Question 1

If a 16-year-old buys a car,uses it for six months,then decides to disaffirm the contract to buy the car on a three-year payment plan,the contract is voidable.

Accepted Answer

According to the law, minors (those under 18 years of age) have the right to disaffirm contracts they enter into, which makes the contract voidable. In this case, the 16-year-old can disaffirm the contract to buy the car within a reasonable amount of time after reaching 18 years of age. Therefore, the statement is true.

Question 2

Contracts that unreasonably restrict competition are unenforceable.

Accepted Answer

This is a general principle of competition law and antitrust law in many jurisdictions around the world. Contracts that impose unreasonable restrictions on competition may violate public policy and be considered void or unenforceable.

Question 3

Contracts in many low income countries are more difficult and costly to enforce than they are in more developed countries.

Accepted Answer

This is because low income countries often have weaker legal systems, corrupt officials or limited access to courts, which can make it harder for parties to seek redressal and enforce contracts. This can lead to higher risk and uncertainty for businesses and investors operating in these countries.

Question 4

In DCS Sanitation Management v.Castillo,where employees signed an agreement not to work for a competitor within 100 miles,the appeals court held that all non-competition agreements could not be enforced.

Accepted Answer

The appeals court held that the specific non-competition agreement in question, which barred employees from working for a competitor within 100 miles, was overly broad and therefore unenforceable. The court did not make a blanket statement that all non-competition agreements are unenforceable.

Question 5

If the subject matter of a contract is unlawful,such as a deal to sell heroin,then there is no contract.

Accepted Answer

A contract must have a lawful subject matter in order to be enforceable. If the subject matter of a contract is illegal or against public policy, the contract is considered void and unenforceable.

Question 6

Unconscionable contracts are upheld by the courts unless force was used to obtain them.

Accepted Answer

Unconscionable contracts are considered unfair and oppressive to one party, and therefore, are generally not enforced by the courts. However, if one party was forced or coerced into signing the contract, it would be considered invalid.

Question 7

If a minor contracts for student loans for college,the contract is not voidable.

Accepted Answer

Generally, student loan contracts are not voidable even if the borrower is a minor. However, in some cases, a court may consider the loan unconscionable and may provide relief to the borrower.

Question 8

If state law limits the interest rate that may be charged on a loan,then a loan charging a higher interest rate may be an illegal,unenforceable agreement.

Accepted Answer

This is because the law sets a maximum limit on the interest rate that can be charged on a loan. Charging a higher interest rate would be a violation of the law, and the agreement may be considered illegal and unenforceable.

Question 9

If you win a lot of money at a poker game,and the other players refuse to pay you,in many states you could not sue to collect your winnings.

Accepted Answer

In many states, gambling winnings are not legally enforceable debts, so a person cannot sue to collect their winnings. It is important to know the laws in your state regarding gambling and the collection of debts.

Question 10

If a minor agrees to join the Army,the minor's agreement to join is voidable.

Accepted Answer

The answer of If a minor agrees to join the...

Question 11

If a party accidentally puts in a contract that a house is to sell for $20,000,when it should have said $200,000,the contract is enforceable if both parties signed it.

Accepted Answer

This is a case of mutual mistake, where both parties were mistaken about the terms of the contract. In such cases, the contract is not enforceable, and the mistake can be corrected by the court or through negotiation between the parties.

Question 12

A valid contract can become unenforceable because of a statute passed after the contract was formed.

Accepted Answer

If a new statute is passed after a contract has been formed, the contract can become unenforceable if it violates the new statute. For example, if the contract involves the sale of a product that was legal at the time of the contract but becomes illegal under a new law, the contract may be unenforceable.

Question 13

If parties enter into a contract by mistake,the contract may be disaffirmed.

Accepted Answer

If parties enter into a contract by mistake, they may be able to disaffirm or rescind the contract. This could happen if there was a mistake in the terms of the agreement or if one of the parties was mistaken about a material fact at the time the contract was formed. However, this is not always possible and will depend on the specific circumstances of the case.

Question 14

Joe contracts with Phil to set fire to Joe's warehouse so he can collect the insurance money,but then Joe refuses to pay Phil for his work.This contract is unenforceable.

Accepted Answer

The contract between Joe and Phil is for an illegal act, making it void and unenforceable under the law.

Question 15

In DCS Sanitation Management v.Castillo,where employees signed an agreement not to work for a competitor within 100 miles,the appeals court held that the contract between the parties,that restrained trade,was too broad and could not be enforced.

Accepted Answer

The statement accurately reflects the holding of the appeals court in DCS Sanitation Management v. Castillo.

Question 16

An employer can avoid liability for on-the-job injuries so long as fully informed workers sign exculpatory agreements.

Accepted Answer

Employers cannot completely avoid liability for on-the-job injuries through exculpatory agreements. Such agreements may be challenged in court and may not be legally enforceable. Employers still have a legal obligation to provide a safe working environment and can be held liable for injuries resulting from their negligence or failure to meet safety standards.

Question 17

If a contract is made under duress or undue influence,it may be disaffirmed because there was no real consent.

Accepted Answer

This statement is true. Duress and undue influence are circumstances in which one party is forced or coerced into entering a contract without giving their true and voluntary consent, which can lead to the contract being disaffirmed.

Question 18

When the U.S.government announced that no Americans could do business with Iraq,all existing contracts became unenforceable.

Accepted Answer

When the U.S. government announced that no Americans could do business with Iraq, it means that all existing contracts with Iraq became unenforceable.

Question 19

If an agreement is held by the courts to be illegal or in violation of public policy,it will allow the parties to recover their costs.

Accepted Answer

If an agreement is held by the courts to be illegal or in violation of public policy, the parties will not be allowed to recover their costs. In fact, they may even be subject to penalties or fines.

Question 20

In DCS Sanitation Management v.Castillo,where employees signed an agreement not to work for a competitor within 100 miles,the appeals court held that the contract was reasonable because the workers had knowledge of many trade secrets.

Accepted Answer

The enforceability of non-compete agreements depends on various factors, including reasonableness in scope and necessity to protect legitimate business interests. The mere possession of trade secrets by employees does not automatically make a non-compete agreement reasonable or enforceable.

Quiz 10: Contracts