Deck 16: Capacity and Legality

Question 1

Parents are responsible for the torts committed by their minor children in all states.

Answer 1

False

Question 2

If a minor enters into contract with an adult,both parties may disaffirm a contract based upon the minor's lack of majority.

Answer 2

False

Question 3

In the Case Opener,Apple customers tried to disaffirm purchases of game currency by their children.What was the result?

A)The court dismissed the lawsuit on the basis that no contractual agreement was needed in order for the parents to be bound in regard to purchases of game currency so long as their passwords were used.
B)The court dismissed the lawsuit on the basis that the parents were bound by the Terms of Service and notifications of their original contracts with Apple binding them to future purchases of game currency regardless of whether passwords were used.
C)The court refused to dismiss the lawsuit because as a matter of law parents cannot be required to contractually agree to their children's future purchases that are unapproved by the parents.
D)The court dismissed the lawsuit on the basis that the parents were bound by the Terms of Service and notifications of their original contracts with Apple binding them to future purchases of game currency when their passwords were used.
E)The court refused to dismiss the lawsuit because no case law was provided to prove that Apple's Terms of Service served as a contract for all subsequent transactions.

Answer 3

E
Explanation: A)The U.S.District Court for the Northern District of California denied Apple's motion to dismiss the lawsuit stating that no case law was provided to prove that Apple's Terms of Service served as a contract for all subsequent transactions.
B)The U.S.District Court for the Northern District of California denied Apple's motion to dismiss the lawsuit stating that no case law was provided to prove that Apple's Terms of Service served as a contract for all subsequent transactions.
C)The U.S.District Court for the Northern District of California denied Apple's motion to dismiss the lawsuit stating that no case law was provided to prove that Apple's Terms of Service served as a contract for all subsequent transactions.
D)The U.S.District Court for the Northern District of California denied Apple's motion to dismiss the lawsuit stating that no case law was provided to prove that Apple's Terms of Service served as a contract for all subsequent transactions.
E)The U.S.District Court for the Northern District of California denied Apple's motion to dismiss the lawsuit stating that no case law was provided to prove that Apple's Terms of Service served as a contract for all subsequent transactions.

Question 4

Once a young person reaches the age of majority and ratifies a contract made as a minor,he or she has a reasonable period of time to void the contract.

Question 5

Which of the following is an element of a legally binding contract?

A)Inquiry
B)Knowledge
C)Acknowledgement
D)Affirmance
E)Capacity

Question 6

If a contract contains an illegal part,courts will sever the illegal part and enforce only the legal part.

Question 7

In Great Britain,a young person may enter into a contract at age 18.

Question 8

In Buckeye Check Cashing,Inc. ,v.Cardegna et al,the case was heard in front of the U.S.Supreme Court to determine whether the court or the arbitrator should decide the issues of a case when illegality in relation to a contract is claimed.What was the ruling?

A)The court should address charges of illegality involving either an arbitration provision or a contract as a whole.
B)An arbitrator should address charges of illegality involving either an arbitration provision or a contract as a whole.
C)When an arbitration provision in a contract is not specifically challenged,a court should address a charge of illegality to a contract as a whole.an arbitration provision in a contract is not specifically challenged,an arbitrator should address a charge of illegality to a contract as a whole.
D)When an arbitration provision in a contract is not specifically challenged,an arbitrator should address a charge of illegality to a contract as a whole.
E)Whether a court or an arbitrator should address charges of illegality involving either an arbitration provision or a contract as a whole depends upon the first to file rule.

Question 9

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

Question 10

In pari delicto is the term for when both parties are equally responsible for an illegal agreement.

Question 11

Someone who has been adjudicated insane has no capacity to enter into contracts,and any contract he attempts to enter into is void,even if he has an appointed guardian.

Question 12

Disaffirmance laws have been found to reflect a policy of discouraging adults from contracting with minors.

Question 13

All exculpatory clauses are unlawful.

Question 14

Which of the following was the result on appeal in Eric Lucier and Karen Haley v.Angela and James Williams,Cambridge Associates Ltd. ,and Al Vasys,the case in the text in which,after finding significant problems with their roof,the plaintiffs claimed that provisions in a home inspection contract illegally limited the liability of the defendants?

