the NBA needed protection during the time before he reached the age of majority.
c
Percy, age 17, purchased a used mobile home from a mobile home dealer for $20,000. This price, however, was twice the reasonable value of the mobile home. One month later, Percy wishes to disaffirm the contract. If the mobile home is considered a necessary, then: a. Percy can disaffirm the contract based on the wrongful act of the dealer. b. Percy can disaffirm the contract because the minor can live in an apartment rather than a mobile home. c. Percy may keep the mobile home but is only liable for the reasonable value of the mobile home. d. Percy must keep the mobile home and abide by the original terms of the contract.
b
Randy, a minor, buys a new four-wheel drive truck from the Jones Dealership. Randy sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to Arthur Smith. Arthur does not personally know Steve or Randy. Which of the following expresses the status of this situation? a. Randy may recover the vehicle from Mr. Smith. b. Randy may not recover the vehicle from Mr. Smith. c. Randy may hold Steve liable in tort. d. Randy may recover the reasonable value of the vehicle from Mr. Smith but not the vehicle itself.
d
Ratification can occur in which of the following ways? a. Through express language b. As implied from conduct c. Through failure to make a timely disaffirmance d. All of the above.
a
Robert is 17 years old. He lies to Bouyers Auto in order to induce it to sell him a new pickup. Bouyers falls for this lie and sells him the pickup. In most jurisdictions, which of the following is correct? a. Robert may disaffirm and get his money back. b. Robert may not disaffirm since he lied. c. Robert must restore Bouyers to its position before contracting with him. d. Robert will receive his money less depreciation.
d
Ryan, a 15-year-old, negligently crashed into Crystal's car and caused extensive damage and severely injured Crystal. Which statement is correct? (p. 7) a. Ryan can disaffirm liability for the damage to Crystal's car and resulting damages unless he has automobile liability insurance. b. Ryan can disaffirm liability for the damage to Crystal's car and resulting damages unless he was intoxicated. c. Ryan can disaffirm liability for the damage to Crystal's car and resulting damages because he is a minor. d. Ryan cannot disaffirm liability for his negligence.
An oral statement such as this is not enforceable because this promise is within the statute of frauds.
Sam, a shopkeeper, dies unexpectedly at the age of 46. His lifelong business associate, Paul, is appointed the administrator of the estate. Sam had a personal debt of $8,000 which he owed to Art's Appliance Store. Paul says to Art, "If there isn't enough money in the estate, I'll personally see that the bill is paid." Which of the following is correct? A.) The oral statement is enforceable because Paul is the administrator. B.) An oral statement such as this is not enforceable because it is outside the statute of frauds. C.) An oral statement such as this is not enforceable because this promise is within the statute of frauds. D.) The oral statement is enforceable because it is a collateral promise.
d
Sean and John are business associates. At dinner, Sean has only one beer over the course of three hours. Sean is a light drinker and normally feels severely intoxicated after three beers. At the end of dinner, Sean and John enter into a multi-year agreement worth potentially millions of dollars. Later, if Sean attempts to void the contract on the basis of intoxication and loses, what would be the reason for it? a. Sean was without reason or understand when entering into the contract. b. Sean's intoxication was unable to understand the nature and consequences of his actions. c. Intoxication is insufficient to void a contract. d. Sean's slight intoxication did not destroy his capacity to contract.
a
Sixteen-year-old Laura's disaffirmance of a contract: a. for a sale of land by her is not effective until after she reaches the age of majority. b. is only effective if expressed in words in the particular form required by statute. c. can only be effective if she is an "emancipated" minor. d. must take place after she reaches the age of majority, regardless of the type of contract, since only then does she have capacity.
d
Steve purchases a four-wheel drive truck from Belk Auto Sales. Steve is only 17 years of age. He wrecks the vehicle and attempts to disaffirm the contract and have Belk repay him all that he has paid. In the majority of jurisdictions, what would happen? a. Steve would be out of luck. b. Steve must have the truck repaired. c. Steve will receive his money less the depreciation in value of the vehicle. d. Steve may simply return the vehicle and get his money.
d
The court in Keser v. Chagnon examined which of the following issues? a. Whether Keser should have insisted that someone cosign the contract with Edsel. b. Whether Chagnon damaged the Edsel during the course of his possession of the vehicle. c. Whether Keser should have been more careful in documenting Chagnon's age before entering into the contract. d. Whether Chagnon ratified the contract for the purchase of the Edsel by delaying his disaffirmance of the contract.
b
The exercise of the power to avoid a contract is known as: a. ratification. b. disaffirmance. c. ab initio. d. restitution.
