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Business Flashcards

Business Law – Chapter 8

A contract entered into under undue influence is voidable.​ True.
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​ The parties’ relative bargaining power.
The chief executive officers of Chemico, Inc., and Petro Products Corporation orally agree that Chemico will sell a refinery and the land on which it is situated to Petro. Under the Statute of Frauds, this deal is enforceable by​ None of the choices.
Intoxicated and not aware of the consequences, Umberto agrees to a two-year cell-phone service contract with Wander Talk, Inc., at more than the average market price. This contract is​ Not enforceable because Umberto was intoxicated enough to lack mental capacity when he agreed to it.
To be enforceable, a memorandum evidencing an oral contract must include the essential terms.​ True.
Sofia signs a covenant not to compete with her employer, Topmost Sales Corporation. A court decides that the covenant is overly restrictive. The court will likely​ Reform its terms to prevent any undue burden.
When both parties to a contract are mistaken about the same material fact, the contract cannot be rescinded.​ True.
A covenant not to compete is enforceable only if it is reasonable in duration and geographic area.​ True.
Nyoko signs a covenant not to compete with her employer, Midstates Distribution, Inc. The covenant will be enforced if it​ is reasonable with respect to geographic area and duration.
Misrepresentation of law ordinarily entitles a party to relief from a contract.​ False.
Gene, an accountant, convinces his client Hazel to sign a contract to invest her savings in 2Gether, a nonexistent social-networking Web site. There is clear and convincing evidence that Hazel did not act out of her free will. This is​ Undue influence.
Guardian Security, Inc., and Hedge Fund Corporation enter into an oral contract under which Guardian Security agrees to provide security services for Hedge Fund’s offices for as long as Hedge Fund needs them. This contract may be enforceable by​ Either Guardian Security or Hedge Fund
A covenant not to compete included in the sale of an ongoing business is unenforceable.​ False.
In certain circumstances, bargains are so oppressive that the courts relieve innocent parties of part or all of their duties.​ True.
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 Must return the skis and pay for the damage.

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