A)The court ruled in favor of the defendants on the basis that no contract of adhesion was involved and that,therefore,by definition the contract satisfied public policy.
B)The court ruled in favor of the plaintiffs on the basis that the limitation of liability provision in the contract was unconscionable and violated the public policy of the state.
C)The court ruled in favor of the defendants on the basis that while the court would intervene in appropriate cases,a presumption against a finding of unconscionability exists in home inspection contracts;and the plaintiffs failed to rebut that presumption.
D)The court ruled in favor of the defendants on the basis that the plaintiffs freely entered into the contract and should,therefore,be bound to its terms.
E)The court ruled in favor of the plaintiffs on the basis that although the contract was not unconscionable,public policy was violated.

Question 15

Minors can disaffirm contracts for necessaries,but they will still be held liable for the reasonable value of the necessary.

Question 16

When a contract is overturned because it is deemed to have illegal subject matter or is illegal to perform,it is generally considered voidable.

Question 17

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.

Question 18

In King v.Riedl,the plaintiffs claimed that the defendant did not have the right to proceed against them for sums allegedly owed,because the contractor was not licensed as a residential home builder as required by state law).What was the result on appeal?

A)The court ruled that the defendant could maintain an action against the plaintiffs and prevail because the proof showed that he was eligible for the required license although he had not yet obtained it.
B)Although recognizing that the contractor's failure to be properly licensed would not in and of itself bar recovery,the court ruled in favor of the plaintiffs because the facts at trial showed that the contractor performed inadequate work.
C)The court ruled in favor of the plaintiffs on the basis that the contractor was statutorily barred from bringing an action to enforce payment because he lacked a residential home builder license and the amount of the contract satisfied statutory requirements.
D)The court ruled that because the contractor lacked the required state license and the amount of the contract satisfied statutory requirements,under common law he could only recover for expenses for materials and labor costs,not the full contract price.
E)The court ruled that the defendant could maintain an action against the plaintiffs and prevail because the state statute only applied when the cost of a contractual undertaking exceeded $10,000,and because the contractor billed periodically,the plaintiffs were never presented with a bill exceeding $10,000.

Question 19

A contract of an intoxicated person for necessaries will be enforced for the reasonable value of the necessaries.

Question 20

For purposes of determining capacity,intoxicated persons include those under the influence of alcohol,but not drugs.

Question 21

If a legal contract is formed and the subject of the contract then becomes illegal under a new statute,the contract is ________.

A)Executory
B)Executed
C)Disregarded
D)Discharged
E)Enforced

Question 22

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

A)Persons suffering from a mental illness have full capacity to enter into a binding contract so long as they inform the other party that they are in treatment.
B)Persons suffering from a mental illness may have full,limited,or no legal capacity to enter into a binding contract depending on the nature and extent of their mental deficiency.
C)Persons who suffer from a mental illness always have full capacity to enter into a binding contract.
D)Persons suffering from a mental illness have full capacity to enter into a binding contract so long as they do not present a danger to themselves or others.
E)Persons suffering from a mental illness have no capacity to enter into a binding contract.

Question 23

When a former minor does not specifically state that he affirms a contract entered into as a minor,but takes some action that is consistent with intent to ratify the contract,which of the following has occurred?

A)Continued safety
B)Express novation
C)Implied ratification
D)Express ratification
E)Implied novation

Question 24

Which of the following is true once a guardian has been appointed for a person who has been adjudicated insane?

A)If a person has been adjudicated insane and has a guardian appointed,that person has no capacity to enter into contracts and any contract he does attempt to enter into is void.
B)If a person has been adjudicated insane and has a guardian appointed,that person retains capacity to enter into contracts so long as the other party to the contract is aware of the insanity issue.
C)If a person has been adjudicated insane and has a guardian appointed,that person has no capacity to enter into contracts and any contract he does attempt to enter into is voidable.
D)If a person has been adjudicated insane and has a guardian appointed,that person retains capacity to enter into contracts so long as the other party to the contract is aware of the guardian's status.
E)If a person has been adjudicated insane and has a guardian appointed,that person retains capacity to enter into contracts so long as the other party to the contract is aware of the guardian's status and also the insanity issue.

Question 25

If a contract is disaffirmed due of intoxication,which of the following statements is true?

