Exam 10: Consideration

A party who claims that he or she could not understand contractual terms because of tiny, hard-to-read print on the back of an agreement and the excessive use of legalese is referring to which of the following?

As a general rule, parents are not liable for contracts entered into by their minor children.

A minor who chooses to disaffirm a contract may disaffirm the entire contract or any part of it.

In the law, when both parties are equally responsible for an illegal agreement, it is known as in pari delicto.

Which of the following involves overly harsh or lopsided substance in an agreement?

Reference - Beauty Shop Woes. When Janice went to work as a hair stylist in Rick's beauty shop, she entered into an agreement with Rick whereby if she left she would not work for another beauty shop within 50 miles for 2 years. Rick trained Janice in a number of new techniques. After nine months, Janice was offered a great job down the street at a new beauty shop, quit Rick, and had a number of customers follow her down the street to her new job. Rick claimed that she had signed a contract and had no right to go to work at the new shop. Janice disagreed and told Rick that no judge in the country would enforce such an agreement. Janice told Rick that she was more worried about a customer, Treena, who was threatening to sue her because her hair turned green after Janice worked on it. Janice agreed that Treena's hair was damaged. Janice pointed out, however, that she told Treena that odd results could result from a dye attempt, and she required that Treena sign a contract releasing Janice from all liabilities before she did anything with Treena's hair. Treena, however, sued anyway. Which of the following is true regarding the enforceability of the clause providing that Treena not hold Janice liable for any bad results?

How many states engage in at least some regulation of gambling?

Which of the following occurs when a minor's parents or legal guardians give up their right to exercise legal control over the minor, typically when the minor moves out of the parents' house and begins supporting himself or herself?

Which of the following is true in regard to how Chinese law treats contracts entered into by minors?

When must a disaffirmance of a contract based on minority occur?

Maurice wishes to purchase a small restaurant named "Tasty Burger" in his community from Todd who tells Maurice that, while he loves the teenagers who have frequented his establishment, he is tired of flipping burgers and wants to spend more time fishing on the lake. Maurice has Todd sign a covenant not to compete prohibiting Todd from opening a restaurant within 25 miles of Tasty Burger for five years. Assuming that the covenant was drafted properly, is it likely to be enforced? Discuss arguments for and against covenants not to compete in the sale of a business.

Today in all but _____________ states, a minor is someone under the age of _____________.

Which of the following is the maximum interest rate?

Which of the following is true regarding the ability of persons suffering from a mental illness to enter into a binding contract?

In most states a person is given full legal capacity to enter into contracts when he or she becomes _____________ before reaching the age of majority.

How many states have statutes requiring that people working in certain professions obtain a license before practicing their craft?

A[n] _____________ contract is one requiring complete performance by both parties, even if it appears as if the contract contains multiple parts.

Today, married women have been removed from the category of those lacking contractual capacity, although in a few states their capacity to enter into certain kinds of contracts is still limited.

Reference - Cheap Motorcycle. Tony, a hateful, disgruntled, business law teacher notices that a student, Peter, who is past the age of majority, has bought a new motorcycle. Peter has struggled through school, is in his last semester, and needs to pass business law in order to graduate. Tony tells Peter that he would like to see Peter pass; and, in the next sentence, Tony says that he wants to buy the motorcycle for $100, a price far below the value of the motorcycle. Peter asks if Tony is serious about the price, and Tony replies, "I have the power here!" Tony proceeds to draw up a contract for the sale of the motorcycle for $100 with lots of fine print by which he can sue Peter and recover any maintenance costs for the next five years. Seeing that he is at an advantage, Tony also throws into the deal that Peter will mow Tony's one acre yard for $5 all summer long. After Tony tells Peter to either take the contract or leave it, Tony reluctantly signs. Which of the following is an appropriate term for the contract drawn up by Tony?

Reference - Beauty Shop Woes. When Janice went to work as a hair stylist in Rick's beauty shop, she entered into an agreement with Rick whereby if she left she would not work for another beauty shop within 50 miles for 2 years. Rick trained Janice in a number of new techniques. After nine months, Janice was offered a great job down the street at a new beauty shop, quit Rick, and had a number of customers follow her down the street to her new job. Rick claimed that she had signed a contract and had no right to go to work at the new shop. Janice disagreed and told Rick that no judge in the country would enforce such an agreement. Janice told Rick that she was more worried about a customer, Treena, who was threatening to sue her because her hair turned green after Janice worked on it. Janice agreed that Treena's hair was damaged. Janice pointed out, however, that she told Treena that odd results could result from a dye attempt, and she required that Treena sign a contract releasing Janice from all liabilities before she did anything with Treena's hair. Treena, however, sued anyway. What type of clause did Janice have Treena sign to the effect that she would not hold Janice liable for any bad results?