acct chapter 16 hw questions

Capacity is an element of a legally binding: _______. a . dictate b . decree c . order d . contract

d

Which of the following is not typically considered a necessary? a . Clothing b . Basic medical services c . Shelter d . A vacation

d

Under common law, a(n) ______ contract is unenforceable. a . unconscionable b . equitable c . conscionable

a

A divisible contract is also known as a(n) ______ contract. a . severable b . several

b

Covenants not to ______ are ______ for the sale of businesses. a . compete b . sell c . enforceable

a,c

A(n) ______ ratification occurs when, after reaching the age of majority, the person states she intends to be bound by the contract entered into as a minor. (Select BEST answer) a . express b . necessary

a

According to the legal principle of ______ both contracting parties are equally responsible for an illegal agreement. a . in pari delicto b . severability c . exculpatory remedies

a

Adhesion contracts are : _______. a . legal b per se inequitable c . per se illegal

a

An agreement presented as the only chance the presented party will have to enter into it is known as a(n) ______ contract. a . adhesion b . exculpatory c . restraint

a

As a general rule, covenants not to compete in employment contracts are: _______. a . permissible b . void c . per se unconstitutional restraints on trade

a

As a general rule, parents are ______ liable for contracts entered into by their minor children. a . not b . conditionally

a

Generally, contracts made by intoxicated persons are ______. a . voidable b . void

a

Public policy involves: _______. a . both the government's concern for its citizens and the beliefs people hold regarding the proper subject of business transaction b . the beliefs people hold regarding the proper subject of business transactions

a

Sabbath laws typically do not apply to contracts for obtaining ______, including prescription medication, food, and anything else related to health or survival. a . necessities b . electives c . desirables

a

The enforceability of covenants not to compete in employment contracts: _______. a . varies from state to state b . is a matter of federal constitutional law

a

Covenants not to compete in _______ contracts are legal in most states, but they mostly protect a(n) ______ business interest. (Choose TWO best answers) a . employment b . legitimate c . foreseeable

a,c

In most states, a person is given full legal ______ to enter into contracts when she becomes ______ before reaching the age of majority. (Choose TWO correct answers) a . capacity b . legal c . emancipated

a,c

Once a person reaches the age of ______, she may ratify contracts made as a(n) ______. a . minor b . illegal alien c . majority

a,c

There are two main types of unconscionable agreements: ______ and ______. a . procedural b . legal c . substantive

a,c

A covenant not to compete is also known as a(n): _______. a . commerical covenant b . restrictive covenant

b

A minor would be most likely able to disaffirm which of the following contracts? a . A contract for a student loan b . A contract for a vacation

b

A minor would be most likely able to disaffirm which of the following contracts? a . A contract for psychological counseling b . A contract for stereo equipment

b

______ refers to agreements in which parties pay consideration for the chance, or opportunity, to obtain an amount of money or property. a . Usury b . Gambling

b

______ unconscionability describes conditions that impair one party's understanding of a contract, as well as the integration of terms into a contract. a . Substantive b . Procedural

b

Businesses closely linked to the ______ interest cannot enforce _______ clauses. a . company b . public c exculpatory

b,c

Excessive use of unnecessary _______ legal language in an agreement, also known as "legalese," is an example of ______ unconscionability. a . substantive b . procedural c . technical

b,c

Given California's definition of ______, betting on draw poker is _______. (Choose TWO best answers) a . illegal b . legal c . gambling d . profiteering

b,c

Heavily _______ contracts are known as ______ agreements. (Choose TWO best answers) a . exculpatory b . unconscionable c . one-sided

b,c

Under ______ law, unconscionable contracts are ________. (Choose TWO best answers) a . common b . statutory c . unenforceable d . void

a,c

When an agreement is deemed ______, courts will usually label it void. a . illegal b . severable c . in pari delicto d . exculpatory

a,c

______ unconscionability occurs when an agreement is overly harsh or lopsided. a . Procedural b . Exculpatory c . Substantive

c

Which of the following is a correct statement regarding a competent party's recourse against a minor who disaffirms when the consideration the minor received is damaged or destroyed? a . The competent party has no recourse against the minor. b . The competent party may recover the fair market value of the consideration from the minor.

