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Exam 13: Capacity and Legality

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Question 31

True/False

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To disaffirm a contract is to deny its existence.

A) True
B) False

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Question 32

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Darien, a minor, wants to disaffirm a contract that he entered into with Echo, a cell service company. The law in Darien's state, as in all states, permits minors to disaffirm

A) fully executed contracts only.
B) executory contracts only.
C) executory and fully executed contracts.
D) none of the choices.

E) C) and D)
F) None of the above

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Question 33

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A court usually will enforce a covenant not to compete provided its restrictions are reasonable.

Games Corporation hires Haley, a minor, to create new customized game software for certain clients. Haley signs a contract that requires her to work for Games for eighteen months. Before beginning work, however, Haley tells Games that she will not create new software for Games and that she is going to work for Imagine Inc., a Games competitor. Is Games' contract with Haley enforceable? Why or why not?

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 contract entered into by an intoxicated person can be voidable.

A minor can disaffirm a contract at any time but remains legally obligated to perform it.

Utilities include whatever is reasonably needed to maintain a minor's standard of living, such as food, clothing, shelter, and medical services.

The state of New York enacts a usury statute. With respect to different types of transactions, including ordinary loans, the purpose of the statute is to

If intoxication is purely voluntary, the intoxicated person's contracts are not voidable.

Van, 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, Van most likely

Ben, a minor, signs a contract to buy a Call-U phone from Dallas, an adult sales representative. Dallas

Best Products, Inc., hires Cole to develop and implement an e-commerce strategy for marketing Best's products. Cole signs a contract that includes a clause prohibiting him from competing with Best during and after the employment. Before the strategy is implemented, Cole resigns from Best's employ and opens a business to compete with Best. In Best's suit against Cole, to determine whether Cole may compete with Best, what is the most important factor the court should consider?

A contract to do something that is prohibited by statutory law is void from the outset.

A contract that calls for an action contrary to public policy is illegal but not unenforceable.

A lease between Mia and Niles for residential property contains an exculpatory clause. This clause is most likely

Fagin and Gretel agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gretel can

Among the requirements for a valid contract, courts generally presume the existence of

A contract provision that deprives one party of the benefits of the agreement may seem unfair but a court is not likely to consider it unconscionable.

Contracts entered into by mentally incompetent persons may be disaffirmed.