Question 1

Caleb contracts with Eliza to beat up Mickey for $50.00. Is that agreement enforceable?

Accepted Answer

A)  No it is illegal. 
B)  Yes as long as they understand the consequences of their actions. 
C)  No unless Caleb has already given her the money. 
D)  It is voidable at Eliza's discretion. 
A)  No it is illegal. 
B)  Yes as long as they understand the consequences of their actions. 
C)  No unless Caleb has already given her the money. 
D)  It is voidable at Eliza's discretion. A

Question 2

To determine if a person is lucid, courts employ

Accepted Answer

A)  A bright-line rule 
B)  A flexible standard 
C)  A fairness standard 
D)  A reasonableness standard 
A)  A bright-line rule 
B)  A flexible standard 
C)  A fairness standard 
D)  A reasonableness standard B

Question 3

Luke, an adult, enters into an agreement with Ashlynn, 17 & ½ years old, wherein she agrees to mow his lawn every week for the next year at $50.00 a week. As a term of the contract, Luke also requires Ashlynn to use a lawnmower that violates a state statute as it pollutes the air that substantially exceeds allowed emission limits. Ashlynn mows the lawn every week until after her 18th birthday until one day local police issue a citation to her for the use of the lawnmower. Given this fact pattern, discuss whether a contract existed based on capacity and legality.

Accepted Answer

Students answers will vary, however, as it relates to capacity, when Ashlynn entered into the agreement, she lacked capacity as she was a minor. At that point, the contract was voidable at the option of Ashlynn through disaffirmance if she took some action to disaffirm it as a minor. However, when she continued to complete the contract and receive the benefits of the contract after she turned 18 years old, her actions showed a ratification of the contract at that point and then she became bound to it. As far as legality, since a term of the contract, using a specifically banned lawn mower, violated a state statute, that portion of the contract was illegal and in return there was no contract as illegality makes it void. However, the student may also discuss as stated in the chapter, that if only one part of the contract is illegal, the court can sever the illegal portion and enforce the legal portion. Separation can only occur if it is possible to do so without changing the nature of the contract and the purpose. In this situation, it would appear that the purpose of the contract is to mow the lawn and which type of lawnmower does not seem to affect that purpose.

Question 4

Gigi Hilonder, an up and coming tennis star on the tennis circuit, travels to Atlanta to compete in a tournament. Officer Grant, an Atlanta police officer on duty during her tournament, offers to give Gigi "added" security for an additional $100 a day, by standing outside her door and promising to aid her before anyone else should she need it. Gigi readily agrees as her popularity is sky-rocketing and her fans are intrusive. Is this a contract?

Accepted Answer

A)  Yes as Officer Grant is providing an extra feature to his job that has legal value. 
B)  No because a public officer cannot accept greater pay other than what is fixed by law as it is against public policy. 
C)  Yes as long as Gigi understands the consequences of the terms of the agreement. 
D)  No as the facts do not indicate that the agreement was in writing and employment contracts must be in writing to be enforceable. 
A)  Yes as Officer Grant is providing an extra feature to his job that has legal value. 
B)  No because a public officer cannot accept greater pay other than what is fixed by law as it is against public policy. 
C)  Yes as long as Gigi understands the consequences of the terms of the agreement. 
D)  No as the facts do not indicate that the agreement was in writing and employment contracts must be in writing to be enforceable.

Question 5

Ralph, 32 years old, sells his car to Joe, 16 years old, thinking Joe is actually 18 years old. When Ralph finds out Joe is actually only 16 years old, he is outraged and wants to have the contract voided because Joe is a minor. Will Ralph be successful?

Accepted Answer

A)  No the contract is only voidable by the Joe, the minor. 
B)  No because Ralph is actually guilty of a crime. 
C)  Yes because Joe is a minor. 
D)  Yes if the court determines that Joe lied to Ralph about his age. 
A)  No the contract is only voidable by the Joe, the minor. 
B)  No because Ralph is actually guilty of a crime. 
C)  Yes because Joe is a minor. 
D)  Yes if the court determines that Joe lied to Ralph about his age.

Question 6

In Sparrow v. Demonico, the court ruled that in order for a person to lack mental capacity due to a mental illness

Accepted Answer

A)  Always requires a medical diagnosis. 
B)  Be permanent and progressive. 
C)  The person must be on medication for a mental illness. 
D)  Must focus on a party's understanding at the time of the disputed transaction. 
A)  Always requires a medical diagnosis. 
B)  Be permanent and progressive. 
C)  The person must be on medication for a mental illness. 
D)  Must focus on a party's understanding at the time of the disputed transaction.

Question 7

If a person if not as guilty as another person in entering an agreement that is illegal based upon fraud, the less guilty person

Accepted Answer

A)  Will be considered just as guilty as the other person 
B)  Will be fined for lack of knowledge 
C)  May be held criminally responsible if the courts determine that person should have known of the illegality 
D)  May have restitution for the portion of the performance the less guilty person performed. 
A)  Will be considered just as guilty as the other person 
B)  Will be fined for lack of knowledge 
C)  May be held criminally responsible if the courts determine that person should have known of the illegality 
D)  May have restitution for the portion of the performance the less guilty person performed.

