Chapter 12 Quiz Questions: (Quiz #5)

Which of the following is an INCORRECT statement regarding the enforceability of immoral​ contracts?

Judges are free to define morality based on their individual views

Exculpatory clauses that result from superior bargaining power are usually found to be​ _____.

Void as against public policy

Preprinted forms whose terms the consumer cannot negotiate and that they must sign in order to obtain a product or service are called contracts of​ _____.

Adhesion

The law has developed which two standards concerning contracts of mentally incompetent​ persons?

Adjudged insane and insane but not adjudged insane

An​ _____ clause is also called a release of liability clause

Exculpatory

​A(n) _____ clause is also called a release of liability clause.

Exculpatory

If a department store had a sign above the entrance​ stating, "The store is not liable for the ordinary negligence of it​ employees," this would be​ a(n) _____clause.

Illegal exculpatory

Which of the following is an INCORRECT statement regarding the infancy​ doctrine?

In most​ states, the infancy doctrine is a subjective standard.

At common​ law, parties to an illegal contract were considered​ _____.

In pari delicto

Legal insanity is a state of contractual​ _____, as determined by law.

Incapacity

The​ _____ doctrine allows minors to disaffirm most contracts they have entered into with adults.

Infancy

To protect​ minors, the law recognizes the​ _____ doctrine, which gives minors the right to disaffirm most contracts they have entered into with adults.

Infancy

An exculpatory clause can be used to relieve a party from tort liability for​ _____.

Ordinary negligence

The doctrine of unconscionability is based on​ _____.

Public policy

​_____ is the act of a​ minor, after the minor has reached the age of​ majority, by which he or she accepts a contract entered into when he or she was a minor.

Ratification

​A(n) _____ statute is enacted to protect the public.

Regulatory licensing

According to the duty of​ _____, if a minor has transferred​ money, property, or other valuables to the competent party before disaffirming the​ contract, the party must place the minor in status quo.

Restitution

According to the duty of​ _____, a minor is obligated only to return the goods or property he or she has received from the adult in the condition it is in at the time of disaffirmance.

Restoration

Licensing statutes enacted to raise money for the government are called​ _____ statutes.

Revenue-raising

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

Special formalities are required for a minor to expressly disaffirm a contract

Which of the following is an element that must be shown to prove that a contract or a clause in a contract is​ unconscionable?

The adhering party had no reasonable alternative.

Which of the following is an INCORRECT statement regarding contracts entered into by minors for the necessaries of​ life?

The minor is obligated to pay the contract price for the necessaries he or she received.

​A(n) _____ contract is a contract that courts refuse to enforce in part or at all because it is so oppressive or manifestly unfair as to be unjust.

Unconscionable

Which of the following is an INCORRECT statement regarding the enforceability of contracts entered into by intoxicated​ persons?

Under the majority​ rule, all contracts entered into by intoxicated persons are void.

State​ _____ laws set an upper limit on the annual interest rate that can be charged on certain types of loans.

Usury

An agreement between two companies to engage in price fixing in violation of federal antitrust statutes is illegal and therefore​ _____.

Void

An illegal contract is​ _____.

Void

Any contract entered into by a person who has been adjudged insane is​ _____.

Void

Contracts contrary to public policy are​ _____.

Void

Contracts to commit criminal acts are​ _____.

Void

A contract that is based on sexual favors is an immoral contract and​ _____ as against​ _____.

Void; public policy

A contract entered into by a person who is​ insane, but not adjudged​ insane, is generally​ _____.

Voidable