A)Any party other than the intoxicated person must be returned to the condition he or she was in at the time the contract was entered into.
B)So long as the contract was objectively fair,neither party must be returned to the condition he or she was in prior to the time the contract was entered into.
C)Each party to the contract must return the other to the condition he or she was in at the time the contract was entered into.
D)The intoxicated person must be returned to the condition he or she was in at the time the contract was entered into,but that is not true for any other party.
E)So long as the contract was subjectively fair in the opinion of the intoxicated party,neither party must be returned to the condition he or she was in prior to the time the contract was entered into.

Question 26

As a general rule,most states will not allow a minor to disaffirm contracts for which of the following items?

A)Life insurance,health insurance,and psychological counseling
B)Education loan contracts and psychological counseling,but not life insurance or health insurance
C)Health insurance and psychological counseling,but not life insurance
D)Psychological counseling,but not health insurance or life insurance
E)Health insurance,but not life insurance or psychological counseling

Question 27

When someone has some sort of mental or physical defect that prevents him or her from being able to enter into a legally binding contract,what term is used?

A)Capacity
B)Immajority
C)Chronic illness
D)Terminal illness
E)Incapacity

Question 28

Which of the following is the majority rule regarding a minor's misrepresentation of his or her age?

A)That the minor must restore the competent party to that party's precontractual position before obtaining the disaffirmance.
B)That misrepresentation results in the minor receiving a return of only half the consideration he or she supplied.
C)That if a competent party relies on a misrepresentation in good faith,the minor gives up the right to disaffirm the agreement.
D)That the minor may disaffirm but that the competent party has the right to sue the minor in tort and recover damages for fraud.
E)That misrepresentation does not affect the minor's right to disaffirm the contract.

Question 29

When a minor gets married,she or he is considered ________ in most cases.

A)Disaffirmed
B)Released
C)Freed
D)Emancipated
E)Either freed or disaffirmed depending on the circumstances

Question 30

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.

A)Released
B)Emancipated
C)Employed
D)Freed
E)Acknowledged

Question 31

A person who has legal ________ to contract is one who has the mental ability to understand his or her rights and obligations under a contract and,therefore,will presumably be able to understand how to comply with the terms of the agreement.

A)Capacity
B)Understanding
C)Consideration
D)History
E)Ratification

Question 32

Which of the following is true regarding the obligation of a minor on disaffirmance?

A)The obligations of a minor upon disaffirmance vary from state to state.
B)In all states,a minor is entitled to a full refund without returning consideration.
C)In all states,a minor must return any consideration in his control but is entitled to a full refund of any purchase price regardless of the condition of the consideration when returned.
D)In all states,a minor only receives a return of half the minor's investment.
E)In all states,a minor must return any consideration in his control,must make restitution,and must pay for any loss in value of the collateral.

Question 33

In Great Britain,the age of majority regarding the right to contract is:

A)21
B)18
C)16
D)19
E)There is not a set age of majority

Question 34

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?

A)Ratification
B)Reaffirmance
C)Legal release
D)Disaffirmance
E)Emancipation

Question 35

Because ________ does not favor intoxication,the courts tend to be unsympathetic to intoxicated parties and will fairly liberally interpret behavior that seems like ratification as ratifying the contract.

A)Public policy
B)Medical literature
C)Popular opinion
D)Morality
E)Religion

Question 36

Which of the following statements regarding contracts for necessaries entered into by minors is false?

A)A contract for a necessary is a contract that supplies the minor with the basic necessities of life.
B)The purpose of holding minors liable for necessaries is to ensure that minors are able to obtain the basic necessities of life when their parents will not provide them.
C)Whether something is considered a necessary is related to whether the minor's parents are willing to provide the item in question for the minor.
D)A minor can disaffirm a contract for necessaries,but the minor will still be held liable for the reasonable value of the necessary.
E)A minor cannot disaffirm contracts for necessaries.

Question 37

Which of the following is the correct timeframe during which a disaffirmance of a contract based on minority must occur?

A)Within 30 days of the minor's reaching the age of majority.
B)Within 60 days of the minor's reaching the age of majority.
C)Within 90 days of the minor's reaching the age of majority.
D)Within one year of the minor's reaching the age of majority.
E)Before or within a reasonable time of the minor's reaching the age of majority.