Question 8

For a contract to be enforceable it must not violate some __________.

Accepted Answer

A)  Standard of fairness 
B)  Public policy 
C)  Requirement of wisdom 
D)  Standard of reasonableness 
A)  Standard of fairness 
B)  Public policy 
C)  Requirement of wisdom 
D)  Standard of reasonableness

Question 9

16 year old Grace agrees to quit school to work for Andrew in his flower shop full-time. When Grace's mom finds out what she has done, she orders her to tell Andrew that she will quit the job. This is called

Accepted Answer

A)  Revocation 
B)  Disaffirmance 
C)  Restitution 
D)  Destruction 
A)  Revocation 
B)  Disaffirmance 
C)  Restitution 
D)  Destruction

Question 10

Rachel, a 16 year old girl, buys a bike for $20 from an adult. From an adult. If she chooses she may avoid the contract because she is a minor.

Accepted Answer

A) True 
 B)False

Question 11

All newly hired attorneys at the law firm of Annaopoli, Windau and Holton must sign a covenant not to compete where they agree that if they leave the firm they will not practice in the same type of law, within 50 miles of the firm for a year after leaving. Miiko, a new attorney who signed the covenant, quits the firm and decides to open an office across the street. Will the covenant not to compete be enforceable?

Accepted Answer

A)  No all covenants not to compete are illegal as against public policy. 
B)  Yes all covenants not to compete are legal. 
C)  Yes if the court determines that the covenant not to compete covers a relatively small area and time. 
D)  No if the court determines that it would impede Miiko's right to work. 
A)  No all covenants not to compete are illegal as against public policy. 
B)  Yes all covenants not to compete are legal. 
C)  Yes if the court determines that the covenant not to compete covers a relatively small area and time. 
D)  No if the court determines that it would impede Miiko's right to work.

Question 12

Examples of characteristics of individuals who lack capacity include all of the following except

Accepted Answer

A)  Minors 
B)  Intoxicated individuals 
C)  Mental incompetents 
D)  Impulsive individuals 
A)  Minors 
B)  Intoxicated individuals 
C)  Mental incompetents 
D)  Impulsive individuals

Question 13

Kevin, at 17 ½ years of age, buys a motorcycle from an adult, Shelby. On his 18th birthday Kevin continues to drive his motorcycle. Because he has done so, he becomes legally bound to the terms of the contract by

Accepted Answer

A)  Ratification 
B)  Restitution 
C)  Affirmance 
D)  Acceptance 
A)  Ratification 
B)  Restitution 
C)  Affirmance 
D)  Acceptance

Question 14

Tom is late for a class and tells his friend Shameem that he will pay her $100.00 to drive 20 miles over the speed limit so that he can make it to class on time. Is there a contract?

Accepted Answer

A)  Yes as long as Shameem agrees to the terms and completes it 
B)  Yes as long as Shameem is able to get Tom to class on time 
C)  No as all contracts must be in writing to be enforceable 
D)  No as an agreement to violate a statue is illegal and void 
A)  Yes as long as Shameem agrees to the terms and completes it 
B)  Yes as long as Shameem is able to get Tom to class on time 
C)  No as all contracts must be in writing to be enforceable 
D)  No as an agreement to violate a statue is illegal and void

Question 15

If a person to an agreement lacks capacity, that person may challenge the agreement if

Accepted Answer

A)  Both parties lacked the capacity 
B)  The person who lacked the capacity is determined to have been taken advantage of. 
C)  The person who lacked capacity chooses to do so. 
D)  The person who lacked capacity was not unjustly enriched. 
A)  Both parties lacked the capacity 
B)  The person who lacked the capacity is determined to have been taken advantage of. 
C)  The person who lacked capacity chooses to do so. 
D)  The person who lacked capacity was not unjustly enriched.

Question 16

Determining if an adult is lucid, and thus possesses capacity to contract, is a bright-line rule and fairly easy to apply.

Accepted Answer

A) True 
 B)False

Question 17

The requirement that both the subject matter and performance of a contract must be legal is called

Accepted Answer

A)  Capacity 
B)  Consideration 
C)  Legality 
D)  Validity 
A)  Capacity 
B)  Consideration 
C)  Legality 
D)  Validity

Question 18

Explain the process of disaffirmance of a contract if one of the parties to the contract is a minor.

Accepted Answer

If an adult enters into a contract with

Question 19

In the case of C.M.D. v. Facebook, Facebook allowed a minor to create a Facebook account, but the minor had to accept Facebook's terms, which included using the minor's name and likeness in advertisements. The minor's parents sued Facebook, claiming the terms of the agreement were not enforceable against a minor, and also claiming that the minor disaffirmed the agreement with Facebook. How did the court rule?

