224. A minor is someone who:
a. is under the legal age of majority
b. is over the legal age of majority
c. is old enough to drive
d. is old enough to vote
e. does not earn any taxable income
225. A minor is someone who:
a. does not earn any taxable income
b. is over the legal age of majority
c. is old enough to drive
d. is old enough to vote
e. none of the other choices are correct
226. Jennifer enters into a contract when she is sixteen. When she reaches the age of majority she may manifest her
intent to be bound to the contract; that is, to the contract.
a. adjudicate
b. exculpate
c. ratify
d. covenant
e. assert
227. Jennifer enters into a contract when she is sixteen. When she reaches the age of majority she may manifest her
intent to be bound to the contract; that is, to the contract.
a. adjudicate
b. exculpate
c. assert
d. covenant
e. none of the other choices
228. Generally a minor cannot disaffirm which contract?
a. for an educational loan
b. for insurance
c. for a bank account
d. for enlisting in the Army
e. none of the other choices may be disaffirmed
229. Army enlistment contracts and marriage contracts are examples of:
a. contracts that minors may not disaffirm
b. contracts that minors can always disaffirm
c. contracts that anyone can disaffirm
d. contracts that minors may not enter into
e. none of the other choices are correct
230. For a contract to be valid, its subject matter must be lawful. A contract is illegal and unenforceable if its subject
matter:
a. violates the common law
b. is contrary to public policy
c. violates state or federal statutory law
d. none of the other choices
e. all of the specific choices are correct
231. For a contract to be valid, its subject matter must be lawful. A contract is illegal and unenforceable if its subject
matter:
a. violates nonvoidable rationales
b. violates “ethical meritoria”
c. violates state or federal statutory law
d. violates judicial conscience
e. all of the other choices
232. A contract that violates state or federal statutory law is:
a. illegal, but enforceable
b. illegal and unenforceable
c. legal, but unenforceable
d. legal and enforceable
e. subject to a variety of fines and extra regulations
233. A contract that violates state or federal statutory law is:
a. illegal, but enforceable
b. subject to a variety of fines and extra regulations
c. legal, but unenforceable
d. legal and enforceable
e. none of the other choices are correct
234. Smith, who lives in your apartment building, drives you crazy. You agree to give Ratzo $5,000 if he gets rid of Smith
for you. After disposing of her, Ratzo returns for his money. You refuse to pay. Ratzo sues you; the court holds the
contract is:
a. enforceable and completed; you must pay what is owed
b. enforceable, but $5,000 is an unconscionable price, so it revises the contract
c. unenforceable because it involves a public servant
d. unenforceable because it involves an illegal agreement
e. enforceable because evidence proved Ms. Smith was driving everyone crazy
235. Smith, who lives in your apartment building, drives you crazy. You agree to give Ratzo $5,000 if he gets rid of Smith
for you. After disposing of her, Ratzo returns for his money. You refuse to pay. Ratzo sues you; the court holds the
contract is:
a. enforceable and completed; you must pay what is owed
b. enforceable, but $5,000 is an unconscionable price, so it revises the contract
c. unenforceable because it involves a public servant
d. enforceable because evidence proved Ms. Smith was driving everyone crazy
e. none of the other choices
236. Because of the war on terrorism, the U.S. government prohibited doing business with certain countries. Contracts
that existed at the time the prohibition was announced were:
a. unenforceable
b. unconscionable
c. exculpatory
d. quasi-contracts
e. unilateral
237. Because of the war on terrorism, the U.S. government prohibited doing business with certain countries. Contracts
that existed at the time the prohibition was announced were:
a. unilateral
b. unconscionable
c. exculpatory
d. quasi-contracts
e. none of the other choices
238. A hires B to work for his logging operation, which is dangerous work. A has B sign a contract that says that B will
not sue A in the event of injuries that happen on the job. This contract, which is probably illegal is:
a. an exculpatory agreement
b. an unconscionable contract
c. a non-voidable contract
d. detrimental reliance contract
e. none of the other choices; the contract is legal
239. A hires B to work for his logging operation, which is dangerous work. A has B sign a contract that says that B will
not sue A in the event of injuries that happen on the job. This contract, which is probably illegal is:
a. promissory estoppel
b. an unconscionable contract
c. a non-voidable contract
d. detrimental reliance contract
e. none of the other choices
240. An exculpatory agreement:
a. is the offeree’s initial expression of agreement before a contract is formalized in writing b.
