Chap 11 sb Capacity and Legality

Today, in all but three states, a minor is someone under the age of ______.

18

Which of the following is an incorrect statement regarding an agreement to commit a crime or tort? Multiple choice question. A contract cannot be for an illegal subject. A contract cannot be carried out by illegal means. A contract, irrespective of its legality, is enforceable. If a legal contract is formed and then the subject of the contract becomes illegal under a new statute, the contract is discharged by law.

A contract, irrespective of its legality, is enforceable.

Which of the following is an incorrect statement regarding the enforceability of a covenant not to compete in an employment agreement? Multiple choice question. To be legal, a covenant not to compete in an employment contract needs to protect a legitimate business interest. To be legal, a covenant not to compete in an employment contract needs to be for a reasonable period of time and geographic area. A covenant not to compete in an employment contract is not enforceable. To be legal, a covenant not to compete in an employment contract must not unreasonably impinge on an employee's right to earn a living.

A covenant not to compete in an employment contract is not enforceable.

Which of the following is an accurate statement regarding the restrictive covenants that involve employment contracts?

A covenant not to compete in employment contracts is legal in most states.

Which of the following is a recognized exception to the general rule that an illegal agreement is void?

A member of a specific, protected class is involved in an agreement that contradicts a statute intended to protect the specific class.

Which of the following is an accurate statement regarding a minor's right to disaffirm a contract?

A minor has the right to disaffirm a contract until a reasonable time after reaching the age of majority.

Which of the following is not an accurate statement regarding the contractual capacity of a mentally incapacitated person?

A person has full capacity to enter into a contract if she suffers from a mental deficiency that prevents her from understanding the transaction.

Which of the following is an accurate statement regarding the effect a minor's misrepresentation of age has on his or her right to disaffirm a contract?

According to the majority rule, it does not affect the minor's right to disaffirm the contract.

Which of the following is an accurate statement regarding adhesion contracts?

Adhesion contracts usually do not allow for debate regarding the agreement.

______ occurs when a minor's parents or legal guardians give up their right to exercise legal control over the minor.

Emancipation

______ typically occurs when a minor moves out of his or her parents' house and begins supporting himself or herself.

Emancipation

______ refers to an agreement in which parties pay consideration for the chance to obtain money or property.

Gambling

Identify the effect of an agreement being deemed illegal.

It becomes void.

Which of the following is not an accurate statement regarding the contractual capacity of an intoxicated person? Multiple choice question. An intoxicated person's contract is voidable if the other party knew the intoxication affected that person's ability to understand the contract. Most states follow the Uniform Contracts Code, which addresses the effect of intoxication on contractual capacity. If the intoxication merely causes someone to exercise poor judgment, the person's capacity to enter into a contract is not affected. For purposes of determining contractual capacity, intoxicated persons include those under the influence of alcohol or drugs.

Most states follow the Uniform Contracts Code, which addresses the effect of intoxication on contractual capacity.

Which of the following is an accurate statement regarding an unenforceable agreement? Multiple choice question. An equitable remedy is typically available for such an agreement. A "benefit of the bargain" remedy is typically available for such an agreement. A quasi-contractual remedy is typically available for such an agreement. No remedy is available for such an agreement.

No remedy is available for such an agreement.

Which of the following is an accurate statement regarding ratification of a contract?

Once ratified, a contract is no longer voidable.

Which of the following is an accurate statement regarding parental liability for the necessaries of their children?

Parents have a legal duty to provide their children with the basic necessities of life.

______ refers to the unconscionability that derives from the process of making a contract.

Procedural unconscionability

______ unconscionability involves overly harsh or lopsided substance in an agreement.

Substantive

Which of the following is an accurate statement regarding a contract that is against generally accepted public policy?

Such a contract is unenforceable.

Which of the following is an accurate statement regarding a minor's right to disaffirm a contract for necessaries?

Technically, a minor can disaffirm a contract for necessaries, but the minor is liable for the reasonable value of the necessaries.

According to the majority of jurisdictions, which of the following is an accurate statement regarding a minor's right to disaffirm a contract when the consideration he or she received has been damaged or destroyed?

The minor can disaffirm the contract, and the other party has no recourse.

As a general rule in most states, which of the following contracts is a minor allowed to disaffirm? Multiple choice question. a contract for health insurance a contract for psychological counseling a contract for life insurance a contract for joining a school team

a contract for joining a school team

Which of the following is a recognized exception to the general rule that an illegal agreement is void?

a contract involving one party's justifiable ignorance of facts

As a general rule in most states, which of the following contracts is a minor allowed to disaffirm? Multiple choice question. a child support contract an educational loan contract a contract to enlist in the armed services a school club membership contract

a school club membership contract

To enter into a valid and enforceable agreement for services, the services that require a license must be ______ by one party to the agreement.

active

A contract created by a party to an agreement that is presented to the other party on a take-it-or-leave-it basis is a(n) ______ contract.

adhesion

A contract in restraint of trade is also known as a(n) ______ agreement.

anticompetitive

A person who has the legal ______ to contract is one who has the mental ability to understand his or her rights and obligations under a contract and therefore will presumably be able to understand how to comply with the terms of the agreement.

capacity

In the context of contractual capacity, which of the following is not a type of mental capacity a person suffering from a mental illness or deficiency might have?

constructive legal capacity

A disaffirmance by a minor of a contract must occur before or within a reasonable period of time of the age of _______.

majority

One of the oldest limitations on capacity is the ability of ______ to enter into only voidable contracts.

minors

An ______ clause is a statement releasing one of the parties to an agreement from all liability, regardless of who is at fault or what the injury suffered is.

exculpatory

Which of the following is a main purpose of licensing statutes?

government regulation of specific industries

In the context of a contract for a necessary, which of the following is not a necessary? medical services high-speed Internet food clothing

high-speed Internet

An agreement to commit a crime or tort is ______.

illegal and unenforceable

A contract for a ______ is a contract that supplies the minor with the basic necessities of life.

necessary

Which of the following is one of the varieties of restrictive covenants? Multiple choice question. agreement to refrain from pursuing higher education agreement to refrain from moving to another state noncompetition in employment agreement to refrain from moving to another country

noncompetition in employment

A contract in restraint of trade violates public ______.

policy

Public ______ involves both the government's concern for its citizens and the beliefs people hold regarding the proper subject of business transactions.

policy

The absence of an opportunity for a person to read over a contract fully and ask any questions before he or she is required to sign is an example of ______ unconscionability.

procedural

Which of the following is not a main purpose of licensing statutes? Multiple choice question. protection of government autonomy protection of public safety protection of public welfare protection of public health

protection of government autonomy

If a person who has reached the age of majority legally affirms a contract made as a minor, he or she is said to have ______ the contract.

ratified

A covenant not to compete is also known as a(n) ______ covenant.

restrictive

Public policy focuses on what is in the best interest of ______.

society

An agreement in which one party has little to no legal recourse is an example of ______ unconscionability.

substantive

The patently unfair nature of an exculpatory clause is closely tied to the idea of ______ contracts.

unconscionable

The term ______ refers to the fact that the agreement in question is so unfair that it is void of conscience.

unconscionable

There are times when agreements are so one-sided, or heavy-handed against one party, that courts will not make the harmed, innocent person fulfill his or her contractual duties. These heavily one-sided agreements are known as ______ agreements.

unconscionable

Generally, when an agreement is deemed illegal, courts will label the contract ______.

void

A minor's contract is ______.

voidable