Week 7 Practice Quiz

When parties to a contract mutually agree to cancel an old contract and replace it with a new one, which of the following is true?

To be enforceable, there must be added features in the new contract benefiting both parties.

Mistakes such as duress and undue influence render contracts void.

false

​The law considers everyone under the age of twenty-one to be a minor

false, 18

If a minor contracts for necessaries, the minor's liability is quasi-contractual in nature. This means that

the minor is not required to pay the contract price but will be required to pay a reasonable amount to avoid unjust enrichment.

Generally, a part payment of a past-due debt is not consideration to support the creditor's promise to cancel the balance of the debt.

true

If the supposed consideration consists merely of a promise to do what one is already legally obligated to do, consideration is invalid.

true

A contract is void if parties to a contract are mutually mistaken about their expectations.

false

A person who sells alcoholic beverages to a minor when such a sale is prohibited can recover on the contract.

false

A promise to steal a valuable piece of art is valid consideration to support a contract.

false

What precaution can a business person take when contracting with a minor?

A business person can require an adult to join the contract as a cosigner.

If an adult purchases personal property from a minor, the minor has only a voidable title to the property.

false

A minor, upon reaching the age of majority, must ratify none or all parts of a contract.

true

Contracts which are designed to limit competition are acceptable by law.

false

For a promise to constitute consideration, the promise must not impose an obligation on the person making it.

false

If a druggist sells morphine to one who does not have a prescription, a suit to collect the price would be successful.

false

Ratification to a contract can be made any time before reaching majority.

false

When one party wrongly threatens to injure another person physically in order to get agreement to a contract, economic duress occurs.

false

​As a general rule, a unilateral mistake made at the time of contracting has an effect on the validity of a contract.

false

Performing or promising to perform what one is already obligated to do is a valid consideration.

flase

When one refrains or promises to refrain from doing something, this conduct is known as _____.

forbearance

A false statement made in the belief that it is true is known as innocent misrepresentation.

true

As a general rule, a promise must be supported by consideration. Which of the following is an exception to the rule?

An obligation of record such as a judgment

_____ is a means of destroying another's free will by one party obtaining consent to a contract as a result of a wrongful threat to do the other person or family members some harm.

Duress

Which of the following is true of undue influence?

It refers to a person in a special relationship causing another's action contrary to free will

Kenneth, aged sixteen, sells his car to Robin, aged 49. Later, Robin sells the car to Sarah, an innocent third party, before Kenneth can disaffirm the contract. In this case, which of the following will hold true?

Sarah can obtain a good title to the property

​A contract must be for a lawful purpose, which must be achieved in a lawful manner, otherwise the contract is:

void

Contracts made by people who have become so intoxicated that they cannot understand the meaning of their acts are:

voidable

Which of the following constitutes valid consideration?

​A promise to refrain from doing an act that can be lawfully done

Ordinarily, for a mistake to invalidate a contract, the mistake must be a mutual one about a material fact.

true

Which of the following is an example of a contract contrary to public policy?

A agrees to appoint B as sheriff, provided he helps him win the local elections.

Which of the following is true of the doctrine of promissory estoppel?​

It requires the promisor to reasonably expect the promise to induce action by the promisee.

Consideration distinguishes mere agreements from legally enforceable obligations.

true

The legal rate of interest is a rate:

that is applied when no rate is specified

disaffirmation refers to

the election to avoid a contract or set it aside.

Which of the following best describes the term "consideration"

​It indicates what the promisor demands and receives as the price for a promise.

Sam and Martha sign a contract in which Sam agrees to pay a certain price and buy Martha's house. Later, Sam's brother states that Sam often has intervals of delusions and hence the contract is invalid because it has been made by an incompetent person. Sam has not been declared by the court as insane. In such a scenario, according to law, which of the following will entitle Martha to the price agreed upon in the contract?

​Sam was in a sane frame of mind and understood the contract when he signed it.

​Which of the following conditions is a prerequisite for any agreement to be legally enforceable?

​The parties entering into the agreement must have the mental capacity to contract.