Chapter 12 Quiz Questions: (Quiz #5)
Which of the following is an INCORRECT statement regarding the enforceability of immoral contracts?
Judges are free to define morality based on their individual views
Exculpatory clauses that result from superior bargaining power are usually found to be _____.
Void as against public policy
Preprinted forms whose terms the consumer cannot negotiate and that they must sign in order to obtain a product or service are called contracts of _____.
Adhesion
The law has developed which two standards concerning contracts of mentally incompetent persons?
Adjudged insane and insane but not adjudged insane
An _____ clause is also called a release of liability clause
Exculpatory
A(n) _____ clause is also called a release of liability clause.
Exculpatory
If a department store had a sign above the entrance stating, "The store is not liable for the ordinary negligence of it employees," this would be a(n) _____clause.
Illegal exculpatory
Which of the following is an INCORRECT statement regarding the infancy doctrine?
In most states, the infancy doctrine is a subjective standard.
At common law, parties to an illegal contract were considered _____.
In pari delicto
Legal insanity is a state of contractual _____, as determined by law.
Incapacity
The _____ doctrine allows minors to disaffirm most contracts they have entered into with adults.
Infancy
To protect minors, the law recognizes the _____ doctrine, which gives minors the right to disaffirm most contracts they have entered into with adults.
Infancy
An exculpatory clause can be used to relieve a party from tort liability for _____.
Ordinary negligence
The doctrine of unconscionability is based on _____.
Public policy
_____ is the act of a minor, after the minor has reached the age of majority, by which he or she accepts a contract entered into when he or she was a minor.
Ratification
A(n) _____ statute is enacted to protect the public.
Regulatory licensing
According to the duty of _____, if a minor has transferred money, property, or other valuables to the competent party before disaffirming the contract, the party must place the minor in status quo.
Restitution
According to the duty of _____, a minor is obligated only to return the goods or property he or she has received from the adult in the condition it is in at the time of disaffirmance.
Restoration
Licensing statutes enacted to raise money for the government are called _____ statutes.
Revenue-raising
Which of the following is an INCORRECT statement regarding a minor's right to disaffirm a contract?
Special formalities are required for a minor to expressly disaffirm a contract
Which of the following is an element that must be shown to prove that a contract or a clause in a contract is unconscionable?
The adhering party had no reasonable alternative.
Which of the following is an INCORRECT statement regarding contracts entered into by minors for the necessaries of life?
The minor is obligated to pay the contract price for the necessaries he or she received.
A(n) _____ contract is a contract that courts refuse to enforce in part or at all because it is so oppressive or manifestly unfair as to be unjust.
Unconscionable
Which of the following is an INCORRECT statement regarding the enforceability of contracts entered into by intoxicated persons?
Under the majority rule, all contracts entered into by intoxicated persons are void.
State _____ laws set an upper limit on the annual interest rate that can be charged on certain types of loans.
Usury
An agreement between two companies to engage in price fixing in violation of federal antitrust statutes is illegal and therefore _____.
Void
An illegal contract is _____.
Void
Any contract entered into by a person who has been adjudged insane is _____.
Void
Contracts contrary to public policy are _____.
Void
Contracts to commit criminal acts are _____.
Void
A contract that is based on sexual favors is an immoral contract and _____ as against _____.
Void; public policy
A contract entered into by a person who is insane, but not adjudged insane, is generally _____.
Voidable