Q&A Hero

Q: Which of the following statements is true regarding noncompetition clauses in the employment contracts? A. These clauses are illegal. B. Employments contracts with these clauses are voidable. C. These clauses put postemployment restrictions on the employees. D. These clause need to be ratified by the employer.

Q: Roger and Erick make a bet concerning whether a certain rich citizen will die within the next year. Neither party has any economic interest in this person's fate, except for that created by the bet. This agreement is: A. unenforceable if the statutes prohibit wagering agreements. B. unenforceable because it tends toward the commission of a crime. C. unconscionable because it contemplates the destruction of life. D. a valid and enforceable risk-allocation agreement.

Q: Mr. Green enters into a contract with Ms. White to purchase legal ingredients used to perfect an illegal marijuana manufacturing operation. Ms. White refuses to pay the amount owed to Mr. Green and he sues in court. What is the court likely to do? A. Recognize the contract but only allow 50% economic recovery for Mr. Green since his products were used to produce illegal items. B. The court will likely not enforce Mr. Green's contract since it was part of an illegal action. C. The court will likely enforce the agreement if Mr. Green registered the contract with the Secretary of State's office. D. The court will enforce the agreement if Mr. Green has lived in the forum state longer than Ms. White.

Q: Which of the following is most true regarding noncompetition clauses in contracts? A. Such clauses are not used during employment contracts. B. If they have a legitimate business purpose, such clauses will be enforced. C. Such clauses are enforced only for protecting the environment and conserving resources. D. Such clauses help in promoting free trade.

Q: In an employment contract, the noncompetition clause might be the only part of the contract: A. that the parties put in writing. B. that would be valid. C. that would be unenforceable. D. that would be illegal.

Q: If a statute is considered to be _____, the purpose of the legislation is to protect the public against dishonest or incompetent practitioners. A. regulatory B. enforceable C. adhesive D. ancillary

Q: Todd is a licensed real estate broker in Ohio. One of Todd's largest clients, Sun Corp., contracted in writing with Todd to find a purchaser for its plant in New York and agreed to pay him a 6% commission if he was successful. Todd located a buyer who purchased the plant. Unknown to Todd, New York has a real estate broker's licensing statute which is regulatory in nature, intended to protect the public against unqualified persons. Todd violated the licensing statute by failing to obtain a New York license. If Sun refuses to pay Todd any commission and Todd brings an action against Sun, he will be entitled to recover: A. nothing. B. a fee based on the actual hours spent. C. the commission agreed upon. D. out of pocket expenses only.

Q: Sam, a plumber, entered into a contract for $75,000 with Orr, Inc., to perform certain plumbing services in a building owned by Orr. After Sam had satisfactorily performed the work, Orr discovered that Sam had violated the state licensing statute by failing to obtain a plumbing license. As a result, Orr denied paying any money to Sam. The licensing statute was enacted merely to raise revenue for the state. An independent appraisal of Sam's work indicated that the building's fair market value increased by $70,000 as a result of Sam's work. The cost of the materials which Sam supplied was $35,000. If Sam sues Orr, Sam will be entitled to recover: A. nothing. B. $35,000. C. $70,000. D. $75,000.

Q: Normally, an illegal contract is: A. a quasi-contract. B. implied-in-fact. C. unenforceable. D. voidable.

Q: A court has held that a certain contract violates public policy. This contract will be treated the same as a(n): A. illegal contract. B. contract between a minor and an adult. C. private contract. D. adhesive contract.

Q: Which of the following is not a category of illegal agreements? A. Agreements that violate statues B. Agreements that violate public policy developed by the courts C. Unconscionable agreements and contracts of adhesion D. Agreements to bring more profit to one party than the other

Q: Which of the following terms refers to a widely shared view about what ideas, interests, institutions, or freedoms promote welfare of people? A. Void contract B. Public policy C. Implied-in-fact policy D. Express contract

Q: A contract of adhesion is one that the courts will always enforce because of the strong public policy underlying such contract.

Q: The Uniform Commercial Code (UCC) allows the court to modify or limit the enforcement of a provision in a contract that is found to be unconscionable.

Q: Courts provide remedy for the breach of illegal agreements.

Q: To encourage people to cancel illegal contracts, courts will allow a person who rescinds such a contract before any illegal act has been performed to recover any consideration that he has given.

Q: In order to have any chance of being enforced, an illegal agreement must be indivisible.

