Business Law Ch 13 Part II Question Preview (ID: 24262)


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Dante enters into a contract with Rosalinda, who does not have contractual ca¬pacity. Dante can enforce the contract if Rosalinda
a) does not choose to avoid the contract
b) is a minor
c) can obtain the funds to pay for the benefits of the contract
d) is intoxicated or mentally incompetent

Olga, a minor, signs a contract to buy a computer from Phil, the owner of Quality Computer Store. Olga’s right to disaffirm the contract
a) does not change the fact that Phil is bound by the contract
b) does not yet exist because Olga is still a minor
c) gives Phil, an adult, the right to disaffirm the contract
d) is not valid because a computer is a 'necessary'

Jenna, a minor acting on her own, signs a contract to buy a horse and its tack from Field Equine Ranch. Later, after taking possession of the horse and tack, Jenna disaffirms the deal. She
a) must return both the horse and the tack
b) can keep the horse and the tack
c) can keep the horse but not the tack
d) can keep the tack but not the horse

Jacquie suffers from severe depression and often times cannot make sound decisions based on her mental state. Jacquie enters into a contract during a lucid state of mind which grants her clarity. This contract is…
a) enforceable
b) ratified
c) unconscionable
d) illegal

Max, an adult, enters into a transaction with Miller Trucking. Later evidence shows the Miller Trucking charged a rate three times the usual rate. This contract could fall into what category?
a) unconscionable
b) conscionable
c) conscionable since Max is an adult
d) illegal

On Tim’s eighteenth birthday, he decides that he no longer wants to keep a car he bought from Woody’s Autos, Inc., when he was seventeen. His right to disaffirm the deal will depend on
a) whether Tim acts within a reasonable period of time
b) the car's condition when Tim bought it
c) the car's current condition
d) whether Woody's has the right to diaffirm

Intoxicated but fully aware of the consequences, Uri agrees to a two-year cell-phone service contract with Wander Talk, Inc., at more than the average market price. This contract is
a) enforceable
b) not enforceable because contracting parties can change their minds.
c) not enforceable because the contract clearly favors Wander Talk
d) not enforceable because Uri was intoxicated when he agreed to it.

Fay is mentally incompetent but has not been so adjudged by a court. Any contract Fay enters into is
a) voidable if Fay lacks the capacity to comprehend the consequences.
b) voidable if Fay has a lucid interval at the time of contracting.
c) voidable if the other party does not realize that Fay is incompetent
d) unavoidable.

Fernando obtains a consumer loan from Greater Regional Credit Union at an interest rate that exceeds the state’s maximum. Greater Regional has
a) committed usury
b) created a risk for the purpose of assuming it
c) engaged in a restraint of trade
d) violated a licensing statute

Brasilia, a real estate broker licensed only in Connecticut, con¬cludes a land sale in Delaware. She can
a) not collect the commission, keep it, or foreclose on the property.
b) collect the commission if it has not been paid.
c) keep the commission if it has already been paid.
d) foreclose on the property to obtain any unpaid amount.

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-Count
a) recover $5,000 from Baldwin
b) do nothing with respect to the contract
c) recover the goods but not the $5,000 from BAldwin
d) recover the goods or the $5,000 from Baldwin

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