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.

Identify the key attributes and applicability of process cost accounting systems.

Differentiate between period costs and product costs in manufacturing and service organizations.

Recognize how costs are reported on the financial statements of manufacturing businesses.

Understand the sources and documentation used in job order cost accounting, including material requisitions and receiving reports.

---

Definitions:

Relaxation Response

A physical state of deep rest in which one experiences a slower respiration and heart rate and lowered metabolism; a standard technique for reducing stress.

Role Underload Stress

Stress experienced when an individual has too few responsibilities or tasks, leading to feelings of underutilization or boredom.

Internal Locus

The belief that one controls their own destiny and outcomes are the result of one's own efforts and characteristics.

Cost Estimator

A professional or tool responsible for predicting the expense associated with projects, products, or services before they are executed or produced.