Chapter 13: Capacity and Legality

A contract for an illegal purpose is: dischargeable enforceable as a quasi-contract void voidable

void

Which statement is true about the ability of minors to enter into contracts? A minor may enter into any contract an adult can, except for contracts that are expressly prohibited for minors. A minor cannot legally enter into contracts. A minor may enter into a contract but must ratify it within one year of the date of the contract. A minor may enter into a contract only if the minor has an adult co-signer.

A minor may enter into any contract an adult can, except for contracts that are expressly prohibited for minors.

What function does a severability clause serve? Choose 2 answers. It preserves the rest of the contract if one part is unenforceable. It specifies what will happen with a potentially unenforceable part of a contract. It specifies how the contract will be terminated. It sets the amount of damages to be paid if one party breaches the agreement.

It preserves the rest of the contract if one part is unenforceable. It specifies what will happen with a potentially unenforceable part of a contract.

When might a contract made by a mentally incompetent person be enforceable? The incompetent person has a court-appointed guardian, and that guardian is aware of the contract. The incompetent person signs a second contract affirming the he understands the nature of the contract. The incompetent person was lucid at the time the contract was made. The incompetent person has not been declared incompetent by a court.

The incompetent person has not been declared incompetent by a court.

What factors may overturn a minor's right to disaffirm a contract? Choose 3 answers. The minor ratifies the contract after reaching the age of majority. The object of the contract has been destroyed. The contract is for necessaries. The minor misrepresented the minor's age while engaging in business as an adult.

The minor ratifies the contract after reaching the age of majority. The contract is for necessaries. The minor misrepresented the minor's age while engaging in business as an adult.

When are covenants not to compete in employment contracts considered to be against public policy? Choose 2 answers. When the business is mostly a service business When the geographical restriction is too broad When the business is mostly online When the specified time of restraint is excessive

When the geographical restriction is too broad When the specified time of restraint is excessive

What factors may cause a person to lack contractual capacity? Choose 3 answers. being under the age of majority (usually 18) mental incompetence being an emancipated minor severe intoxication

being under the age of majority (usually 18) mental incompetence severe intoxication

What is the term for the legal ability to enter into a binding contract? contractual capacity emancipation legal capability mental incompetence

contractual capacity

What types of contracts violate public policy? Choose 3 answers. employment contracts that forbid membership in a union a contract to allow a political candidate exclusive use of billboards you own conducting trade with a country that is an enemy to the United States a candidate for public office paying his competitor to retire

employment contracts that forbid membership in a union conducting trade with a country that is an enemy to the United States a candidate for public office paying his competitor to retire

A contract for a purpose that causes the parties to violate a law is: illegal and voidable enforceable as a quasi-contract illegal and dischargeable illegal and void

illegal and void