Question 38

Because their contracts are ,minors have the right,until a reasonable time after reaching the age of majority,to or void their contracts.

A)Void;resist
B)Voidable;affirm
C)Void;disaffirm
D)Void;affirm
E)Voidable;disaffirm

Question 39

Which of the following is true regarding an agreement to commit a crime or a tort?

A)An agreement to commit a crime is unenforceable,and an agreement to commit a tort is unenforceable unless a privacy tort is involved in which case the agreement is enforceable.
B)An agreement to commit a crime is unenforceable,and an agreement to commit a tort is unenforceable.
C)An agreement to commit a crime is enforceable and deemed legal so long as the substance of the agreement was deemed a crime after the agreement was entered into,but an agreement to commit a tort is unenforceable.
D)An agreement to commit a tort is enforceable,but an agreement to commit a crime is unenforceable.
E)An agreement to commit a crime is unenforceable,and an agreement to commit a tort is unenforceable unless a business tort is involved in which case the agreement is enforceable.

Question 40

Which of the following occurs when a person reaches the age of majority and states,either orally or in writing,that he or she intends to be bound by the contract entered in to as a minor?

A)Implied novation
B)Implied ratification
C)Express ratification
D)Express novation
E)Express ratification if the statement is in writing but nothing if the statement is only oral

Question 41

What is the maximum interest rate in the United States?

A)12%
B)15%
C)20%
D)10%
E)It varies depending on the state involved.

Question 42

Payton gets a job as a salesman at an auto-parts store.He agrees that if he leaves his employment,he will not work for another auto-parts store within 25 miles for a period of three years.That type of agreement is called a[n] ________.

A)Covenant not to compete
B)Working covenant
C)Employment covenant
D)Termination agreement
E)Public policy agreement

Question 43

Which of the following are contracts that contain multiple parts which can each be performed separately and for which separate consideration is offered?

A)Independent contracts
B)Adhesion contracts
C)Justifiable contracts
D)Substantive contracts
E)Severable contracts

Question 44

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

A)25
B)45
C)30
D)49
E)50

Question 45

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?

A)Procedural unconscionability.
B)Exculpatory clauses.
C)An in pari delicto agreement.
D)Adhesion conscionability.
E)Substantive unconscionability.

Question 46

Which of the following is true regarding Rose and her parents asserting that the car was a necessary?

A)Even if a minor disaffirms a contract for a necessary,the minor will still be held liable for the reasonable value of the necessary.
B)Whether or not parents would buy the item at issue is irrelevant in addressing a claim that an item was a necessary.
C)A minor may not disaffirm a contract for a frivolous matter that is clearly not required.
D)The claim will have no effect because the law does not recognize the concept of necessaries when minors are involved.
E)Social status is irrelevant as a matter of law in addressing a claim that an item was a necessary.

Question 47

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

A)Justifiable
B)Independent
C)Indivisible
D)Adhesion
E)Divisible

Question 48

[Irresponsible Teen] Rose is 17 in a state where majority age is 18.She purchased a prom dress from Your Special Day.She wore it to the prom and then attempted to return it to the store,claiming that she was a minor and that she was entitled to a refund.The dress had clearly been worn and had a purple stain which Rose claimed was from grape juice.Additionally,a few days before she turned 18,Rose purchased a used car from Sal's Car Savings.She had a deal whereby she paid $100 per month on the car.She drove the car and made payments for six months after she turned 18.Rose then returned the car to Sal's Car Savings,informed the owner that she was under 18 when she entered into the contract to purchase the car,and told the owner that she was returning the car for a full refund.Sal's Car Savings claimed the car was a necessity.Rose and her parents disagreed claiming that the parents were ready and willing to provide a car to Rose,and that she only purchased the car from Sal's Car Savings because she liked that particular style and color.When purchases of the dress and car were made,the sellers knew that Rose was under the age of 18.
Which statement about Rose's attempt to return the damaged dress is true?

A)In all states Rose must return the dress;but she has a right to a full refund.
B)In all states Rose has the right to keep the dress and get a refund.
C)Regardless of what she does with the dress,Rose has no right to a refund in any state.
D)In some states Rose would have an obligation of restitution to the store.
E)In all states Rose would have an obligation of restitution to the store.

