Business Law Final (Ch 14&15)

A minor is liable for necessities and for the agreed price. a. True b. False

B. False

An oral contract that is covered by the statute of frauds is: a. voidable. b. void. c. unenforceable. d. executory.

c. unenforceable.

A female attains the age of majority at what age? a. 12 b. 14 c. 18 d. 21 e. 25

c. 18

A contract that is considered to be "within" the Statute of Frauds must comply with the requirements of the Statute in order to be enforceable. a. True b. False

a. True

Which of the following cannot be disaffirmed until AFTER the age of majority? a. A contract that affects title to real estate sold by a minor b. A contract for a necessary c. A contract that is fully completed d. A contract for the sale of goods

a. A contract that affects title to real estate sold by a minor

Which of the following is least classifiable as a necessity for which a minor will be held liable on a contract? a. A new sports car b. A rabbit skin fur coat c. A personal computer for school d. Lunch at McDonald's

a. A new sports car

Which of the following is least classifiable as a necessity for which a minor will be held liable on a contract? a. Cassette tapes b. School supplies c. Clothing d. An automobile

a. Cassette tapes

Don, a minor, contracts to sell 100 acres of land to Jerry who is also a minor. Don reaches the age of 18 as does Jerry. Don takes no action to avoid the contract for several months. Which of the following most accurately describes the status? a. Don has ratified the contract. b. Don has not ratified the contract. c. The contract remains executory. d. There is no contract, so there is no legal obligation owed by either party.

a. Don has ratified the contract.

Donald, a minor, makes a contract to sell a motorcycle to Albert, an adult. One week later, Donald has his eighteenth birthday and shortly thereafter Albert picks up the motorcycle. 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.

a. Donald has expressly ratified the contract.

Harold purchased 400 pairs of gloves from Isaac at a contract price of $800. Fifty of the gloves were defective and a dispute arose as to the amount due and owing under the contract. Harold refuses to pay the $800 and Isaac is threatening to sue. Which of the following is correct with regard to this transaction? a. If Isaac agrees to accept $600 to settle the dispute and Harold agrees to pay that amount, the agreement is enforceable. b. If Isaac agrees to accept $600 to settle the dispute and Harold pays that amount, Isaac can still sue for the balance of $200 and will win the lawsuit. c. Harold is under a pre-existing legal obligation to pay the $800. d. Two of the above, b and c.

a. If Isaac agrees to accept $600 to settle the dispute and Harold agrees to pay that amount, the agreement is enforceable.

Three days before she was judicially declared mentally incompetent and institutionalized, Irma bought a $50,000 automobile for cash and took delivery of it. Which of the following is true about this contract? Assume that Irma was pretty far gone when she bought the car. a. It is voidable. b. Due to Irma's institutionalization, it is void. c. The contract cannot be disaffirmed because it is fully executed. d. By paying cash, Irma ratified the contract.

a. It is voidable.

Which of the following is true regarding promissory estoppel? a. It requires that the promisor should reasonably expect to induct the promisee's action or forbearance. b. Damages awarded for promissory estoppel always equal the value of the promise relied upon by the promisee. c. It requires consideration. d. It applies only when one or both parties is a merchant.

a. It requires that the promisor should reasonably expect to induct the promisee's action or forbearance.

Percy is a rich boy whose parents supply him with every conceivable necessity of life. While still a minor, Percy buys a coat on credit from a men's store for $5000. After wearing the coat for a while, Percy decides that it bores him and that he'd like to disaffirm. Which of the following is MOST likely to be true? Assume that Percy is still a minor. a. Percy can disaffirm the contract, and he must return the coat. b. Percy cannot disaffirm the contract, but he only is liable for the reasonable value of the coat. c. Percy cannot disaffirm the contract, and he is liable for the full price of the coat ($5000). d. Percy can disaffirm the contract and he need not return the coat.

a. Percy can disaffirm the contract, and he must return the coat.