Q: When a court says that an agreement is illegal, it most likely means that the agreement: A. has not mentioned a time period for which the agreement is valid. B. does not identify the parties involved in the agreement. C. is related to buying and selling of trade secrets. D. violates public policy.

Q: Courts will always enforce an exculpatory clause from a properly executed contract.

Q: Under the doctrine of unconscionability, the courts would refuse to grant the equitable remedy of specific performance for breach of contract if the contract is oppressively unfair.

Q: One example of procedural unconscionability is the use of "fine print" in stating a contractual provision.

Q: An agreement to divorce one's spouse is considered to be illegal.

Q: A court will enforce a noncompetition clause even if its restraints are unduly burdensome either on the public or on the party whose ability to compete would be restrained.

Q: The origin of the policy against restrictions on competition in the market comes from common law.

Q: A noncompetition clause is also known as a "liability waiver."

Q: An exculpatory clause is a provision in a contract that purports to relieve one of the parties from tort liability.

Q: An agreement can be illegal even if no statute specifically states that such an agreement is illegal.

Q: Public policy never changes and is constant for judges to rule on.

Q: For a noncompetition clause to be enforceable, the clause must serve a legitimate business purpose.

Q: Any contract that is deemed illegal is also a criminal violation.

Q: Even if both parties consent to an agreement, if a court finds the agreement illegal then it will not enforce it.

Q: A contract to commit a serious crime is a legal contract.

Q: Statutes that require proof of character and skill and impose penalties for violation are considered to be revenue-raising in nature.

Q: Janet, age 15, has to make it on her own. To protect herself from the winter winds, Janet buys a coat on credit for $200 from the Lifestyle Clothing Store. The coat's reasonable value is $80. Before making any payments on the coat, Janet tells the store that she wants to disaffirm, i.e., she wants her money back in exchange for the coat. Can Janet disaffirm? If not, what must she pay?

Q: Courts may sometimes be sympathetic to an adult who has suffered losses due to a minor who misrepresented his age. How so?

Q: After consuming a mind-altering drug, Hal buys some real estate from Edith for $100,000. Hal was completely wrecked when he made the deal, and could not understand what he was doing. Due to the after effects of the drug, Hal goes into a coma that lasts for one year. As soon as he awakes from the coma, Hal tries to disaffirm his contract with Edith. Edith maintains that Hal cannot disaffirm because he has ratified the contract. What should Hal argue in return?

Q: An agreement that violates legislative and court-made rules and creates threat to public policy shall be denied enforcement on the ground of illegality.

Q: What is the justification for the rule that, generally speaking, a minor can disaffirm contracts for necessaries, if a parent or guardian supplies the minor with such necessaries?

Q: Which of the following is true of contracts involving intoxicated parties? A. The rules are similar to the ones for people with a mental incapacity. B. Courts are generally sympathetic to people involved in such contracts. C. A person incapacitated by intoxication can disaffirm at any period of time. D. In most such cases, people have escaped their contractual obligations.

Q: Contracts made by severely intoxicated people: A. are void rather than voidable. B. can be disaffirmed anytime after he/she has regained his/her mental faculties. C. cannot be ratified until the person has regained his mental faculties. D. are always binding, because the law does not want to reward drug or alcohol abuse.

Q: Payne entered into a written agreement to sell a parcel of land to Stevens. At the time the agreement was executed, Payne had consumed alcoholic beverages. Payne's ability to understand the nature and terms of the contract was not impaired. Stevens did not believe that Payne was intoxicated. The contract is: A. void as a matter of law. B. legally binding on both parties. C. voidable at Payne's option. D. voidable at Stevens' option.

Q: Kenny, aged 17 years, 11 months, buys a used car on credit. The contract also includes a service agreement obligating the seller to perform certain maintenance on the car for one year. Kenny makes five monthly payments in the five months after he turns 18. In addition, he has the seller service the car on four separate occasions. After making the fifth payment, Kenny announces that he wants to disaffirm, i.e., return the car and get back the full price. Can Kenny disaffirm?

Q: Which of the following characterizes the effect of incapacity caused by mental impairment? A. A person formerly incapacitated by mental impairment cannot ratify a contract if he/she regains his capacity. B. If a contract is found to be voidable on the ground of mental impairment, the person who lacked capacity at the time the contract was made has the right to disaffirm the contract. C. If a court has found a person mentally incompetent after holding a hearing on his mental capacity and has appointed a guardian for him, the contract is considered voidable. D. The contracts of people who are suffering from a mental defect at the time of contracting are usually considered to be void.