releases one party from the consequences brought about by wrongful acts or negligence c.
is a form of counteroffer whereby the offeree accepts part and rejects part of a contract d.
is an agreement that has not been fully performed by either party
e. none of the other choices
241. An exculpatory agreement:
a. is the offeree’s initial expression of agreement before a contract is formalized in writing
b. releases all unknown parties from the consequences brought about by wrongful acts
c. is a form of counteroffer whereby the offeree accepts part and rejects part of a contract
d. is an agreement that has not been fully performed by either party
e. none of the other choices
242. A(n) releases one party from the consequences brought about by wrongful acts or negligence.
a. unconscionable contract
b. conscionable contract
c. exculpatory agreement
d. releasing agreement
e. unfair agreement
243. A(n) releases one party from the consequences brought about by wrongful acts or negligence.
a. unconscionable contract
b. conscionable contract
c. unfair agreement
d. releasing agreement
e. none of the other choices are correct
244. An unconscionable contract is:
a. a contract so unfair to an innocent party that the courts, in equity, will not enforce it
b. enforced if the contract is for the sale of perishable goods whose demand fluctuates widely
c. one involving public servants, such as legislators
d. one involving minors
e. all of the other choices
245. Contracts where one party, being in a position of strength, takes advantage of the other party, and which are held to
be unenforceable, are called:
a. unconscionable contracts
b. contracts in restraint of trade
c. exculpatory agreements
d. contracts with public servants
e. none of the other choices
246. Contracts where one party, being in a position of strength, takes advantage of the other party, and which are held to
be unenforceable, are called:
a. voidable contracts
b. contracts in restraint of trade
c. exculpatory agreements
d. contracts with public servants
e. none of the other choices
247. occur when one of the parties, being in a strong position, takes advantage of the other party and convinces
the other party to enter into a contract contrary to his well-being.
a. Unconscionable contracts
b. Conscionable contracts
c. Exculpatory agreements
d. Unconscionable agreements
e. none of the other choices are correct
248. A contract is unenforceable if:
a. it is in restraint of trade
b. it is unconscionable
c. it is contrary to public policy
d. it has an exculpatory agreement
e. all of the other choices
249. Suess signed a contract which included a covenant not to compete with his employer for a year if he left the firm.
When Suess quit, he went into competition with his former employer and was sued. He argued that the covenant
was not valid. The court held:
a. Suess was right, such covenants are void under federal law
b. in all states, such covenants violate public policy
c. such covenant are unconscionable in all states
d. the covenant is probably valid in states that allow them
e. the covenant was not backed up by consideration, so there was no contract to be violated
