Question 1

Fact Pattern 14-B1 (Questions B14-B15 apply)
Bay City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault.Coco's Chocolate Creations signs a lease with Bay City that contains the clause.
-Refer to Fact pattern 14-B1.The clause is most likely
A)enforceable as a matter of public policy.
B)enforceable if either party is considered to be a business for essential services.
C)enforceable if the lease also involves residential property.
D)unenforceable.

Accepted Answer

The clause releasing Metro from liability is likely unenforceable as it goes against public policy to allow a party to be released from liability for their own negligence, regardless of fault.

Question 2

Fact Pattern 14-B1 (Questions B14-B15 apply)
Bay City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault.Coco's Chocolate Creations signs a lease with Bay City that contains the clause.
-Refer to Fact pattern 14-B1.This clause is
A)a covenant not to compete.
B)an adhesion contract.
C)an exculpatory clause.
D)an illusory promise.

Accepted Answer

The clause releasing Metro from liability in the event of monetary or physical injury regardless of fault is an exculpatory clause. An exculpatory clause is a provision in a contract that relieves one party from liability for damages regardless of who is at fault. Such clauses are generally disfavored by the courts and may be unenforceable if found to be unconscionable or against public policy.

Question 3

Intoxicated but still capable of comprehending the consequences of her actions,Cricket signs a contract to sell her phone app design to Downloads,Inc.This contract is
A)unenforceable because Cricket was intoxicated.
B)enforceable.
C)unenforceable if Cricket disaffirms it.
D)unenforceable if Downloads disaffirms it.

Accepted Answer

Cricket was still capable of comprehending the consequences of her actions, therefore she had the capacity to enter into a contract. As long as all other legal requirements are met, the contract should be enforceable.

Question 4

At age seventeen,Daryl enters into a contract to buy a dozen movies from eHD Stream,Inc.,an online video service.Soon after reaching the age of majority,Daryl attempts to disaffirm the contract.eHD files a suit against him.The court will most likely consider the contract ratified if it is
A)executed.
B)exculpatory.
C)express or implied.
D)emancipated.

Accepted Answer

If the contract is executed, meaning Daryl has already received and used the movies, the court may consider the contract ratified because he did not disaffirm it upon reaching the age of majority and accepted the benefits of the contract.

Question 5

A court declares Jimi to be mentally incompetent and appoints Krispin to be his guardian.Later,without Krispin's knowledge,Jimi signs a contract to sell his lake cabin to Lazar for its real market value.The contract is
A)enforceable if Jimi comprehended the consequences.
B)enforceable if Jimi knew the market value of the farm.
C)enforceable if Lazar has been recorded to be the owner of the cabin.
D)void.

Accepted Answer

A court declaration of mental incompetence means that Jimi lacks the capacity to enter into legally binding contracts. Therefore, any contract that Jimi signs without the knowledge or consent of his court-appointed guardian, Krispin, is void. It does not matter if Jimi comprehended the consequences of the contract or knew the market value of the cabin. Additionally, recording the transfer of ownership to Lazar does not make the contract enforceable.

Question 6

Becca is a minor.As a minor,Becca
A)is not usually legally bound by a contract.
B)has the right to avoid liability under a valid contract.
C)has the capacity to enter into a valid contract.
D)all of the choices.

Accepted Answer

Minors typically have the right to disaffirm contracts, meaning they are not usually legally bound by them, and they can avoid liability under a valid contract. However, they do have the capacity to enter into contracts, though these are often voidable at the minor's discretion.

Question 7

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

Petra can enforce the policy or recover the amount of the premiums paid because she is a member of the class of persons protected by the statute. A state licensing statute is designed to protect consumers from unlicensed insurers and to regulate the insurance industry. Therefore, Omni's violation of the statute does not automatically render the policy void, and Petra may still be entitled to benefits under the policy or to a refund of the premiums she paid.

Question 8

Lucy,a minor,disaffirms a contract for necessaries without returning the goods.To Manny's Food Mart,the seller,Lucy is required to pay
A)nothing.
B)the reasonable value of the goods.
C)the sales price of the goods.
D)the ultimate worth of the goods.