Q: In general, contracts made by insane (mentally impaired) persons: A. can sometimes be ratified. B. are unconditionally void. C. are unconditionally voidable. D. are voidable only if they involve necessaries.

Q: Which of the following is true of contracts involving people suffering from mental illnesses? A. Contracts of people suffering from a mental defect at the time of contracting are usually considered to be enforceable. B. A person disaffirming on the ground of mental impairment need not return any consideration given by the other party. C. A person disaffirming on the ground of mental impairment is liable for the reasonable value of necessaries. D. A person incapacitated by mental impairments cannot ratify a contract if he/she regains his capacity.

Q: _____ is a ground for lack of capacity only when it is so extreme that the person is unable to understand the nature of the business at hand. A. Infancy B. Intoxication C. Misrepresentation D. Duress

Q: What remedy is provided by the states that allow disaffirmance to adults who suffer losses due to a minor's misrepresentation of age? A. There is no remedy B. Tort of necessaries C. Tort of deceit D. Emancipation

Q: Three days before she was judicially declared mentally incompetent and institutionalized, Irma bought a $50,000 automobile by cash and took delivery of it. Which of the following is true about this contract? A. It is voidable at the discretion of the seller. B. The contract is voidable due to Irma's institutionalization. C. The contract cannot be disaffirmed because it is fully executed. D. Irma ratified the contract by paying the price of the car.

Q: Russell, 45, has been suffering from mental impairment for a long time. He signs a contract to sell his villa for $1 million to Andre. When Russell's wife Katie, who is also his appointed (by the court) guardian, gets to know of the deal, she wants to ends the contract. Which of the following statements is true? A. Andre cannot claim the villa until he has paid for it. B. Russell has the right to enter into such a contract. C. Katie need not worry because the contract is void. D. The court will give primary preference to Russell's opinion.

Q: Rebecca, a minor, rented an apartment from Jones for a period of one year when she had no place to stay. She disaffirmed the contract after four months, though she paid rent only for the first two months. Which of the following is true of the case? A. Jones can recover the unpaid rent for two months. B. Jones can recover rent for the whole year because he has suffered a loss. C. Rebecca need not pay any rent because she has disaffirmed the contract. D. Rebecca is not liable to pay any rent if she can prove that she is a minor.

Q: Which of the following characterizes the traditional rule regarding a minor who misrepresents his/her age? A. He/she can be prosecuted for such an offense. B. An adult can file a tort of deceit against such a minor. C. An adult can seek compensation for any losses caused by such a minor. D. A minor's right to disaffirm is valid in such a case.

Q: In January 2002, a court with the necessary subject-matter jurisdiction holds Marvin mentally incompetent and appoints a guardian for him. In November 2002, Marvin escapes his guardian's care and takes off on his own. While eating lunch with Clara, who knows about Marvin's condition, Marvin signs an agreement to sell a valuable property he owns. When he signs the contract, Marvin believes that he is the President of the United States signing an important treaty. The agreement between Marvin and Clara is best described as: A. void. B. voidable. C. unenforceable. D. perfectly valid, if the price Clara pays for the property is fair.

Q: The law makes individuals suffering from mental illness lack capacity to enter into contracts because: A. The mental ill tend not to vote in large numbers B. Those with mental illness would be at a disadvantage in their ability to protect their own interest in bargaining C. An individual cannot be on public assistance and be legally competent to enter into a contract D. There is fear that those with mental illness would manipulate and harm those that they would enter into contracts with

Q: Marlene, a self-employed 16-year-old whose parents are dead, buys a dress on credit for $50. After receiving the dress and discovering that its reasonable value is only $25, Marlene tries to disaffirm the deal before paying the $50. In this case: A. Marlene can disaffirm, and she is bound to pay the full $50. B. Marlene can disaffirm, but she is only bound to pay $25. C. Marlene can disaffirm, and she can return the dress without paying for it. D. Marlene can disaffirm, and she can keep the dress without paying for it.

