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Exam 11: Requirements for a Contract

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Question 21

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Agreeing not to open a competing business could be consideration.

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Question 22

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What is consideration and what are the two basic elements of consideration?

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Consideration is the inducement, price, ...

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Question 23

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Describe legal capacity and discuss how it applies to minors entering into and cancelling contracts.

To formally cancel a contract is to _______ it.

A forbearance is, in essence, the opposite of an act.

Marty, a 16-year-old, contracts with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle. Marty agrees to make monthly payments until the purchase price plus interest is paid in full. Which of the following is correct?

Discuss exculpatory clauses, and designate when an exculpatory clause is unenforceable.

Amanda, a recent university graduate, needed a car to get to her new job. To help Amanda secure a loan for the car, Ted, a friend, agreed to pay the loan should Amanda default. Ted's promise to pay the loan is a collateral promise. His promise must be in writing to be enforceable.

Which of the following statements, if made by a seller who knows the statement to be untruthful, would NOT be misrepresentation of material fact resulting in a cause of action for fraud?

The two basic elements of consideration are intention and agreement.

An exculpatory clause is generally unenforceable when

Barb has been a children's day care provider for several years in the small town of Sallton. She has decided to give it all up and move to the big city for excitement and adventure. She sells her business to Ken, agreeing not to open a competing business within five miles of Sallton for a period of nine months. After five months of the big city life, Barb is broke and moves back to Sallton. She opens a small day care business. Ken sues on the non-compete clause. What is the most likely result?

A court is unlikely to enforce the non-compete agreement Kelly and Amber signed because of which of the following clauses?

A party injured by fraud generally has the choice of suing for damages or rescinding the contract.

Roger, a minor, buys a stereo from Tuneland, Inc. Roger uses the stereo for a few months, returns it to Tuneland, and demands his money back. Roger may rescind the contract, return the stereo and get his money back.

Courts will not allow the rescission of a contract due to a unilateral mistake.

Barbara, a skilled engineer, was hired at Mainco Enterprises. She was asked to sign a non-compete clause limiting future employment if she left Mainco. A court would be likely to enforce the non-compete clause if it was put into place to protect trade secrets or confidential information.

Under a contract for the sale of land, the Statute of Frauds

Larson entered Forrester's Auto Mart to purchase a used car. Larson found a vehicle with a sales price of $11,000. After Forrester answered all of Larson's questions, Forrester and Larson agreed to a sale. As Larson was leaving to get the money to pay for the car, Forrester told Larson that he thought Robert Redford formerly owned the car. Larson later learned that Robert Redford had never owned the car. If Larson seeks to rescind the deal based on Forrester's statement, Larson will

To be valid, an agreement not to compete must be ancillary to a legitimate bargain.