Accepted Answer

As Lucy is a minor, she has the right to disaffirm the contract for necessaries. However, she is required to pay the reasonable value of the goods that she has received. The seller, Manny's Food Mart, cannot recover the sales price of the goods as Lucy has disaffirmed the contract. Neither can the seller recover the ultimate worth of the goods as it may not be the same as the reasonable value of the goods. Therefore, option B is the best choice.

Question 9

Jolie signs a contract with Keaton,an unlicensed physician,to perform a medical procedure.This contract is enforceable by
A)Jolie.
B)Jolie's medical insurance company.
C)Keaton.
D)no one.

Accepted Answer

The contract is unenforceable because Keaton is an unlicensed physician. Performing a medical procedure without a license is illegal, and courts will not enforce contracts that involve an illegal act. Therefore, the contract is void, and no one can legally enforce it.

Question 10

Brasilia,a real estate broker licensed only in Connecticut,concludes a land sale in Delaware.She can
A)collect the commission if it has not been paid.
B)keep the commission if it has already been paid.
C)foreclose on the property to obtain any unpaid amount.
D)not collect the commission,keep it,or foreclose on the property.

Accepted Answer

Brasilia cannot collect or keep the commission because she is not licensed in Delaware, where the transaction took place. Real estate brokers must be licensed in the state where the property is located to legally earn a commission.

Question 11

Duffy and Elbert agree to hijack a truck carrying a load of almonds.Duffy later refuses to go through with the crime.Elbert can
A)enforce the agreement.
B)obtain damages from Duffy in the amount of Duffy's probable share of the illegal profits.
C)recover in quasi contract for the loss of his share of the illegal profits.
D)not enforce the agreement or recover damages.

Accepted Answer

The agreement to hijack a truck carrying a load of almonds is illegal and against the law. As such, no legal action can be taken by either party, and Duffy cannot be held liable for damages or losses resulting from the illegal activity. Therefore, Elbert cannot enforce the agreement or recover damages under any legal theory.

Question 12

Rosalind,a seventeen-year-old,signs a contract to sell her car to Street Fleet Used Cars.The next day,Rosalind tells Street Fleet that she's decided not to sell the car.Rosalind is liable to Street Fleet for
A)the cost of a car of comparable value.
B)the value of her performance under the contract.
C)the amount of its profit on the deal.
D)nothing.

Accepted Answer

As a minor, Rosalind has the right to disaffirm the contract, making it voidable at her discretion, and thus she is not liable for any damages.

Question 13

While a minor,Uri misrepresents his age as twenty-one to purchase a motorbike from Van's Dirt Bikes & Scramblers.Ordinarily,Uri can
A)disaffirm the contract but must return the motorbike.
B)none of the choices.
C)ratify the contract,keep the motorbike,and recover any payments that he made to Van's.
D)reject the contract,keep the motorbike,and recover any payments that he made to Van's.

Accepted Answer

Since Uri misrepresented his age and was a minor at the time of the contract, he has the right to disaffirm or void the contract. However, he must return the motorbike to Van's Dirt Bikes & Scramblers because he cannot keep the benefit of the contract without fulfilling his obligations. Therefore, option A is the best choice.

Question 14

Lydia,a minor,charges the cost of a smartphone at a Mobile Devices & Minutes store.Two nights later,Lydia loses the phone at Natural Foods restaurant.She disaffirms the phone's purchase.Lydia owes Mobile Devices the reasonable value of the phone
A)if it is deemed a necessary.
B)if it is deemed a luxury.
C)if it is deemed unique.
D)under no circumstances.

Accepted Answer

Minors are generally not bound by contracts, but they are liable for the reasonable value of necessaries, which are goods or services essential for their well-being.

Question 15

Geri is a minor.Without her parents' knowledge,she signs a contract to buy an airline ticket to Hawaii for spring break.Geri's parents are liable for
A)the entire price of the ticket.
B)no part of the price of the ticket.
C)up to half of the price of the ticket.
D)up to two-thirds of the price of the ticket.