Which of the following would be an invalid ratification? a. Seventeen year old Tim Teenager ratifies a contract which he signed two months ago. b. Eighteen year old Tim Teenager disaffirms a contract he signed when he was seventeen. He does so two weeks after his eighteenth birthday. c. Two weeks after attaining his eighteenth birthday, Tim calls the bank to assure them that he will continue making payments on the loan agreement he signed a month before his eighteenth birthday. d. Two weeks after his eighteenth birthday, Tim makes a payment on the installment contract he signed a month before.

a. Seventeen year old Tim Teenager ratifies a contract which he signed two months ago.

M, a minor, contracted with A, an adult. The contract has been fully performed by both. M reaches majority plus 3 months. a. The contract is ratified because of a failure to disaffirm within a reasonable time. b. The contract is automatically disaffirmed because of a failure to ratify. c. The contract was void and is still void. d. None is correct.

a. The contract is ratified because of a failure to disaffirm within a reasonable time.

An incompetent person who lacks understanding of a contract and its consequences can avoid it even if the other party has no reason to know of the incompetent's mental condition. a. True b. False

a. True

Courts treat contracts of incompetents and intoxicated persons essentially the same, except they are stricter with intoxicated persons because of its voluntary nature. a. True b. False

a. True

If Marie, a minor, disaffirms the purchase of her new car that she has recently wrecked, she need only return the damaged vehicle to validly disaffirm the contract. a. True b. False

a. True

If a person is unable to understand the nature and effect of entering into a contract, he or she can avoid it. a. True b. False

a. True

If a person lacks mental capacity at the time they enter into a contract, he/she may avoid liability under the agreement. a. True b. False

a. True

Ratification of a contract, once effected, is final and cannot be withdrawn. a. True b. False

a. True

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.

a. Violet may not disaffirm the contract.

A condition precedent is: a. a requirement which must be met before the obligations of the contract are enforceable. b. a requirement which limits the number of individuals who can accept an offer. c. a requirement which limits the making of an offer. d. an obligation imposed on the offeror after a contract is made such as a warranty.

a. a requirement which must be met before the obligations of the contract are enforceable.

Egan, a minor, purchased Baker's used computer for Egan's personal use. Egan paid $200 down on delivery and was to pay $200 thirty days later. Twenty days later, the computer was damaged seriously as a result of Egan's negligence. Five days after the damage occurred and one day after Egan reached the age of majority, Egan attempted to disaffirm the contract with Baker. Egan will a. be able to disaffirm despite the fact that Egan was not a minor at the time of disaffirmance. b. be able to disaffirm only if Egan does so in writing. c. not be able to disaffirm because Egan had failed to pay the balance of the purchase price. d. not be able to disaffirm because the computer was damaged as a result of Egan's negligence.

a. be able to disaffirm despite the fact that Egan was not a minor at the time of disaffirmance.

When a minor ratifies a contract, the minor: a. can ratify the contract only as a whole. b. can retain the benefits and avoid the burdens. c. can escape payment for what he has received. d. two of the above, b and c.

a. can ratify the contract only as a whole.

When a person who just became an adult ratifies a contract made as a minor, he a. can ratify the contract only as a whole. b. can retain the benefits and avoid the burdens. c. can escape payment for what he received. d. two of the above, b and c.

a. can ratify the contract only as a whole.

Exculpatory clauses: a. cannot relieve a party from liability for battery. b. always are enforceable if they are clearly and conspicuously stated in the agreement. c. may relieve an employer from liability for workers' compensation benefits. d. are effective only when the party benefited by them owes a duty to the public.

a. cannot relieve a party from liability for battery.

Mork is an alien who resides in this country. If Mork makes a contract with a United States citizen, the contract is a. enforceable. b. not valid since citizens cannot make contracts with aliens. c. valid, but neither party can sue in court in order to enforce their contractual rights. d. enforceable only if Mork is married to a citizen.

a. enforceable.

When a person enters into a written agreement while drinking alcohol or using drugs, the agreement a. is voidable if the party didn't know the general nature of the agreement due to the alcohol or drugs. b. is void in all cases. c. is always enforceable. d. none is correct.

a. is voidable if the party didn't know the general nature of the agreement due to the alcohol or drugs.

