Question 1

Games Galore 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 Galore for eighteen months. Before beginning work,however,Haley tells Games Galore that she will not create new software for Games Galore and that she is going to work for Ideal Worldcraft,Inc.,a Games Galore competitor. Is Games Galore's contract with Haley en-forceable? Why or why not?

Accepted Answer

The answer of Games Galore Corporation hires Haley,a minor,to create...

Question 2

Cross-Country Trucking Company contracts with Baldwin to transport crated goods to a certain destination for $5,000. Cross-Country delivers the crates,but Baldwin does not pay. Cross-Country learns that the crates contained stolen goods. Cross-Country can
A)do nothing with respect to the contract.
B)recover $5,000 from Baldwin.
C)recover the goods but not the $5,000 from Baldwin.
D)recover the goods and the $5,000 from Baldwin.

Accepted Answer

Even though the goods were stolen, Cross-Country fulfilled their part of the contract by delivering the crates to the designated destination. Therefore, they are entitled to the agreed-upon payment of $5,000 from Baldwin. However, Cross-Country cannot keep the stolen goods and must turn them over to the proper authorities.

Question 3

Through fraudulent means,Finlay induces Ethel to sign a contract to in-vest with him the profits from her business. When Ethel learns the truth,she may
A)only enforce the contract.
B)only recover what she invested with Finlay.
C)enforce the contract or recover what she invested with Finlay.
D)do nothing.

Accepted Answer

Ethel can choose to enforce the contract or recover what she invested with Finlay because the contract was entered into through fraudulent means, which makes it voidable at her option. Thus, she has the choice of either enforcing the contract, which allows her to invest with Finlay, or recovering what she invested with Finlay.

Question 4

Gloria,the owner of a manufacturing company with declining sales,pays Sandra $10,000 in exchange for her written agreement to murder the president of a competi-tive company with increasing sales. Sandra keeps the money without doing anything more. Gloria will be able to recover the $10,000
A)under no circumstances.
B)if Sandra never in-tended to carry out the crime.
C)if Gloria fully complied with the terms of the agreement.
D)if Gloria's sales continue to decline.

Accepted Answer

The agreement to commit murder is illegal and unenforceable. Therefore, Gloria cannot recover the $10,000 paid to Sandra regardless of whether Sandra intended to carry out the crime or if Gloria fully complied with the terms of the agreement.

Question 5

With the intent to avoid liability for negligence,Mall Mart Discount Stores can normally obtain a court order to enforce
A)a covenant not to compete.
B)an adhesion contract.
C)an exculpatory clause.
D)none of the choices.

Accepted Answer

The answer of With the intent to avoid liability for...

Question 6

Best Products,Inc.,hires Cole to develop and implement an e-commerce strategy for marketing Best's products. Cole signs a contract that in-cludes a clause prohibiting him from competing with Best during and af-ter 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,what is the most important factor the court should consider in determining whether Cole should be allowed to compete with Best?

Accepted Answer

The answer of Best Products,Inc.,hires Cole to develop and implement...

Question 7

Jimenez is an emergency medical technician. Medical personnel such as Jimenez are pro-hibited by state statute from working more than a certain num-ber of consecutive hours. One month,Jimenez works more than the legal limit. Jimenez can recover for
A)the hours up to the statutory maximum but not more.
B)the hours up to the statutory maximum and the extra hours.
C)the hours up to the statutory maximum or the extra hours.
D)nothing.

Accepted Answer

The answer of Jimenez is an emergency medical technician. Medical...

Question 8

Omni Insurance Company violates a state licensing statute when selling an insurance policy to Petra,in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute,Petra can
A)do nothing with respect to the policy.
B)enforce the policy or recover the amount of the premiums paid.
C)only enforce the policy.
D)only recover the amount of the premiums paid.

Accepted Answer

As a member of the class of persons protected by the licensing statute, Petra has the right to enforce the policy or recover the amount of premiums paid, even though Omni violated the statute by selling the policy without a license in Petra's state.

