Chapter 16

Adhesion

an agreement in which a party is given an offer without the right to negotiate its terms is called a(n) ____________ contract.

Exculpatory Clause

A clause in a contract that basically frees one party (usually the drafter of the agreement) from all liability arising out of performance of the contract; generally based on factors such as consumer ignorance or a great deal of unexplained fine print that serve to deprive the less powerful party of a meaningful choice.

Adhesion 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. Such contracts are legal but are sometimes rescinded on the grounds of unconscionability and the absence of one party's free will to enter a contract.

Valid

A contract entered into by a person suffering from mental problems yet who still understands the nature of the contract and the obligations it imposes is considered

Indivisible Contract

A contract that cannot be divided and must be performed in its entirety.

Sabbath Law

A law that prohibits the performance of certain activities on Sundays.

unconscionable

A term applied to a contract in which one party has so much more bargaining power than the other party that the powerful party dictates the terms of the agreement and eliminates the other party's free will.

Express Ratification

A(n)_____ occurs when, after reaching the age of majority, a person states orally or in writing that he or she intends to be bound by the contract entered into as a minor.

Gambling

Agreements in which parties pay consideration (money placed during bets) for the chance, or opportunity, to obtain an amount of money or property.

Exculpatory

An __________ clause releases one of the contracting parties from all liability, regardless of who is at fault or what injury is suffered.

Covenants not to compete

An agreement not to compete against a party for a set period of time within a designated geographic area.

Future

In employment contracts, covenants restrict __________ employment.

in pari delicto

In equal fault.

Capacity

The legal ability to enter into a binding contract.

Usury

The lending of money at an exorbitant or unlawful rate of interest.

usury

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

substantive unconscionability

derives from contract terms that are so one-sided, unjust, or overly harsh that the contract should not be enforced.

Void

if a person has been adjudicated insane and has a guardian appointed, any contract the person attempts to enter into is

Minor has the right to disaffirm the contract or within a reasonable time of reaching the age of majority

in a contract made by a minor, the

Procedural Unconscionability

that derives from the process of making a contract.

Unconscionable

the term __________ refers to the fact that the agreement in question is so unfair that it is void of conscience