Requirements of a Contract Include Capacity of the Parties to Contract

question 31

Multiple Choice

Requirements of a contract include capacity of the parties to contract, legality, and intention of the parties to be legally bound. Which of the following is false with regard to these elements?

• A) A restrictive covenant prohibiting one party to the contract from competing with the other is enforceable if it is reasonable between the parties and not contrary to public policy.
• B) The court can presume the intention of the parties to be legally bound, but a party to the contract can bring forward contrary evidence to rebut the presumption.
• C) If an adult cannot sue the other party to the contract because he is a minor, neither can the infant sue the adult.
• D) A seller that contracts with an infant cannot avoid the difficulties of enforcing the contract by suing him in tort instead of breach of contract.
• E) A person with mental incapacity might still be held to a contract even if, at the time of the contract, he didn't understand the nature and quality of his act.

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Definitions:

Policy Lags

The delay between the time a policy is enacted and the time it has an impact on the economy.

Discretionary Policy

Discretionary policy involves government and central banking measures that are actively implemented to influence economic conditions, such as adjusting taxes or changing interest rates.

Active Monetary Policy

Active monetary policy involves deliberate actions by a central bank to influence the economy's monetary supply and interest rates, aiming to achieve specific macroeconomic objectives.

Passive Approach

A strategy characterized by minimal or no intervention, often used in investment or management contexts.