Question 49

If a licensing statute is intended to protect the public's health,safety,and welfare,an agreement with an unlicensed professional is typically deemed ________.

A)Usury
B)Illegal and unenforceable
C)Enforceable but with a fine
D)Enforceable without a fine
E)Executed

Question 50

The term ________ refers to the fact that an agreement is so unfair that it is void of conscience.

A)Unconscionable
B)Unrealistic
C)Outrageous
D)Unreasonable
E)Unbelievable

Question 51

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

A)50
B)35
C)10
D)40
E)47

Question 52

A[n] contract is a contract created by a party to an agreement that is presented to the other party on a take-it-or-leave-it basis.

A)Outrageous
B)Adhesion
C)Unreasonable
D)Substantively unconscionable
E)Procedurally unreasonable

Question 53

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

A)Exculpatory clauses.
B)An in pari delicto agreement.
C)Adhesion conscionability.
D)Substantive unconscionability.
E)Procedural unconscionability.

Question 54

[Useless Friend] Antoine and Tevis,are roommates.Antoine has Tevis sign a contract promising to wash Antoine's car once a week for $80 per month in payment.The contract incorporated by reference terms on the back.The terms on the back were in very small print and required Tevis to cook dinner for Antoine,do his laundry,and clean their apartment.Antoine is also very angry with his former girlfriend,Flora,and decides to start rumors that would constitute the tort of defamation.He spreads via SnapChat that Flora cheated on tests and stole from friends.Antoine wants to enlist the help of Tevis in smearing Flora but knows that Tevis would be hesitant to assist in his endeavors.One evening,however,Tevis comes home clearly intoxicated - a fact apparent to Antoine.Antoine has him sign a contract agreeing to defame Flora for $50.When he sobers up,Tevis tells Antoine that he was drunk and that he has no intention of defaming Flora,who also happens to be the best friend of Tevis's new girlfriend.He also finally takes a look at the contract involving work for Antoine and tells Antoine that the contract is outrageous.
Tevis's assertion that he should be able to avoid the contract involving Flora because he was intoxicated,is best supported by which of the following statements,under the Restatement of Contracts,Section 16?

A)Contracts of an intoxicated person are voidable only if it can be proven that the other party was involved in encouraging the abuse of alcohol by the intoxicated person rendering the intoxicated person unable to understand the nature and consequences of the transaction or unable to act in a reasonable manner in relation to the transaction.
B)Contracts of an intoxicated person are void only if it can be proven that the other party was involved in encouraging the abuse of alcohol by the intoxicated person rendering the intoxicated person unable to understand the nature and consequences of the transaction or unable to act in a reasonable manner in relation to the transaction.
C)Contracts of an intoxicated person are voidable if the other party had reason to know that because of the intoxicated person's condition,that person was unable to understand the nature and consequences of the transaction or was unable to act in a reasonable manner in relation to the transaction.
D)Contracts of an intoxicated person are void if the other party had reason to know that because of the intoxicated person's condition,that person was unable to understand the nature and consequences of the transaction or was unable to act in a reasonable manner in relation to the transaction.
E)Contracts of an intoxicated person are enforceable because a person should be bound by his or her actions.

Question 55

Tevis's claim that he had no obligation to defame Flora is supported by which of the following statements?

A)Tevis is correct in that he could not be legally obligated to commit defamation.
B)Tevis is correct only if it can be proven that the defamation would cause Flora actual injury.
C)Tevis is correct only if it can be proven that the defamation is undeserved.
D)Tevis is correct only if it can be proven that the defamation would cause Flora money damages.
E)Tevis is correct only if it can be proven that he had a prior relationship with Flora.

Question 56

Which of the following is a term for laws that limit the types of business activities in which parties may legally engage on Sundays?

A)Christian laws
B)Blue laws
C)True laws
D)Red laws
E)Colonial laws

Question 57

Which statement applies in the dispute between Rose and Sal's Car Savings,considering that she waited to turn 18 before attempting to disaffirm the contract?

A)An implied ratification occurs when parents agree to accept the debt entered into by a minor.
B)If Rose caused any damage whatsoever to the car,she was said to have impliedly ratified the contract.
C)Rose was required to expressly ratify the contract before she could be bound to it.
D)Rose was required to expressly ratify the contract before she could be bound to it so long as no damage was done;but if she did any damage to the car,as a matter of law,she is said to have impliedly ratified it.
E)So long as,after reaching the age of majority,Rose did not state orally or in writing that she intended to be bound by the contract,then she did not commit an express ratification.

