Deck 11: Capacity and Legality

Question 1

The infancy doctrine is based on public policy considerations.

Answer 1

True

Question 2

Common law defines minors as females under the age of 18 and males under the age of 21.

Answer 2

True

Question 3

The most prevalent age of majority is 21 years of age for both males and females.

Answer 3

False

Question 4

No special formalities are required for a minor to disaffirm a contract.

Question 5

Ratification must be expressed by written words.

Question 6

The infancy doctrine protects very young children from contracts entered into on their behalf by their parents.

Question 7

If a minor does not disaffirm a contract either during the period of minority or within a reasonable time after reaching the age of majority,the contract is considered clarified.

Question 8

The infancy doctrine gives minors the right to disaffirm most contracts they have entered into with adults.

Question 9

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

Question 10

To disaffirm a contract,a minor must act before reaching the age of majority.

Question 11

If a minor is extremely mature and of above-average intelligence,her contract will be valid.

Question 12

Under the infancy doctrine,a court will not generally inquire into the particular minor's actual knowledge or sophistication.

Question 13

As a general rule,in order to disaffirm a contract,a minor is obligated only to return the goods or property he or she has received from the adult in the condition it is in at the time of disaffirmance.

Question 14

All contracts entered into by minors are void.

Question 15

Ratification relates back to the inception of the contract.

Question 16

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

Question 17

The minor's duty of restitution is based on the rationale that if a minor had to place the adult in status quo upon disaffirmance of a contract,there would be no incentive for an adult not to deal with a minor.

Question 18

Any age below the statutory age of majority is called the period of plurality.

Question 19

Because adults deal with a minor at their peril,in most states today a minor who has misrepresented her age has the same rights and duties as a minor who did not do so.

Question 20

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

Question 21

The level of intoxication allowing a party to disaffirm a contract is the same as that considered too intoxicated to legally operate a motor vehicle.

Question 22

What constitutes a necessary for a minor will depend on the particular minor's own individual circumstances.

Question 23

To be relieved of his or her duties under a contract,a person must have been legally insane at the time of entering into the contract.

Question 24

Any contract entered into by a person who has been adjudged insane is void.

Question 25

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

Question 26

In order to avoid a contract on the basis of insanity,a party must have been adjudged insane.

Question 27

Insane persons are liable in quasi-contract to pay the reasonable value for the necessaries of life they receive.

Question 28

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

Question 29

A court-appointed guardian is the only person who has the legal authority to enter into contracts on behalf of a person adjudged insane.

Question 30

The seller's recovery for necessaries of life sold to a minor is based on the equitable doctrine of quasi-contract.

Question 31

A party can avoid a contract on the basis of insanity if that party has significantly lower intelligence than the other party.

Question 32

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

Question 33

The law has developed two (2)standards concerning contracts of mentally incompetent persons: 1)legal insanity; and 2)quasi-insanity.

Question 34

Most states use the subjective cognitive comprehension test to determine legal insanity.

Question 35

A person who has dealt with an insane person must place the insane person in status quo if the contract between them is void; however,a person who has dealt with an insane person need not place the insane person in status quo if their contract is voided by the insane person.

Question 36

Parents are liable for their children's contracts for necessaries of life if they have not adequately provided such items.

Question 37

To avoid misunderstanding,a minor's ratification of a contract must be done in writing in order to be effective.

Question 38

Minors are liable for the contract price of any necessaries of life for which they contract.

Question 39

In most states,if a contract is disaffirmed due to intoxication,both parties must be returned to the status quo.

Question 40

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

Question 41

Kevin overhears his roommate Donovan tell someone that he is planning to go ski-diving next weekend.Despite not really knowing Donavan very well,Kevin purchases a $1M life insurance policy on Donovan's life.Donovan's chute fails to open and he meets his demise.Kevin can collect the $1M.

Question 42

At common law,parties to an illegal contract are considered in pari quantum.

Question 43

Courts have held contracts to be contrary to public policy if they have a negative impact on society or interfere with the public's safety and welfare.

Question 44

After becoming sober,an intoxicated person can ratify a contract he or she entered into while intoxicated.

Question 45

When a contract includes an interest rate that exceeds the maximum rate that can be charged,all states will allow interest at the maximum legal rate to be collected.

Question 46

Most states provide civil,but not criminal,penalties for making usurious loans.

Question 47

Because ignorance of the law is not an excuse,a court will never order a remedy in favor of a party who was unaware that a contract was illegal.

Question 48

A person who provides services pursuant to a contract without the appropriate license required by a revenue-raising statute can enforce the contract and recover payment for services rendered.

Question 49

Because what constitutes morality is personal and subjective,immorality is not a basis to find that a contract violates public policy.

Question 50

If the object of a contract becomes illegal after the contract is entered into because the government has enacted a statute that makes it unlawful,the parties must still perform their contractual obligations pursuant to the grandfather clause.

Question 51

In order for a contract to be considered against public policy,it must be in violation of a statute.

Question 52

If a court finds that the subject matter of a contract is not legal,the court will undo the contract and place the parties in the status quo.

Question 53

Many contracts involving gambling are considered to be illegal contracts.

Question 54

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.

Question 55

Most states provide that contracts entered into by certain intoxicated persons are void.

Question 56

Usury law limits vary from state to state.

Question 57

Contracts to commit criminal acts are voidable.

Question 58

All states have usury law prohibiting the charging of illegal interest rates on all loans.

Question 59

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

Question 60

Some states have changed the in pari delicto rule and permit the less-at-fault party to recover restitution of the consideration they paid under an illegal contact from the more-at-fault party.

Question 61

In order to be enforceable,a covenant not to compete must be ancillary to a legitimate employment contract or contract for the sale of a business.

Question 62

Common law defines minors as ________.

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 63

Exculpatory clauses often are found illegal because they violate state statutes.

Question 64

A non-compete agreement will not be found to violate public policy so long as it meets the required tests for reasonableness.

Question 65

If a court finds that a contract clause is unconscionable,it may limit the applicability of the unconscionable clause so as to avoid an unconscionable result.

Question 66

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

Question 67

A person who provides contract services without the appropriate license required by a revenue-raising statute cannot enforce the contract or recover payment for services rendered pursuant to the contract.

Question 68

If a court finds that a contract or contract clause is unconscionable,it may refuse to enforce the entire contract.

Question 69

At common law,contracts in restraint of trade are deemed unlawful.

Question 70

An exculpatory clause is not valid if one,but not the other,party is released from liability for negligence.

Question 71

A person who is aware that a hired contractor is unlicensed but allows the contractor to continue working is in all cases barred under equitable principles from raising a claim regarding the lack of licensure to avoid payment.

Question 72

All states have licensing statutes that require members of certain professions and occupations to be licensed by the state in which they practice.

Question 73

If a court finds that a contract clause is unconscionable,it may refuse to enforce the unconscionable clause but enforce the remainder of the contract.

Question 74

Licensing statutes enacted to protect the public are called in loco parentis statutes.

Question 75

The doctrine of unconscionability is based on public policy.

Question 76

In all states exculpatory contracts are void as to minors.

Question 77

Most adhesion contracts are lawful even though there is a disparity in the power of contracting.

Question 78

Generally,unlicensed persons cannot recover payments for services that a regulatory statute requires a licensed person to provide.

Question 79

Any contract in which the parties possessed severely unequal bargaining power is an unconscionable contract.

Question 80

Automobile sales contracts are usually contracts of adhesion.