B-Law Exam 3 Chapter 8

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

no one

Doug agrees with Elinor to sell methamphetamine to patrons of Elinor's nightclub Garden of Eden for 25 percent of the take. Doug sells the drugs but keeps all of the money. Elinor can

not enforce the deal

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

the reasonable value of the goods

Kathleen sells Richard a racehorse for $1,000. Both Kathleen and Richard think that the horse is too slow to win any races. Richard then enters the horse in a race, and it wins easily. He enters it in more races, and the horse soon wins more than $1 million. Kathleen tries to rescind the contract to sell the horse, claiming that it was worth more than $1,000. A court will

enforce the contract

Dixie May enters into a contract to buy one hundred pounds of pecans from Margaret. The contract must be in writing if the pecans cost

$500

Gaye, a minor, signs a contract to buy a motorcycle from Hi-Valu Cycles by misrepresenting her age as twenty-one. Gaye fails to make the payments. Hi-Valu sues. Ordinarily, Gaye can

return the motorcycle and avoid further liability

The state of Illinois enacts a usury statute. The purpose is to

establish a MAXIMUM rate of interest that may be charged for loans

Betty is selling her used clothing shop on Main Street. In the sale agreement, there is a covenant not to compete that prohibits Betty from opening another used clothing shop within 300 miles of the shop she is selling. A court will most likely conclude that this restriction on competition is

unreasonable and may reform the covenant

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

reform its terms to prevent any undue burden

Beth is a minor. She buys a set of sessions with a personal trainer, and a water bottle and some weights from a fitness store. Later, Beth decides that she does not want the water bottle or weights. In most states, Beth

can only disaffirm the contract if she returns all the goods

T/F? For a minor to disaffirm a contract, he or she must present the contract to a court.

F

T/F? A unilateral mistake always gives the mistaken party a right to relief from the contract.

F

T/F? In general, minors are personally liable for their contracts.

T

T/F? A minor may enter into a contract for the sale of alcoholic beverages if the other contractual party is an adult

F

T/F? In some states, misrepresentation of age by a minor is enough to prohibit disaffirmance.

T

T/F? A person who enters into a contract when he or she is intoxicated can void the contract under any circumstances.

F

T/F? A person who enters into a contract when he or she is intoxicated can void the contract if he or she did not comprehend the legal consequences.

T

T/F? A seller's failure to disclose a serious defect about a product for sale may give rise to an action for fraud.

T

T/F? Parents who sign a contract made by their minor child with an adult have the same option to disaffirm as the child

F

T/F? An innocent party does not need to suffer an injury to collect damages as a result of a misrepresentation.

F

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

not collect the commission, keep it, or foreclose on the property

Selena buys a cell phone for $350 and an air hockey table for $1,500, and signs a one-year employment contract for a $4,000 monthly salary to start at the beginning of the next month. The Statute of Frauds covers

the employment contract and the game table purchase only

Chloe files a suit against Digital Associates, Inc. (DAI), to enforce a contract. The only written evidence of the contract is a memo on DAI's letterhead as signed by a DAI officer in its files. The contract can be enforced if the memo includes

all essential terms

Joy and Karl contract for the sale of Joy's prize-winning show dog for $1,000. Unknown to either party, the dog has died. Karl is

not required to pay due to the BILATERAL mistake

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

the hours up to the statutory maximum AND the extra hours

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

not liable for the contract

Richard is an adult. He enters into a contract to sell sixteen-year-old Jane his car for $3,000. The next day Richard receives an offer of $4,000 for his car from twenty-year-old Bill. Richard

cannot disaffirm his contract with Jane because he is an adult

T/F? A minor has a reasonable time, after the minor reaches the age of majority, to disaffirm a contract.

T

T/F? All forms of gambling are legal in all states

F

T/F? A deceived person must have a justifiable reason for relying on a misrepresentation.

T

T/F? An oral contract may be enforceable if enforcing the promise is the only way to avoid injustice.

T

T/F? An oral contract for a sale of goods for more than $5,000 is not enforceable even if the parties to it admit to its existence in court.

F

T/F? If a minor disaffirms a contract, he or she must disaffirm the entire contract.

