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Exam 12: Consideration, Capacity, and Legality

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Question 21

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Aaron questions whether there is consideration for his contract with Banquet Hall to exchange his musical performance of country tunes at select social events for Banquet’s payment of a certain amount. To constitute consideration, the value of whatever is exchanged must be

A) objectively worthy.
B) precisely adequate.
C) legally sufficient.
D) practically sound.

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Question 22

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Contractual capacity refers to the legal ability to enter into a contract.

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Question 23

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Gambling debts will be enforced even if their enforcement violates a statute.

To be legally sufficient, consideration must be evidenced by something tangible.

D’Sean promises to pay his personal assistant Edie $50,000 in consideration of the services she provided over the years. D’Sean never makes the payment. D’Sean’s promise is

Metro City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault. Coco's Chocolate Creations signs a lease with the mall that contains the clause. This is

Twyla's dock is damaged in an accident caused by Ulric's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulric fails to pay, Twyla can bring an action for breach of contract. This is

Vijay enters into a contract to sell his laptop to Winnie. Winnie takes possession of the laptop as a minor and continues to use it well after reaching the age of majority. Winnie has

A contract entered into by a minor is voidable at the option of either of the contracting parties.

William obtains a loan from a bank at 4.5 percent interest. The state where he obtains the loan has a usury statute that limits interest rates to a 3.5 percent maximum. William's contract with the bank is

Rosalind, a seventeen-year-old, signs a contract to sell her car to Street Fleet Used Cars. The next day, Rosalind tells Street Fleet that she's decided not to sell the car. Rosalind is liable to Street Fleet for

Neil, a minor, attempts to return to its former owner, a set of skis that he recently bought, used, and wrecked, in a state in which a duty of restitution is imposed. Neil

A transaction that lacks a bargained-for exchange lacks an element of consideration.

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

Ordinarily, a minor can disaffirm a contract even though she has misrepresented her age.

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is

U-Can-Own-It Corporation sells appliances to less educated consumers, including Viv, on installment plans. U-Can-Own-It files a suit against Viv when she stops making payments. Viv claims that the deal is unconscionable. The court will most likely consider

Nyoko signs a covenant not to compete with her employer, Midstate Distribution, Inc. The covenant will be enforced if it

Dean, the president of Billing & Credit Company, promises to pay his employee Ewing, who is dangerously obese, $10 for every pound that he loses within the next two years. Ewing agrees, diets and exercises, loses 154 pounds, and asks Dean for $1,540. Dean refuses to pay, saying that he does not remember the promise, but that even if he did make it, there was no consideration, and Ewing's improved health is a sufficient benefit for his effort and sacrifice. Ewing files a suit against Dean. In whose favor is the court likely to rule, and why?

If there is a statute that prohibits a certain act, a contract to do it is unenforceable.