Accepted Answer

Since Geri is a minor and signed the contract without her parents' knowledge, the contract is invalid and unenforceable. Therefore, Geri's parents are not liable for any part of the price of the ticket.

Question 16

Lou and Mike negotiate a deal to transfer stolen body building equipment for counterfeit currency that Mike will attempt to spend at Now! Discount Mart.This contract is
A)enforceable.
B)void.
C)voidable at the option of Lou or Mike.
D)voidable at the option of Now!

Accepted Answer

This contract is void because the subject matter of the contract is illegal. Stolen property and counterfeit currency are both illegal and cannot form the basis of a valid contract. Therefore, the contract is not enforceable.

Question 17

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
A)expressly ratified the contract.
B)impliedly ratified the contract.
C)disaffirmed the contract.
D)none of the choices.

Accepted Answer

Winnie's continued use of the laptop after reaching the age of majority implies her ratification of the contract. This means that she has accepted the terms of the contract and is bound by them.

Question 18

Stella is fifteen.In most states,for contractual purposes,Stella would be considered a minor until she is
A)sixteen.
B)eighteen.
C)seventeen.
D)twenty-one.

Accepted Answer

In most states, the age of majority, or the age at which a person is considered an adult and can enter into contracts, is eighteen. Therefore, Stella would be considered a minor until she turns eighteen.

Question 19

Jimenez is an emergency medical technician.Medical personnel such as Jimenez are prohibited by state statute from working more than a certain number 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 personnel...

Question 20

Odina signs a covenant not to compete with her employer,Penultimate Sales Corporation.A court decides that the covenant is overly restrictive.Depending on the jurisdiction,the court will likely
A)enforce it as written so as not to undercut the freedom of contract.
B)enforce it but evaluate its effects over time.
C)reform its terms to prevent any undue burden.
D)refuse to enforce it unless Penultimate pays a fine to the court.

Accepted Answer

In this case, the court will likely reform the terms of the covenant not to compete to make it less restrictive and prevent any undue burden on the employee's ability to find work. This is a common approach taken in many jurisdictions where courts balance the interests of the employer in protecting their business with the employee's right to earn a living. Enforcing the covenant as written or refusing to enforce it altogether would not be the most reasonable or fair solution. Evaluating the effects over time or imposing a fine on the employer would also not be the most suitable options in this situation.

Quiz 14: Capacity and Legality

Intoxicated but still capable of comprehending the consequences of her actions,Cricket signs a contract to sell her phone app design to Downloads,Inc.This contract is

At age seventeen,Daryl enters into a contract to buy a dozen movies from eHD Stream,Inc.,an online video service.Soon after reaching the age of majority,Daryl attempts to disaffirm the contract.eHD files a suit against him.The court will most likely consider the contract ratified if it is

A court declares Jimi to be mentally incompetent and appoints Krispin to be his guardian.Later,without Krispin's knowledge,Jimi signs a contract to sell his lake cabin to Lazar for its real market value.The contract is

Becca is a minor.As a minor,Becca

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

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

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

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

Duffy and Elbert agree to hijack a truck carrying a load of almonds.Duffy later refuses to go through with the crime.Elbert can

Rosalind,a seventeen-year-old,signs a contract to sell her car to Street Fleet Used Cars.The next day,Rosalind tells Street Fleet that she's decided not to sell the car.Rosalind is liable to Street Fleet for

While a minor,Uri misrepresents his age as twenty-one to purchase a motorbike from Van's Dirt Bikes & Scramblers.Ordinarily,Uri can

Lydia,a minor,charges the cost of a smartphone at a Mobile Devices & Minutes store.Two nights later,Lydia loses the phone at Natural Foods restaurant.She disaffirms the phone's purchase.Lydia owes Mobile Devices the reasonable value of the phone

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

Lou and Mike negotiate a deal to transfer stolen body building equipment for counterfeit currency that Mike will attempt to spend at Now! Discount Mart.This contract is

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

Stella is fifteen.In most states,for contractual purposes,Stella would be considered a minor until she is

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

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