Question 1

If a contract is fully performed by all parties to it, then it is pre?sumed to have been ratified.

Accepted Answer

A) True 
 B)False

Question 2

Under the Statute of Frauds, oral contracts are void.

Accepted Answer

A) True 
 B)False

Question 3

If a minor disaffirms a contract, he or she must disaffirm the entire contract.

Accepted Answer

A) True 
 B)False

Question 4

An innocent party does not need to suffer an injury to collect damages as a result of a misrepresentation.

Accepted Answer

A) True 
 B)False

Question 5

Valley Tack Shop signs a contract with Gary's Boots and Saddles for delivery of five saddles that cost $200 each. To be enforceable under the Statute of Frauds, the written contract must designate

Accepted Answer

A)  the method of delivery. 
B)  the method of payment. 
C)  the quantity of saddles. 
D)  the seller. 
A)  the method of delivery. 
B)  the method of payment. 
C)  the quantity of saddles. 
D)  the seller.

Question 6

Lucy, a minor, disaffirms a contract for necessaries without returning the goods. To Manny's Food Mart, the seller, Lucy is required to pay

Accepted Answer

A)  nothing. 
B)  the reasonable value of the goods. 
C)  the sales price of the goods. 
D)  the ultimate worth of the goods. 
A)  nothing. 
B)  the reasonable value of the goods. 
C)  the sales price of the goods. 
D)  the ultimate worth of the goods.

Question 7

Odina signs a covenant not to compete with her employer, Penultimate Sales Corporation. A court decides that the covenant is overly restrictive. The court will likely

Accepted Answer

A)  enforce it as written so as not to undercut the freedom of contract. 
B)  enforce it but evaluate its effects over time. 
C)  reform its terms to prevent any undue burden. 
D)  refuse to enforce it unless Penultimate pays additional consideration. 
A)  enforce it as written so as not to undercut the freedom of contract. 
B)  enforce it but evaluate its effects over time. 
C)  reform its terms to prevent any undue burden. 
D)  refuse to enforce it unless Penultimate pays additional consideration.

Question 8

Selena buys a cell phone for $350 and an air hockey table for $1,500, and signs a one-year employment contract for a $4,000 monthly salary to start at the beginning of the next month. The Statute of Frauds covers

Accepted Answer

A)  the employment contract, and the game table and phone purchases. 
B)  the employment contract and the game table purchase only. 
C)  the employment contract only. 
D)  the game table and phone purchases only. 
A)  the employment contract, and the game table and phone purchases. 
B)  the employment contract and the game table purchase only. 
C)  the employment contract only. 
D)  the game table and phone purchases only.

Question 9

Any contract entered into with an unlicensed party is unenforceable.

Accepted Answer

A) True 
 B)False

Question 10

For a party to a contract to receive relief from either a unilateral or a bilateral mistake, the mistake must involve a material fact.

Accepted Answer

A) True 
 B)False

Question 11

All states require that members of certain professions to have licenses.

Accepted Answer

A) True 
 B)False

Question 12

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 13

James is in an art gallery when Mitch, who has no special art expertise, points to a painting and says, "That artist is so good. That piece will be worth a fortune in a few years!" James buys the painting, which does not turn out to be valuable. James tries to return the painting and recover his purchase price. A court will

Accepted Answer

A)  order the art gallery to pay James the full purchase price. 
B)  order Mitch to pay James the full purchase price. 
C)  enforce the contract between James and the art gallery. 
D)  enforce the contract between James and the art gallery, but order Mitch to pay James the full purchase price. 
A)  order the art gallery to pay James the full purchase price. 
B)  order Mitch to pay James the full purchase price. 
C)  enforce the contract between James and the art gallery. 
D)  enforce the contract between James and the art gallery, but order Mitch to pay James the full purchase price.

Question 14

Some states impose a duty on a minor who disaffirms a contract to re?store the adult party to the position he or she held before the con?tract was made.

Accepted Answer

A) True 
 B)False

Question 15

At age seventeen, Daryl enters into a contract to buy a dozen movies from eHD TV Stream, Inc., an online video service. Soon after reaching the age of ma?jority, Daryl attempts to disaffirm the contract. eHD files a suit against him. The court will most likely consider the contract ratified if it is

Accepted Answer

A)  executed. 
B)  exculpatory. 
C)  express or implied. 
D)  emancipated. 
A)  executed. 
B)  exculpatory. 
C)  express or implied. 
D)  emancipated.

