Exam 11: Capacity and Legality

In most states,when can a party avoid a contract on the basis of intoxication?

Which of the following is correct about contracts entered into by insane persons?

Sid is a 15-year old sophomore at East High School.He purchases a computer at a local store for a computer class,but wants to return it after using it for a couple of weeks because his classmates have nicer computers than his and he wants to get one of the better models.He did not misrepresent his age.Which of the following statements is correct?

If a court finds that a contract or contract clause is unconscionable,it may refuse to enforce the entire contract.

Which of the following exculpatory clauses will most likely be enforceable?

The Raging Waves Rafting Company takes tourists on half-day whitewater rafting trips in the Colorado mountains.All patrons sign an agreement that states in part that,"Raging Waves will not be liable for any injuries whatsoever cause by Raging Waves,whether caused intentionally,by negligence,or in any other manner." During the first hour,the guide negligently allowed the raft to hit a large rock,causing Heather to fall out of the raft and injure her arm when she crashed into this rock.Later on the trip,as Heather was criticizing the guide for the earlier incident,the guide got upset and hit her on the back with a paddle.This injured Heather's back.Assuming that the rafting company is responsible for the actions of its employees,can Heather recover for the injuries to her arm and back?

The law has developed two (2)standards concerning contracts of mentally incompetent persons: 1)legal insanity; and 2)quasi-insanity.

Insane persons are liable in quasi-contract to pay the reasonable value for the necessaries of life they receive.

If a court finds that the subject matter of a contract is not legal,the court will undo the contract and place the parties in the status quo.

Usury law limits vary from state to state.

Kevin overhears his roommate Donovan tell someone that he is planning to go ski-diving next weekend.Despite not really knowing Donavan very well,Kevin purchases a $1M life insurance policy on Donovan's life.Donovan's chute fails to open and he meets his demise.Kevin can collect the $1M.

Under current law a minor generally can disaffirm most contracts without a need to show that he or she was taken advantage of or that the particular contract was unfair.Should the law allow disaffirmance only if the minor can show that there was some kind of unfairness in the specific transaction?

Courts have held contracts to be contrary to public policy if they have a negative impact on society or interfere with the public's safety and welfare.

A contract of ________ is a preprinted form whose terms the consumer cannot negotiate and must sign in order to obtain a product or service.

What constitutes a necessary for a minor will depend on the particular minor's own individual circumstances.

In order to be considered legally insane for the purposes of avoiding a contract,a person must:

In all states exculpatory contracts are void as to minors.

Most states provide that the minor must put the adult in status quo upon disaffirmance of the contract if the minor's intentional,reckless,or grossly negligent conduct caused the loss of value to the adult's property.This rule is called the minor's duty of ________.

The two common situations where a covenant not to compete can be found valid are in connection with:

Most states use the ________ test to determine legal insanity.