Electronic Signatures in Global and National Commerce Act.
The statute enacted by Congress which makes electronic records and signatures valid and enforceable for many transactions affecting interstate or foreign commerce is the:
b
The type of substance ingestion that could lead a court to find one lacking in capacity is: a. the person is a chronic alcoholic. b. because of mental impairment, the person does not comprehend that a contract is being made or understand its consequences. c. the person is a drug addict. d. All of these are correct.
a
Tim, who is a minor, enters into a contract with Violet, who is an adult. Which of the following is correct? a. Violet may not disaffirm the contract. b. Violet may disaffirm the contract at any time. c. Violet may disaffirm the contract when Tim becomes an adult. d. Tim may ratify the contract at any time during his minority.
d
Todd, a minor, rents an automobile from Rosa, an adult. Todd damages the vehicle when he negligently backs into a pole. Under the majority view, can Rosa recover damages from Todd? a. Yes, Todd breached his duty to exercise reasonable care and diligence to protect the automobile. b. Yes, although Todd is a minor, it is well settled that minors are generally liable for their torts. c. No, minors generally cannot be held liable for their torts. d. No, his contractual immunity protects him from legal action by Rosa.
The quantity of the goods
Under the UCC statute of frauds, which of the following terms must be included in a writing in order to satisfy the writing requirement?
course of performance
Under the UCC, ____ refers to the manner and extent to which the respective parties to a contract have accepted successive tenders of performance by the other party without objection.
usage of trade
Under the UCC, a(n) ____ is a practice or method of dealing, regularly observed and followed in a place or vocation or trade.
course of dealing
Under the UCC, a(n) ____ is a sequence of previous conduct between the parties to an agreement which may be fairly regarded as establishing a common basis of understanding for interpreting their conduct under the contract.
subsequent oral or written agreements modifying the original agreement
Under the parol evidence rule, which of the following types of evidence may be used to vary or contradict the written agreement? A.) Prior oral or written agreements B.) Contemporaneous oral or written agreements C.) Subsequent oral or written agreements modifying the original agreement D.) Both (a) and (b).
c
Veronica has not been declared incompetent by a court, but she suffers from delusions that a Martian visits her every evening at 6 p.m. to tell her that the future of the human race depended on her buying a tract of land in Lackawanna County. Today, Veronica entered a contract to purchase a large tract of land in Lackawanna County on the Martian's advice. Which of the following statements is true about the contract? a. The contract to purchase is void, because it was made on a Martian's advice. b. The contract to purchase the land is valid, because the seller had no knowledge that the Martian suggested the purchase. c. The contract to purchase the land is voidable, because Veronica has not been adjudicated insane, and possible could still have understood the contract. d. None of these answers are correct.
a
Wanda at age 17 purchased an expensive stereo system from Stereo Sales. If Wanda wishes to ratify this contract, Wanda: a. must reach the age of majority and ratify the contract as a whole. b. may do so by express notification at any time before reaching the age of majority. c. may at any time keep the stereo but avoid any remaining debt owed on the stereo. d. may do so at any time by express or implied action before or after reaching the age of majority.
d
Wendy is taking a prescribed medication which makes her drowsy and inattentive. If she enters into a contract when she is in that condition, the contract: a. would be unaffected as long as she took the medication exactly as prescribed by her doctor. b. would be void. c. would be void only if the medication impaired her ability to act in a reasonable and rational way. d. would be voidable if, when she makes them, she is unable to comprehend the subject, nature, and consequences of the contracts.
The leading object rule
What is another name for the main purpose doctrine?
d
What is the capacity of a person adjudicated incompetent by a court order? a. A merchant might be able to recover the fair value of any necessaries. b. The person's own contracts are void. c. The guardian may be able to ratify contracts made by the ward. d. All of these are correct.
c
What is the effect of slight intoxication on the capacity of a person to enter into a contract? a. If an intoxicated person is unable to understand the nature and consequences of his act, then the contract is voidable. b. The effect of intoxication is generally the same as that given to contracts that are voidable because of incompetency. c. Slight intoxication will not destroy one's contractual capacity. d. To make a contract voidable, a person need not be so drunk that he is totally without reason or understanding.
d
When a minor falsely advises the other party that he is of the age of majority and based upon that misrepresentation, the other party in good faith enters into a contract with the minor: a. the minor has lost his right to disaffirm the contract because of the misrepresentation. b. the adult party can recover damages from the minor in tort. c. the minor is required to restore the other party to the position occupied before the making of the contract. d. There is no uniform rule. States differ, and depending upon the state, any of the above could be correct.