T

James is in an art gallery when Mitch, who has no special art expertise, points to a painting and says, "That artist is so good. That piece will be worth a fortune in a few years!" James buys the painting, which does not turn out to be valuable. James tries to return the painting and recover his purchase price. A court will

enforce the contract between James and the art gallery

Colleen is intoxicated, but still mentally capable of understanding the consequences of her actions when she signs a contract to sell the rights to her latest phone app design to Addie. The contract is

enforceable even if Colleen attempts to disaffirm it

Beau sells a car to Cody without disclosing that the odometer, which reads 40,000 miles, was disconnected 80,000 miles ago. Beau is liable for

fraud

Frugal Insurance Company sells a policy to Grover Company, insuring the life of one of Grover's key executives. When the executive dies, Frugal refuses to pay, noting that it was not licensed to sell insurance in Grover's state and arguing that thus, its policy cannot be enforced. Grover can recover

the amount of the policy from Frugal in full

Olivia, a minor, signs a contract to buy a bike from Phil, the owner of SuperCycles Bike Store. Olivia's right to disaffirm the contract

does not change the fact that Phil is bound by the contract

Ruthie, a minor, charges the cost of an expensive leather jacket at a Girl's Trend store. Two nights later, Ruthie loses the jacket at Minors Only Club. She disaffirms the jacket's purchase. Ruthie owes Girl's Trend the reasonable value of the jacket

if it is deemed a necessary

Garth owns two all-terrain vehicles (ATVs), worth $1,000 and $500, respectively. Helen agrees to buy "Garth's ATV" for $750. Garth believes, in good faith, that he is selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this situation

there is no contract

T/F? Under the Statute of Frauds, oral contracts are void.

F

T/F? A false statement by an expert to a naive buyer usually will entitle the buyer to rescind or reform a contract.

T

T/F? In general, if a contract is illegal, a court will not enforce it.

T

T/F? An innocent party may never rescind a fraudulent contract.

F

T/F? All states require that members of certain professions to have licenses.

T

T/F? A mistake in value will rarely enable a party to a contract to avoid the contract.

T

T/F? When a minor disaffirms a contract, he or she cannot keep whatever he or she has received as a result of the contract without paying for it.

T

T/F? Misrepresentation can occur through conduct.

T

T/F? At age seventeen, Daryl enters into a contract to buy a dozen movies from eHD TV 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

Executed

Andy knows nothing about horses. Peter, an expert horse trainer, knows that a certain horse has no talent and is not likely to win any competitions. Peter convinces Andy to buy the horse for $500,000 by assuring him that it has great talent. The horse turns out to have no talent and never wins any competitions. Andy can most likely recover damages based on

Fraud

Wilma, who lives in New York, enters into a contract to buy a painting from Fred, who lives in France. The contract includes all the costs of insuring and shipping the painting from France to New York. The agent that made the shipping estimate makes a mistake when adding up the costs and, as a result, the shipping cost listed in the contract is $1,000 less than the shipping actually costs. A court will most likely

Allow the parties to rescind the contract

Byron agrees to sell to Charity, for $1,500, a remote parcel of land. They believe the land to be worthless, but beneath it is a gold mine. A court would

Enforce the contract

T/F? For a party to a contract to receive relief from either a unilateral or a bilateral mistake, the mistake must involve a material fact.

T

T/F? A prenuptial agreement must be in writing to be enforceable.

T

An adhesion contract is a contract drafted by one party and presented to another on a take-it-or-leave-it basis.

T

T/F? If a contract is fully performed by all parties to it, then it is presumed to have been ratified.

T

Chris, a minor, signs a contract to purchase alcoholic beverages for Dine & Drink, his parents' restaurant. The contract is

void as a matter of law

Eli, a minor, buys an automobile insurance policy from Faithful Insurance Company and pays a $1,000 premium. If Eli can disaffirm the contract, he can most likely

$1,000

Wild Rides Theme Park owes money to both RollercoasterRepair, Inc. and Hot Dog Harry. RollercoasterRepair orally agrees to assume Wild Rides's debt to Hot Dog Harry to prevent Hot Dog Harry from filing suit against Wild Rides. This contract is enforceable by

Any party

T/F? Gambling involves the distribution of property by chance among persons who have paid valuable consideration for the opportunity to receive it.

T

T/F? A unilateral mistake is a mistake made by both parties to a contract.

F

T/F? Some states impose a duty on a minor who disaffirms a contract to restore the adult party to the position he or she held before the contract was made.

T

It is legal to charge any interest rate for an ordinary loan.

F

A covenant not to compete is never enforceable.

F

Barb, a real estate agent, is showing John a house. She tells him that this is a house where "his family can live happily ever after." John buys the house, but his wife does not like it. John

was not defrauded

Valley Tack Shop signs a contract with Gary's Boots and Saddles for delivery of five saddles that cost $200 each. To be enforceable under the Statute of Frauds, the written contract must designate

the quantity of saddles

An exculpatory clause in an employment contract is not enforceable if it removes the employer's potential liability for injuries to employees.

F

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