Tom Teen, age 16, purchased a radio from an adult. Tom was not asked how old he was. In order to disaffirm the contract, Tom must a. return the radio if he has it. b. return the radio and pay for the use of the radio. c. return the radio and pay for any damage to the radio. d. return the radio, pay for any damage, and pay for the use of the radio.

a. return the radio if he has it.

When a minor falsely advises the other party that he is of the age of majority and based upon that misrepresentation, the other party 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. the minor may disaffirm the contract.

a. the minor has lost his right to disaffirm the contract because of the misrepresentation.

Sometimes adults who can't sue a minor on the contract will sue in a tort. In order to be successful a. the tort must be clearly separate from and independent of the contract. b. the tort must be based on a specific statute. c. the tort must be one that involves an evil intent. d. none is correct.

a. the tort must be clearly separate from and independent of the contract.

As a general rule, disaffirmance must come either during a minor's minority or within a reasonable time after he reaches majority. a. True b. False

a. true

A contract with an intoxicated person is... a. voidable by intoxicated person. b. illegal. c. void. d. unenforceable.

a. voidable by intoxicated person.

Which of the following promises is enforceable in most states? a. A creditor promises to accept a lesser sum than due. b. A written promise to pay a debt barred by the statute of limitations. c. A promise to perform an illegal act. d. A promise to pay a debt after the discharge of the debt in bankruptcy was granted.

b. A written promise to pay a debt barred by the statute of limitations.

X, a manufacturer of pencils, offers to sell Y 1,000,000 pencils for $1 million. The offer, which is signed by X's president, says that it will remain open for six months. The offer does not request that Y pay any consideration for the promise to keep the offer open, and Y does not pay X any consideration. When can X revoke the offer? a. At any time, because there is no consideration for X's option promise b. After three months c. After six months d. After a reasonable time

b. After three months

The Uniform Commercial Code has not changed the traditional common law view that a minor could avoid her contract and recover property, even though a third party may have given value for it and had no notice that it was the property of a minor. a. True b. False

b. False

Today, under the UCC, a person buying goods from a minor may not transfer valid title to a good faith purchaser for value. a. True b. False

b. False

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 still liable because she used the skis. d. Fay is not liable because skis are not necessaries.

b. Fay is still liable because selling the skis amounts to a ratification.

Seventeen-year-old Tim Teenager decides he would like a new car, so he brings his 1972 Ford Maverick to the local Ford dealer as a trade-in on a new Thunderbird. He turns over his Maverick to the dealer and drives away with a new Thunderbird. Two days later, Tim decides he cannot afford the payments for the new car on his salary as a burgermaker, so he returns the car and asks for his Maverick back. The dealer says he will take the Thunderbird and rescind the contract, but that he is unable to return the Maverick because he sold it to another buyer. a. Tim is entitled to the Maverick and can sue the dealer to get it back. b. If the dealer sold the car to a good faith purchaser, then Tim has no right to get his Maverick back. c. Tim cannot avoid the contract until he is eighteen. d. Under the UCC and the majority rule, Tim must make restitution for the difference between the depreciation on the Thunderbird and the market value of the Maverick.

b. If the dealer sold the car to a good faith purchaser, then Tim has no right to get his Maverick back.

Which of the following is untrue 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.

b. Unlike a minor, an incompetent person can never ratify a contract.

Kent, a 16-year-old, purchased a used car from Mint Motors, Inc. Ten months later, the car was stolen and never recovered. Which of the following statements is correct? a. The car's theft is a de facto ratification of the purchase because it is impossible to return the car. b. Kent may disaffirm the purchase because Kent is a minor. c. Kent effectively ratified the purchase because Kent used the car for an unreasonable period of time. d. Kent may disaffirm the purchase because Mint, a merchant, is subject to the UCC.

b. Kent may disaffirm the purchase because Kent is a minor.

Mary, a self-employed 16-year-old whose parents are dead, buys a dress on credit for $50. After receiving the dress and discovering that its reasonable value is only $25, Mary tries to disaffirm the deal before paying the $50 (and while she is still 16). In this case: a. Mary cannot disaffirm, and she is bound to pay the full $50. b. Mary cannot disaffirm, but she is only bound to pay $25. c. Mary can disaffirm, and she can return the dress without paying for it. d. Mary can disaffirm, and she can keep the dress without paying for it.

b. Mary cannot disaffirm, but she is only bound to pay $25.

