Question 1

Fagin and Gretel agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gretel can

Accepted Answer

A) enforce the agreement. 
B) obtain damages in the amount of her partner's share of the illegal profits. 
C) obtain damages in the amount of her own share of the illegal profits. 
D) none of the choices. 
A) enforce the agreement. 
B) obtain damages in the amount of her partner's share of the illegal profits. 
C) obtain damages in the amount of her own share of the illegal profits. 
D) none of the choices. D

Question 2

Opal is a minor. In at least some states, Opal can enter into a legally binding contract when she

Accepted Answer

A) reaches the age of majority. 
B) gets married. 
C) is emancipated from her parents. 
D) all of the choices. 
A) reaches the age of majority. 
B) gets married. 
C) is emancipated from her parents. 
D) all of the choices. D

Question 3

Game Corporation hires Hale, a minor, to create new customized game software for certain clients. Hale signs a contract that requires her to work for Game for eighteen months. Before beginning work, however, Hale tells Game that she will not create new software for Game and that she is going to work for Imagine Inc., a Game competitor. Is Game's contract with Hale enforceable? Why or why not?

Accepted Answer

The contract is not enforceable. Hale is a minor, so any contract that she enters is voidable by her. In other words, Hale had the option to disaffirm the contract. 
A contract entered into by a minor can be disaffirmed at any time during minority, or for a reasonable time after the minor comes of age. Hale's announcement that she would not be bound by the contract was sufficient to disaffirm it. 
Hale had not received anything under the contract with Game, so there is nothing to return under a duty of restitution. Also, there is no significance to Hale's agreeing to work for Imagine, Game's competitor.

Question 4

Restraints of trade interfere with free competition.

Accepted Answer

A) True 
 B)False

Question 5

A promise to refrain from competing in business with another is considered to be unconscionable.

Accepted Answer

A) True 
 B)False

Question 6

To disaffirm a contract is to deny its existence.

Accepted Answer

A) True 
 B)False

Question 7

Horse racing, video poker games, and charity-sponsored bingo are

Accepted Answer

A) forms of gambling not allowed or regulated by any state. 
B) forms of gambling allowed and regulated by many states. 
C) forms of gambling allowed and regulated by all states. 
D) not forms of gambling. 
A) forms of gambling not allowed or regulated by any state. 
B) forms of gambling allowed and regulated by many states. 
C) forms of gambling allowed and regulated by all states. 
D) not forms of gambling.

Question 8

Intoxicated, Obo enters a contract for the sale of his business, Precision Parts, to Quad for less than its market value. This contract is voidable if, at the time,

Accepted Answer

A) Obo's intoxication was purely voluntary. 
B) Quad fraudulently induced Obo to become intoxicated. 
C) Quad was also intoxicated. 
D) Obo understood the legal consequences. 
A) Obo's intoxication was purely voluntary. 
B) Quad fraudulently induced Obo to become intoxicated. 
C) Quad was also intoxicated. 
D) Obo understood the legal consequences.

Question 9

Any contract entered into with an unlicensed party is enforceable.

Accepted Answer

A) True 
 B)False

Question 10

The performance of a contract cannot be rendered illegal by a statute after the parties have already entered into the contract.

Accepted Answer

A) True 
 B)False

Question 11

If intoxication is purely voluntary, the intoxicated person's contracts are not voidable.

Accepted Answer

A) True 
 B)False

Question 12

A court usually will enforce a covenant not to compete provided its restrictions are reasonable.

Accepted Answer

A) True 
 B)False

Question 13

Twig is fifteen. In most states, for contractual purposes, Twig would be considered a minor until she is

Accepted Answer

A) sixteen. 
B) seventeen. 
C) eighteen. 
D) twenty-one. 
A) sixteen. 
B) seventeen. 
C) eighteen. 
D) twenty-one.

Question 14

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients. This deal is

Accepted Answer

A) enforceable. 
B) void. 
C) voidable at the option of either party. 
D) voidable at the option of the party having less bargaining power. 
A) enforceable. 
B) void. 
C) voidable at the option of either party. 
D) voidable at the option of the party having less bargaining power.

Question 15

Bianca, a minor, enters into a contract to buy two all-season passes from Chalet Ski Park. The contract will be made enforceable if Bianca

Accepted Answer

A) ratifies it. 
B) disaffirms it. 
C) nullifies it. 
D) voids it. 
A) ratifies it. 
B) disaffirms it. 
C) nullifies it. 
D) voids it.

Question 16

The general rule is that any party to an illegal contract can recover for performance rendered.

Accepted Answer

A) True 
 B)False

Question 17

Bern, a minor, signs a contract to buy a Caterwauler jet boat from Dahl, an adult. Dahl

Accepted Answer

A) can avoid the contract without Bern's consent. 
B) cannot avoid the contract. 
C) can avoid as much of the contract as Bern elects to avoid. 
D) must obtain Bern's consent to avoid the contract. 
A) can avoid the contract without Bern's consent. 
B) cannot avoid the contract. 
C) can avoid as much of the contract as Bern elects to avoid. 
D) must obtain Bern's consent to avoid the contract.

Question 18

Accepting and giving legal force to an obligation that previously was not enforceable is

Accepted Answer

A) disaffirmance. 
B) emancipation. 
C) ratification. 
D) illegal. 
A) disaffirmance. 
B) emancipation. 
C) ratification. 
D) illegal.

Question 19

Generally neither party to an illegal contract can sue for breach.

Accepted Answer

A) True 
 B)False

Question 20

A contract clause that releases an employer from liability for any injury to an employee, no matter who is at fault, is generally enforceable.

Accepted Answer

A) True 
 B)False

Exam 14: Capacity and Legality

Fagin and Gretel agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gretel can

Opal is a minor. In at least some states, Opal can enter into a legally binding contract when she

Restraints of trade interfere with free competition.

A promise to refrain from competing in business with another is considered to be unconscionable.

To disaffirm a contract is to deny its existence.

Horse racing, video poker games, and charity-sponsored bingo are

Intoxicated, Obo enters a contract for the sale of his business, Precision Parts, to Quad for less than its market value. This contract is voidable if, at the time,

Any contract entered into with an unlicensed party is enforceable.

The performance of a contract cannot be rendered illegal by a statute after the parties have already entered into the contract.

If intoxication is purely voluntary, the intoxicated person's contracts are not voidable.

A court usually will enforce a covenant not to compete provided its restrictions are reasonable.

Twig is fifteen. In most states, for contractual purposes, Twig would be considered a minor until she is

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients. This deal is

Bianca, a minor, enters into a contract to buy two all-season passes from Chalet Ski Park. The contract will be made enforceable if Bianca

The general rule is that any party to an illegal contract can recover for performance rendered.

Bern, a minor, signs a contract to buy a Caterwauler jet boat from Dahl, an adult. Dahl

Accepting and giving legal force to an obligation that previously was not enforceable is

Generally neither party to an illegal contract can sue for breach.

A contract clause that releases an employer from liability for any injury to an employee, no matter who is at fault, is generally enforceable.

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