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41 Cards in this Set
- Front
- Back
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1. An employee who is leaving a place of employment cannot solicit other employees and clients to come with him to his new job if he has signed an agreement not to compete
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True
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3. An oral fully executor contract for the sale of land is not binding on either party because of the lack of writing
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true
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4. In order for a writing to be sufficient to satisfy the statute of frauds requirement it can be less complete as to the terms if the contract is for $1700 to provide services to maintain a car over a two year period than if it is for $17,000 to purchase a car
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false
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6. If a clause in a contract is grossly unfair, the court may find the clause unconscionable and may enforce the remaining parts o the contract and modify the unfair clause to make it fair
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true
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7. Jim could not buy an auto insurance policy on the car of his friend Cary, because he would be wagering and it is illegal to do so if he had no insurable interest in the car
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true
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if defrauded, contract is voidable, not void
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true
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8. If a firm terminates an employee, the agreement not to compete clause in the employment contract is usually still valid and enforceable
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true
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9. Wagering is illegal except where allowed by a specific statute because it involves creating a risk in order to assume it
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true
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9. Wagering is illegal except where allowed by a specific statute because it involves creating a risk in order to assume it
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true
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14. An agreement not to compete can be enforced if it is ancillary to (part of) a contract for the sale of a business, is reasonable as to time and area and is necessary to protect goodwill
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true
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15. The statement “sell Andrea whatever groceries she needs up to a value of $600 and I will pay for them” is not enforceable unless it is in writing and signed by the person making the statement
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true
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16. A person who lacks capacity because of mental illness is generally given more rights by the law of contracts than an intoxicated person
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true
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17. According to the provisions of the Statute of Frauds some contracts require written evidence signed by both parties to be enforceable
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false
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18. If a court follows the precedent of the flying school case, a minor can disaffirm a contract and receive her money back even if she has consumed the value she received
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true
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19. In the case discussed in class, the person who orally agreed to sell a piece of land was required by the court to do so because even though it was not in writing, he admitted to the agreement while testifying under oath
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true
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21. A clause in contract in which a person eliminates their liability for their own negligent acts is an unconscionable clause and can never be enforced
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false
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23. If there is a mistake by only one party to the contract, that party cannot void the contract if the mistake was not obvious and the non-mistaken party was not taking advantage of the mistaken party
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true
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lack of voluntary consent by one of the parties usually makes the contract void
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false
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voidable contract may be voided if it is done in a reasonable time since voiding the contract is an equitable remedy
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true
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an agreement to commit a tort or crime is void and unenforceable
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true
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29. An exculpable clause is one where a party seeks to avoid liability for their own intentional tortuous conduct such as defamation
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false
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30. In most states, a minor who misrepresents her age can disaffirm the contract and can be held liable in tort law for the misrepresentation (fraud)
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true
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31. A contract entered into when a person believed they were under duress even if the other party did nothing wrong is voidable
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false
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32. A contract entered into when the parties are both mistaken as to a material fact is voidable by either party to the contract
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true
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33. The act of a minor after the minor has reached the age of majority by which she accepts a contract entered into when she has a minor defines
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ratification
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34. Lisa, age 17, buys an iPad from 20 year old Nick. She pays $100 for the iPad. It turns out that the iPad is really worth $500. Nick wants to disaffirm the contract and get the iPad back. Which of the following best describes the situation?
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c. Since Lisa is a minor, this contract is voidable, and Lisa can get the $100 by returning the iPad to Nick
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35. Jamie was an accountant with an established practice in a small town. Desiring to retire, Jamie offered to sell her business to Mark for $190,000. She told him that she had made an 8% return on her investment during the last 5 years. Her records clearly indicated that his was true. Relying on this, Mark purchased the business. He had a net loss of $18,000 the first year
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c. Mark has no remedy, as Jamie’s statement was factual but did not indicate what kind of return he would receive
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36. Robert is aspiring to be an attorney. To get some practice before he goes to law school, he offered to provide any legal services that Samantha needed from January 1, 2010 to June 30, 2010 for $500. Samantha did not pay the $500 and Robert sued. What result?
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The contract is void and Robert cannot enforce it
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36. Robert is aspiring to be an attorney. To get some practice before he goes to law school, he offered to provide any legal services that Samantha needed from January 1, 2010 to June 30, 2010 for $500. Samantha paid the $500 and Robert refused to provide legal services because he was not licensed. Samantha paid $600 to receive the services elsewhere and sued Robert
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Samantha is entitled to recover the $600 she paid for services elsewhere
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38. The Parole Evidence Rule
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Allows admission of evidence that clarifies ambiguities in the contract, Allows admission of evidence that fills in gaps in the contract, AS WELL AS : obvious error, show fraud, duress, etc.
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The minor’s liability for a necessity
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limited to the value received under the concept of Quasi contract, Requires that the item be a necessity to live such as food, clothing, and shelter, and Requires that the item was not available from a parent or guardian
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40. A co-signer
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Is making a collateral promise so it needs written evidence, on a consumer credit must sign a statement that explains their obligation, and Is liable for payment when the original debtor defaults
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41. Megan was a financial advisor to Bill. She convinced him to loan money to a local restaurant owner. She did not tell him that the owner was her brother and that he was having financial problems. Also, she was a part owner of the restaurant. The contract
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Is voidable because of undue influence
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the following may be illegal, which is possibly legal
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A promise not to compete
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the following may be illegal, which cannot be legal
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(none of the above - promise to restrain trade, promise by unlicensed person, promise to not be liable for one's own negligent actions)
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44. Which of the following would not result in a ratification of fully executed contract that Matt entered into in Indiana as a minor
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none of above
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45. Kevin contracts with Sarah to purchase a computer from her and pays her $500. Sarah decides to steal a computer and delivers the stolen computer to Kevin. The true owner gets the computer back from Kevin and Kevin sues Sarah for breach of contract. What result
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b. The court will order Sarah to pay Kevin $500 because the contract could have been performed legally and therefore was not void
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47. If the courts find one part of a contract to be illegal, but the rest of the contract is legal and the contract can be enforced without the illegal clause, the court is likely to
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enforce only the legal part of the contract
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48. The following would create a voidable contract
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b. A wrongful act that induces another to enter into a contract and Abuse of a position of influence that induces another to enter into a contract
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49. Natalie is a real estate agent; however she does not have nor has she ever had a license as required by a statute. Natalie sells a piece of property for Mick, but Mick refuses to pay her the agreed upon commission. Natalie sues Mick. What result
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a. If the licensing statute is a regulatory statue, Natalie cannot collect
b. If the licensing statue is a revenue raising statue, Natalie can collect |
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50. The following would require written evidence under the statute of frauds
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A fully executory contract for the sale of real estate, A fully executory contract for the sale of goods over $500, and A contract entered into on November 10, 2009 to employ someone beginning March 1, 2010 until December 24, 2010
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