Randy, a minor, buys a new four-wheel-drive truck from Jones Ford. Randy sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to Arthur Smith. Arthur does not personally known 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.

b. Randy may not recover the vehicle from Mr. Smith.

Robert Briscoe is 17 years old. He lies to Belk Ford about his age, saying he is 18 in order to induce them to sell him a new pickup. Belk falls for this lie and sells him the pickup. 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 may only receive a portion of his money. d. Robert will receive his money less depreciation.

b. Robert may not disaffirm since he lied.

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. 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.

b. 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.

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code? a. The sale of a house b. The sale of a new car c. An employment agreement d. A sale of automobile insurance

b. The sale of a new car

Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable? a. Yes, there is no way for the dealer to get the extra money anyway. b. Yes, there is consideration for the modified amount. c. No, there is no consideration and the dealer can sue for the extra $300. d. No, there is an implied contract to pay the dealer whatever he billed Jack.

b. Yes, there is consideration for the modified amount.

A contract made by a mentally impaired person; who has not been adjudicated incompetent: a. can only be disaffirmed after the person has regained his mental capacity. b. can only be ratified after the person has regained his mental capacity. c. normally is void rather than voidable. d. a and b are true.

b. can only be ratified after the person has regained his mental capacity.

Which of the following is ordinarily competent to give binding assent to a contract? a. teenagers (under 18) b. convicts c. insane persons d. persons under guardianship

b. convicts

The exercise of the power to avoid a contract is known as ____________. a. ratification b. disaffirmance c. ab initio d. restitution

b. disaffirmance

A minor may disaffirm a conveyance of land prior to reaching majority or within a reasonable time after doing so. a. True b. False

b. false

Payne entered into a written agreement to sell a parcel of land to Stevens. At the time the agreement was executed, Payne had consumed alcoholic beverages. Payne's ability to understand the nature and terms of the contract was not impaired. Stevens did not believe that Payne was intoxicated. The contract is a. void as a matter of law. b. legally binding on both parties. c. voidable at Payne's option. d. voidable at Steven's option.

b. legally binding on both parties.

Toni Minor purchased an automobile from Majority Motors on September 17. She attained the age of majority on October 5. In the early morning of October 6, she was involved in an accident that destroyed the vehicle, which was not insured. On November 1, she informed Majority Motors that she would make no further payments. If Majority Motors sues, it would a. lose even if defendant had misrepresented her age. b. lose because disaffirmance is permitted even though the property has been destroyed. c. win because defendant attempted to avoid the contract only after reaching her majority. d. win because an effective disaffirmance would have required defendant to return the property or its equivalent.

b. lose because disaffirmance is permitted even though the property has been destroyed.

A minor generally is liable for the reasonable value of... a. insurance. b. necessaries. c. transportation. d. education.

b. necessaries

If a minor enters a contract which is interwoven with a tort, will the minor be held liable in tort? a. yes b. no c. only if the agreement is voidable d. depends on the age of the minor

b. no

Joanne, a minor, sold her laptop computer to Bruce, an adult. Bruce then sold the laptop to Anna, also an adult, who had no knowledge of the fact that the original owner was a minor. Under the Uniform Commercial Code, Joanne may: a. avoid her contract to Bruce and recover her laptop. b. not avoid her contract to Bruce and may not recover her laptop. c. register with the UCC filing department, the Department of State and require that if Anna sells the laptop she must give Joanne the rights of first refusal. d. none of the above.

b. not avoid her contract to Bruce and may not recover her laptop.

When a minor disaffirms a contract, he must a. do nothing. b. notify the other party and return any property he has from the other party provided he has it. c. return everything which he received from the other party. d. continue to make payments.

b. notify the other party and return any property he has from the other party provided he has it.