a

Which of the following occurs when a minor's parents or legal guardians give up their right to exercise legal control over the minor? a Emancipation b . Infiltration c . Inculcation d . Emaciation

a

Which of the following states allows casino gambling? a . Louisiana b . Utah c . South Carolina d . Hawaii

a

Which of the following terms refers to a clause that releases one of the contracting parties from all liability, regardless of who is at fault or what injury is suffered? a . Exculpatory b . Subrogation c . Inculpatory

a

Which of the following terms refers to a contract that may have both illegal and legal portions, allowing a court to void the illegal portions and enforce the rest? a . Severable b . Indivisible

a

Which of the following terms refers to a contract that must be enforced or rejected in its entirety? a . Indivisible b . Divisible

a

A(n) ______ contract requires ________ performance by the parties, even if it appears to contain multiple parts. a . complete b . indivisible c . severable d . no

a,b

A(n) ______ contract requires ________ performance by the parties, even if it appears to contain multiple parts. a . indivisible b . complete c . no d . severable

a,b

An express ratification occurs when, after reaching the age of majority, the person states ______ or ______ that she intends to be bound by the contract entered into as a minor. (Choose TWO correct answers) a . in writing b . orally c . implicitly d . majority

a,b

Depending on the nature and extent of the mental or physical _______, a person may have either no capacity, the complete inability to enter into contracts, or limited capacity, the ability to form only ______ contracts. (Choose TWO correct answers) a . voidable b . defect c . ability d . void

a,b

A person who has legal _______ has the mental ability to understand his or her ______ and ______ under a contract, and therefore, presumably to comply with the terms of the contract. (Choose THREE correct answers) a . capacity b . rights c . obligations d . liability

a,b,c

_______ statutes act as a _______ on rates, but there are a few legal exceptions whereby loans may exceed the predetermined _______. (Choose ALL that apply) a . maximum b . Usury c . ceiling d . minimum

a,b,c

Persons suffering from a mental illness or deficiency may have ______, ______, or ______ legal capacity to enter into a binding contract, depending on the nature and extent of their deficiency. (Check ALL that apply) a . limited b . no c . enforceable d . full

a,b,d

A contract need not be in violation of a statute to be illegal; agreements against generally accepted ______ policy are also illegal and ________. a . unenforceable b . severable c . public d . private

a,c

A minor can ______ a contract for a necessary, but upon doing so, the minor is still liable for the ______ of the necessary. a . reasonable value b . ratify c . disaffirm d . actual value

a,c

A party seeking enforcement of an exculpatory clause must be a(n) ______ business or individual not important to the ______ interest. (Choose TWO best answers) a . private b . substantial c . public

a,c

Agreements that _______ trade frequently violate ______ laws. (Check TWO best answers) a . antitrust b . incentivize c . restrain d . government

a,c

Although most people do not consider them to be such, state-run _______ are a form of ______. a . gambling b . check-cashing services c . lotteries d . liquor

a,c

To facilitate business, most states with ______ statutes allow corporations to borrow at rates exceeding the _______. (Choose TWO correct answers) a . maximum b . gambling c . usury

a,c

Incapacity is the possession of a(n) ______ or ______ defect that prevents a natural person from being able to enter into a(n) _______ contract. (Choose TWO correct answers) a . mental b . voidable or void c . legally binding d . physical

a,c,d

When an agreement is deemed illegal, courts will usually label it ______. (Check ALL that apply) a . void b . severable c voided d . unenforceable

a,c,d

According to the legal principle of in pari delicto, neither contracting party can ______ the subject agreement, and neither is entitled to ______. a . enforce b . performance c . compensation d . recovery

