BUSINESS LAW: (All True or False unless listed)
1. Contractual capacity includes the financial ability to pay for the benefits of a contract.
2. All contracts between adults and minors are void.
3. Parents are always liable for the contracts made by their minor children
4. Any contract to commit a crime is in violation of a statute and thus is enforceable.
5. In an employment contract, a covenant not to compete can be enforceable.
6. If a contract is divisible into legal and illegal portions, a court may enforce the legal portions but not the illegal ones.
7. Chet, a minor, signs a contract with Porsha, an adult. The contract is
8. Alexis, a minor acting on her own, signs a contract to buy a motorcycle and accessories from Bad Bikes dealership. Later, after taking possession, Alexis deaffirms the deal. She
a. can keep the accessories but not the motorcycle.
b. can keep the motorcycle and accessories.
c. must return both the motorcycle and accessories.
d. can keep the motorcycle but not the accessories.
9. Bailey is an accountant who is not licensed to practice her profession in Connecticut. Despite this lack of a license, Bailey enters into a contract with Douglas in Connecticut. This contract is most likely
a. enforceable by Douglas but not by Bailey.
b. enforceable by Bailey and Douglas.
c. enforceable only by a third party who is not aware that Bailey is not licensed in Connecticut.
d. unenforceable.
10. Fletcher signs a contract to buy a new electric guitar and amplifier just before reaching the age of majority. After reaching the age of majority, Fletcher does not take possession or make payments. With respect to the contract, most courts would hold that this is
a. ratification.
b. rescission.
c. emancipation.
d. disaffirmance.
11. Nelson, a minor, misrepresents his age when agreeing to a contract to buy a restored, antique soda vending machine from Old Is New Again, Inc. Ordinarily, Nelson can disaffirm the contract
a. only if he can prove that the seller did not know his true age.
b. under no circumstances.
c. only if he can prove that the seller knew his true age.
d. under any circumstances.