c
When a minor's guardian furnishes her with an adequate wardrobe would a new hoodie be a necessary (in the majority of states)? a. Yes, the hoodie is a necessary because it is clothing. b. Yes, it is a necessary if the minor decides she needs it. c. No, necessaries are items not provided by the guardian. d. No, the minor is not stuck with clothing of the guardian's choice.
a
When it is said that a contract made by a minor is voidable, which of the following is true? a. While still a minor, he can disaffirm the contract and return the property. b. At any time before he turns 21, he can disaffirm the contract and return the property. c. Within 72 hours of the contract a minor can disaffirm the contract. d. None of these are correct.
A promise, the leading object of which is to obtain an economic benefit for oneself
Which of the following is an exception to the suretyship provision requirement under the statute of frauds? A.) A collateral promise made to the creditor B.) A promise, the leading object of which is to obtain an economic benefit for oneself C.) A collateral promise where there are three parties and two contracts involved D.) A promise by an executor to pay the debts of the decedent from the executor's own funds
b
Which of the following is correct regarding the contractual liability of incompetent persons? a. An incompetent person's responsibility upon disaffirmance is the same as for a minor. b. For executed, fair contracts with a mentally incompetent person who understands but cannot control his behavior to act rationally, the incompetent must restore the competent party to the status quo before the transaction by a return of the consideration received or its equivalent in money. c. The contracts of a person under guardianship by court order are voidable. d. The contracts of a ward are binding without the approval of the guardian.
a
Which of the following is least likely to be classified as a necessary for which a minor will be held liable on a contract? a. A camera b. School supplies c. Boots for a snowy climate d. An automobile
d
Which of the following is most likely to be classified as a necessary for which a minor will be held liable on a contract? a. A television. b. School supplies. c. Education. d. Food.
b
Which of the following is not true regarding the contracts of incompetent persons? a. An incompetent person is liable for necessaries. b. Unlike a minor, an incompetent person can never ratify a contract. c. To avoid a contract, a person need not be permanently incompetent. d. A person is competent unless he is unable to understand the nature and effect of his act.
c
Which of the following is not true regarding the contracts of intoxicated persons? a. If an intoxicated person is unable to understand the nature and consequences of his act, then the contract is voidable. b. The effect of intoxication is generally the same as that given to contracts that are voidable because of incompetency. c. Slight intoxication will destroy one's contractual capacity. d. Contracts made while a person is too intoxicated to act in a reasonable manner may be ratified when the intoxicated person regains his capacity.p
Technical terms will always be given technical meaning even where a different intent is manifested by the parties.
Which of the following is untrue with regard to the interpretation of contracts? A.) Express terms prevail over course of performance, and course of performance prevails over course of dealing. B.) Technical terms will always be given technical meaning even where a different intent is manifested by the parties. C.) Handwritten or typed terms are given greater weight than preprinted terms. D.) All writings that are part of the same transaction are interpreted together.
The signature of the party suing
Which of the following need NOT be contained in a memorandum, which satisfies the general statute of frauds writing requirement? A.) The names of the parties to the contract B.) The signature of the party being sued C.) The signature of the party suing D.) The subject matter and essential terms of the unperformed promises
Mindy's agreement with Susan to buy her bike for $400
Which of the following promises does not have to be evidenced by writing in order to be enforceable? A.) Jones' agreement with Smith to sell his condominium for $100,000 B.) Stewart's promise to work for Austin for a two-year period C.) Dad's promise to the credit union that he will make payments on his son's truck if his son does not pay D.) Mindy's agreement with Susan to buy her bike for $400
John and Joan mutually promise to marry each other in a formal ceremony on June 23.
Which of the following promises in consideration of marriage would be outside the statute of frauds? A.) In consideration of Joan's promising to marry him, a man promises to pay her an allowance and to give her all of his property upon his death. B.) John and Mary mutually agree that their marriage shall not affect the existing property rights of the other. C.) John and Joan mutually promise to marry each other in a formal ceremony on June 23. D.) Joan promises to release a money judgment against Steven in consideration of his marrying her.
All of the above meet the signature requirement.
Which of the following would NOT meet the signature requirement for a writing to satisfy the statute of frauds? A.) A typewritten name B.) Handwritten initials C.) A printed name D.) All of the above meet the signature requirement.