Question 58

A statement releasing one of the parties to an agreement from all liability,regardless of who is at fault or what the injury suffered is,would be referred to as a[n] ________ agreement.

A)Substantive
B)Adhesion
C)Exculpatory
D)In pari delicto
E)Res Ipsa

Question 59

_______ refers to when both parties are equally responsible for an illegal agreement.

A)In pari delicto
B)A res ipsa contract
C)An adhesion contract
D)Procedurally unconscionable
E)A stare decisis contract

Question 60

What is the term for giving a loan at an interest rate that exceeds the legal maximum?

A)Interest prohibition
B)No enforceable legal violation
C)Usury
D)Plenary
E)Principle reduction

Question 61

Trina lists her convertible for sale on Facebook for $12,000,the fair market value.Dion e-mails Trina and offers to buy the car for the price Trina listed.Trina is not aware that Dion had been drinking for the past few hours.Is the contract to buy Trina's car likely to be valid?

A)Yes,because the level of intoxication is the primary factor in determining whether the contract is likely to be valid.
B)Yes,because Trina did not know Dion was intoxicated and the agreement is fair.
C)Yes,but the only relevant question is whether Trina knew Dion was intoxicated;the price is not relevant.
D)No,because it is irrelevant that Trina did not know of Dion's intoxication.
E)No,because intoxicated persons lack capacity to determine fair market value.

Question 62

[Beauty Shop Woes] When Giuseppe hired Ines to work in his beauty shop as a hair stylist,she entered into an agreement with Giuseppe whereby if she left his employment she would not work for another beauty shop within 50 miles for 2 years.Giuseppe trained Ines in a number of new techniques.After nine months,Ines was offered a great job down the street at a new beauty shop.She quit Giuseppe's shop and a number of customers followed her down the street to her new job.Giuseppe claimed that she had signed a contract and had no right to go to work at the new shop.Ines disagreed and told Giuseppe that no judge in the country would enforce such an agreement.Ines then told Giuseppe that she was more worried about a customer who was threatening to sue her because her hair turned green after Ines worked on it.Ines said that she knew that the customer's hair was damaged;but that she told the customer that odd results could result from a dye attempt,and had the customer sign a contract that she released Ines from all liability and would not sue.The customer,however,sued anyway.
Which is the correct term for the agreement Giuseppe and Ines entered?

A)A covenant not to compete
B)A covenant not to misappropriate
C)A competition agreement
D)A prohibited competition agreement
E)A policy agreement

Question 63

Which of the following statements is true about the legality of contracts?

A)To be enforceable,contracts must have legal subject matter,they must be able to be performed legally,or they cannot violate either state or federal law.
B)To be enforceable,contracts must have legal subject matter or they must be able to be performed legally.
C)Agreements against generally accepted public policy are usually illegal,but are enforceable as long as they do not violate either a state or federal statute.
D)To be illegal,a contract must violate either a state or federal statute.
E)To be enforceable,contracts must have legal subject matter,they must be able to be performed legally,and they cannot violate either state or federal law.

Question 64

[Zaltar Zeb] Zeb suffers from delusions that he is from the planet Zaltar.Zeb's contract with DigiTV,his digital television service provider,has expired.After comparing his past payments to the potential savings from satellite television provider SatTV,Zeb decides to sign a two-year contract with SatTV.After six months with SatTV,Zeb realizes he paid less with DigiTV and he now wants to be released from his contract with SatTV.
Is the SatTV contract legally binding on Zeb?

A)Yes,although Zeb may suffer from mental problems,Zeb appears to still understand the nature of the contract and the obligations it imposes.
B)No,because he did not ratify the contract.
C)Yes,because,even though Zeb understands the nature of the contract and the obligations it imposes,Zeb did not disaffirm the contract within a reasonable period of time.
D)No,because contracts with mentally incapacitated persons are void.
E)No,because contracts with mentally incapacitated persons are void,unless expressly ratified.

Question 65

What was the ruling in Adrian Lopez v.Kmart Corporation,the case in the text regarding whether a minor could disaffirm an arbitration clause in an employment contract?

