Chapter 7 Business Law

What happens when a person lacks the legal capacity to enter into a contract?

He/she, or the legal guardian, can void it

Examples of illegal contracts include all but the following: Contracts for the sale or distribution of heroin. Contracts for loansharking. Contracts in consideration of marriage. Employment contracts for the hiring of undocumented workers.

Contracts for loansharking

Consideration may include any of the following except: A promise. A gift. Property. Money.

A gift

Typical remedies available for a breach of contract include: Money damages. Rescission. Specific Performance. All of the above.

All of the above

What are the ways an agreement can be invalidated? Fraud. Misrepresentation. Undue influence. All of the above.

All of the above

. Courts of equity will not grant specific performance of contracts: For a personal service contract. For the sale of real estate. For the sale of the original manuscript of a rare edition book. All of these are correct.

All of these are correct

Which of the following is most likely to be classified as a necessity for which a minor will be held liable on a contract? A television. School supplies. Education. Food.

Food

When can a mentally incompetent person void a contract?

If a person lacks the mental capacity to enter a contract, then either he or she, or his or her legal guardian, may void it, except in cases where the contract involved necessities.

The elements of a contract include all but the following element: Offer and acceptance. Consideration. Capacity. Promissory Estoppel.

Promissory Estoppel.

What is an exception to the requirement of consideration for contracts?

Promissory estoppel

____________ terminates the duties of both parties under the contract, while ____________ allows courts to equitably change the contracts substance.

Rescission, reformation

______________ restores the injured party to status quo or the position they had prior to the formation of the contract, by returning the plaintiff any money or property give pursuant to the contract.

Restitution

What is an agreement between two or more parties that is enforceable by law?

contract

What is it when something substantially different from what was expected under the terms of the contract is delivered, the breach is considered material?

material breach