Where a landscaper agrees to landscape the lot surrounding an office building
Which of the following would NOT require a writing under the statute of frauds? A.) Where the buyer of a five-acre lot pays the $40,000 purchase price, thus fully performing his obligation B.) Where a renter agrees to rent a building for a 5-year period C.) Where a contractor enters into an agreement for an easement across adjoining land to run cables D.) Where a landscaper agrees to landscape the lot surrounding an office building
d
Which of the following would be a valid ratification? a. Two weeks after his eighteenth birthday, Jerry sells the motorcycle he contracted to buy when he was seventeen. b. Two weeks after attaining his eighteenth birthday, Jerry calls the bank to assure them that he will continue making payments on the loan agreement he signed a month before his eighteenth birthday. c. Two weeks after his eighteenth birthday, Jerry makes a payment on the installment contract he signed a month before. d. All of the above
A letter dated July 9, 2007, reciting agreement to new delivery terms
Which of the following would be admissible under the parol evidence rule? Assume the written contract was made on June 1, 2007, and that it is an integrated document. A.) A letter dated July 9, 2007, reciting agreement to new delivery terms B.) A chart showing the dates for delivery written on August 16, 2006 C.) A copy of two letters while the parties were in the negotiation stage of their contract which showed agreement to a term not included in the June 1, 2007 contract D.) A copy of common carrier rules on the duty of delivery persons for uncrating merchandise, which is dated December 1, 2003
Medical care received in a hospital
Which of the following would not be subject to the writing requirements of Article 2 of the UCC? A.) An unborn puppy whose mother is an AKC champion B.) Trees that will be cut from a ten-acre tree farm C.) Food served in the banquet room of a Florida resort D.) Medical care received in a hospital
E-Sign
________- ensures that the electronic form of Internet and e-mail agreements will not make them unenforceable because of the statute of frauds.
12. Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere in River City for a period of five years. a. The geographic restraint is reasonable. b. This agreement is unreasonable. c. The agreement unduly interferes with the interest of the public. d. Both (b) and (c).
a
20. Custom Sales and Rentals uses a four-page contract with important contract terms buried in the fine print. This is an example of: a. procedural unconscionability. b. a reasonable, legal business practice. c. a "Blue law." d. substantive unconscionability.
a
23. Under which of the following circumstances would a court be likely to enforce an illegal contract? a. Under certain circumstances in which the aggrieved party was unaware of the illegality b. Where, although the contract is unconscionable, there is only procedural unconscionability c. Where the agreement is with an unlicensed attorney d. A court will never enforce an illegal contract.
a
14. Sarah is working hard on the mayoral campaign of Timothy. She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 to register and vote. Violet does so, but Timothy loses the election, and Sarah now refuses to pay. a. This agreement is enforceable. b. This agreement is unenforceable and opposed to public policy. c. This is an agreement to obstruct the administration of justice. d. This is an unconscionable contract covered by the UCC.
b
15. Which of the following would generally be considered to be a revenue-raising licensing law? a. A statute requiring that doctors be licensed b. A statute requiring that salespeople be licensed, but not establishing any educational or training requirements c. A statute requiring public school teachers to be licensed d. A statute that requires insurance agents to pass a test before selling insurance in a state
b
17. Non-compete agreements drafted for employees of Internet companies: a. are interpreted no differently in terms of standards of reasonableness than are agreements for other types of companies. b. are subject to larger geographic restrictions than for other types of companies. c. are subject to longer periods of reasonable duration. d. are irrelevant.
b
3. Don has an employment contract with Dunkirk Ice Cream. He sells ice cream and novelty ice cream products. He has nine children and doesn't make enough money, so he decides to see if another dairy will hire him, too. "After all," he reasons, "most stores carry four or five different brands." His employment contract prohibits him from competing. If Don sells for another dairy in addition to Dunkirk, will he be in trouble under his contract? a. No, it is unenforceable as against public policy. b. Yes, it is likely to be enforceable during employment. c. No, the prohibition against competing is enforceable only after he quits Dunkirk. d. A court would have to rule on the enforceability of the covenant not to compete since courts are reluctant to enforce such covenants during a period of employment.
b
1. Nell gives Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true? a. Nell can get the money back from Al through litigation. b. Nell can get the money back and force Al to do as he promised. c. Legally, Nell can neither get the money back nor force Al to do as he promised. d. Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50.
c
10. John operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of: a. in para delicto. b. partial illegality. c. substantive unconscionability. d. procedural unconscionability.