Q: Cathy Young, age 16, buys a 1973 Chevy Camaro from Mark Watson, age 23, for $400. Cathy's indulgent parents, who give her everything she wants, loaned her the money for the car. The reason for Cathy's purchase is that all her friends have cars and she feels left out without one. One week after buying the car, however, Cathy changes her mind and tells Mark that she wants to disaffirm the contract. When Mark comes to pick up the car and give Cathy her money, though, Cathy changes her mind again, telling Mark, "I'll stick by the deal." However, when Cathy's parents gave her a new car for her 17th birthday, she finally decides to disaffirm once again. Which of the following is correct? A. Cathy cannot disaffirm because the car is a necessary. B. Cathy cannot disaffirm because she ratified the contract by saying "I'll stick by the deal." C. Cathy cannot disaffirm because we have a sale of goods and Article 2 of the UCC says that 16 is the age of contractual capacity. D. Cathy can still disaffirm.

Q: Pat is a rich boy whose parents supply him with every conceivable necessity of life. While still a minor, Pat buys a coat on credit from a men's store for $5,000. After wearing the coat for a while, Pat decides that it bores him and that he would like to disaffirm. Which of the following is most likely to be true? Assume that Pat is still a minor. A. Pat can disaffirm the contract, and he must return the coat. B. Pat cannot disaffirm the contract, but he is liable only for the reasonable value of the coat. C. Pat cannot disaffirm the contract, and he is liable for the full price of the coat ($5,000). D. Pat can disaffirm the contract, but the store will sue him for deceit.

Q: Which of the following is true of necessaries? A. The liability for necessaries is quasi-contractual. B. A minor is liable for the necessaries that he/she did not receive. C. In case of a disaffirmance, the minor need not pay for any necessary. D. An item is considered a necessary even if the minor already possesses it.

Q: Sarah is 16 years old. She left home at age 15; her parents no longer support her. Sarah entered into a contract with Best Groceries for the purchase of $100 of groceries on credit. The groceries consisted of basic, necessary items. However, their reasonable value is only $80. If Sarah discovers that she has been overcharged and refuses to pay, Best is entitled to collect: A. nothing. B. $80. C. $100. D. $90.

Q: A(n) _____ is something that is essential for the minor's continued existence and general welfare that has not been provided by the minor's parents or guardian. A. disaffirmance B. necessary C. estoppel D. capacity

Q: Beth has just turned 17 years of age. She entered into a contract with ABC Corp. for the purchase of a used car, with full payment due in 30 days. The purchase price was $5,000. This car is necessary for Beth to use as transportation to her job, which she needs in order to pay tuition at the university where she is a freshman. Beth's parents have refused to help her pay for college. Three days later Beth changes her mind; she now wants to return the car because she has learned that it is worth only $4,000. $4,000 is in fact the reasonable value of this car. If Beth does not pay, and the seller sues, the outcome of this lawsuit will be that: A. Beth must pay $5,000. B. Beth must pay $4,000. C. Beth does not have to pay for the car; she is entitled to the remedy of rescission because she is a minor. D. Beth does not have to pay for the car; she is entitled to the remedy of punitive damages because ABC overcharged her.

Q: Bill is 17 years old. His parents no longer support him. He purchases bread and eggs from a grocer on credit, and then does not pay. Does the grocer have a right to payment from Bill for these items? A. No, because Bill is a minor. B. No, because these items are "necessaries." C. Yes, because these items are "necessaries." D. Yes, because Bill is emancipated.

Q: Betty, age 16, buys a car and wrecks it one week later. She takes it back to the seller and demands all her money back. According to the traditional rule, is she entitled to get all her money back? A. Yes, regardless of the condition of the car, because this was a void contract. B. Yes, regardless of the condition of the car, because this was a voidable contract. C. No, she is entitled to no remedy in this situation. D. No, she is entitled to get some money back but less the value of the damage to the car.

Q: Which of the following is a criticism of the traditional rule of restitution in the case of minors? A. It allows adults to ratify a contract with a minor. B. It allows a minor to be exploited in a contract. C. It does not allow a minor to disaffirm a bargain. D. It is harsh on innocent adults dealing with minors.

Q: Which of the following is most likely to constitute ratification of a contract made by a minor? A. Not performing one's duties under the contract after reaching the age of majority. B. Nonperformance of the other party to the contract after the age of majority. C. Failing to disaffirm a completely executory contract within one month after the age of majority. D. Making an oral statement that "I will ratify the contract."