Ann, a minor, disaffirmed her agreement to buy $127 worth of cosmetics from Mary Kay Company. She had used up all the eye shadows, lipsticks and powders. The general rule is that: a. she may disaffirm, but she must pay the asking price of the cosmetics used. b. she may disaffirm but she has to return the makeup that is not used up. c. she may not disaffirm without paying the value of used makeup. d. she may not disaffirm because she has used the property.

b. she may disaffirm but she has to return the makeup that is not used up.

Which of the following would least likely considered a "necessary" as discussed in class? a. food b. transportation c. medical care d. clothing

b. transportation

Contractual capacity of the parties is a prerequisite to the formation of a binding agreement, but the consequences of different forms of incapacity vary. The contracts of a person are void if (s)he is... a. a minor. b. under guardianship of a court. c. lacks the capacity to understand but has not been declared incompetent by a court. d. intoxicated.

b. under guardianship of a court.

A minor's contract is ordinarily a. void. b. voidable. c. unenforceable by either party. d. valid if in writing.

b. voidable.

Which of the following would likely be considered a non-necessary item for a minor? a. A used car to drive to school b. A camera for a high school student with a part-time job as a photographer c. A miniature television set to watch the soaps during lunch d. A visit to a dermatologist for skin problems.

c. A miniature television set to watch the soaps during lunch

Within the law of consideration, which of the following is a correct statement of law? a. The UCC does not change the common law in any major respects. b. Past consideration is effective to bind a present promise. c. A promise in writing to pay a debt barred by the statute of limitations is binding without new consideration. d. Charitable subscriptions are not binding unless consideration is clearly present.

c. A promise in writing to pay a debt barred by the statute of limitations is binding without new consideration.

Which of the following is not always necessary in order for a valid contract to be formed? a. Mutual assent b. Legality of purpose c. A writing d. Competent parties

c. A writing

Why does it matter whether or not a contracting party is an Article 2 merchant? a. Because this is the test for determining whether Article 2 applies. b. Because contracts between merchants are covered by the Restatement (Second) of Contracts rather than by Article 2 of the UCC. c. Because Article 2 sometimes creates different rules for merchants in sale-of-goods cases. d. Actually, the term merchant has little or no practical significance.

c. Because Article 2 sometimes creates different rules for

Which of the following is necessary for the existence of an offer? a. A writing b. A conscious intent to contract on the offeror's part c. Facts and circumstances that reasonably indicate the offeror's intent to contract d. Reliance by the offeree on the offeror's promise

c. Facts and circumstances that reasonably indicate the offeror's intent to contract

Which of the following is LEAST likely to constitute ratification of a contract made by a minor? a. Performing one's duties under the contract after reaching the age of majority b. Accepting performance from the other party to the contract after the age of majority c. Failing to disaffirm a completely executory contract within one month after the age of majority d. Making an oral statement that "I ratify the contract."

c. Failing to disaffirm a completely executory contract within one month after the age of majority

A person may ratify a contract... a. anytime. b. up until his 18th birthday plus a reasonable period of time. c. only after his 18th birthday. d. only if it is for necessaries.

c. only after his 18th birthday.

Which of the following is untrue 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. Courts are strict with respect to the requirement of restitution upon disaffirmance.

c. Slight intoxication will destroy one's contractual capacity.

When may a person disaffirm a contract for the sale of real property? a. Prior to reaching majority b. Prior to reaching majority or within a reasonable time thereafter c. Upon reaching the age of 18 d. Upon reaching the age of 22

c. Upon reaching the age of 18

Ratification a. can come about only by express conduct. b. can come about through implied conduct only. c. can only be of the whole and not a part of the contract. d. none is correct.

c. can only be of the whole and not a part of the contract.

Contracts made by severely intoxicated people: a. are void rather than voidable. b. cannot be disaffirmed until the person has regained his mental faculties. c. cannot be ratified until the person has regained his mental faculties. d. are always binding, because the law does not want to reward drug or alcohol abuse.

c. cannot be ratified until the person has regained his mental faculties.

A minor, M, has obtained necessaries on credit. It is correct to say that... a. he can be made to pay the contract price for them. b. his parents must pay the contract price. c. he is only liable for the reasonable value of the necessaries. d. neither he nor his parents have to pay anything.

c. he is only liable for the reasonable value of the necessaries.