Question 16

Carly is a minor. Without her parents' knowledge, she signs a contract to buy an airplane ticket to Hawaii for spring break. Carly's parents are

Accepted Answer

A)  liable for the contract. 
B)  not liable for the contract. 
C)  liable for up to half the value of the goods in the contract. 
D)  liable for up to one third of the value of the goods in the contract. 
A)  liable for the contract. 
B)  not liable for the contract. 
C)  liable for up to half the value of the goods in the contract. 
D)  liable for up to one third of the value of the goods in the contract.

Question 17

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 18

Chloe files a suit against Digital Associates, Inc. (DAI), to enforce a con?tract. The only written evidence of the contract is a memo on DAI's let?terhead as signed by a DAI officer in its files. The con?tract can be en?forced if the memo includes

Accepted Answer

A)  a correct title, such as "Chloe-DAI Contract." 
B)  all essential terms. 
C)  a statement of the consideration. 
D)  the parties' addresses. 
A)  a correct title, such as "Chloe-DAI Contract." 
B)  all essential terms. 
C)  a statement of the consideration. 
D)  the parties' addresses.

Question 19

Garth owns two all-terrain vehicles (ATVs), worth $1,000 and $500, re?spec?tively. Helen agrees to buy "Garth's ATV" for $750. Garth believes, in good faith, that he is selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this situation

Accepted Answer

A)  Garth is entitled to $750 for the $500 ATV. 
B)  Helen is entitled to the $1,000 ATV for $750. 
C)  Helen must buy both ATVs for $1,500. 
D)  there is no contract. 
A)  Garth is entitled to $750 for the $500 ATV. 
B)  Helen is entitled to the $1,000 ATV for $750. 
C)  Helen must buy both ATVs for $1,500. 
D)  there is no contract.

Question 20

For a minor to disaffirm a contract, he or she must present the contract to a court.

Accepted Answer

A) True 
 B)False

Exam 8: Capacity, Legality, and Enforceability

If a contract is fully performed by all parties to it, then it is pre?sumed to have been ratified.

Under the Statute of Frauds, oral contracts are void.

If a minor disaffirms a contract, he or she must disaffirm the entire contract.

An innocent party does not need to suffer an injury to collect damages as a result of a misrepresentation.

Valley Tack Shop signs a contract with Gary's Boots and Saddles for delivery of five saddles that cost $200 each. To be enforceable under the Statute of Frauds, the written contract must designate

Lucy, a minor, disaffirms a contract for necessaries without returning the goods. To Manny's Food Mart, the seller, Lucy is required to pay

Odina signs a covenant not to compete with her employer, Penultimate Sales Corporation. A court decides that the covenant is overly restrictive. The court will likely

Selena buys a cell phone for $350 and an air hockey table for $1,500, and signs a one-year employment contract for a $4,000 monthly salary to start at the beginning of the next month. The Statute of Frauds covers

Any contract entered into with an unlicensed party is unenforceable.

For a party to a contract to receive relief from either a unilateral or a bilateral mistake, the mistake must involve a material fact.

All states require that members of certain professions to have licenses.

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

Some states impose a duty on a minor who disaffirms a contract to re?store the adult party to the position he or she held before the con?tract was made.

Carly is a minor. Without her parents' knowledge, she signs a contract to buy an airplane ticket to Hawaii for spring break. Carly's parents are

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

Chloe files a suit against Digital Associates, Inc. (DAI), to enforce a con?tract. The only written evidence of the contract is a memo on DAI's let?terhead as signed by a DAI officer in its files. The con?tract can be en?forced if the memo includes

Garth owns two all-terrain vehicles (ATVs), worth $1,000 and $500, re?spec?tively. Helen agrees to buy "Garth's ATV" for $750. Garth believes, in good faith, that he is selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this situation

For a minor to disaffirm a contract, he or she must present the contract to a court.

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Courts and Alternative Dispute Resolution

Torts and Cyber Torts

Intellectual Property and Internet Law

Criminal Law and Cyber Crime

Agreement and Consideration in Contracts

Third Party Rights and Discharge

Sales and Lease Contracts

Performance and Breach of Sales Lease Contracts

Warranties, Product Liability, and Consumer Law

Negotiable Instruments

Checks and Banking in the Digital Age

Creditors Rights and Bankruptcy

Mortgages Foreclosures After the Recession

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Employment Law

The Entrepreneurs Options

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Investor Protection, Insider Trading, Corp Gov

Antitrust Law and Promoting Competition

Personal Property, Bailments, and Insurance

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