250. Suess signed a contract which included a covenant not to compete with his employer for a year if he left the firm.
When Suess quit, he went into competition with his former employer and was sued. He argued that the covenant
was not valid. The court held:
a. Suess was right, such covenants are void under federal law
b. in all states, such covenants violate public policy
c. such covenant are unconscionable in all states
d. the covenant was not backed up by consideration, so there was no contract to be violated
e. none of the other choices
251. If a company required a subcontractor it worked with to agree not to do business with any of its clients that it
introduced it to unless it paid a fee, the subcontractor would likely claim the agreement was void:
a. as a contract in restraint of trade
b. as an unconscionable contract
c. as a contract with a public servant
d. as an exculpatory agreement
e. none of the other choices
252. In DCS Sanitary Management v. Castillo, where a company had employees agree not to work for any
competitors within 100 miles of any customer of DCS, the appeals court held that the agreement:
a. overly broad and could not be enforced
b. violated public policy and that the company must pay damages to the employees
c. was not enforceable due to lack of consideration
d. was a reasonable restraint on competition that could be enforced
e. was a valid restraint on competition since such agreements are legal unless they violate the antitrust laws
253. In DCS Sanitary Management v. Castillo, where a company had employees agree not to work for any
competitors within 100 miles of any customer of DCS, the appeals court held that the agreement:
a. was a valid restraint on competition since such agreements are legal unless they violate the antitrust laws
b. violated public policy and that the company must pay damages to the employees
c. was not enforceable due to lack of consideration
d. was a reasonable restraint on competition that could be enforced
e. none of the other choices
254. In DCS Sanitary Management v. Castillo, where a company had employees agree not to work for any
competitors within 100 miles of any customer of DCS, the appeals court held that the agreement:
a. effectively put the former employees out of the cleaning business within an extensive region and so were too
broad to be enforced
b. effectively put the former employees out of the cleaning business within an extensive region and so could be
enforced
c. ineffectively put the former employees out of the cleaning business within an extensive region and so were
too broad to be enforced
d. did not put the former employees out of the cleaning business within an extensive region and so could be
enforced
e. none of the other choices are correct
255. In general, if there is an error in a contract and if the other party should have known of the error:
a. the contract cannot be enforced to allow one party to profit from a simple error
b. the contract will still be enforced so long as both parties had the chance to read the contract
c. some states will still enforce the contract
d. the state Supreme Court will have to decide if the contract should be enforced
e. none of the other choices are correct
256. Without a contract may be void.
a. a fair exchange of property
b. the presence of a witness
c. genuine consent by both parties
d. a court order
e. none of the other choices are correct
257. A occurs when one party to a contract enters into it with false information or accidentally makes an error in a
significant matter. a.
bilateral mistake b.
unilateral mistake c.
known mistake
d. consolidated mistake
e. voidable mistake
258. You verbally agree to buy a house for $250,000. When the contract is prepared, the price is accidentally typed in as
$25,000 rather than $250,000, but no one notices it until after you and the seller sign the document. At that point,
you claim you only have to pay $25,000 and you claim that was the price you had agreed to originally. The court
will say you are:
a. correct; under the Statute of Frauds, written documents control, not oral statements
b. correct; under the Statute of Frauds, written documents for real estate control the deal
c. incorrect; the consideration ($25,000) is insufficient given the value of the house
d. incorrect; $25,000 was obviously a mistake and the price goes to $250,000
e. incorrect; you are guilty of perjury and will go to prison
259. You verbally agree to buy a house for $250,000. When the contract is prepared, the price is accidentally typed in as
$25,000 rather than $250,000, but no one notices it until after you and the seller sign the document. At that point,
you claim you only have to pay $25,000 and you claim that was the price you had agreed to originally. The court
will say you are:
a. correct; under the Statute of Frauds, written documents control, not oral statements
b. correct; under the Statute of Frauds, written documents for real estate control the deal
c. incorrect; the consideration ($25,000) is insufficient given the value of the house
d. incorrect; promissory estoppel requires the price to be $250,000
e. none of the other choices
260. When both parties to an agreement are mistaken as to a material fact, the contract:
a. is enforced because the mistake is mutual
b. may be voidable
c. is enforced because a mistake does not provide a basis for relief
d. requires amendment by the court
e. none of the other choices
261. In a famous old case Sherwood v. Walker, Sherwood sold Walker a cow for $80 that both believed could not
produce calves. When it was later discovered the cow could calve, which made her much more valuable, Sherwood
sued to get the cow back. You would expect the Supreme Court of Michigan ruled for:
a. Walker; it was a valid contract; he keeps the cow
b. Sherwood; he did not get the cow back, but got the price for the more valuable animal c.
Sherwood; the contract violated the statute of frauds and so the contract was canceled d.
Sherwood; there was a mutual mistake as to an important fact, so the contract was void e.
