Question 1

All forms of gambling are legal in all states.

Accepted Answer

A) True 
 B)False  False

Question 2

Ruthie,a minor,charges the cost of an expensive leather jacket at a Girl's Trend store.Two nights later,Ruthie loses the jacket at Minors Only Club.She disaf-firms the jacket's purchase.Ruthie owes Girl's Trend the reasonable value of the jacket

Accepted Answer

A) if it is deemed a "necessary." 
B) if it is deemed unnecessary. 
C) under any circumstances. 
D) under no circumstances. 
A) if it is deemed a "necessary." 
B) if it is deemed unnecessary. 
C) under any circumstances. 
D) under no circumstances. A

Question 3

Past consideration can be legally sufficient consideration.

Accepted Answer

A) True 
 B)False  False

Question 4

Mariah promises to pay her assistant Nadine $10,000 in consideration of the ser-vices she provided over the years.Mariah never pays Nadine.Mariah is

Accepted Answer

A) liable for payment of the $10,000. 
B) liable only if Nadine still works for Mariah. 
C) not liable,because the consideration is in the past. 
D) not liable,because the consideration was unintentional. 
A) liable for payment of the $10,000. 
B) liable only if Nadine still works for Mariah. 
C) not liable,because the consideration is in the past. 
D) not liable,because the consideration was unintentional.

Question 5

Parents who sign a contract made by their minor child with an adult have the same option to disaffirm as the child.

Accepted Answer

A) True 
 B)False

Question 6

An adhesion contract is a contract drafted by one party and presented to another on a take-it-or-leave-it basis.

Accepted Answer

A) True 
 B)False

Question 7

An illusory promise is unenforceable.

Accepted Answer

A) True 
 B)False

Question 8

It is illegal for two parties to mutually agree to rescind a valid contract.

Accepted Answer

A) True 
 B)False

Question 9

Consideration is the value given in return for a promise.

Accepted Answer

A) True 
 B)False

Question 10

The doctrine of promissory estoppel does not apply if there exists a clear and definite promise.

Accepted Answer

A) True 
 B)False

Question 11

Kingston promises to pay Melina $500 to install a sump pump in his warehouse.Melina com-pletes the installation.The act of installing the pump

Accepted Answer

A) imposes a moral obligation on Kingston to pay Melina. 
B) imposes no obligation on Kingston unless he is satisfied with the job. 
C) is not sufficient consideration because it is not goods or money. 
D) is the consideration that creates Kingston's obligation to pay Melina. 
A) imposes a moral obligation on Kingston to pay Melina. 
B) imposes no obligation on Kingston unless he is satisfied with the job. 
C) is not sufficient consideration because it is not goods or money. 
D) is the consideration that creates Kingston's obligation to pay Melina.

Question 12

Olivia,a minor,signs a contract to buy a bike from Phil,the owner of SuperCycles Bike Store.Olivia's right to disaffirm the contract

Accepted Answer

A) does not change the fact that Phil is bound by the contract. 
B) does not yet exist because Olivia is still a minor. 
C) gives Phil,an adult,the right to disaffirm the contract. 
D) is not valid because a bike is a "necessary." 
A) does not change the fact that Phil is bound by the contract. 
B) does not yet exist because Olivia is still a minor. 
C) gives Phil,an adult,the right to disaffirm the contract. 
D) is not valid because a bike is a "necessary."

Question 13

A minor has a reasonable time,after the minor reaches the age of major-ity,to disaffirm a contract.

Accepted Answer

A) True 
 B)False

Question 14

Fact Pattern 10-1 
Sally contracts with Tasty Pizza Company to deliver its products.Both parties change their minds,however,and inform each other that they would like to cancel the contract.
-Refer to Fact Pattern 10-1.Sally and Tasty

Accepted Answer

A) may rescind their entire contract. 
B) may rescind their contract to the extent that it is executory. 
C) must perform their entire contract. 
D) must perform the part of their contract that is executory. 
A) may rescind their entire contract. 
B) may rescind their contract to the extent that it is executory. 
C) must perform their entire contract. 
D) must perform the part of their contract that is executory.

Question 15

Adequacy of consideration refers to how much consideration is given.

Accepted Answer

A) True 
 B)False

Question 16

Forbearance is the act of refraining from doing something that one has a legal right to do.