c
2. Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia agrees never to open a hair salon in the state. Which of the following best describes this contract clause? a. Void as an illegal primary restraint b. Valid as a reasonable restraint on trade c. An unenforceable restraint of trade contrary to public policy d. Binding as fair protection
c
21. R&R, Inc. entered into a contract with Scott, an agent, under the terms of which Scott would receive $20,000 if he stole trade secrets from the leading competitor of R&R. Scott performed his end of the agreement by delivering the trade secrets. R&R now refuses to pay Scott for his services. a. Scott may recover based upon the express contract of the parties. b. Scott may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of R&R. c. Scott will be unable to recover, because this is an illegal contract. d. Scott will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by R&R.
c
24. Which of the following would always be considered to be contrary to public policy? a. A contract which contains a covenant not to compete b. A contract offered on a take-it-or-leave-it basis c. An agreement to pay someone to make false, negative statements about a competitor's product d. An agreement which contains an exculpatory clause
c
8. A(n) ____ is a measure designed to protect the public from unqualified practitioners. a. exculpatory clause b. revenue license c. regulatory license d. usury statute
c
9. Before granting an injunction enjoining a former employee from competing in a described territory, the courts insist that the employer demonstrate that the restriction is: a. exculpatory. b. conscionable. c. necessary to protect the employer's legitimate interest. d. in compliance with the state's Blue Law.
c
11. Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere within the state for a period of three years. a. The agreement is reasonable. b. The agreement is unreasonable. c. The agreement unduly interferes with the interests of the public. d. Both (b) and (c).
d
13. The UCC provides that if a court as a matter of law finds a contract for the sale of goods or a clause of such a contract to have been unconscionable at the time it was made, the court may: a. refuse to enforce the contract. b. enforce the part of the contract that is not unconscionable. c. limit the application of any unconscionable clause in order to avoid an unconscionable result. d. All of the above.
d
16. Numerous states impose no limit on the rate of interest that may be charged on: a. loans to corporations. b. credit card transactions. c. loans made by certain designated types of lenders. d. All of the above.
d
18. Patrick agrees to sell two different goods to his friend Ron, a retailer. One item is legal, and one item is illegal. The contract price is $2,000. a. Patrick may not recover payment for either of the goods if delivered. b. Patrick may recover for the legal item, but he may not recover for the illegal item. c. This is an unconscionable contract under the UCC. d. The court may view the contract as in (a) or (b).
d
19. A contract prepared on a standard form and offering terms on a take-it-or-leave-it basis is called: a. exculpatory. b. a usurious contract. c. an illegal restraint of trade. d. an adhesion contract.
d
22. Which of the following is correct with regard to an enforceable restraint of trade? a. The restraint should be no more extensive than is required to protect a specified property interest. b. Restraints typically arise in connection with the sale of a business. c. A typical restraint is a covenant not to compete. d. All of the above.
d
25. Which of the following would be considered a valid and legally enforceable agreement? a. An agreement to pay a legislator to vote for a particular bill b. An agreement under which Arthur agrees to pay Barbara $3,000 to disparage the product of Arthur's competitor c. An agreement by the seller of a service station not to enter the service station business in Ohio for a period of 30 years after the sale of his business d. An agreement by a car salesman not to sell automobiles or automobile parts in Marin County for a period of one year after terminating his employment
d
5. Which of the following is true with regard to an exculpatory clause? a. An exculpatory clause excuses one party from liability for her own tortious conduct. b. Where one party has a superior bargaining position that has enabled him to impose an exculpatory clause upon the other, the courts are inclined to nullify the provision. c. An exculpatory clause may be unenforceable for unconscionability. d. All of the above are true
d
6. If a restriction in an employment contract is found to be too harsh, a court may do any of the following EXCEPT:a. change the terms of the contract. b. refuse to enforce the whole contract. c. refuse to enforce that part of the contract. d. refuse to void the restriction.
d
7. Divided Parcel (DP) includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through the fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to its manufacturer to be repaired anyway. The watch is destroyed when the DP driver uses the package for a ball and tosses it to his buddy. Mary is: a. out of luck because the clause was communicated to her. b. out of luck because she should have insured the package. c. likely to collect from DP since exculpatory clauses always violate public policy. d. likely to collect from DP because it is a common carrier.
d
4. William recently sold his successful business to Janice. The contract for the sale contained an unreasonable restriction that did not allow William to open a similar business for fifteen years. The courts would, in this instance, a. reform the contract to make it reasonable and enforceable. b. require the parties to draft a new contract. c. enforce the contract as it is written. d. refuse to enforce the unreasonable restriction. e. Either (a) or (d).
e
