Question 1

Odina signs a covenant not to compete with her employer, Penultimate Sales Corporation. A court decides that the covenant is overly restrictive. The court will likely

Accepted Answer

If a court determines that a covenant not to compete is overly restrictive, it may choose to reform its terms to prevent any undue burden. This allows the employer to still have some degree of protection while also balancing the employee's right to work in their chosen profession. Additionally, courts will typically only refuse to enforce a covenant not to compete if it is found to be unreasonable or if it was not supported by adequate consideration at the time of signing.

Question 2

Jolie signs a contract with Keaton, an unlicensed physician, to perform a medical procedure. This contract is enforceable by

Accepted Answer

Keaton is an unlicensed physician and therefore unable to legally perform a medical procedure. Therefore, this contract is not enforceable by anyone as it is illegal and void.

Question 3

Gaye, a minor, signs a contract to buy a motorcycle from Hi-Valu Cycles by mis?representing her age as twenty-one. Gaye fails to make the pay?ments. Hi-Valu sues. Ordinarily, Gaye can

Accepted Answer

The answer of Gaye, a minor, signs a contract to...

Question 4

Betty is selling her used clothing shop on Main Street. In the sale agreement, there is a covenant not to compete that prohibits Betty from opening another used clothing shop within 300 miles of the shop she is selling. A court will most likely conclude that this restriction on competition is

Accepted Answer

While courts generally disfavor covenants not to compete, they will uphold them if they are reasonable in scope and duration. In this case, the 300-mile restriction may be seen as overly broad and prohibitive of Betty's ability to engage in a similar business. However, the court may opt to reform the covenant to make it more reasonable (e.g. reducing the distance restriction). It is unlikely that the court will prohibit both parties from opening used clothing shops unless there is some other legal basis for doing so.

Question 5

Lucy, a minor, disaffirms a contract for necessaries without returning the goods. To Manny's Food Mart, the seller, Lucy is required to pay

Accepted Answer

A minor can disaffirm a contract for necessaries without returning the goods, but they are still required to pay the reasonable value of the goods to the seller. Option A is incorrect as the minor cannot avoid payment entirely. Option C is incorrect as the sales price may not reflect the actual value of the goods. Option D is incorrect as the ultimate worth of the goods may not reflect their value at the time of purchase.

Question 6

Brasilia, a real estate broker licensed only in Connecticut, con?cludes a land sale in Delaware. She can

Accepted Answer

Brasilia is only licensed in Connecticut and therefore cannot legally conduct real estate transactions in Delaware. As a result, she cannot collect a commission or foreclose on the property. If she has already received a commission payment, she should return it to avoid any legal implications.

Question 7

Fletcher signs a contract to buy a new electric guitar and amplifier just before reaching the age of major?ity. After reaching the age of majority, Fletcher does not take possession or make payments. With respect to the contract, most courts would hold that this is

Accepted Answer

Fletcher's failure to take possession or make payments after reaching the age of majority is an indication of disaffirmance, which is the act of a minor to cancel a contract upon reaching legal age. Therefore, most courts would hold that Fletcher has disaffirmed the contract.

Question 8

Colleen is intoxicated, but still mentally capable of understanding the consequences of her actions when she signs a contract to sell the rights to her latest phone app design to Addie. The contract is

Accepted Answer

If Colleen is still mentally capable of understanding the consequences of her actions when signing the contract, then the contract is enforceable even if she later attempts to disaffirm it due to her intoxication. This is because the contract was entered into while she was capable of understanding it. However, if Addie were to attempt to disaffirm the contract, it would be unenforceable as she cannot claim intoxication as a defense.

Question 9

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

Accepted Answer

A mentally incompetent person lacks the capacity to enter into a contract. Therefore, any contract signed by Jimi would be void, even if he may have comprehended the consequences or knew the market value of the cabin. Additionally, the fact that Krispin was appointed as Jimi's guardian means that any contracts signed by Jimi without Krispin's knowledge are also void. The contract cannot be enforceable even if Lazar has been recorded as the owner of the cabin.