a,d

To be enforceable, contracts must have legal ______ matter and must be able to be performed _______. a . legally b . consideration c . in a timely manner d . subject

a,d

Upon _______ most states simply require a minor to notify the other party and return any ______ received, regardless of its condition. (Choose TWO correct answers) a . consideration b . ratification c . gifts d . disaffirmance

a,d

A(n) ______ contract is an agreement presented on a take-it-or-leave-it basis. a . dilution b . adhesion c . annulment

b

According to Section 2-302 of the Uniform Commercial Code, if a court -- as a matter of law -- finds a contract or any clause of the contract to have been unconscionable at the time it was made, the court may do all of the following except: _______. a . refuse to enforce the contract b . award the affected party treble damages

b

An agreement in violation of a statute or legal code is illegal: ______. a . per diem. b . per se.

b

An implied _______ occurs when a former minor takes some action after reaching the age of majority consistent with intent to ratify a contract. a . restraint b . ratification

b

As a general rule, when an agreement is deemed illegal, courts will usually label it void, meaning neither party can enforce the agreement, and neither is entitled to recovery. Which of the following is not a recognized exception to this rule? a . Justifiable ignorance of facts leaves one party unaware of a provision of an agreement that would make it illegal. b . One of the parties withdraws from an illegal agreement after an illegality occurs.

b

Courts will usually consider an illegal agreement: _______. a . voidable b . void

b

Industry officials prefer to use the term ______, rather than gambling, to refer to agreements in which parties pay consideration for the chance, or opportunity, to obtain an amount of money or property. a . profiteering b . gaming

b

Once a person reaches the age of majority, she may ratify, or ______ contracts made as a minor. a . legally void b . legally affirm c . legally concede

b

Ratification may be either ______ or ______. a . licensed; non-licensed b . express; implied c . proactive; reactive

b

Rules against unconscionable contracts exist in both the ______ (Second) of Contracts and the Uniform ______ Code. a . Reformation; Commercial b . Restatement; Commercial

b

Usury occurs when a party gives a loan at an interest rate ______ the legal ______. a . below; maximum b . exceeding; maximum c . exceeding; minimum

b

Which of the following businesses would most likely be able to enforce an exculpatory clause? a . An airline b . A nightclub

b

Which of the following contracts requires complete performance by both parties, even if it appears to contain multiple parts? a . Divisible b . Indivisible

b

Which of the following is a correct statement regarding a minor's power to disaffirm or void a contract? a . A minor only has the right to disaffirm any portion of a contract pertaining to the sale of goods. b . If a minor chooses to disaffirm a contract, he or she must void the entire contract. c . A minor has the right to disaffirm a portion of a contract. d . A minor only has the right to disaffirm any portion of a contract pertaining to the provision of services.

b

Which of the following is not a recognized purpose of licensing statutes? a . Government protection of the public's health b . Government protection of the public's constitutional rights

b

Which of the following statements is correct regarding the legal exceptions to usury statutes? a . The legal exceptions to usury statutes apply to personal loans, but not business loans. b . To facilitate business, most states with usury statutes allow corporations to borrow at rates exceeding the maximum.

b

Which of the following terms refers to an agreement so unfair that it is void of conscience? a . Devoid b . Unconscionable c . Conscionable

b

If the purpose of a(n) _______ statute is to provide government control over the profession or generate revenue, most states _______ enforcement of the contract. (Check TWO correct answers) a . gambling b . licensing c . allow

b,c

When a court determines a restraint on trade is ______ and the restraint is part of a(n) ______, or ancillary, clause in a contract, the restraint is typically allowed. a . dominant b . subordinate c . reasonable

b,c

______ may enter into only ______ contracts. (Choose TWO correct answers) a . Adults b . Minors c . voidable d . void

b,c

______ laws limit the types of business activities in which parties can legally engage on _______. (Choose ALL that apply) a . Gambling b . Blue c . Sabbath d . Sunday

