QUESTION 11

1. Consideration can be a promise or an act.
2. True
3. False

QUESTION 12

1. In order to satisfy the statute of frauds, a writing must:
2. A.Be a formal written document drafted by an attorney.
3. B.Be signed by the defendant and contain the name of each party, the subject matter of the agreement, and the essential terms and promises.
4. C.Be notarized.
5. D.All of the above.

QUESTION 13

1. An agreement to pay a lesser amount to settle an unliquidated debt is:
2. A.Enforceable, as there is consideration.
3. B.Unenforceable, as there is no consideration.
4. C.Enforceable in only some states.
5. D.Unenforceable as a violation of public policy.

QUESTION 14

1. Marty, a 16-year-old, contracted withCream-of-the-Crop Cyclesto buy an $8,000 motorcycle.He agreed to make monthly payments until the purchase price plus interest were paid in full.It is three years later and Marty has not disaffirmed the contract and has made regular payments on the cycle since turning 19.Which of the following is correct?
2. A.The contract is void and Marty has no obligation.
3. B.The contract is now voidable byCream-of-the-Crop Cycles.
4. C.Marty has ratified the contract and is now bound by its terms.
5. D.Marty has ratified the contract but can still get a return of the payments made while he was a minor.

QUESTION 15

1. A gambling contract is legal unless it is specifically prohibited by state statute.
2. True
3. False

QUESTION 16

1. If a minor can cancel a contract, it can be done at any time during minority or within a reasonable time after reaching majority.
2. True
3. False

QUESTION 17

1. An agreement may violate public policy even if the agreement does not require a party to commit a crime, tort, or violate a statute.
2. True
3. False

QUESTION 18

1. Alpha and Xenon companies are both major international conglomerates.They are negotiating a contract whereby Alpha will install a computer system for Xenon.One clause in the contract states that Alpha will not be liable for damages caused by the negligent installation of the computer system, except that Alpha warrants the system and will fix any problem for a period of two years following installation.Alpha completes the installation of the computer system.Xenon loads extensive amounts of information on the system, but all of it is destroyed because Alpha negligently installed the memory chips.Alpha fixes the memory, but Xenon incurred significant expenses in recreating the lost information.Xenon sues for these expenses.Alpha defends with the noted clause in the contract.
2. A.Xenon wins; these types of clauses are never enforceable.
3. B.Xenon wins; exculpatory clauses are sometimes valid, but this one would not be valid.
4. C.Xenon wins; this exculpatory clause is not valid because it is unconscionable.
5. D.Alpha wins; this exculpatory clause is enforceable.

QUESTION 19

1. Some of the elements of a contract are: agreement, consideration, legality, and capacity.
2. True
3. False

QUESTION 20

1. Ramona, age 42, orally agreed to work forBrahma, Inc. for the rest of her life for $50,000 per year.This agreement would not be enforceable since it violates the one-year rule of the statute of frauds.
2. True
3. False