Rail, who was 16 years old, purchased an $800 computer from Elco Electronics. Rail was unhappy with the computer. Two days after reaching the age of 18, Rail was still frustrated with the computer's reliability. He returned it to Elco, demanding an $800 refund. Elco refused, claiming that Rail no longer had a right to disaffirm the contract. Elco's refusal is a. correct, because Rail's multiple requests for service acted as a ratification of the contract. b. correct, because Rail could have transferred good title to a good faith purchaser for value. c. incorrect, because Rail disaffirmed the contract within a reasonable period of time after reaching the age of 18. d. incorrect, because Rail could disaffirm the contract at any time.

c. incorrect, because Rail disaffirmed the contract within a reasonable period of time after reaching the age of 18.

If a tort and a contract are so intertwined that to enforce the tort, the court must enforce the contract, the minor is not liable in tort. This is the definition of: a. liability on contracts. b. liability for necessaries. c. liability for tort connected with contract. d. liability for misrepresentation of age.

c. liability for tort connected with contract.

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 ___________ to protect the employer's legitimate interest. a. exculpatory b. unconscionable c. necessary d. usurious

c. necessary

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 of the case. d. common law.

c. the facts of the case.

When a minor commits a tort while completing a contract and the tort and a contract are so "interwoven" that they cannot be separated, then a. the court will apply the law of torts to the tort and the law of contracts to the contract. b. the law of torts will prevail. c. the law of contracts will prevail. d. the case will be thrown out.

c. the law of contracts will prevail.

When personal property is transferred to a third person who is unaware that it was originally purchased by a minor a. the minor can avoid the sale to the third person under the UCC. b. the third person can avoid the purchase under the UCC. c. the minor cannot get the property back from the third person under the UCC. d. the minor can recover the property from the third person under the UCC upon full restitution.

c. the minor cannot get the property back from the third person under the UCC.

Lee has been declared incompetent by the court and is under the care of his sister. Unknown to his sister, Lee rents the 30,000-seat civic center for his birthday party. Lee's contract to rent the civic center is best described as a: a. valid contract. b. voidable contract. c. void contract. d. quasi contract.

c. void contract.

Meed entered into a written agreement to sell a parcel of land to Beel for $80,000. At the time the agreement was executed, Meed had consumed a large amount of alcoholic beverages which significantly impaired Meed's ability to understand the nature and terms of the contract. Beel knew Meed was very intoxicated and that the land had been appraised at $125,000. Meed wishes to avoid the contract. The contract is a. void. b. legally binding on both parties in the absence of fraud or undue influence. c. voidable at Meed's option. d. voidable at Meed's option only if the intoxication was involuntary.

c. voidable at Meed's option.

Except for necessaries, contracts with minors are generally a. void. b. voidable by either party. c. voidable only by minor. d. illegal.

c. voidable only by minor.

Sandy fraudulently induced Fred to enter a contract with her. A court would treat the contract as: a. enforceable. b. unenforceable. c. voidable. d. void.

c. voidable.

Instead of refusing to enforce an unreasonable covenant, some courts will: a. reform the agreement. b. uphold reasonable restrictions. c. delete unreasonable restrictions. d. A court can do all of the above.

d. A court can do all of the above.

Which of the following would most likely be enforceable? a. An agreement supported by past consideration b. A substitute agreement to settle an undisputed debt c. A debt agreed to seven years ago in a state where the statute of limitations is six years d. A promise following the rendering of emergency services that is not supported by new consideration

d. A promise following the rendering of emergency services that is not supported by new consideration

Which of the following promises are enforceable without consideration? a. A contract modification in a contract covered by the U.C.C. b. A written offer signed by a merchant to buy or sell goods that assures it will be kept open for one month c. A renunciation of a claim a written waiver that is signed and delivered by the aggrieved party when the contract involves a sale of goods d. All of the above are enforceable by statute

d. All of the above are enforceable by statute

Which of the following statements is/are true? a. A business may require, though it may request, a parent to sign a contract between the business and a minor as a precondition for a sale to a minor. b. A parent who cosigns a loan with his or her minor child becomes obligated under the loan contract. c. As a general rule, parents are not liable for contracts made by their minor children. d. All of the above are true.

d. All of the above are true.

