1. Which one of the following individual's contracts are voidable?
A. A five-year old.
B. A convicted felon while in prison.
C. A person who has been declared incompetent.
D. A seventeen-year old.
2. Which one of the following contracts would be void?
A. A seventeen-year old.
B. A confused person who has not been declared incompetent.
C. An individual who has just consumed two bottles of beer.
D. A five-year old.
3. An eighteen year old may __________ a contract that he/she entered into when he/she was seventeen.
A. ratify
B. not avoid
C. convert
D. not enforce
4. If an older teenager purchases a product that is considered a nonnecessary, he/she may
A. not be released from the contractual obligation because he/she is no longer a child of "tender years".
B. disaffirm his/her contractual obligations and return whatever he/she acquired.
C. retain whatever he/she acquired as long as he/she did not misrepresent his/her age.
D. intentionally destroy whatever he/she acquired and then receive a full refund.
5. When an older minor misrepresents his/her age, and the contract involves a necessary, he/she most likely will
A. be required to compensate the other party so that he/she does not incur a loss.
B. not be liable for the reasonable value of the goods or services that were acquired.
C. be charged with a misdemeanor known as "impersonating an adult".
D. be treated no differently than if the contract involved a nonnecessary.
6. With regard to the legality of a contract, the subject matter may either violate a/an __________ or it may be declared __________.
A. precedent - - - - consistent with a norm
B. statute - - - - contrary to public policy
C. norm - - - -contrary to judicial intent
D. public policy - - - - an executive duty
7. A lender, who makes a loan at an interest rate that is above the maximum allowed by state law, could be accused of __________, while a contract entered into on a Sunday might be a violation of a state's __________.
A. blue laws - - - - usury
B. bookmaking - - - - religious covenants
C. usury - - - - blue laws
D. fraud - - - - police power
8. Legislators, who oppose the legalization of various forms of gambling, base their opposition on all but one of the following. Which one of the following is NOT a basis for their opposition?
A. The law of probability works against the gambler and, therefore, creates the risk of loss.
B. Gambling shifts the risk of loss from the individual to the organization, or promoter.
C. The most active, long term, gamblers tend to be individuals with relatively low income.
D. Some gamblers will become addicted and will be unable to cope with their losses.