Walker and imposed punitive damages on Sherwood for bringing a nuisance suit
262. In a famous old case Sherwood v. Walker, Sherwood sold Walker a cow for $80 that both believed could not
produce calves. When it was later discovered the cow could calve, which made her much more valuable, Sherwood
sued to get the cow back. You would expect the Supreme Court of Michigan ruled for:
a. Walker; it was a valid contract; he keeps the cow
b. Sherwood; he did not get the cow back, but got the price for the more valuable animal
c. Sherwood; the contract violated the statute of frauds and so the contract was canceled
d. Walker and imposed punitive damages on Sherwood for bringing a nuisance suit
e. none of the other choices
263. A person can disaffirm a contract if it was agreed to due to:
a. fraud
b. misrepresentation
c. duress
d. undue influence
e. all of the other choices
264. occurs when someone is “forced” to sign a contract; that is, the contract is made because of a threat that
gave no sensible way out.
a. Duress
b. Fraud
c. Discomfort
d. Misrepresentation
e. none of the other choices are correct
265. In a case of , a person enters into a contract because they are so dominated by another person, or have so
much trust in that person that they are subject to improper persuasion.
a. duress
b. misrepresentation
c. undue influence
d. dominance
e. none of the other choices are correct
266. is an effort by a party to induce another party to enter into a contract based on false information.
a. fraud
b. duress
c. exculpatory behavior
d. dominance
e. none of the other choices are correct
267. A smooth talking door–to–door salesman talks you into buying $200 worth of magazine subscriptions. After he
leaves you want out of the deal. The contract you signed:
a. is voidable because you did not give genuine consent
b. is voidable because you were under duress
c. will be voidable only if you can show the subscriptions are worth far less than you paid
d. may be rescinded within 3 days under the FTC Cooling-Off Rule
e. is enforceable, you cannot walk away from this
268. A smooth talking door–to–door salesman talks you into buying $200 worth of magazine subscriptions. After he
leaves you want out of the deal. The contract you signed:
a. is voidable because you did not give genuine consent
b. is voidable because you were under duress
c. will be voidable only if you can show the subscriptions are worth far less than you paid
d. is enforceable, you cannot walk away from this just because the salesman was good
e. none of the other choices
269. is quite similar to fraud; it requires a false statement to significantly influence the making of a contract:
a. materiality
b. influence
c. misrepresentation
d. voidable contract
e. none of the other choices
270. Some contracts must be in writing and signed to be enforceable. Contracts that are covered by the statute of frauds
include:
a. contracts for the sale of land
b. promises to pay the debt of another
c. contracts that take more than a year to perform
d. all of the specific choices are included
e. none of the other choices
271. Some contracts must be in writing and signed to be enforceable. Contracts that are covered by the statute of frauds
include:
a. contracts for the sale of personal property
b. promises to pay the debt of another
c. contracts that must be performed within a year
d. contracts for vehicles
e. none of the other choices
272. Some contracts must be in writing and signed to be enforceable. Contracts that are covered by the statute of frauds
include:
a. contracts for the sale of land
b. promises to pay the debts of another person
c. contracts that cannot be finished within a year
d. promises made in consideration of marriage
e. all of the other choices
273. To be enforceable, which of the following contracts require a written document under the statute of frauds?
a. your promise to pay the debts your sister owes to someone
b. your offer to build someone a house in 18 months
c. your offer to buy a warehouse
d. your offer to a prospective spouse to put $100,000 in his or her name
e. all of the other choices
274. To be enforceable, which of the following contracts require a written document under the statute of frauds?
a. your promise to buy a car from a dealership for $30,000 cash
b. your promise to write a software program next month for $11,000
c. your promise to buy a warehouse for $40,000
d. your promise to buy ten tons of coal for $2,000
e. none of the other choices
275. If parties contract via the Internet, the digital signature provided by the parties is:
a. generally presumed to be valid
b. presumed to be valid, but must eventually be backed by a written signature
c. presumed to be valid if notarized
d. not valid; the law does not accept digital signatures for contract formation
e. not valid; the law will accept digital signatures when they can be proven secure
276. If parties contract via the Internet, the digital signature provided by the parties is:
a. presumed to be valid, but must eventually be backed by a written signature
b. presumed to be valid if notarized
c. not valid; the law does not accept digital signatures for contract formation
d. not valid; the law will accept digital signatures when they can be proven secure
e. none of the other choices