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 six months after terminating his employment

d. An agreement by a car salesman not to sell automobiles or automobile parts in Marin County for a period of six months after terminating his employment

Which of the following transactions would be subject to Article 2 of the UCC? a. An employment contract b. An agreement to sell a house c. An agreement to paint someone's garage d. An agreement to sell a television set

d. An agreement to sell a television set

Promissory estoppel is a contractual doctrine that includes the following considerations: a. The courts use the doctrine of promissory estoppel to enforce noncontractual promises. b. Under this doctrine the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the nature of the promise to take action or refrain from taking action and the promisee does so. c. The courts will not, under any circumstance, enforce promises that do not include all four of the elements of contract. d. Both a and b.

d. Both a and b.

Cindy Smith, age 16, buys a Chevy Camaro from Mike Mason, age 23, for $4,000. Cindy's parents, who give her everything she wants, loaned her the money for the car. The reason for Cindy's purchase is that all her friends have cars and she feels left out without one. One week after buying the car, however, Cindy changes her mind and told Mike that she wants to disaffirm the contract. When Mike comes to pick up the car and give Cindy her money, though, Cindy changes her mind again, telling Mike that "I'll stick by the deal." But when Cindy's parents gave her a new car for her seventeenth birthday, she finally decides to disaffirm once again. Which of the following is true? a. Cindy cannot disaffirm because the car is a necessary. b. Cindy cannot disaffirm because she ratified the contract by saying, "I'll stick by the deal." c. Cindy cannot disaffirm because we have a sale of goods and Article 2 of the UCC says that 16 is the age of contractual capacity. d. Cindy can still disaffirm.

d. Cindy can still disaffirm. (181)

Cheryl Cheerleader, a 16-year-old high school junior, orders a new dress to wear to the high school prom. She agrees to pay $200 when the dress arrives. Before the dress comes in, she has a fight with her boyfriend and calls the store to cancel the order. a. This is an executory contract. b. The dress is a necessary item. c. Cheryl will have to pay $200 for the dress. d. Two of the above, a and b.

d. Two of the above, a and b.

When does acceptance of an offer to enter into a unilateral contract occur? a. Upon notice of intent to accept by the offeree b. Upon full performance by the offeror c. Upon commencement of performance by the offeree d. Upon full performance by the offeree

d. Upon full performance by the offeree

Norm Hefty was a door-to-door salesman for Toothrot Candy Company. His duties were to call on customers and make sales in Bedford, Indiana, which is located in the southern part of the state. Toothrot's business territory covers the entire state of Indiana. Hefty and Toothrot had entered into a written employment contract at the time he joined the firm. One of the clauses in the contract stated that if Hefty ceased working for Toothrot, he could not work as a salesman for a competing company anywhere in Indiana for a period of five years. Hefty left his employment with Toothrot and promptly went to work as a salesman for a candy company that competed with Toothrot. His duties with the new employer were confined to the town of Elkhart, which is located in northern Indiana. Toothrot has sued Hefty in an effort to obtain an injunction against further violation of the non-competition clause in the parties' employment contract. Which of the following is most true? a. Toothrot will win, because the clause's geographic scope was restricted to the state in which Toothrot does business. b. Toothrot will win, because the time period of the clause was reasonable. c. Both a and b are true. d. Hefty will win, because the area of the restriction is not reasonable.

d. Hefty will win, because the area of the restriction is not reasonable.

When Lynx, Inc. hired Parr, Parr signed an employment contract prohibiting Parr from competing with Lynx during and after employment. While employed, Parr acquired knowledge of many of Lynx's trade secrets. Which of the following statements is correct? a. Parr has the right to compete with Lynx upon resigning from Lynx. b. Parr has the right to compete with Lynx only if fired from Lynx. c. In determining whether Parr may compete with Lynx, the court should not consider Parr's ability to obtain other employment. d. In determining whether Parr may compete with Lynx, the court should consider, among other factors, whether the agreement is necessary to protect Lynx's legitimate business interests.

d. In determining whether Parr may compete with Lynx, the court should consider, among other factors, whether the agreement is necessary to protect Lynx's legitimate business interests.

