MindTap Assignment #7 (Chapter 14)

A judge ruled that Ron was mentally incompetent, placed him in a hospital, and appointed a guardian. Ron escaped from the hospital and purchased a recreational vehicle. In this situation: a. Ron's contract was void from the start. b. Ron can avoid the contract only if the salesperson knew he was mentally ill. c. Ron has a valid contract. d. Ron cannot avoid the contract as long as he had sufficient funds to pay for the vehicle.

a. Ron's contract was void from the start.

Patrick agrees to pay Anna $25,000 in exchange for Anna taking Patrick's hazardous waste and surreptitiously dumping it on the property of a competitor. After Anna dumps the waste, Patrick refuses to pay. This contract will: a. be void from the outset and thus unenforceable. b. be enforced because it has sufficient consideration and is a bargained-for exchange. c. be enforced because both parties agreed to the contract and will be held accountable to its terms. d. be unenforceable due to usury laws.

a. be void from the outset and thus unenforceable.

Egbert, who is sixteen years old, purchases a $500 video game system and a $50 computer chair from CompuStore. Egbert changes his mind and wants to avoid the contract for the video game system but not the computer chair. Egbert may: a. only disaffirm the entire contract. b. disaffirm only the computer chair because it is incidental to the contract. c. disaffirm part of the contract for the video game system as he wishes. d. may not disaffirm the contract because it is for necessaries.

a. only disaffirm the entire contract.

Amjed sues Larry, a landowner on whose property Amjed was injured. Larry believes that Craig is a lawyer and hires Craig to defend him in the lawsuit. Craig is not a lawyer, so the contract between Larry and Craig: a. will not be enforced. b. will be enforced only if Craig wins. c. will be enforced despite Craig's winning or losing of the case. d. will be enforced unless Craig loses the case.

a. will not be enforced.

Countrywide Trucking Inc. contracts with Dewey to transport crated goods to a certain destination for $5,000. Countrywide delivers the crates, but Dewey does not pay. Countrywide learns that the crates contained stolen goods. Countrywide can recover from Dewey a. ​$5,000, but not the goods. b. ​none of the choices. c. ​the goods and $5,000. d. ​the goods but not $5,000.

a. ​$5,000, but not the goods.

GavelCo Insurance sells an insurance policy to Barry in the state of Colorado. GavelCo violates a Colorado state statute when doing so. Later, Barry gets into a dispute with GavelCo over coverage under the insurance policy and wants to enforce the contract. The insurance contract will be: a. enforceable, but only if a court finds the contract unconscionable. b. enforceable by Barry, the purchaser, and he can recover from the insurer if applicable. c. enforceable by both parties just as any other contract. d. unenforceable.

b. enforceable by Barry, the purchaser, and he can recover from the insurer if applicable.

Fagin and Gage agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gage can a. ​obtain damages in the amount of his partner's share of the illegal profits. b. ​none of the choices. c. ​enforce the agreement. d. ​obtain damages in the amount of his own share of the illegal profits.

b. ​none of the choices.

Betty sells her Clothes Shop to Diane. In the sale agreement, there is a covenant not to compete that prohibits Betty from opening another clothing store within a certain distance. If a court concludes that this restriction is unreasonable, it will most likely a. ​order Diane to stop doing business. b. ​reform the covenant. c. ​award Betty damages equal to the speculative profit of a closer store. d. ​prohibit both parties from opening clothing stores.

b. ​reform the covenant.

Heather is sixteen but looks much older. She goes into a jewelry store and buys a diamond bracelet with the money she has been saving for college. If Heather realizes a year later that it was unwise to spend the money on the bracelet, she: a. can disaffirm this contract only if she has turned eighteen. b. cannot return the bracelet, because she has kept it too long. c. can return the bracelet and get her money back. d. can return the bracelet, but she will only get 50 percent of what she paid for it.

c. can return the bracelet and get her money back.

Melissa is a minor who agrees to purchase a car from Umberto for $10,000, one month after she turns 18. Upon turning 18, Melissa writes to Umberto, stating that she still agrees to purchase the car. Melissa's contract with Umberto is: a. enforceable because Melissa and Umberto agreed to the purchase of a car. b. unenforceable because Melissa was a minor when she entered into the contract. c. enforceable because it has been expressly ratified by Melissa. d. unenforceable because Melissa has a right to disaffirm the contract.

c. enforceable because it has been expressly ratified by Melissa.

To celebrate his seventeenth birthday, Alan buys a new computer. Two weeks later, his parents insist that he return it. Alan's attempt to return the computer will be: a. successful, if he pays a fine. b. unsuccessful unless he gets court approval. c. successful, because he has acted within a reasonable time. d. unsuccessful, because he has waited too long.

c. successful, because he has acted within a reasonable time.

Bay City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault. Coco's Chocolate signs a lease with Bay City that contains the clause. This is a. ​an illusory promise. b. ​a covenant not to compete. c. ​an exculpatory clause. d. ​an adhesion contract.

c. ​an exculpatory clause.

Elisa truly believes that she is a space alien from the planet Zelnor. She walks into a car dealership and buys a new Volkswagen Jetta, telling the salesperson that she needs a sample of Earthling transportation to beam back to her home planet. If Elisa wants the option to avoid her contract later, she must: a. prove that the salesperson talked her into buying the car. b. prove that a court had judged her to be mentally incompetent previously. c. prove that the car dealership did not take adequate precautions to prevent sales to mentally disturbed individuals. d. prove that she lacked adequate mental capacity when she bought the car.

d. prove that she lacked adequate mental capacity when she bought the car.

Orin signs a covenant not to compete with his employer, Product Distribution, Inc. The covenant will be enforced if it a. ​relieves the employer from liability for any injury to Orin. b. ​does not require either party to obtain a business license. c. ​none of the choices. d. ​is reasonable with respect to geographic area and duration.

d. ​is reasonable with respect to geographic area and duration.

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients, to whom Oscar will aggressively market Payroll's services. This deal is a. ​enforceable. b. ​voidable at the option of either party. c. ​voidable at the option of the party having less bargaining power. d. ​void.

d. ​void.