Question 1

A minor can expressly disaffirm a contract orally,in writing,or through his or her conduct.

Accepted Answer

A) True 
 B)False

Question 2

To protect minors,the law recognizes the ________ doctrine,which gives minors the right to ________ most contracts they have entered into with adults.

Accepted Answer

A)   child protection; disaffirm
B)   child protection; renunciation
C)   infancy; disaffirm
D)   infancy; renunction
E)   infancy; void

Question 3

Under the infancy doctrine,a contract involving a minor and an adult can be avoided by either party.

Accepted Answer

A) True 
 B)False

Question 4

The infancy doctrine is based on public policy considerations.

Accepted Answer

A) True 
 B)False

Question 5

Intoxication always makes a contract either void or voidable,depending on the level of intoxication.

Accepted Answer

A) True 
 B)False

Question 6

Under the laws of most states today,when a minor enters into a contract with an adult,what effect is there on the situation if the minor has falsely misrepresented that the minor is an adult?

Accepted Answer

A)   The minor loses all right to disaffirm the contract.
B)   The minor's right to disaffirm will end immediately upon the minor reaching the age of majority.
C)   The minor will be obligated to pay the fair market value for items purchased.
D)   The minor must place the adult in status quo.
E)   The minor owes nothing and is not required to return the goods because a minor is not held responsible for misrepresentations.

Question 7

The seller's recovery for providing a minor the necessaries of life is based on the legal doctrine of contract.

Accepted Answer

A) True 
 B)False

Question 8

A seller's recovery for providing a minor with the necessaries of life is based on the ________ doctrine of ________.

Accepted Answer

A)   legal; contract
B)   equitable; quasi-contract
C)   legal; quasi-contract
D)   equitable; contract
E)   legal; quantum meruit

Question 9

A shop owner who pays $5,000 "protection money" to a mobster so that his store will not be burned down by the mobster can recover the $5,000.

Accepted Answer

A) True 
 B)False

Question 10

What is the consequence of purchasing insurance in a situation where one does not have an insurable interest?

Accepted Answer

A)   This will be considered a violation of state blue laws, making the contract unenforceable.
B)   Due to the freedom to contract, the contract will be enforceable in the absence of fraud or other wrongdoing.
C)   The insurance contract will be considered an illegal gambling contract.
D)   The policy holder will have a reasonable period of time to obtain an insurable interest.
E)   There is no consequence, and the policy will be enforced.

Question 11

Emancipation occurs when a minor involuntarily leaves home and lives apart from his or her parents.

Accepted Answer

A) True 
 B)False

Question 12

If a person is insane but not adjudged insane,any contract entered into by such person is void.

Accepted Answer

A) True 
 B)False

Question 13

Common law defines minors as ________.

Accepted Answer

A)   males and females under the age of 18
B)   females under the age of 18 and males under the age of 21
C)   males under the age of 18 and females under the age of 21
D)   males and females under the age of 21
E)   males and females under the age of 25.

Question 14

A minor's duty of restoration upon disaffirmance of a contract is generally a lesser duty than restitution.

Accepted Answer

A) True 
 B)False

Question 15

A(n) ________ clause is a contractual provision that relieves one or both parties to a contract from tort liability.

Accepted Answer

A)   culpability
B)   inculpatory
C)   exculpatory
D)   divestiture
E)   exclusionary

Question 16

Licensing statutes enacted to raise money for the government are called extractive statutes.

Accepted Answer

A) True 
 B)False

Question 17

State usury laws set a lower limit on the annual interest rate that can be charged on certain types of loans.

Accepted Answer

A) True 
 B)False

Question 18

In order to be enforceable,a covenant not to compete must be reasonable in each of the following aspects except:

Accepted Answer

A)   the length of time the restriction is in effect.
B)   the scope of the restriction.
C)   the amount paid to the one who gives up the right to compete.
D)   the geographic area of the restriction.
E)   Covenants not to compete are generally unenforceable, since they are prima facie unreasonable.

Question 19

Which of the following is not true?

Accepted Answer

A)   A minor can still disaffirm a contract for a reasonable time after reaching majority.
B)   In most states a minor who misrepresents his or her age has no duty to place the competent party in status quo if the minor disaffirms the contract.
C)   A minor must pay the agreed price on a contract for necessaries.
D)   What constitutes a necessary varies over time and can differ from state to state.
E)   A minor does not have to wait until reaching majority to disaffirm a contract.

Question 20

For purposes of determining the enforceability of contracts,licensing statutes can be divided into what two general categories?

Accepted Answer

A)   professional and non-professional
B)   actual and quasi
C)   permanent and temporary
D)   revenue-raising and regulatory
E)   mandatory and optional

Exam 11: Capacity and Legality

The infancy doctrine is based on public policy considerations.

Correct AnswerverifiedShow Answer

If a person is insane but not adjudged insane,any contract entered into by such person is void.

Correct AnswerverifiedShow Answer

Which of the following is not true?

Correct AnswerverifiedShow Answer

Intoxication always makes a contract either void or voidable,depending on the level of intoxication.

Correct AnswerverifiedShow Answer

The seller's recovery for providing a minor the necessaries of life is based on the legal doctrine of contract.

Correct AnswerverifiedShow Answer

State usury laws set a lower limit on the annual interest rate that can be charged on certain types of loans.

Correct AnswerverifiedShow Answer

Under the laws of most states today,when a minor enters into a contract with an adult,what effect is there on the situation if the minor has falsely misrepresented that the minor is an adult?

Correct AnswerverifiedShow Answer

A seller's recovery for providing a minor with the necessaries of life is based on the ________ doctrine of ________.

Correct AnswerverifiedShow Answer

A minor can expressly disaffirm a contract orally,in writing,or through his or her conduct.

Correct AnswerverifiedShow Answer

To protect minors,the law recognizes the ________ doctrine,which gives minors the right to ________ most contracts they have entered into with adults.

Correct AnswerverifiedShow Answer

A minor's duty of restoration upon disaffirmance of a contract is generally a lesser duty than restitution.

Correct AnswerverifiedShow Answer

A shop owner who pays $5,000 "protection money" to a mobster so that his store will not be burned down by the mobster can recover the $5,000.

Correct AnswerverifiedShow Answer

For purposes of determining the enforceability of contracts,licensing statutes can be divided into what two general categories?

Correct AnswerverifiedShow Answer

Under the infancy doctrine,a contract involving a minor and an adult can be avoided by either party.

Correct AnswerverifiedShow Answer

A(n) ________ clause is a contractual provision that relieves one or both parties to a contract from tort liability.

Correct AnswerverifiedShow Answer

In order to be enforceable,a covenant not to compete must be reasonable in each of the following aspects except:

Correct AnswerverifiedShow Answer

What is the consequence of purchasing insurance in a situation where one does not have an insurable interest?

Correct AnswerverifiedShow Answer

Licensing statutes enacted to raise money for the government are called extractive statutes.

Correct AnswerverifiedShow Answer

Emancipation occurs when a minor involuntarily leaves home and lives apart from his or her parents.

Correct AnswerverifiedShow Answer

Common law defines minors as ________.

Correct AnswerverifiedShow Answer

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A seller's recovery for providing a minor with the necessaries of life is based on the doctrine of .

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To protect minors,the law recognizes the doctrine,which gives minors the right to most contracts they have entered into with adults.

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