Question 10

Gabriella and Esteban are emancipated minors who, after their emancipation, marry each other. Later, they enter into a contract to buy a condominium. In this sequence of events, most likely, their minority status

Accepted Answer

Emancipation terminates minority status.

Question 11

On Mitchell's eighteenth birthday, he decides that he no longer wants to keep a fishing boat he bought from Water Craft, Inc., when he was seventeen. His right to disaffirm the deal will depend on

Accepted Answer

Mitchell's right to disaffirm the deal will depend on whether he acts within a reasonable period of time. Under the law, minors can disaffirm contracts they entered into while still minors, but they must do so promptly after reaching the age of majority. The reason for wanting to disaffirm the contract, why it was entered into, and whether Water Craft has the right to disaffirm are not relevant factors in determining Mitchell's right to disaffirm the contract.

Question 12

Chet, a minor, signs a contract with Porsha, an adult. The contract is

Accepted Answer

A contract between a minor and an adult is considered voidable at the option of the minor. This means that the minor has the right to either affirm or disaffirm the contract upon reaching the age of majority. Therefore, the contract is not void but can be voided by the minor.

Question 13

A court has not previously judged Ace to be mentally incompetent. Any contract Ace enters into is

Accepted Answer

A contract is voidable if one party lacks the capacity to comprehend the consequences of the agreement, even if they have not been previously judged mentally incompetent.

Question 14

Eli, a minor, buys an automobile insurance policy from Faithful Insurance Company and pays a $1,000 pre?mi?um. If Eli can disaffirm the contract, he can most likely recover

Accepted Answer

If Eli disaffirms the contract, he can recover the full premium amount he paid.

Question 15

John obtains a loan from Liberty Credit Bank at an interest rate that exceeds the state's maximum. Liberty has

Accepted Answer

Usury is the practice of lending money at an excessively high interest rate, often in violation of laws that set a cap on interest rates. In this case, Liberty Credit Bank has exceeded the state's maximum interest rate, which constitutes usury.

Question 16

Ruthie, a minor, charges the cost of an expensive leather jacket at a Girl's Trend store. Two nights later, Ruthie loses the jacket at Minors Only Club. She disaf?firms the jacket's purchase. Ruthie owes Girl's Trend the reasonable value of the jacket

Accepted Answer

The answer of Ruthie, a minor, charges the cost of...

Question 17

The state of Illinois enacts a usury statute. The purpose is to

Accepted Answer

A usury statute is enacted to establish a maximum rate of interest that may be charged for loans. It is meant to protect borrowers from excessive and exploitative interest rates on loans.

Question 18

Beth is a minor. She buys a set of sessions with a personal trainer, and a water bottle and some weights from a fitness store. Later, Beth decides that she does not want the water bottle or weights. In most states, Beth

Accepted Answer

The answer of Beth is a minor. She buys a...

Question 19

Vijay enters into a contract to sell his laptop to Winnie. Winnie takes possession of the laptop as a minor and continues to use it well after reaching the age of majority. Winnie has

Accepted Answer

Winnie has impliedly ratified the contract by continuing to use the laptop well after reaching the age of majority. Ratification occurs when a person, upon reaching the age of majority, explicitly or implicitly accepts and approves a contract made while they were still a minor. By using the laptop without objection, Winnie has impliedly accepted the contract and ratified it.

Question 20

Carly is a minor. Without her parents' knowledge, she signs a contract to buy an airplane ticket to Hawaii for spring break. Carly's parents are

Accepted Answer

As a minor, Carly does not have the legal capacity to enter into a binding contract, and the contract she signed is voidable at her option. Her parents are not liable for the contract simply because they did not give their consent or participate in the transaction. It is important to note, however, that if Carly were to receive the benefit of the airplane ticket and then disaffirm the contract, she would be required to return the value of the benefit to the airline.

Quiz 11: Capacity and Legality