BUSAD 120 - Business Law » Summer 2022 » Chapter 14 Study Guide Quiz

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Question #1
A court adjudicates Jimi mentally incompetent and appoints Krispin to be his guard¬ian. Later, without Krispin’s knowledge, Jimi signs a contract to sell his lake cabin to Lazar for its real market value. The contract is
A.   void.
B.   enforceable if Jimi knew the market value of the farm.
C.   enforceable if Lazar has been recorded to be the owner of the cabin.
D.   enforceable if Jimi comprehended the consequences.
Question #2
At age seventeen, Daryl enters into a contract to buy a dozen movies from eHD Stream, Inc., an online video service. Soon after reaching the age of majority, Daryl attempts to disaffirm the contract. eHD files a suit against him. The court will most likely consider the contract ratified if it is
A.   express or implied.
B.   exculpatory.
C.   executed.
D.   emancipated.
Question #3
Brasilia, a real estate broker licensed only in Connecticut, concludes a land sale in Delaware. She can
A.   foreclose on the property to obtain any unpaid amount.
B.   collect the commission if it has not been paid.
C.   not collect the commission, keep it, or foreclose on the property.
D.   keep the commission if it has already been paid.
Question #4
Fact Pattern 14-B1 Bay City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault. Coco’s Chocolate Creations signs a lease with Bay City that contains the clause. Refer to Fact pattern 14-B1. This clause is
A.   an adhesion contract.
B.     
C.   an illusory promise.
D.   a covenant not to compete.
E.   an exculpatory clause.
Question #5
Geri is a minor. Without her parents’ knowledge, she signs a contract to buy an airline ticket to Hawaii for spring break. Geri’s parents are liable for
A.   the entire price of the ticket.
B.   up to half of the price of the ticket.
C.   up to two-thirds of the price of the ticket.
D.   no part of the price of the ticket.
Question #6
Intoxicated but still capable of comprehending the consequences of her actions, Cricket signs a contract to sell her phone app design to Downloads, Inc. This contract is
A.   enforceable.
B.   unenforceable because Cricket was intoxicated.
C.   unenforceable if Cricket disaffirms it.
D.   unenforceable if Downloads disaffirms it.
Question #7
Jolie signs a contract with Keaton, an unlicensed physician, to perform a medical procedure. This contract is enforceable by
A.   Keaton.
B.   Jolie.
C.   Jolie’s medical insurance company.
D.   no one.
Question #8
Lucy, a minor, disaffirms a contract for necessaries without returning the goods. To Manny’s Food Mart, the seller, Lucy is required to pay
A.   nothing.
B.   the ultimate worth of the goods.
C.   the sales price of the goods.
D.   the reasonable value of the goods.
Question #9
Lydia, a minor, charges the cost of a smartphone at a Mobile Devices & Minutes store. Two nights later, Lydia loses the phone at Natural Foods restaurant. She disaffirms the phone’s purchase. Lydia owes Mobile Devices the reasonable value of the phone
A.   if it is deemed a luxury.
B.   under no circumstances.
C.   if it is deemed a necessary.
D.   if it is deemed unique.
Question #10
Odina signs a covenant not to compete with her employer, Penultimate Sales Corporation. A court decides that the covenant is overly restrictive. Depending on the jurisdiction, the court will likely
A.   reform its terms to prevent any undue burden.
B.   enforce it but evaluate its effects over time.
C.   enforce it as written so as not to undercut the freedom of contract.
D.   refuse to enforce it unless Penultimate pays a fine to the court.
Question #11
While a minor, Uri misrepresents his age as twenty-one to purchase a motorbike from Van’s Dirt Bikes & Scramblers. Ordinarily, Uri can
A.   disaffirm the contract but must return the motorbike.
B.   ratify the contract, keep the motorbike, and recover any payments that he made to Van’s.
C.   reject the contract, keep the motorbike, and recover any payments that he made to Van’s.
D.   none of the choices.
Question #12
A contract entered into by a minor is voidable at the option of either of the contracting parties.
A.   False
B.   True
Question #13
A contract entered into by an intoxicated person is never valid.
A.   True
B.   False
Question #14
A minor who enters into a contract for necessaries may disaffirm the contract but remains liable for the reasonable value of the goods.
A.   False
B.   True
Question #15
A person who has been determined by a court to be mentally competent cannot form a legally binding contract with another party.
A.   False
B.   True
Question #16
All adhesion contracts are unconscionable.
A.   True
B.   False
Question #17
An intoxicated person, after becoming sober, may ratify a contract expressly or impliedly.
A.   False
B.   True
Question #18
Contracts in restraint of trade usually positively affect the public policy that favors competition in the economy.
A.   False
B.   True
Question #19
If the illegal part of a bargain has not yet been performed, the party rendering performance must fulfill the contract before seeking damages.
A.   False
B.   True
Question #20
In acontract, an exculpatory clause releases a party from liability in the event of monetary or physical injury no matter who is at fault.
A.   False
B.   True
Question #21
In certain circumstances, bargains are so oppressive that the courts relieve innocent parties of part or all of their duties.
A.   True
B.   False
Question #22
In general, an illegal contract is void.
A.   False
B.   True
Question #23
In most illegal contracts, both parties are considered to be equally at fault, and neither party can enforce it or recover damages under it.
A.   True
B.   False
Question #24
In some states, misrepresentation of age is enough to prevent disaffirmance.
A.   True
B.   False
Question #25
When one party uses fraud to induce another party to enter into an illegal bargain, the second party will be allowed to recover for the performance or its value.
A.   False
B.   True

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