A)Plaintiff entered into a valid arbitration agreement with his employer,but the employer properly exercised its right to void the contract.
B)Plaintiff entered into a valid arbitration agreement with his employer,but properly exercised his statutory right of disaffirmance,thereby rescinding the arbitration contract and rending it a nullity.
C)Plaintiff did not enter into a valid arbitration agreement with his employer because he was a minor,and therefore the agreement was a nullity.
D)Plaintiff entered into a valid arbitration agreement with his employer,but did not properly exercise his statutory right of disaffirmance,thereby he was required to arbitrate.
E)Plaintiff entered into a valid arbitration agreement with his employer,but the employer failed to exercise its right to void the contract.

Question 66

If,after her eighteenth birthday,Cassandra had paid the monthly payment on the financing agreement,would she still have the right to disaffirm the contract?

A)No,because her actions do not constitute a valid ratification.
B)Yes,as long as the disaffirmance is within a reasonable time after she reached the age of majority.
C)Yes,although making the payment constitutes an implied ratification of the contract,she may still void the contract as long as the disaffirmance is within a reasonable time after she reached the age of majority.
D)Yes,because courts recognize a public policy to protect minors who are naïve against others who may take advantage of them.
E)No,because making the payment constitutes an implied ratification of the contract,and once a contract is ratified,it is no longer voidable.

Question 67

If a court has declared Zeb insane and his sister is appointed guardian,which of the following statements would be true?

A)Zeb's sister has the sole legal capacity to enter contracts on Zeb's behalf and any contract Zeb enters is void.
B)Zeb may enter contracts,but they are voidable by his sister.
C)Zeb's sister may enter contracts on Zeb's behalf,but only with Zeb's affirmance.
D)Zeb may enter contracts,but they may be disaffirmed by his sister.
E)Both Zeb and his sister have capacity to enter contracts,however,any contract Zeb enters may be disaffirmed by Zeb.

Question 68

Which of the following is least likely to be considered a "necessary"?

A)Monthly credit card bills for a local book store.
B)Rent
C)Raincoat.
D)Monthly credit card bills for a grocery store.
E)X-ray technician's fee.

Question 69

The harsh and lopsided terms of Antoine's contract could be claimed as which of the following?

A)Unclear drafting
B)Procedural unconscionability
C)Adhesion conscionability
D)Outrageous wording
E)Substantive unconscionability

Question 70

Under which of the following scenarios might Zeb's contract with SatTV be voidable?

A)If Zeb's delusions persuaded him to sign the contract with SatTV so he could contact the planet Zaltar and return home.
B)If Zeb shows that he no longer believes he is from the planet Zaltar.
C)Zeb's contract with SatTV is voidable because it is a contract with mentally incapacitated persons.
D)If Zeb shows that he miscalculated his savings with SatTV.
E)If Zeb provides a spreadsheet of his payments with DigiTV.

Question 71

Depending on the size of the print on the back of the contract,which of the following could Tevis possibly use as a defense?

A)Unclear drafting
B)Outrageous wording
C)Procedural unconscionability
D)Substantive unconscionability
E)Adhesion conscionability

Question 72

According to Exhibit 16-4 regarding contracts that violate state or federal statutes,which of the following types of contracts would violate a statute in all states?

A)An agreement to publish a defamatory article about one's boss.
B)An agreement for an unlicensed attorney to perform legal work.
C)An agreement regarding gambling.
D)An agreement regarding a usurious loan.
E)An employment contract that requires employees to work on the Sabbath.

Question 73

The type of agreement Ines asked the customer with green hair to sign is called ________.

A)malfeasance
B)procedural
C)substantive
D)adhesion
E)exculpatory

Question 74

According to the majority rule,would Cassandra have the right to disaffirm the financing agreement?

A)No,under the majority rule,if a minor misrepresents his or her age,the right to disaffirm a contract transfers to the other party.
B)Yes,but only because Hal did not notice the name on the ID was not Cassandra's name.
C)Yes,under the majority rule,her misrepresentation of age does not affect her right to disaffirm the contract.
D)No,because under the majority rule,a minor's misrepresentation of age voids the minor's right to disaffirm the contract.
E)No,under the majority rule,a minor's misrepresentation of age is a misdemeanor.