Accepted Answer

A)  There never was a contract because the minor lacked capacity. 
B)  The contract was illegal and therefore unenforceable. 
C)  As long as the parents knew their child had a Facebook account and allowed it, they impliedly accepted the terms on behalf of the minor. 
D)  Since the minor kept using Facebook he never disaffirmed it. 
A)  There never was a contract because the minor lacked capacity. 
B)  The contract was illegal and therefore unenforceable. 
C)  As long as the parents knew their child had a Facebook account and allowed it, they impliedly accepted the terms on behalf of the minor. 
D)  Since the minor kept using Facebook he never disaffirmed it.

Question 20

Dottie, 15 years old, purchases a pint of milk and drinks it all. While she is not old enough to have contractual capacity, under what theory would she be held liable for this item that is necessary for her health and welfare?

Accepted Answer

A)  Necessaries 
B)  Emancipation 
C)  Unjust enrichment 
D)  Maturation 
A)  Necessaries 
B)  Emancipation 
C)  Unjust enrichment 
D)  Maturation

Exam 8: Capacity and Legality

Caleb contracts with Eliza to beat up Mickey for $50.00. Is that agreement enforceable?

To determine if a person is lucid, courts employ

Ralph, 32 years old, sells his car to Joe, 16 years old, thinking Joe is actually 18 years old. When Ralph finds out Joe is actually only 16 years old, he is outraged and wants to have the contract voided because Joe is a minor. Will Ralph be successful?

In Sparrow v. Demonico, the court ruled that in order for a person to lack mental capacity due to a mental illness

If a person if not as guilty as another person in entering an agreement that is illegal based upon fraud, the less guilty person

For a contract to be enforceable it must not violate some __________.

16 year old Grace agrees to quit school to work for Andrew in his flower shop full-time. When Grace's mom finds out what she has done, she orders her to tell Andrew that she will quit the job. This is called

Rachel, a 16 year old girl, buys a bike for $20 from an adult. From an adult. If she chooses she may avoid the contract because she is a minor.

Examples of characteristics of individuals who lack capacity include all of the following except

Kevin, at 17 ½ years of age, buys a motorcycle from an adult, Shelby. On his 18th birthday Kevin continues to drive his motorcycle. Because he has done so, he becomes legally bound to the terms of the contract by

Tom is late for a class and tells his friend Shameem that he will pay her $100.00 to drive 20 miles over the speed limit so that he can make it to class on time. Is there a contract?

If a person to an agreement lacks capacity, that person may challenge the agreement if

Determining if an adult is lucid, and thus possesses capacity to contract, is a bright-line rule and fairly easy to apply.

The requirement that both the subject matter and performance of a contract must be legal is called

Explain the process of disaffirmance of a contract if one of the parties to the contract is a minor.

Dottie, 15 years old, purchases a pint of milk and drinks it all. While she is not old enough to have contractual capacity, under what theory would she be held liable for this item that is necessary for her health and welfare?

Legal Foundations and Thinking Strategically

Business, Societal, and Ethical Contexts of Law

Business and the Constitution

The American Judicial System, Jurisdiction, and Venue

Resolving Disputes: Litigation and Alternative Dispute Resolution

Contracts: Overview, Definition, Categories, and Source of Law

Mutual Assent: Agreement and Consideration

Enforceability

Performance

Breach and Remedies

Contracts for the Sale of Goods: Overview of Article 2

Sales Contracts: Agreement, Consideration, and the Statute of Frauds

Title, Allocation of Risk, and Insurable Interest

Performance and Cure in Sales Contracts

Breach and Remedies in a Sales Transaction

UCC Article 2A: Lease Contracts

Sales Warranties

Definition, Creation, and Categories of Negotiable Instruments

Negotiation, Endorsements, and Holder in Due Course

Liability, Defenses, and Discharge

Checks, Deposits, and Financial Institutions

Secured Transactions

Creditors Rights

Alternatives for Insolvent Borrowers

Bankruptcy

Choice of Business Entity and Sole Proprietorships

Partnerships

Limited Liability Partnerships and Limited Liability Companies

Corporations: Formation and Organization

Corporate Transactions: Acquisitions and Mergers

Overview of the Securities Market: Definition, Categories, and Regulation

Regulation of Issuance: The Securities Act of 1933

Regulation of Trading: The Securities Exchange Act of 1934

Regulation of Corporate Governance

Regulation of Financial Markets

Agency Formation, Categories, and Authority

Duties and Liabilities of Principals and Agents

Employment at Will

Employment Regulation and Labor Law

Employment Discrimination

Torts and Products Liability

Administrative Law

Consumer Protection

Criminal Law and Procedure

Insurance Law

Environmental Law

Personal Property, Real Property, and Land Use Law

Wills, Trusts, and Estates

Intellectual Property

Filters

Kevin, at 17 ½ years of age, buys a motorcycle from an adult, Shelby. On his 18^th birthday Kevin continues to drive his motorcycle. Because he has done so, he becomes legally bound to the terms of the contract by