1. Beauty Shop Woes. When Janice went to work as a hair stylist in Rick's beauty shop, she entered into an agreement with Rick, whereby, if she left she would not work for another beauty shop within 50 miles for 2 years. Rick trained Janice in a number of new techniques. After nine months, Janice was offered a great job down the street at a new beauty shop, quit Rick, and had a number of customers follow her down the street to her new job. Rick claimed that she had signed a contract and had no right to go to work at the new shop. Janice disagreed and told Rick that no judge in the country would enforce such an agreement. Janice told Rick that she was more worried about a customer, Treena, who was threatening to sue her because her hair turned green after Janice worked on it. Janice agreed that Treena's hair was damaged. Janice pointed out, however, that she told Treena that odd results could result from a dye attempt, and she required that Treena sign a contract releasing Janice from all liabilities before she did anything with Treena's hair. Treena, however, sued anyway. The agreement Rick and Janice entered into is referred to as which of the following?

A prohibited competition agreement

A policy agreement

A covenant not to compete

A competition agreement

A covenant not to misappropriate

2. The person who makes an offer is called the _____________.

offeree

agreeor

inquisitor

offeror

agree

3. Courtney, who does not keep up with the price of current technology, agrees to buy a used computer from Jake for $2,500. Later, Brice tells Courtney that she made a really bad deal and that she could get an even better new computer for no more than $1,000. Courtney tells Jake that she is not giving him any money because he was not fair with her. Which of the following is the most likely result if Jake sues Courtney alleging breach of contract?

Jake will win only if he can establish that Brice is wrong and that the deal was actually reasonable

Courtney will win if she can establish that she made a bad deal and that truly she was not aware of current prices of computers

Courtney will win if she can establish that she paid at least 75% more than the computer was actually worth

Courtney will win if she can establish that she paid at least 50% more than the computer was actually worth

Jake will win because the court would not weigh whether a good bargain was made

4. Sally goes to have her hair trimmed and agrees to pay $40 to the stylist. While there, Sally decides that she would also like highlights. The stylist informs her that highlights will cost an additional $30. Sally agrees to the price, gets the highlights, but refuses to pay the extra amount. What is the likely result in a dispute between Sally and the stylist, and why?

The stylist will win because she did additional work in exchange for the extra payment and, therefore, Sally's promise was supported by valid consideration

The stylist will win because she did additional work in exchange for the extra payment and, therefore, a valid unilateral contract existed

The stylist will win unless Sally can show that she had previously received both a trim and highlights for $40. If she can prove that she previously received both for $40, then the past expectations rule applies

Sally will win because there was no valid consideration in exchange for the highlighting

Sally will win because the stylist had a preexisting duty to have her hair looking as good as possible

5. Garage sale. Richard, who is cleaning out his garage, offers to sell Dawn a used computer for $200. Dawn replies that "I'll think about it and buy it if I decide to do so." Meanwhile, Sam comes to visit, and offers Richard $50 for the used computer. Richard sells it to Sam because he does not expect to hear from Dawn. Exactly 31 days later, Dawn tells Richard that she would like the computer. She tells him that her response constituted consideration in that it bound him to an option contract and that he should have awaited her final decision. Which of the following is true regarding Dawn's statement that her response was sufficient consideration to bind Richard to an option contract and that he should have awaited her final decision?

She is incorrect on both counts. Her statement did not create an option contract nor was Richard bound to await her final decision

She is correct. Her statement bound him to an option contract, and he should have awaited her final decision

She is correct that her response bound Richard to an option correct, but she is incorrect that he should have awaited her final decision

She is incorrect in that her response bound Richard to an option contract, but she is correct that he should have awaited her final decision

She is correct that her statement bound him to an option contract, but he should have awaited her final decision only if she can prove that they have had significant business dealings in the past

6. A minor may be given full legal capacity to enter into contracts when he or she becomes _____.

freed

either released or employed

released

employed

emancipated