Question 75

In Lopez v.Kmart Corporation,the case in the text regarding disaffirmance,did the court find the minor plaintiff's disaffirmance of an employment contract to be reasonable?

A)Yes,because the disaffirmance occurred within six months of reaching the age of majority.
B)Yes,because the type of contract at issues was an arbitration agreement.
C)No,because the plaintiff could have disaffirmed the contract when he was under the age of majority but chose not to do so.
D)Yes,because the disaffirmance occurred within one month of reaching the age of majority.
E)The court did not find the disaffirmance to be reasonable.

Question 76

Roland wants to avoid paying for the training program and claims the contract is indivisible and thus unenforceable.Is he correct?

A)Yes,if Roland could show that the main purpose of the contract was for Parna to work as a poker dealer,then declaring parts of the contract as void would substantially alter the contract.
B)No,because courts are likely to enforce a contract regardless of whether severing the contract would substantially alter it.
C)No,because almost every contract is divisible.
D)No,because even if the legal parts were separated from the contract,the main purpose of the contract employing Parna as a poker dealer)can be met after she turns 21.
E)Yes,because Parna would be unjustifiably enriched if Roland paid for the program.

Question 77

[Motorcycle crash] Cassandra,who would be turning 18 in two weeks,wanted to purchase a motorcycle at Hal's Cycles.Hal explained she could pay monthly installments through a financing agreement,and that he needed an ID to verify she was at least 18 years old.Cassandra,who strongly resembled her older sister Alana,handed Alana's drivers' license to Hal,but Hal did not notice the license had the wrong name.The next day,when cruising in her new motorcycle,Cassandra crashed into Jonah,who was injured in the collision.The next month,Cassandra received a bill for the first installment of the motorcycle.Her parents also received a notice that they were being sued by Jonah because of Cassandra's collision.Realizing her parents would be upset that she purchased a motorcycle,Cassandra went to Hal to return the broken motorcycle and tell him she was a minor and she's not responsible for any payments under the financing agreement.
Are Cassandra's parents liable for Jonah's injuries from the motorcycle crash?

A)Yes,because all states recognize parental liability,regardless of proper supervision.
B)Yes,because parents are usually liable for a minor's personal torts.
C)No,but only because they were not aware of any misappropriation.
D)No,even if there is evidence that her parents failed to properly supervise Cassandra,parents cannot be held liable for a minor's personal torts.
E)No,because in most states,minors,not their parents,are liable for a minor's personal torts.

Question 78

Is Ines correct in claiming that no judge in the country would enforce such an agreement?

A)She is incorrect because all courts approve such agreements so long as it can be shown the employee gained a benefit other than pay from the employment.
B)She is incorrect because while no court would approve a geographical restriction,some courts recognize time restrictions as being valid.
C)She is incorrect because such agreements are criminally illegal in every state.
D)She is correct because such agreements are considered in restraint of trade in every state.
E)She is incorrect because courts across the country vary in regards to the enforceability of such agreements.

Question 79

Is Roland required to pay for the training program?

A)No,although the training program was legal,the contract contains an illegal subject and is void.
B)Although the contract was legal when formed,its subject later became illegal under a new statute,thus both parties are discharged from their obligations under the contract.
C)Although the contract was legal when formed,its subject later became illegal under a new statute,thus it is voidable by either party.
D)Yes,the training program was legal and the legal part of the contract can be severed from the illegal part.
E)Yes,only Parna has the right to void the contract.

Question 80

[Poker dealer] Roland and Parna sign a contract for Parna to work as a poker dealer for a minimum of one year in Roland's casino.The contract includes a requirement for Roland to pay for a training program for Parna for the software system used throughout the casino.Parna completes the program and obtains a certificate.The week before Parna begins work at Roland's casino,their state passes a law that all poker dealers must be 21 years old.Parna,however,is only nineteen.
Is Roland required to employ Parna?

A)Yes,because the contract was ratified when Parna completed the training program.
B)Although the contract was legal when formed,its subject later became illegal under a new statute,thus it is voidable by either party.
C)Although the contract was legal when formed,its subject later became illegal under a new statute,thus both parties are discharged from their obligations under the contract.
D)Yes,because the contract was legal when formed.
E)No,because the subject matter of the contract is illegal,thus it is void.