b,c,d

Because their contracts are _______, minors have the right, until a reasonable time after reaching the age of majority, to _______ their contracts. a . void b . disaffirm c . ratify d . voidable

b,d

Despite the existence of _______ laws, most states allow the performance of ______ work on Sundays. (Choose TWO best answers) a . Usury b . charity c . some d . Sabbath

b,d

The public policy argument in favor of supporting the enforceability of a(n) _______ covenant regarding the sale of a business involves the ______ of the sale. a . express b . restrictive c . legality d . fairness

b,d

_____ or _______ contracts contain multiple parts that can each be performed separately and for which separate consideration is offered. a . Illegal b . Divisible c . Exculpatory d . Severable

b,d

Agreements that restrain trade, called ______ agreements, are viewed as being harmful to consumers and against public policy. a . competitive b deprivation c . anticompetitive

c

Agreements that restrain trade, called ______ agreements, are viewed as being harmful to consumers and against public policy. a . privation b . competitive c . anticompetitive d . deprivation

c

If intoxication causes a person to exercise poor judgment in making a contract, the contract is ______ unless the other party unfairly capitalized on the impaired judgment. a . voidable b . null c . not voidable

c

In most states, ______ are liable for a minor's personal torts. a . parents, but not their minor children, b . both minors and their parents c . minors, not their parents,

c

In terms of the effect of entering into an agreement with a person who is unlawfully unlicensed, in some states the rule is "no ______, no ______." These states will not enforce any agreement with an unlawfully licensed professional. a . license; consideration b . agreement; consideration c . license; contract

c

Most courts find that continuing to act in accordance with a contract, such as continuing to make regular payments after reaching the age of majority, constitutes a(n) _______. a . restraint of trade b . disaffirmance c . implied ratification

c

Which of the following is a correct statement regarding minors and contracts? a . Minors may enter into fully enforceable, valid contracts. b . Minors may not enter into contracts. c . Minors may enter into only voidable contracts.

c

Which of the following is a type of legal capacity a person suffering from a mental illness may have, depending on the nature and extent of their deficiency? a . Resolute b . Draconian c . Limited

c

Which of the following is not a recognized purpose of licensing statutes? a . Government revenue b . Government control over how many people can perform certain jobs c . Government retribution

c

Which of the following statements is correct regarding the legality and enforceability of contracts? a . A contract that requires an illegal act for performance is enforceable, while a contract for an illegal purpose is unenforceable. b . Both a contract that requires an illegal act for performance and a contract for an illegal purpose are enforceable. c . Both a contract that requires an illegal act for performance and a contract for an illegal purpose are unenforceable.

c

Which of the following statements is most accurate regarding a restrictive covenant made in conjunction with the sale of an ongoing business? a . A restrictive covenant made in conjunction with the sale of an ongoing business is unconscionable. b . A restrictive covenant made in conjunction with the sale of an ongoing business is unconstitutional. c . A restrictive covenant made in conjunction with the sale of an ongoing business is enforceable.

c

An agreement against ______ policy may not be illegal _______, but is nevertheless unenforceable. a . under the rule of reason b . corporate c . per-se d . public

c,d

As a general rule, when an agreement is deemed illegal, courts will usually label it _______, meaning neither party can enforce the agreement, and neither is entitled to recovery. One exception to this rule is when justifiable ______ of facts leaves one party unaware of a provision of the agreement that would make it illegal. a . severability b voidable c . ignorance d . void

c,d

If no exception allows a usurious loan, a few states declare all usurious loans _______, which means the lender is not entitled to recover either principal or ______ from the borrower. (Check TWO correct answers) a . voidable b . consideration c . interest d . void

c,d

Which of the following terms refers to a contract that must be enforced or rejected in its entirety? a . Divisible b . Diversified c . Integrated d . Indivisible

d