Chapter 5 BUS 2200

A covenant not to compete included in the sale of an ongoing business is unenforceable. (T/F)

False

A covenant not to compete is enforceable only if it is necessary to restrain trade. (T/F)

False

A minor who enters into a contract for necessaries is liable for the reasonable value of the goods unless he or she disaffirms the contract. (T/F)

False

An exculpatory clause in an employment contract is usually enforceable. (T/F)

False

If a court has determined that a person is mentally competent, any contract made by that person is void. (T/F)

False

Parents are liable for the contracts made by their minor children acting on their own. (T/F)

False

The Statute of Frauds operates as a defense to the enforcement of any contract for the sale of land. (T/F)

False

​A contract entered into by a minor is voidable at the option of either of the contracting parties. (T/F)

False

​Under the Statute of Frauds, all contracts must be in writing to be enforceable. (T/F)

False

A contract must be in writing to be enforceable if it makes performance possible only over a period of more than one year. (T/F)

True

A minor "avoids" a contract by disaffirming it.​ (T/F)

True

A written contract for a transfer of land is usually enforceable. (T/F)

True

Courts often find that gambling contracts are illegal. (T/F)

True

Food is a "necessary." (T/F)

True

For public policy reasons, a minor's contract to enlist in the armed services cannot be avoided. (T/F)

True

If a contract is fully performed by all parties to it, then it is presumed to have been ratified. (T/F)

True

If there is a statute that prohibits a certain action, a contract to do it is unenforceable. (T/F)

True

In general, an illegal contract is void. (T/F)

True

Statutes often prescribe the terms of contracts. (T/F)

True

Under the Statute of Frauds, physical objects that are permanently attached to land, such as buildings, growing crops, and minerals, are treated as real property. (T/F)

True

David agrees to assume the debt of eDotCom Company to Fidelity Bank. The agreement is not in writing. To be enforceable, the promise must be for the benefit of a. David. b. ​eDotCom. c. Fidelity. d. any of the choices.

a. David.

Intoxicated but fully aware of the consequences, Cory agrees to a two-year service contract with Signal Maintenance, Inc., at more than the average market price. This contract is​ a. enforceable.​ b. notenforceable because Cory was intoxicated when he agreed to it. c. notenforceable because the contract clearly favors Signal. d. notenforceable because contracting parties can change their minds.

a. enforceable.​

Elaine offers Francie$1 millionto invest in a start-up business venture if Francie marries Elaine's son Guinn. This promise is enforceable a. only if it is in writing. b. only if the venture is not likely to succeed or fail within one year c. under no circumstances. d. ​only if Guinn agrees to marry Francie.

a. only if it is in writing.

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

a. void.

Ranchland Properties and Prairie State Investments sign a writ-ten contract for a sale of land. In some states, to be enforceable, this con-tract must include a. a statement of the source of financing. b. a description of the land. c. a declaration of the contract's purpose. d. a correct title, such as "Land Transfer" or "Real Estate Agreement."

b. a description of the land.

Ed and Four Star Company enter into an oral contract under which Ed agrees to provide delivery service for Four Star for nine months. This contract is enforceable by a. neither party. b. either party. c. Ed only. d. First Star only.

b. either party.

Presley agrees to sell his Omni Sports Center facility to Nola. As part of the sale, Presley promises never to open a similar, competing business anywhere. This promise is most likely a. valid because it is part of a sale of an ongoing business. b. invalid because of the unreasonable terms of area and time. c. valid if Presley and Nola are reasonably intelligent. d. ​invalid because it is part of a sale of an ongoing business.

b. invalid because of the unreasonable terms of area and time.

Boz runs an illegal gambling business and pays Colin, a police officer, not to interfere. The payments are discovered. Boz and Colin are sent to prison. With respect to the amount of the payments, Boz can recover a. ​only as much as Colin has not spent. b. none of it. c. all of it. d. only as much as Colin has spent.

b. none of it.

Cray, a minor, returns a digital music player that he bought from Discount City, which refunds the price. Their exchange involves a. misrepresentation. b. restitution. c. emancipation. d. ratification.

b. restitution.

With the intent to avoid liability for negligence, Mall Mart Discount Stores can normally obtain a court order to enforce a. an adhesion contract. b. ​none of the choices. c. ​a covenant not to compete. d. an exculpatory clause.

b. ​none of the choices.

Intoxicated, Clio agrees to sell her restaurant, Diners Café, to Evan for half of its real market value. This deal is most likely void if a. Clio appeared intoxicated to Evan. b. ​Clio was so intoxicated as to have no memory of the deal. c. Evan fraudulently induced Clio to become intoxicated. d. ​Clio disaffirms the contract after becoming sober.

c. Evan fraudulently induced Clio to become intoxicated.

Hal's Hardware Stores and Ideal Tools, Inc., sign a written contract for a sale of goods. To be enforceable, this written contract must include a. a correct title, such as "Purchase Order" or "Sales Invoice." b. the parties' contact information. c. a quantity term, such as "50 hammers" or "100 boxes of assorted nails." d. a date, such as "October 2014" or "10/2014."

c. a quantity term, such as "50 hammers" or "100 boxes of assorted nails."

Gina, a minor, enters into a contract to buy a tractor from Herb, an adult. If the deal is set aside, restoring Gina and Herb to their original positions prior to a contract is a. emancipation. b. ratification. c. restitution. d. disaffirmance.

c. restitution.

Del's Granola Company enters into a contract to buy one hundred pounds of almonds from Earth Grove Farms. The contract must be in writing if the almonds cost a. ​$150. b. $50. c. ​$250. d. $500.

d. $500.

Alexis, a minor acting on her own, signs a contract to buy a motorcycle and accessories from Bad Bikes dealership. Later, after taking possession, Alexis disaffirms the deal. She a. can keep the motorcycle and accessories. b. can keep the motorcycle but not the accessories. c. can keep the accessories but not the motorcycle. d. must return both motorcycle and accessories.

d. must return both motorcycle and accessories.