Question 1

Explain,in brief,the concept of "necessaries of life."

Accepted Answer

Food,clothing,shelter,medical care,and o

Question 2

A licensing statute enacted to protect the public is called a regulatory licensing statute.

Accepted Answer

A) True 
 B)False

Question 3

The state of Transas has set a maximum interest rate of 12 percent on loans.Matt borrows $10,000 from Tony to pay off a gambling debt.Both are residents of Transas.They sign a contract which states that Matt would have to pay $15,000 as interest in one year to pay off the loan.Later Matt finds out the state usury limit and sues Tony.What is the nature of the contract between Matt and Tony?

Accepted Answer

A)  It is illegal as it violates gambling statutes. 
B)  It is legal as both parties were competent when the contract was signed. 
C)  The contract is void as it violates usury laws. 
D)  The contract is void as it is a contract to commit a crime. 
A)  It is illegal as it violates gambling statutes. 
B)  It is legal as both parties were competent when the contract was signed. 
C)  The contract is void as it violates usury laws. 
D)  The contract is void as it is a contract to commit a crime.

Question 4

A doctrine that allows minors to disaffirm (cancel)most contracts they have entered into with adults is referred to as covenant not to compete.

Accepted Answer

A) True 
 B)False

Question 5

A contract with an illegal object is not voidable.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true of a contract,the object of which has become unlawful after the creation of the contract?

Accepted Answer

A)  The contract is still legal as the object was legal at the time of creating that contract. 
B)  The contract is illegal even if the parties don't complete the contractual agreement. 
C)  The parties of the contract will be discharged from that contract. 
D)  Both parties are still obligated to complete their contractual agreements. 
A)  The contract is still legal as the object was legal at the time of creating that contract. 
B)  The contract is illegal even if the parties don't complete the contractual agreement. 
C)  The parties of the contract will be discharged from that contract. 
D)  Both parties are still obligated to complete their contractual agreements.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Exculpatory clauses are mandatorily reciprocal.

Accepted Answer

A) True 
 B)False

Question 9

The duty of restoration is a rule that states that if a minor has transferred money,property,or other valuables to the competent party before disaffirming the contract,that party must place the minor in status quo.

Accepted Answer

A) True 
 B)False

Question 10

Senility cannot lead to mental incapacity.

Accepted Answer

A) True 
 B)False

Question 11

An exculpatory clause can relieve a party of liability for ordinary negligence.

Accepted Answer

A) True 
 B)False

Question 12

________ is a licensing statute with the primary purpose of increasing earnings for the government.

Accepted Answer

A)  Usury statute 
B)  Ratification statute 
C)  Regulatory-licensing statute 
D)  Revenue-raising statute 
A)  Usury statute 
B)  Ratification statute 
C)  Regulatory-licensing statute 
D)  Revenue-raising statute

Question 13

Disaffirmance may be conveyed orally or by the minor's conduct.

Accepted Answer

A) True 
 B)False

Question 14

The equitable doctrine of ________ obligates a minor to only pay reasonable value for goods or services received.

Accepted Answer

A)  emancipation 
B)  restraint of contract 
C)  contract of adhesion 
D)  quasi-contract 
A)  emancipation 
B)  restraint of contract 
C)  contract of adhesion 
D)  quasi-contract

Question 15

Licensing statutes cannot be enacted with the purpose of raising money for the government.

Accepted Answer

A) True 
 B)False

Question 16

What are the consequences of contracting while being intoxicated?

Accepted Answer

By definition,a person who is under cont

Question 17

An exculpatory clause is also called a release of liability clause.

Accepted Answer

A) True 
 B)False

Question 18

Minors must pay the reasonable value of necessaries of life for which they contract.

Accepted Answer

A) True 
 B)False

Question 19

________ constitutes legal insanity.

Accepted Answer

A)  Weakness of intellect 
B)  Mild delusion 
C)  Mild emotional instability 
D)  Brain damage 
A)  Weakness of intellect 
B)  Mild delusion 
C)  Mild emotional instability 
D)  Brain damage

Question 20

Suppose a state has set a usurious rate of interest as any interest rate above ________ percent.Joseph borrows $10,000 from Derek.Derek can demand a maximum of $11,000 without violating the usury law.

Accepted Answer

A)  10 
B)  100 
C)  1 
D)  1000 
A)  10 
B)  100 
C)  1 
D)  1000

Exam 11: Capacity and Legality

Explain,in brief,the concept of "necessaries of life."

A licensing statute enacted to protect the public is called a regulatory licensing statute.

A doctrine that allows minors to disaffirm (cancel)most contracts they have entered into with adults is referred to as covenant not to compete.

A contract with an illegal object is not voidable.

Which of the following is true of a contract,the object of which has become unlawful after the creation of the contract?

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

Exculpatory clauses are mandatorily reciprocal.

The duty of restoration is a rule that states that if a minor has transferred money,property,or other valuables to the competent party before disaffirming the contract,that party must place the minor in status quo.

Senility cannot lead to mental incapacity.

An exculpatory clause can relieve a party of liability for ordinary negligence.

________ is a licensing statute with the primary purpose of increasing earnings for the government.

Disaffirmance may be conveyed orally or by the minor's conduct.

The equitable doctrine of ________ obligates a minor to only pay reasonable value for goods or services received.

Licensing statutes cannot be enacted with the purpose of raising money for the government.

What are the consequences of contracting while being intoxicated?

An exculpatory clause is also called a release of liability clause.

Minors must pay the reasonable value of necessaries of life for which they contract.

________ constitutes legal insanity.

Suppose a state has set a usurious rate of interest as any interest rate above ________ percent.Joseph borrows $10,000 from Derek.Derek can demand a maximum of $11,000 without violating the usury law.

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