Mike Minor buys some real estate for investment purposes. The contract obligates Mike to make monthly installment payments for ten years. Mike reaches the age of majority one month after making the contract. After this, Mike makes 25 monthly payments under the contract, but then decides that he wants to disaffirm the deal. Which of the following is MOST true? a. Mike can disaffirm. b. Mike cannot disaffirm because contracts for the sale of land can only be disaffirmed before the age of majority. c. Mike cannot disaffirm because contracts for the sale of land must be disaffirmed within one year of the age of majority. d. Mike cannot disaffirm because he has already ratified the contract.

d. Mike cannot disaffirm because he has already ratified the contract.

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 from whom his purchased it.

d. No, if Mark's father bought it without knowing from whom his purchased it.

Which of the following is true about situations where a minor or former minor tries to disaffirm a completed contract in which the consideration furnished to the minor has been lost, stolen, or dissipated? a. The traditional rule here is that the minor cannot disaffirm because the minor has nothing to give back to the other party. b. The traditional rule here is that the minor cannot disaffirm because the contract is completed, and only uncompleted contracts can be disaffirmed. c. Today, the courts all agree that a minor can disaffirm here - without giving anything back to the adult. d. None of the above.

d. None of the above.

Steve purchases a four-wheel-drive truck from Belk Ford. Steve is only 17 years of age. He wrecks the vehicle and attempts to disaffirm the contract and have Belk Ford repay him all that he has paid. 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. Steve may simply return the vehicle and get his money.

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 real property is involved, upon reaching the age of majority c. During the time of his minority or for a reasonable time thereafter d. Where the minor wishes to perform part of a contract and disaffirm another part of the same contract

d. Where the minor wishes to perform part of a contract and disaffirm another part of the same contract

A minor may NOT disaffirm a contract for... a. purchase of food. b. sale of land. c. purchase of land. d. a and b. e. a and c.

d. a and b.

An item considered a necessary is a. lodging. b. medicine. c. food. d. all of the above.

d. all of the above.

Generally, minors are liable for a. libel. b. negligence. c. fraud. d. all of the above.

d. all of the above.

Once a court finds a contract or a term of the contract to be unconscionable, it may: a. refuse to enforce the entire agreement. b. enforce the contract without the unconscionable provision. c. change the unconscionable term so as to avoid any unconscionable result. d. all of the above.

d. all of the above.

Ratification can occur in three ways. They are: a. through express language. b. as implied from contract. c. through failure to make a timely disaffirmance. d. all of the above. e. none of the above.

d. all of the above.

Opal offered, in writing, to sell Larkin a parcel of land for $300,000. If Opal dies, the offer will a. terminate prior to Larkin's acceptance only if Larkin received notice of Opal's death. b. remain open for a reasonable period of time after Opal's death. c. automatically terminate despite Larkin's prior acceptance. d. automatically terminate prior to Larkin's acceptance.

d. automatically terminate prior to Larkin's acceptance.

An offer to sell a tract of real property is terminated at the time the a. buyer mails a counter-offer. b. seller mails his/her revocation if the original offer was made by mail. c. buyer mails a rejection of the offer, if the original offer was received by mail. d. buyer learns of the sale of the property to a third party.

d. buyer learns of the sale of the property to a third party.

A person who is OLDER than the age of majority may disaffirm a contract if: a. the other party is a minor who lied about his age. b. the other party is an emancipated minor. c. the contract is for necessaries. d. none of the above.

d. none of the above.

Cesare offers to sell a gram of arsenic to Lucrezia for $50. Lucrezia says, "No." However, a moment later she changes her mind and tells Cesare that she accepts his offer: a. there is no contract because Lucrezia made a counteroffer. b. there is a contract as long as Cesare has not withdrawn his offer. c. there is a contract since Cesare did not sell to anyone else. d. there is no contract because of Lucrezia's rejection.

d. there is no contract because of Lucrezia's rejection.