Question 9

Boz runs an illegal gambling business and pays Colin,a police officer,not to interfere. The payments are discovered. Boz and Colin are sent to prison. With respect to the amount of the payments,Boz can recover
A)all of it.
B)none of it.
C)only as much as Colin has not spent.
D)only as much as Colin has spent.

Accepted Answer

Boz was engaging in illegal activity and Colin was accepting bribes, which is a criminal offense. As a result, Boz cannot recover any of the payments made to Colin as it is against public policy and the law to benefit from illegal activity.

Question 10

Oscar owns Payroll Company,a bookkeeping service losing market share to Quik Bookwork,Inc. Oscar pays Remy $5,000 to steal a list of Quik's clients,to whom Oscar will aggressively market Payroll's services. This deal is
A)enforceable.
B)void.
C)voidable at the option of either party.
D)voidable at the option of the party having less bargaining power.

Accepted Answer

This deal is void because it involves illegal action (stealing) and is against the law. Any contract that involves or promotes illegal or unethical behavior is considered void and unenforceable in a court of law.

Question 11

A contract between Kim and Larry to lease residential property contains an exculpatory clause. This clause is
A)nforceable as a matter of public policy.
B)enforceable if either party is in a business important to the pub-lic.
C)enforceable if an event occurs to which the clause applies.
D)generally unenforceable.

Accepted Answer

Exculpatory clauses, which attempt to relieve a party from liability for its own negligence, are generally disfavored and unenforceable. They are viewed as contrary to public policy because they encourage negligent conduct and deprive individuals of their legal rights.

Question 12

Jack and Jill bet illegally on the outcome of a sporting event. Before the event is held,Jack changes his mind about the wager. Jack can
A)not withdraw from the deal without Jill's consent.
B)not withdraw from the deal under any circumstances.
C)withdraw from the deal by giving notice.
D)not withdraw from the deal without paying Jill's expenses.

Accepted Answer

Jack can withdraw from the bet by giving notice. Even though the bet is illegal, it is still considered a contract, and one party can generally withdraw before the event occurs as long as they give notice to the other party. Option A is incorrect because Jill's consent is not required for Jack to withdraw. Option B is incorrect because there are circumstances under which Jack can withdraw. Option D is incorrect because there is no requirement for Jack to pay Jill's expenses if he withdraws.

Quiz 13: Capacity and Legality

Cross-Country Trucking Company contracts with Baldwin to transport crated goods to a certain destination for $5,000. Cross-Country delivers the crates,but Baldwin does not pay. Cross-Country learns that the crates contained stolen goods. Cross-Country can

Through fraudulent means,Finlay induces Ethel to sign a contract to in-vest with him the profits from her business. When Ethel learns the truth,she may

Gloria,the owner of a manufacturing company with declining sales,pays Sandra $10,000 in exchange for her written agreement to murder the president of a competi-tive company with increasing sales. Sandra keeps the money without doing anything more. Gloria will be able to recover the $10,000

With the intent to avoid liability for negligence,Mall Mart Discount Stores can normally obtain a court order to enforce

Jimenez is an emergency medical technician. Medical personnel such as Jimenez are pro-hibited by state statute from working more than a certain num-ber of consecutive hours. One month,Jimenez works more than the legal limit. Jimenez can recover for

Omni Insurance Company violates a state licensing statute when selling an insurance policy to Petra,in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute,Petra can

Boz runs an illegal gambling business and pays Colin,a police officer,not to interfere. The payments are discovered. Boz and Colin are sent to prison. With respect to the amount of the payments,Boz can recover

Oscar owns Payroll Company,a bookkeeping service losing market share to Quik Bookwork,Inc. Oscar pays Remy $5,000 to steal a list of Quik's clients,to whom Oscar will aggressively market Payroll's services. This deal is

A contract between Kim and Larry to lease residential property contains an exculpatory clause. This clause is

Jack and Jill bet illegally on the outcome of a sporting event. Before the event is held,Jack changes his mind about the wager. Jack can