BUSAD 120 - Business Law » Fall 2021 » Chapter 14 Quiz

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Question #1
Les, a minor, enters into a contract to buy a dirt bike from Motocross LLC. Les can ordinarily disaffirm the contract
A.   all of the choices.
B.   for a reasonable time after coming of age.
C.   in a timely manner.
D.   at any time during minority.
Question #2
The contracts entered into by a minor are voidable at the option of that minor.
A.   TRUE
B.   FALSE
Question #3
If a person was sufficiently intoxicated to lack mental capacity, his or her contracts are void.
A.   FALSE
B.   TRUE
Question #4
Dari, a minor, wants to disaffirm a contract that she entered into with Echo, a cell service company. The law in Dari’s state, as in all states, permits minors to disaffirm
A.   executory contracts only.
B.   executory and fully executed contracts.
C.   none of the choices.
D.   fully executed contracts only.
Question #5
A court usually will enforce a covenant not to compete provided its restrictions are reasonable.
A.   FALSE
B.   TRUE
Question #6
A minor can enter into any contract an adult can, without exception.
A.   TRUE
B.   FALSE
Question #7
Von, a minor, wants to return a set of skis that he bought from Winter Sports. He used—and wrecked—the skis. In a state in which a duty of restitution is imposed, Von most likely
A.   must return the skis and pay for the damage.
B.   cannot return the skis unless they can be fully restored.
C.   is not required to return the skis due to his or her minority.
D.   can return the skis “as is” and avoid further liability.
Question #8
Foy, a minor, misrepresents his age when entering into a contract to buy a car from Gas Hogs Inc. Foy takes possession of the car, but makes no payments on the contract and tries to disaffirm it. Most likely, Gas Hogs can recover
A.   nothing.
B.   the balance due on the contract.
C.   the car, but not any of the balance due on the contract.
D.   an amount equal to the wholesale value of the car.
Question #9
A party to a contract who has no reason to know that the contract is illegal can often obtain restitution on a partially executed contract.
A.   FALSE
B.   TRUE
Question #10
A party may have the capacity to enter into a valid contract and the right to avoid liability under it.
A.   TRUE
B.   FALSE
Question #11
A promise to refrain from competing in business with another is considered to be unconscionable.
A.   TRUE
B.   FALSE
Question #12
Among the requirements for a valid contract, courts generally presume the existence of
A.   mental incompetence.
B.   contractual capacity.
C.   minority.
D.   none of the choices.
Question #13
Generally neither party to an illegal contract can sue for breach.
A.   TRUE
B.   FALSE
Question #14
Reed agrees to sell his Sports Equipment store to Taylor. As part of the sale, Reed promises not to open a similar, competing store anywhere. This promise is most likely
A.   valid because it is part of a sale of an ongoing business.
B.   invalid because it is part of a sale of an ongoing business.
C.   invalid because of the unreasonable terms of area and time.
D.   valid if both parties are justifiably ignorant of the facts.
Question #15
If intoxication is purely voluntary, the intoxicated person’s contracts are not voidable.
A.   TRUE
B.   FALSE
Question #16
The lack of a license in certain occupations bars the enforcement of work-related contracts.
A.   FALSE
B.   TRUE
Question #17
Seth is mentally incompetent but has not been adjudged by a court to be incompetent. Seth enters into a contract with Toby for the cleaning and maintenance of Seth’s warehouse. Most likely, the contract is
A.   enforceable if the warehouse needs cleaning and maintenance.
B.   void.
C.   voidable if Seth did not comprehend the consequences.
D.   enforceable if Toby did not know that Seth was mentally incompetent.
Question #18
Twig is fifteen. In most states, for contractual purposes, Twig would be considered a minor until she is
A.   sixteen.
B.   eighteen.
C.   twenty-one.
D.   seventeen.
Question #19
Bern, a minor, signs a contract to buy a Caterwauler jet boat from Dahl, an adult. Dahl
A.   can avoid as much of the contract as Bern elects to avoid.
B.   must obtain Bern’s consent to avoid the contract.
C.   cannot avoid the contract.
D.   can avoid the contract without Bern’s consent.
Question #20
A contract entered into by an intoxicated person can be voidable.
A.   TRUE
B.   FALSE
Question #21
Evelyn is a minor. As a minor, she
A.   all of the choices.
B.   is not usually legally bound by a contract.
C.   has the right to avoid liability under a valid contract.
D.   has the capacity to enter into a valid contract.
Question #22
A minor can ratify a contract and thus make it enforceable.
A.   FALSE
B.   TRUE
Question #23
Accepting and giving legal force to an obligation that previously was not enforceable is
A.   illegal.
B.   ratification.
C.   emancipation.
D.   disaffirmance.
Question #24
A minor can disaffirm a contract at any time but remains legally obligated to perform it.
A.   TRUE
B.   FALSE
Question #25
An unconscionable contract is one in which the terms of the agreement are oppressive, unscrupulous, or grossly unfair.
A.   FALSE
B.   TRUE

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