Q: Shelly, aged 15, sells a car to Fiona, aged 25. Fiona in turn sells the car to Raphael. Under section 2-403 of the Uniform Commercial Code, if Shelly chooses to disaffirm the contract with Fiona: A. Shelly can get the car back from Raphael. B. Raphael will have to sell it back to Shelly. C. Shelly can do so, since she is a minor. D. Shelly needs to file a breach of contract against both Fiona and Raphael.

Q: On May 1, 1985, Mint, a 16-year-old, purchased a sailboat from Sly Boats. Mint used the boat for six months, at which time he advertised it for sale. Which of the following statements is correct? A. The sale of the boat to Mint was void, thereby requiring Mint to return the boat and Sly to return the money received. B. Sly Boats has the power to recover the boat from Mint because he has advertised it for sale. C. Mint's use of the boat for six months after the sale on May 1 constituted a ratification of that contract. D. Mint may disaffirm the May 1 contract at any time prior to reaching majority.

Q: _____ makes any contract valid from its inception and can be done effectively only after a minor reaches majority. A. Disaffirmance B. Emancipation C. Ratification D. Consideration

Q: Ted failed to disaffirm a contract during his minority. The contract was automatically: A. ratified. B. rescinded. C. set aside. D. made voidable at the option of the minor.

Q: At 17, Otto signed a contract to purchase a new Hummer by advancing a payment of $50,000. However, when Otto turned 20, he wished to disaffirm this contract. Does the law permit this? A. Yes, because he was a minor when he signed the contract. B. Yes, because he is not yet 21 years of age. C. No, because a car is a "necessary." D. No, because Otto implied his ratification.

Q: Mike, a minor, buys some real estate as investment. The contract obligates Mike to make monthly installment payments for 10 years. Mike reaches the age of majority one month after making the contract. After this, Mike makes 25 monthly payments under the contract, but then decides that he wants to rescind the deal. Which of the following is most true? A. Mike can disaffirm. B. Mike cannot disaffirm because contracts for the sale of land can only be disaffirmed before the age of majority. C. Mike cannot disaffirm because contracts for the sale of land must be disaffirmed within one year of the age of majority. D. Mike cannot disaffirm because he has already ratified the contract.

Q: The general rule is that, contracts entered into during minority can be disaffirmed as soon as they are formed. Which of the following is an EXCEPTION to the rule? A. Contracts affecting investment. B. Contracts affecting the title to real estate. C. Contracts affecting necessary supplies to be provided to the minor. D. Contracts affecting his/her employment as a child actor.

Q: Which of the following CANNOT be disaffirmed until after the age of majority? A. A contract that affects title to real estate. B. A contract for a necessary. C. A contract that is fully executed. D. A contract for the sale of goods.

Q: The right of minors to avoid a contract as a means of protecting themselves against their own improvidence and against overreaching adults is called: A. emancipation. B. ratification. C. adjudication. D. disaffirmance.

Q: What is emancipation? A. Termination of a case of fraud and misrepresentation. B. Termination of a bargain that is considered void. C. Termination of parental rights to control a child. D. Termination of necessaries in a quasi-contractual case.

Q: Which of the following characterizes emancipation? A. It allows parents to receive services from the child. B. It occurs only through parents' consent. C. Most states grant an emancipated minor the capacity to contract. D. There are no formal requirements for it.

Q: Tracy, aged 12, is named the sole inheritor of her family mansion which is valued to be worth millions. She has disaffirmed the agreement on the advice of her uncle and guardian Pete. This automatically transfers the title to the latter. Which of the following statements is true of the case? A. Tracy cannot disaffirm until she has reached majority. B. Tracy's decision will be allowed by the family courts. C. Pete has every right to Tracy's property and can take legal possession of it. D. Tracy's decision is valid as long as it is in writing.

Q: Which of the following contracts is void? A. A contract made by an unemancipated minor. B. A contract made by a person who has been adjudicated insane and institutionalized. C. A contract made by a person under the influence of mind-altering drugs. D. A contract made by a minor who receives no support from a parent or guardian.

Q: What is the term for affirming a contract and surrendering the right to avoid a contract made while being a minor? A. Ratification B. Emancipation C. Impairment D. Duress

Q: A minor entered into a contract with GAM & Co. On attaining majority, he wishes to enforce the contract. The adult party must: A. perform the contract. B. rescind the contract. C. abandon the contract. D. ratify the contract.

Q: A bargain is considered to be void if a court has _____ a person to be mentally incompetent at the time the bargain was formed. A. ratified B. adjudicated C. disaffirmed D. emancipated