Accepted Answer

A) True 
 B)False

Question 17

Betty is selling her used clothing shop on Main Street.In the sale agreement,there is a covenant not to compete that prohibits Betty from opening another used clothing shop within 300 miles of the shop she is selling.A court will most likely conclude that this restriction on competition is

Accepted Answer

A) reasonable. 
B) unreasonable and order Betty's successor to stop doing business. 
C) unreasonable and may reform the covenant . 
D) unreasonable and prohibit both parties from opening used clothing shops. 
A) reasonable. 
B) unreasonable and order Betty's successor to stop doing business. 
C) unreasonable and may reform the covenant . 
D) unreasonable and prohibit both parties from opening used clothing shops.

Question 18

Richard is an adult.He enters into a contract to sell sixteen-year-old Jane his car for $3,000.The next day Richard recieves an offer of $4,000 for his car from twenty-year-old Bill.Richard

Accepted Answer

A) cannot disaffirm his contract with Jane because he is an adult. 
B) can disaffirm his contract with Jane because Bill is an adult and contracts with adults take precedence over contracts with minors. 
C) cannot disaffirm his contract with Jane because she is a minor. 
D) can disaffirm his contract with Jane because the contract has not been ratified. 
A) cannot disaffirm his contract with Jane because he is an adult. 
B) can disaffirm his contract with Jane because Bill is an adult and contracts with adults take precedence over contracts with minors. 
C) cannot disaffirm his contract with Jane because she is a minor. 
D) can disaffirm his contract with Jane because the contract has not been ratified.

Question 19

SuperBumperCars,Inc.requires all customers to sign a release that contains a clause that releases SuperBumperCars from all liability in the event of an injury occurring during a bumper car ride,no matter who is at fault.This is an example of

Accepted Answer

A) a covenant not to compete. 
B) an adhesion contract. 
C) an exculpatory clause. 
D) an illusory promise. 
A) a covenant not to compete. 
B) an adhesion contract. 
C) an exculpatory clause. 
D) an illusory promise.

Question 20

A minor may enter into a contract for the sale of alcoholic beverages if the other contractual party is an adult.

Accepted Answer

A) True 
 B)False

Exam 10: Consideration, capacity, and Legality

All forms of gambling are legal in all states.

Ruthie,a minor,charges the cost of an expensive leather jacket at a Girl's Trend store.Two nights later,Ruthie loses the jacket at Minors Only Club.She disaf-firms the jacket's purchase.Ruthie owes Girl's Trend the reasonable value of the jacket

Past consideration can be legally sufficient consideration.

Mariah promises to pay her assistant Nadine $10,000 in consideration of the ser-vices she provided over the years.Mariah never pays Nadine.Mariah is

Parents who sign a contract made by their minor child with an adult have the same option to disaffirm as the child.

An adhesion contract is a contract drafted by one party and presented to another on a take-it-or-leave-it basis.

An illusory promise is unenforceable.

It is illegal for two parties to mutually agree to rescind a valid contract.

Consideration is the value given in return for a promise.

The doctrine of promissory estoppel does not apply if there exists a clear and definite promise.

Kingston promises to pay Melina $500 to install a sump pump in his warehouse.Melina com-pletes the installation.The act of installing the pump

Olivia,a minor,signs a contract to buy a bike from Phil,the owner of SuperCycles Bike Store.Olivia's right to disaffirm the contract

A minor has a reasonable time,after the minor reaches the age of major-ity,to disaffirm a contract.

Fact Pattern 10-1 Sally contracts with Tasty Pizza Company to deliver its products.Both parties change their minds,however,and inform each other that they would like to cancel the contract. -Refer to Fact Pattern 10-1.Sally and Tasty

Adequacy of consideration refers to how much consideration is given.

Forbearance is the act of refraining from doing something that one has a legal right to do.

Betty is selling her used clothing shop on Main Street.In the sale agreement,there is a covenant not to compete that prohibits Betty from opening another used clothing shop within 300 miles of the shop she is selling.A court will most likely conclude that this restriction on competition is

Richard is an adult.He enters into a contract to sell sixteen-year-old Jane his car for $3,000.The next day Richard recieves an offer of $4,000 for his car from twenty-year-old Bill.Richard

SuperBumperCars,Inc.requires all customers to sign a release that contains a clause that releases SuperBumperCars from all liability in the event of an injury occurring during a bumper car ride,no matter who is at fault.This is an example of

A minor may enter into a contract for the sale of alcoholic beverages if the other contractual party is an adult.

The Legal and Constitutional Environment of Business

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Ethics and Business Decision Making

Tort Law

Intellectual Property

Internet Law,social Media,and Privacy

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Nature and Classification

Agreement in Traditional and E-Contracts

Defenses to Contract Enforceability

Third Party Rights and Discharge

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Performance and Breach of Sales and Lease Contracts

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Negotiability, transferability, and Liability

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Corporate Formation, financing, and Termination

Corporate Directors, officers, and Shareholders

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